**UNITED STATESSECURITIES AND EXCHANGE COMMISSION**WASHINGTON,D.C. 20549

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**FORM 10-K**

**x**                              ANNUALREPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

**Forthe fiscal year ended December 31, 2006**

**or**

**o**                                 TRANSITIONREPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

**Forthe transition period from                    to                    **

**CommissionFile Number: 001-33075**

**Granahan McCourt Acquisition Corporation**

(Exact name of registrantas specified in its charter)
| **Delaware**                                                     | ** ** | **02-0781911**                        |
|------------------------------------------------------------------|------------|---------------------------------------|
| (State or Other  Jurisdiction of  Incorporation or Organization) | ** ** | (I.R.S. Employer  Identification No.) |
| **179 Stony Brook Road   Hopewell, NJ**                          | ** ** | **08525**                             |
| (Address of  Principal Executive Offices)                        | ** ** | (Zip Code)                            |

 

**Registrant’s telephone number,including area code:** (609) 333-1200

**Securitiesregistered pursuant to Section 12(b) of the Act:**

| **Title of Each Class**                    |   | **Name of  Each Exchange on Which Registered** |
|--------------------------------------------|--------|------------------------------------------------|
| Units                                      |   | American Stock  Exchange                       |
| Common Stock,  par value $0.0001 per share |   | American Stock  Exchange                       |
| Warrants                                   |   | American Stock  Exchange                       |

 

**Securities registered pursuant toSection 12(g) of the Act: None**

Indicate by check mark ifthe registrant is a well-known seasoned issuer, as defined in Rule 405 of theSecurities Act.   Yes o   No x

Indicate by check mark ifthe registrant is not required to file reports pursuant to Section 13 orSection 15(d) of the Act.   Yes o   No x

Indicate by check markwhether the registrant: (1) has filed all reports required to be filed bySection 13 or 15(d) of the Securities Exchange Act of 1934 during thepreceding 12 months (or for such shorter period that the registrant wasrequired to file such reports), and (2) has been subject to such filingrequirements for the past 90 days.   Yes x   No o

Indicate by check mark ifdisclosure of delinquent filers pursuant to Item 405 of Regulation S-K isnot contained herein, and will not be contained, to the best of registrant’sknowledge, in definitive proxy or information statements incorporated byreference in Part III of this Form 10-K or any amendment to this Form 10-K. x

Indicate by checkmark whether the registrant is a large accelerated filer, an accelerated filer,or a non-accelerated filer. See definition of “accelerated filer” and “largeaccelerated filer” in Rule 12b-2 of the Exchange Act. (Check one):

| Large Accelerated Filer      o   Accelerated  Filer o      Non-Accelerated  Filer x |
|-------------------------------------------------------------------------------------------------------------------------------------------------|

 

Indicate by check markwhether the registrant is a shell company (as defined in Rule 12b-2 of theExchange Act).   Yes x   No o

As of June 30, 2006 wedid not exist, therefore the aggregate market value of the registrant’s commonstock held by non-affiliates of the registrant was zero.

Numberof shares of common stock outstanding as of March 30, 2007: 14,062,500.

 

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**Table of Contents**

**TABLE OF CONTENTS**
| **Item**  | ** ** | **Description**                                                                                                    | ** ** | **Page** |
|-----------|------------|--------------------------------------------------------------------------------------------------------------------|------------|----------|
|      |       |                                                                                                               |       |     |
|      |       | PART I                                                                                                             |       |     |
|      |       |                                                                                                               |       |     |
| ITEM 1.   |       | BUSINESS                                                                                                           |       | 1        |
|      |       |                                                                                                               |       |     |
| ITEM 1A.  |       | RISK FACTORS                                                                                                       |       | 6        |
|      |       |                                                                                                               |       |     |
| ITEM  1B. |       | UNRESOLVED  STAFF COMMENTS                                                                                         |       | 19       |
|      |       |                                                                                                               |       |     |
| ITEM 2.   |       | PROPERTIES                                                                                                         |       | 19       |
|      |       |                                                                                                               |       |     |
| ITEM 3.   |       | LEGAL PROCEEDINGS                                                                                                  |       | 19       |
|      |       |                                                                                                               |       |     |
| ITEM 4.   |       | SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS                                                                |       | 19       |
|      |       |                                                                                                               |       |     |
|      |       | PART II                                                                                                            |       |     |
|      |       |                                                                                                               |       |     |
| ITEM 5.   |       | MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED  STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES |       | 20       |
|      |       |                                                                                                               |       |     |
| ITEM 6.   |       | SELECTED FINANCIAL DATA                                                                                            |       | 22       |
|      |       |                                                                                                               |       |     |
| ITEM 7.   |       | MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL  CONDITION AND RESULTS OF OPERATIONS                        |       | 22       |
|      |       |                                                                                                               |       |     |
| ITEM 7A.  |       | QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET  RISK                                                        |       | 23       |
|      |       |                                                                                                               |       |     |
| ITEM 8.   |       | FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA                                                                        |       | 23       |
|      |       |                                                                                                               |       |     |
| ITEM 9.   |       | CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON  ACCOUNTING AND FINANCIAL DISCLOSURE                              |       | 23       |
|      |       |                                                                                                               |       |     |
| ITEM 9A.  |       | CONTROLS AND PROCEDURES                                                                                            |       | 23       |
|      |       |                                                                                                               |       |     |
| ITEM 9B.  |       | OTHER INFORMATION                                                                                                  |       | 23       |
|      |       |                                                                                                               |       |     |
|      |       | PART III                                                                                                           |       |     |
|      |       |                                                                                                               |       |     |
| ITEM 10.  |       | DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT                                                                 |       | 24       |
|      |       |                                                                                                               |       |     |
| ITEM 11.  |       | EXECUTIVE COMPENSATION                                                                                             |       | 27       |
|      |       |                                                                                                               |       |     |
| ITEM 12.  |       | SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND  MANAGEMENT AND RELATED STOCKHOLDER MATTERS                    |       | 28       |
|      |       |                                                                                                               |       |     |
| ITEM 13.  |       | CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS                                                                     |       | 28       |
|      |       |                                                                                                               |       |     |
| ITEM 14.  |       | PRINCIPAL ACCOUNTANT FEES AND SERVICES                                                                             |       | 31       |
|      |       |                                                                                                               |       |     |
|      |       | PART IV                                                                                                            |       |     |
|      |       |                                                                                                               |       |     |
| ITEM 15.  |       | EXHIBITS AND FINANCIAL STATEMENT SCHEDULES                                                                         |       | 33       |
|      |       |                                                                                                               |       |     |
|      |       | SIGNATURES                                                                                                         |       | 34       |

 

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**CAUTIONARY STATEMENT CONCERNINGFORWARD-LOOKING INFORMATION**

Thisreport includes forward-looking statements within the meaning ofSection 27A of the Securities Act of 1933, as amended (the “Securities Act”),and Section 21E of the Securities Exchange Act of 1934, as amended (the “ExchangeAct”), that involve substantial risks and uncertainties. We have based theseforward-looking statements on our current expectations, estimates andprojections about our target industries, our beliefs, our assumptions and futureevents. These forward-looking statements are subject to known and unknownrisks, uncertainties and assumptions about us that may cause our actualresults, levels of activity, performance or achievements to be materiallydifferent from any future results, levels of activity, performance orachievements expressed or implied by such forward-looking statements. In somecases, 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. Factorsthat might cause or contribute to such a discrepancy include, but are notlimited to, those described in this report, including in “Item 1A. Risk Factors”,and our other Securities and Exchange Commission (“SEC”) filings, and thefollowing:

•                                            ourstatus as a development stage company;

•                                            ourability to dissolve and liquidate in a timely manner;

•                                            ourfailure to receive necessary regulatory consents, or to receive them in atimely manner, in connection with our initial business combination;

•                                            ourdissolution or liquidation prior to a business combination;

•                                            thereduction of the proceeds held in the trust account due to third party claims;

•                                            ourselection of a prospective target business or asset;

•                                            ourissuance of our capital stock or incurrence of debt to complete a businesscombination;

•                                            ourability to consummate an attractive business combination due to our limitedresources and the significant competition for business combinationopportunities;

•                                            ourdependence on our key personnel;

•                                            thetax consequences of an acquisition or disposition by us;

•                                            conflictsof interest of our officers and directors;

•                                            potentialfuture affiliations of our officers and directors with competing businesses;

•                                            ourability to obtain additional financing if necessary;

•                                            thecontrol by our existing stockholders of a substantial interest in us;

•                                            ourcommon stock becoming subject to the SEC’s penny stock rules;

•                                            theadverse effect the outstanding warrants may have on the market price of ourcommon shares;

•                                            theexistence of registration rights with respect to the securities owned by ourexisting stockholders;

•                                            ourbeing deemed an investment company;

•                                            thelack of adequate resources to cover our operating expenses;

•                                            thelack of a market for our securities;

•                                            marketrisks;

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•                                            regulatoryrisks and operational risks, including those involved in operating outside theUnited States;

•                                            lossof our intellectual property rights;

•                                            foreigncurrency fluctuation;

•                                            limitedoperating histories of businesses we may acquire in the telecommunications andmedia industries;

•                                            cyclicalityof the telecommunications and media industries; and

•                                            ourfailure to keep pace with changes in our target industries.

        Theserisks and others described below under “Risk Factors” are not exhaustive.

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**PARTI**

**ITEM 1.**   **BUSINESS**

**Introduction**

Granahan McCourt Acquisition Corporation is a blankcheck company that was organized under the laws of the State of Delaware onJuly 10, 2006. We were formed for the purpose of acquiring, or acquiringcontrol of, one or more assets or operating businesses in thetelecommunications and media industries through a merger, capital stockexchange, asset or stock acquisition or other similar business transaction,which we refer to as a “business combination.” We have not generated revenue todate. We are considered to be in the development stage and are subject to therisks associated with activities of development stage companies. Since ourinitial public offering in October 2006, we have been actively engaged inidentifying a suitable business combination candidate. We have met withpotential target companies, service professionals and other intermediaries todiscuss our company, the background of our management and our combinationpreferences. However, as of the date of filing of this report we have notconsummated any business combination. Unless the context otherwise requires,references in this report to “the Company,” “we,” “us,” and “our” refer toGranahan McCourt Acquisition Corporation.

A registration statement for our initial publicoffering was declared effective on October 18, 2006. On October 24, 2006, wesold 11,250,000 units in our initial public offering. Each of our unitsconsists of one share of our common stock, $0.0001 par value per share, and onewarrant. Each warrant sold in the initial public offering entitles the holderto purchase from us one share of common stock at an exercise price of $6.00. Ourunits began public trading on October 19, 2006. Our warrants and common stock have traded separately since November 27,2006.  We received net proceeds of $87,150,000 from our initial public offering and the sale of warrants to DavidC. McCourt in a private placement. Of those net proceeds, approximately$85,050,000 (plus an additional $3,600,000 attributable to a deferredunderwriters’ discount) has been placed in a trust account and will not bereleased until the earlier of (i) the completion of an initial transaction or(ii) our liquidation. Therefore, unless and until an initial transaction isconsummated, the proceeds held in the trust account will not be available tous.  For a more complete discussion ofour financial information, see the section appearing elsewhere in our AnnualReport on Form 10-K entitled “Selected Financial Data”.

We will focus our investment activities on thetelecommunications and media industries. Based on our management team’sexperience in buying, building, restructuring and operating businesses, we willseek to acquire one or more companies in sectors where we believe there areopportunities for value creation as a result of technological or regulatorychanges and where we can leverage the expertise of our management team. We willfocus our efforts in North America and Europe, where our management has directinvestment experience and a network of industry contacts to source transactionopportunities. We believe there is an opportunity to capitalize on technologiesand business models that are transferable across geographies, which is one ofthe strategies we intend to pursue.

**Telecommunicationsand Media Companies**

We anticipate that our initial business combinationmay include, but will not be limited to, one or more companies engaged in oneor more of the following three sectors of the telecommunications and mediaindustries:

·                                          NetworkProviders: including established wireline, established wireless and alternativetechnology access providers, as well as traditional phone, cable and broadbandproviders.

 

·                                          TransportProviders: including Internet Protocol, or IP, infrastructure providers such asdata center and co-location facilities for facilitating hosting, peering,interconnection, and other managed services, as well as content distributionproviders and IP routing companies.

 

·                                          Applicationand Content Providers: including new bandwidth-intensive products and servicesin the entertainment and gaming sectors such as TV over the internet andbroadband interactive gaming, as well as broadcasters, traditional networks,channel operators and content owners.

**Effectinga Business Combination**

***Fair market value of initial business combination***

Our initial business combination must have a fairmarket value equal to at least 80% of our net assets (excluding the amount heldin trust representing a portion of the underwriters’ discount) at the time ofthe business combination. We intend to accomplish this by identifying andeffecting a business combination with one or more telecommunications andmedia-related businesses contemporaneously.

We believe that an investment in a telecommunicationsand media-related business in the size range of our initial public offeringwill provide a sufficient “critical mass” upon which to develop a productiveand profitable business in the telecommunications and media industries. Ourinitial business combination with a telecommunications and media-relatedbusiness could be structured in one of the following ways:

·                                          amerger with one or more operating businesses in which the aggregate fair marketvalue is equal to at least 80% of our net assets (excluding the amount held intrust representing a portion of the underwriters’ discount) at the time of thebusiness combination;

 

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·                                          anacquisition of a controlling interest in one or more telecommunications andmedia-related businesses in which the aggregate fair market value is equal toat least 80% of our net assets (excluding the amount held in trust representinga portion of the underwriters’ discount) at the time of the businesscombination; or

 

·                                          anacquisition of certain assets and related liabilities of an existing telecommunicationsand media-related business of which the aggregate fair market value is equal toat least 80% of our net assets (excluding the amount held in trust representinga portion of the underwriters’ discount) at the time of the business combination.

If our board is not able to independently determinethat a proposed business combination with one or more target businesses has asufficient fair market value or if a conflict of interest exists, such as ifmanagement selects a company affiliated with one of our directors as aprospective target business, we will obtain an opinion from a third-partyappraiser and/or an independent investment banking firm regarding the fairnessto our stockholders from a financial point of view of the business combination.However, we will not be required to obtain an opinion from such firms as to thebusiness combination if our board of directors independently determines thatthe target businesses have sufficient fair market value and no actual orperceived conflict of interest exists.

***We have not consummated any business combination***

We have met with target companies, serviceprofessionals and other intermediaries to discuss our company, the backgroundof our management and our combination preferences. However, as of the date offiling of this report we have not consummated any business combination. Subjectto the requirement that our initial business combination must be with one ormore telecommunications and media-related businesses with an aggregate fairmarket value equal to at least 80% of our net assets (excluding the amount heldin trust representing a portion of the underwriters’ discount) at the time ofthe business combination, we have virtually unrestricted flexibility inidentifying and selecting prospective target business candidates in thetelecommunications and media industries. Accordingly, investors have no basisto evaluate the possible merits or risks of the target businesses with which wemay ultimately complete a business combination. Our acquisition criteria aresimilar to those of other blank check companies, except that we intend toacquire telecommunications and media-related businesses.

***Sources of target businesses***

Target business candidates have been, and weanticipate that target business candidates will continue to be, brought to ourattention by various unaffiliated sources, including private equity funds,companies, investment bankers and advisory firms that specialize in thetelecommunications and media business. These persons may present solicited orunsolicited proposals to us. In addition, our directors and officers havegenerated, and we anticipate that our directors’ and officers’ experience andtheir business contacts will continue to generate, other proposals. We mayengage the services of professional firms that specialize in acquisitions, inwhich event we may pay a finder’s fee or other compensation. Any finder’s feeor compensation would be subject to arm’s-length negotiations between us andany of these professional firms and will likely be paid only upon theconsummation of a business combination. We will not pay any of our directors,officers or pre-initial public offering stockholders (“initial stockholders”)or any entity of which they are an officer, director or principal stockholder,any finder’s fee or other compensation for services rendered to us prior to, orin connection with, the consummation of our initial business combination.  However, such individuals will receivereimbursement, subject to board approval, for any out-of-pocket expensesincurred by them in connection with activities on our behalf, such asidentifying potential target acquisitions, performing business due diligence onsuitable target acquisitions and business combinations, as well as traveling toand from the offices, plants or similar locations of prospective targetacquisitions to examine their operations. In addition, David C. McCourt,our President, CEO and Chairman, may, in his sole discretion, transfer oursecurities held by him to our existing officers and directors who participatein the due diligence, structuring and negotiating of a business combination.

***Selection of target businesses and structuring of a businesscombination***

Our management team has developed a comprehensive duediligence process for evaluating the financial, sales and marketing,engineering, network operations, customer service, back-office operations,compensation and benefits, information technology and other criticalorganizational functions of target companies in the telecommunications andmedia sectors. We will favor specific sectors and geographies where we believeour management team can add value based on its operational expertise and pasttrack record. Although we will not limit the sectors we target, our initialfocus will include telecommunications infrastructure and networking companiesservicing residential or enterprise customers, traditional cable, phone andinternet providers, traditional media, new media and content companies, as wellas applications and application service providers or internet relatedtechnologies. Although we will not limit the geographic areas we target, ourinitial focus will include North America and Europe. We intend to focus ourefforts on potential targets that have one or several of the followingcharacteristics:

·                                          Anexisting under-capitalized business with the potential to further grow productsand services in multiple geographies;

·                                          Anexisting business with strong fundamentals in an environment requiring scale,which has caused the business to appear undervalued or distressed;

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·                                          A partialproduct or service offering that may require a business combination to augmentand complete the product service or solution;

 

·                                          A valuableasset embedded in an underperforming business which could be made more valuablethrough improved management, technology, or enhanced operational efficiency;and/or

 

·                                          An existingbusiness requiring a non-traditional business model in order to adapt to thechanging regulatory and technological environment and unlock stockholder value.

 

While we may seek to effect business combinations withmore than one business, our initial business combination must be with abusiness or businesses whose collective fair market value is at least equal to80% of our net assets (excluding the amount held in the trust accountrepresenting a portion of the underwriters’ discount) at the time of suchbusiness combination. Consequently, it is likely that we will have the abilityto complete only a single transaction at first, although this may entailsimultaneous transactions with several operating businesses. If we determine tosimultaneously engage in a business combination with several operatingbusinesses and these businesses are owned by different persons, each of thesepersons will have to agree that our transaction with its business is contingenton the simultaneous closings of the other transactions. This requirement maymake it more difficult for us, and delay our ability, to complete the businesscombination. With multiple transactions, we could also face additional risks,including additional burdens and costs with respect to possible multiplenegotiations and due diligence investigations (if there are multiplecounterparties) and the additional risks associated with the subsequent assimilationof the operations, services and products of the various companies in a singleoperating business.

***Limited ability to evaluate the target business’ management***

We closely scrutinize the management of prospectivetarget businesses when evaluating the desirability of effecting a businesscombination. However, given the uncertainties associated with any third-partydue diligence investigation, our assessment of the target business’ managementmay not be complete and accurate. In addition, the target business’ managementmay not have the necessary skills, qualifications or abilities to manage apublic company upon the consummation of our initial business combination.Furthermore, the future role, if any, of our existing management in the targetbusinesses cannot presently be stated with any certainty.

Following a business combination, we may seek torecruit additional management to supplement the incumbent management of thetarget business or businesses. We cannot assure you that we will have theability to recruit additional management, or that the additional managementwill have the requisite skills, knowledge or experience necessary to enhancethe incumbent management.

***Possible lack of business diversification***

It is possible that our initial business combinationmay be with a target business that has only a limited number of products orservices. The resulting lack of diversification may:

·                                          resultin our dependency upon the performance of a single telecommunications ormedia-related business;

 

·                                          resultin our dependency upon the development of a single or limited number ofproducts or services; and

 

·                                          subjectus to economic, competitive and regulatory developments, any or all of whichmay have a substantial adverse impact upon the telecommunications and mediaindustries subsequent to the consummation of a business combination.

 

In this case, the initial business combination may notenable us to diversify our operations or to benefit from the possible spreadingof risk or offsetting of losses, unlike other entities that may have sufficientresources to complete several business combinations so as to diversify risk andoffset losses. Further, the prospects for our success may depend entirely uponthe future performance of the initial target business or businesses with whichwe effect a business combination.

***Opportunity for stockholder approval of our initial businesscombination***

Prior to the completion of our initial businesscombination, we will submit the proposed business combination to ourstockholders for their approval, even if the structure of the businesscombination is such that it would not ordinarily require stockholder approvalunder applicable state law. In connection with seeking stockholder approval ofour initial business combination, we will furnish our stockholders with proxysolicitation materials prepared in accordance with the Exchange Act, which willinclude a description of the operations of the target business or businessesand certain required financial information regarding the target business orbusinesses.

In connection with the vote required for our initialbusiness combination, all of our existing stockholders, including all of ourofficers and directors, have agreed to vote all of the shares of common stockowned by them immediately prior to our initial public offering in accordancewith the majority of the shares of common stock voted by the publicstockholders. The existing stockholders may cast votes with respect to anyshares of common stock acquired in our initial public offering or in the openmarket in any manner as they may determine (other than with respect to adissolution in the event we are unable to timely complete a businesscombination, which they have agreed to vote in favor of). As a

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result, an existingstockholder who acquires shares in or after the initial public offering, and istherefore a public stockholder with respect to such shares of common stock, mayvote against the proposed business combination with respect to such shares andretains the right to exercise the conversion rights attributable to such sharesin the event that a business combination is approved. We will proceed with abusiness combination only if the votes cast by our public stockholders in favorof the business combination represent a majority of the votes cast by ourpublic stockholders with respect to the proposed transaction and publicstockholders owning less than 20% of the number of shares sold in our initialpublic offering both exercise their conversion rights described below and voteagainst the business combination.  Wewill structure our initial business combination so that the transaction willproceed and may be consummated even if the maximum number of shares that may beconverted to cash in connection with our initial business combination are infact converted to cash, reducing the amount of cash ultimately available toconsummate the transaction by up to approximately 20%. However, we will notproceed with our initial business combination if public stockholders owning 20%or more of the shares sold in our initial public offering both vote against thebusiness combination and exercise their conversion rights, even if publicstockholders holding a majority of the shares vote in favor of the businesscombination.

***Conversion rights***

At the time we seek stockholder approval of anybusiness combination, we will offer each public stockholder the right to havehis or her shares of common stock converted to cash if the stockholder votesagainst the business combination and the business combination is approved andcompleted. Our existing stockholders will not have such conversion rights withrespect to any shares of common stock owned by them, directly or indirectly,prior to our initial public offering; they will have the right with respect toany shares of our common stock that they may acquire in connection with orfollowing our initial public offering. An existing stockholder who acquiresshares in or after the initial public offering would be a public stockholderwith respect to these shares and retains the right to exercise conversionrights attributable to such shares. The actual per share conversion price willbe equal to the amount in the trust account (including the amount held in thetrust account representing a portion of the underwriters’ discount), whichshall include $4,000,000 from the private placement of warrants, inclusive ofany interest net of taxes payable (calculated as of two business days prior tothe consummation of the proposed business combination), divided by the numberof shares sold in our initial public offering. Without taking into any accountinterest earned on the trust account, the initial per share conversion pricewould be approximately $7.88 or $0.12 less than the per unit offering price of$8.00.

An eligible stockholder may request conversion at anytime after the mailing to our stockholders of the proxy statement and prior tothe vote taken with respect to a proposed business combination at a meetingheld for that purpose, but the request will not be granted unless thestockholder votes against the business combination, the business combination isapproved and completed and the stockholder continues to hold his shares throughcompletion of the business combination. Any request for conversion, once made,may be withdrawn at any time up to the date of the meeting. It is anticipatedthat the funds to be distributed to stockholders entitled to convert theirshares who elect conversion will be distributed promptly after completion of abusiness combination. Public stockholders who convert their stock into theirshare of the trust account still have the right to exercise any warrants thatthey still hold. We will not complete any business combination if publicstockholders owning 20% or more of the shares sold in our initial publicoffering both exercise their conversion rights and vote against the businesscombination.

***Liquidation if no business combination***

If we do not consummate a business combination byApril 24, 2008 (18 months after the completion of our initial public offering),or by October 24, 2008 (24 months after the completion of our initial publicoffering, if the extension criteria described below have been satisfied), wewill liquidate and distribute to all of our public stockholders, in proportionto their respective equity interests, an aggregate sum equal to the amount thenon deposit in the trust account, inclusive of (1) the 4% deferredunderwriting discount, (2) the proceeds from the private placement and(3) any interest earned on the trust account (net of taxes payable), plusany remaining net assets. All of our initial stockholders, directors andofficers have agreed to waive their respective rights to participate in anyliquidation distribution occurring upon our failure to consummate a businesscombination, but only with respect to those shares of common stock beneficiallyowned and acquired by them prior to our initial public offering. They willparticipate in any liquidation distribution with respect to any shares ofcommon stock acquired in connection with or following our initial publicoffering. There will be no distribution from the trust account with respect tothe warrants, and all rights with respect to the warrants will effectivelyterminate upon our liquidation.

If we were to expend all of the net proceeds of ourinitial public offering, other than the proceeds deposited in the trustaccount, without taking into account any interest earned on the balance held inthe trust account but including the deferred underwriting discount, the initialper share liquidation price would be approximately $7.88, or $0.12 less thanthe per unit initial public offering price of $8.00. The offering proceedsdeposited in the trust account could, however, become subject to the claims ofour creditors, and the claims would have a preference over the claims of ourpublic stockholders in the event of a liquidation.  In the event of liquidation, the actual pershare liquidation price may be less than approximately $7.88 plus interest (netof taxes payable), due to claims of creditors. David C. McCourt has agreedpursuant to an agreement with us and Deutsche Bank Securities Inc.,representative of the underwriters for our initial public offering, that, if weliquidate prior to the consummation of a business combination, he will bepersonally liable to cover claims made by prospective target businesses,vendors and service providers, but only if, and to the extent, the claimsreduce the amounts in the trust account available for payment to ourstockholders in the event of a liquidation and the claims are made by a vendorfor services rendered, or products sold, to us or by a prospective targetbusiness. However, Mr. McCourt will not have any personal liability as to anyclaimed amounts owed to a third party who executed a waiver, or as to anyclaims under our indemnity of the underwriters of our initial public offeringagainst certain liabilities, including liabilities under the Securities Act of1933. These obligations of Mr. McCourt will remain in place even if the period withinwhich to consummate a 

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business combination isextended by an amendment to our amended and restated certificate ofincorporation. However, Mr. McCourt may not be able to satisfy his obligations.

Prior to completion of a business combination, we willseek waivers from all target acquisitions, vendors and service providers toclaims to amounts in the trust account. In the event that a third party were torefuse to enter into the waiver, our decision to engage the third party or toenter into discussions with the target business would be based on ourmanagement’s determination that we would be unable to obtain, on a reasonablebasis, substantially similar services or opportunities from another entitywilling to enter into the waiver.

If we enter into either a letter of intent, anagreement in principle or a definitive agreement to complete a businesscombination prior to the expiration of 18 months after the consummation of ourinitial public offering, but are unable to complete the business combination withinthe 18-month period, then we will have an additional six months in which tocomplete the business combination contemplated by the letter of intent,agreement in principle or definitive agreement. If we are unable to do so bythe expiration of the 24-month period from the date of closing of our initialpublic offering, we will liquidate. Upon notice from us, the trustee of thetrust account will commence liquidating the investments constituting the trustaccount and will turn over the proceeds to our transfer agent for furtherdistribution to our public stockholders. We anticipate that our instruction tothe trustee would be given promptly after the expiration of the applicable18-month or 24-month period.

Our public stockholders will be entitled to receivefunds from the trust account only in the event of our liquidation or if thestockholders seek to convert their respective shares into cash upon a businesscombination that the stockholder voted against and that is actually completedby us. In no other circumstances will a stockholder have any right or interestof any kind to or in the trust account.

**GovernmentRegulation of the Telecommunications and Media Industries**

Certain segments of the telecommunications and mediaindustries historically have been subject to substantial government regulation,both in the United States and overseas. If we complete a business combinationwith a target business or businesses in these industries, changes in regulatoryrequirements in the United States or other countries could affect the sales ofour products, limit the growth of the markets we serve, or require costlyalterations of current or future products. Future changes in tariffs byregulatory agencies or application of tariff requirements to currently untariffedservices could affect the sales of our products for certain classes ofcustomers.

On the other hand, few laws or regulations currentlyapply directly to access of or commerce on the Internet. New regulationsgoverning the Internet and Internet commerce, if adopted, could have an adverseeffect on our business, operating results, and financial condition following abusiness combination. New regulations governing the Internet and Internetcommerce could include matters such as changes in encryption requirements,sales taxes on Internet product sales, and access charges for Internet serviceand/or content and/or commerce providers

**Competition**

In identifying, evaluating and pursuing targetbusinesses, we may encounter intense competition from other entities having abusiness objective similar to ours, including leveraged buyout and otherprivate equity funds, operating businesses and other entities and individuals,both foreign and domestic, competing for business combinations in thetelecommunications and media industries. Many of these entities are wellestablished and have extensive experience identifying and effecting businesscombinations directly or through affiliates. Many of these competitors possessgreater financial, marketing, technical, human and other resources than we do.Our ability to compete in effecting a business combination with anappropriately sized target business or businesses will be limited by ouravailable financial resources.

This inherent competitive limitation gives others anadvantage in pursuing a business combination with target businesses. Further:

·                                          ourobligation to seek stockholder approval of our initial business combination mayimpede or delay the completion of a transaction;

 

·                                          ourobligation to convert shares of common stock held by our stockholders into cashin certain instances may reduce the resources available to effect our initialbusiness combination;

 

·                                          ourinability to effect a business combination with a target business that does nothave or will not reconcile its audited financial statements in conformity withU.S. generally accepted accounting principles may limit the prospective targetbusinesses we may pursue; and

 

·                                          ouroutstanding warrants and the purchase option we granted to the underwriters ascompensation for underwriting our initial public offering, and the futuredilution they potentially represent, may not be viewed favorably by targetbusinesses.

 

Any of these factors may place us at a competitivedisadvantage in successfully negotiating our initial business combination,particularly against a competitor that does not need stockholder approval tocomplete a business combination.

If we succeed in effecting a business combination,there will in all likelihood be intense competition from competitors of the targetbusiness or businesses. The telecommunications and media industries are rapidlyevolving and intensely competitive. We expect competition to intensify in thefuture. Many of the competitors we will face upon consummation of a businesscombination will have significantly greater financial, technical,manufacturing, marketing and other resources than we do. Competing with thesecompanies after a business combination 

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will require investmentby us in engineering, research and development and marketing. We may not havethe resources to make these investments and may not be successful in makingthese investments. In addition, the management of our competitors may havegreater operating resources and experience in their respective industries. Someof these competitors may also offer a wider range of services than we can andmay have greater name recognition and a larger client base. For example, cablenetwork operators and communications operators are increasingly offeringsimilar products in an effort to become an all-in-one provider of voice, highspeed internet access and video services to customers. These competitors may beable to respond more quickly and effectively to new or changing opportunities,technologies and client requirements. They may also be able to undertake moreextensive promotional activities, offer more attractive terms to clients, andadopt more aggressive pricing policies. If we are unable to compete effectivelyfollowing a business combination, our business, financial condition, results ofoperations and prospects could be materially adversely affected.

**Facilities**

We do not own any real estate or other physicalproperties. Our headquarters are located at 179 Stony Brook Road, Hopewell, NJ08525. Under an office administration agreement between Granahan McCourtCapital, LLC, a private investment firm of which David C. McCourt is thePresident and CEO, and us, Granahan McCourt Capital, LLC furnishes us withoffice facilities, equipment and clerical services at the facilities inexchange for a payment of $10,000 per month. We believe, based on ourmanagement’s experience, that our office facilities are suitable and adequatefor our business as it is presently conducted.

**Employees**

We currently have three officers, one of whom is alsoa member of our board of directors. These individuals are not obligated todevote any specific number of hours to our matters and intend to devote only asmuch time as they deem necessary to our affairs. We do not intend to have anyfull-time employees prior to the consummation of a business combination.

**AvailableInformation**

We file with or submit to the SEC annual, quarterlyand current periodic reports, proxy statements and other information meetingthe informational requirements of the Exchange Act. While we do not have awebsite with available filings, we will provide, at no additional charge,copies of these reports, proxy and information statements and other informationupon request to our address at 179 Stony Brook Road, Hopewell, NJ 08525,Attention: Barak Bar-Cohen or by telephone to (609) 333-1200. You may alsoinspect and copy these reports, proxy statements and other information, andrelated exhibits and schedules, at the Public Reference Room of the SEC at 100F Street, NE, Washington, D.C. 20549. You may obtain information on theoperation of the Public Reference Room by calling the SEC at 1-800-SEC-0330. Inaddition, the SEC maintains an Internet site that contains reports, proxy andinformation statements and other information filed electronically by us withthe SEC which are available on the SEC’s Internet site at http://www.sec.gov.

**ITEM 1A.   RISKFACTORS**

*An investment in our securitiesinvolves a high degree of risk. You should consider carefully all of the risksdescribed below, together with the other information contained in this report,before making a decision to invest in our securities. If any of the followingrisks occur, our business, financial condition and results of operations may beadversely affected.*

**Risks Related toOur Business**

***We are a development stage company with no operating historyand, accordingly, you will not have any basis on which to evaluate our abilityto achieve our business objective.***

We are a recently incorporated development stagecompany with no operating results to date. Since we do not have an operatinghistory, you will have no basis upon which to evaluate our ability to achieveour business objective, which is to effect a business combination. We will notgenerate any revenues until, at the earliest, after the consummation of abusiness combination.

***If we are forced to dissolve and liquidate before a businesscombination and distribute the trust account, our public stockholders mayreceive less than $8.00 per share and our warrants will expire worthless.***

We must complete a business combination with a fairmarket value of at least 80% of our net assets (excluding the amount held inthe trust account representing a portion of the underwriters’ discount) at thetime of acquisition by April 24, 2008 (18 months after the consummation ofour initial public offering) or by October 24, 2008 (within 24 months fromthe consummation of our initial public offering if a letter of intent,agreement in principle or definitive agreement has been executed within18 months after the consummation of our initial public offering). If weare unable to complete a business combination within the prescribed time frameand are forced to dissolve and liquidate our assets, the per share liquidationdistribution may be less than $8.00 because of the expenses paid in our initialpublic offering. Furthermore, there will be no 

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distribution fromthe trust account with respect to our outstanding warrants which will expireworthless if we dissolve and liquidate before the completion of a businesscombination.

***If we do not consummate a business combination and areforced to dissolve, payments from the trust account to our public stockholdersmay be delayed.***

We currently believe that any plan of dissolution anddistribution subsequent to the expiration of the 18 and 24-month deadlineswould proceed in approximately the following manner:

·                                          ourboard of directors will, consistent with its obligations described in ourfourth amended and restated certificate of incorporation to dissolve, prior tothe passing of such deadline, convene and adopt a specific plan of dissolutionand distribution, which it will then vote to recommend to our stockholders; atsuch time it will also cause to be prepared a preliminary proxy statementsetting out the plan of dissolution and distribution as well as the board’srecommendation of the plan;

·                                          promptlyafter the passing of such deadline, we would file our preliminary proxystatement with the Securities and Exchange Commission;

·                                          ifthe Securities and Exchange Commission does not review the preliminary proxystatement, then, ten days following the passing of such deadline, we will mailthe proxy statements to our stockholders, and 30 days following thepassing of such deadline we will convene a meeting of our stockholders, atwhich they will either approve or reject our plan of dissolution anddistribution; and

·                                          ifthe Securities and Exchange Commission does review the preliminary proxystatement, we currently estimate that we will receive such comments withinapproximately 30 days following the passing of such deadline. We will mailthe proxy statements to our stockholders following the conclusion of thecomment and review process (the length of which we cannot predict with anycertainty, and which may be substantial) and we will convene a meeting of ourstockholders at which they will either approve or reject our plan ofdissolution and distribution.

In the event we seek stockholder approval for a planof dissolution and distribution and do not obtain such approval, we willnonetheless continue to pursue stockholder approval for our dissolution.Pursuant to the terms of our fourth amended and restated certificate ofincorporation, our powers following the expiration of the permitted timeperiods for consummating a business combination will automatically be limitedto acts and activities relating to dissolving and winding up our affairs,including liquidation. The funds held in our trust account may not bedistributed except upon our dissolution and, unless and until approval isobtained from our stockholders, the funds held in our trust account will not bereleased.

These procedures, or a vote to reject any plan ofdissolution and distribution by our stockholders, may result in substantialdelays in the liquidation of our trust account to our public stockholders aspart of our plan of dissolution and distribution.

***Upon distribution of the trust account, our stockholders maybe held liable for claims of third parties against us to the extent ofdistributions received by them.***

Under the Delaware General Corporation Law,stockholders may be held liable for claims by third parties against acorporation to the extent of distributions received by them in a dissolution.If a corporation complies with certain statutory procedures set forth inSection 280 of the Delaware General Corporation Law intended to ensurethat the corporation makes reasonable provision for all claims against it, anyliability of stockholders with respect to a liquidating distribution is limitedto the lesser of such stockholder’s pro rata share of the claim or the amountdistributed to the stockholder, and any liability of the stockholder would bebarred from claims brought after the third anniversary of the dissolution. Theprocedures in Section 280 include a 60-day notice period during which anythird-party claims may be brought against us, a 90-day period during which wemay reject any claims brought, and an additional 150-day waiting period beforeany liquidating distributions may be made to stockholders. We do not intend tofollow the procedures in Section 280 of the Delaware General CorporationLaw, and therefore, our stockholders could potentially be liable for any claimsto the extent of distributions received by them in a dissolution and anyliability of our holders of common stock sold in our initial public offeringmay extend beyond the third anniversary of such dissolution.

***If the net proceeds from the initial public offering thatwere not  placed in the trust account areinsufficient to allow us to operate until October, 2008, we may not be able tocomplete a business combination.***

We currently believe that the funds available to usfrom the net proceeds from our initial public offering not placed in the trustaccount are sufficient to allow us to operate until October, 2008, assumingthat a business combination is not consummated during that time. However, wecannot assure you that our estimates will be accurate. We could use a portionof these funds to pay due diligence costs in connection with a potentialbusiness combination or to pay fees to consultants to assist us with our searchfor a target acquisition. We could also use a portion of these funds as a downpayment or to fund a “no-shop” provision (a provision in letters of intent designedto keep target acquisitions from “shopping” around for transactions with otherson terms more favorable to such target acquisitions) with respect to aparticular proposed business combination, although we do not have any currentintention to do so. If we entered into such a letter of intent where we paidfor the right to receive exclusivity from a target acquisition and weresubsequently required to forfeit such funds (whether as a result of our breachor 

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otherwise), wemight not have sufficient funds to continue searching for, or conduct duediligence with respect to any other potential target acquisitions.

***You will not be entitled to protections normally afforded toinvestors of blank check companies.***

Since the net proceeds of our initial public offeringare intended to be used to complete a business combination with an unidentifiedtarget acquisition, we may be deemed to be a “blank check” company under theUnited States securities laws. However, since we have net tangible assets inexcess of $5,000,000 and filed a Current Report on Form 8-K with theSEC promptly following the consummation of our offering including an auditedbalance sheet demonstrating this fact, we are exempt from rules promulgated bythe SEC to protect investors of blank check companies such as Rule 419.Accordingly, investors will not be afforded the benefits or protections ofthose rules. Because we are not subject to these rules, includingRule 419, our units were immediately tradable and we have a longer periodof time to complete a business combination in certain circumstances than wewould if we were subject to such rule.

***If third parties bring claims against us, the proceeds heldin the trust account could be reduced and the per share liquidation pricereceived by stockholders will be less than the approximately $7.88 per shareheld in trust.***

Our placing of funds in the trust account may notprotect those funds from third party claims against us. Upon our dissolution,we will be required, pursuant to Delaware General Corporate Law Sections 280and 281, to pay or make reasonable provision to pay all of our claims andobligations, including contingent or conditional claims, which we intend topay, to the extent sufficient to do so, from our funds not held in the trustaccount. Although we will seek to have all vendors, prospective targetbusinesses or other entities with which we execute agreements waive any right,title, interest or claim of any kind in or to any monies held in the trustaccount for the benefit of our public stockholders, there is no guarantee thatthey will execute such agreements, or even if they execute such agreements thatthey would be prevented from bringing claims against the trust account. If anythird party refused to execute an agreement waiving such claims to the moniesheld in the trust account, we would perform an analysis of the alternativesavailable to us if we chose not to engage such third party and evaluate if suchengagement would be in the best interest of our stockholders if such thirdparty refused to waive such claims.

Examples of possible instances where we may engage athird party that refused to execute a waiver include the engagement of a thirdparty consultant whose particular expertise or skills are believed bymanagement to be significantly superior to those of other consultants thatwould agree to execute a waiver or in cases where management is unable to finda provider of required services willing to provide the waiver. In any event,our management would perform an analysis of the alternatives available to itand would enter into an agreement with a third party that did not execute awaiver only if management believed that such third party’s engagement would besignificantly more beneficial to us than any alternative. In addition, there isno guarantee that such entities will agree to waive any claims they may have inthe future as a result of, or arising out of, any negotiations, contracts oragreements with us and not seek recourse against the trust account for anyreason. In addition, creditors may seek to interfere with the distributionprocess under state or federal creditor and bankruptcy laws. Accordingly, theproceeds held in the trust account could be subject to claims which could takepriority over those of our public stockholders. We cannot assure you that theper share distribution from the trust account will not be less thanapproximately $7.88 (of which $0.32 per share is attributable to theunderwriters’ deferred discount), plus net interest accrued, due to suchclaims, or that there will not be delays in distributing funds in addition tothose imposed by our duties to comply with Delaware General Corporation Lawprocedures and federal securities laws and regulations. Mr. McCourt hasagreed that he will be personally liable to cover claims made by such thirdparties, but only if, and to the extent, the claims reduce the amounts in thetrust account available for payment to our stockholders in the event of aliquidation and the claims are made by a vendor for services rendered, orproducts sold, to us or by a prospective target business. However,Mr. McCourt will not have any personal liability as to any claimed amountsowed to a third party who executed a waiver, or as to any claims under ourindemnity of the underwriters of our initial public offering against certainliabilities, including liabilities under the Securities Act of 1933. However,we cannot assure you that Mr. McCourt will be able to satisfy thoseobligations.

***Under Delaware law, the requirements and restrictionsrelating to our initial public offering contained in our fourth amended andrestated certificate of incorporation may be amended, which could reduce oreliminate the protection afforded to our stockholders by such requirements andrestrictions.***

Our fourth amended and restated certificate ofincorporation contains certain requirements and restrictions relating to ourinitial public offering that will apply to us until the consummation of abusiness combination. Specifically, our fourth amended and restated certificateof incorporation provides among other things, that:

·                                          approximately$88,650,000 of the proceeds from our initial public offering, as well as theunderwriters’ deferred discount and the proceeds of the private placement, weredeposited into the trust account, which proceeds may not be disbursed from thetrust account until the earlier of (i) a business combination or(ii) our liquidation, or as otherwise permitted in our fourth amended andrestated certificate of incorporation;

·                                          priorto consummating our initial business combination, we must submit such businesscombination to our stockholders for approval;

·                                          wemay consummate our initial business combination if it is approved by publicstockholders holding a majority of the shares of our common stock sold in ourinitial public offering and voted by our public stockholders and if publicstockholders owning less than 20% 

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of the shares soldin our initial public offering both vote against the business combination andexercise their conversion rights;

·                                          ifour initial business combination is approved and consummated, publicstockholders who voted against the business combination and who exercised theirown conversion rights will receive their pro rata share of the trust account(including the underwriters’ deferred discount);

·                                          if a businesscombination is not consummated or a letter of intent, an agreement inprinciple, or a definitive agreement is not signed within the time periodsspecified in this prospectus, then we will be dissolved and distribute to allof our public stockholders their pro rata share of the trust account; and

·                                          we may notconsummate any other merger, capital stock exchange, stock purchase, assetacquisition or similar transaction other than a business combination that meetsthe conditions specified in this prospectus, including the requirement that thebusiness combination be with one or more operating businesses whose fair marketvalue, collectively, is at least equal to 80% of our net assets (excluding theunderwriters’ deferred discount) at the time of such business combination.

Our fourth amended and restated certificate ofincorporation requires that we obtain the unanimous consent of stockholders toamend the above provisions. However, the validity of unanimous consent provisionsunder Delaware law has not been settled. A court could conclude that theunanimous consent requirement constitutes a practical prohibition on amendmentin violation of the stockholders’ implicit rights to amend the company’s fourthamended and restated certificate of incorporation. In that case, some or all ofthe above provisions could be amended without unanimous consent and any suchamendment could reduce or eliminate the protection afforded to ourstockholders. However, we view the foregoing provisions as obligations to ourstockholders and we will not take any action to waive or amend any of theseprovisions that would take effect prior to the consummation of a businesscombination.

***Since we have not yet selected any target acquisition withwhich to complete a business combination, we are unable to currently ascertainthe merits or risks of the business’ operations.***

Because we have not yet identified a prospectivetarget acquisition, investors currently have no basis to evaluate the possiblemerits or risks of the target acquisition. We cannot assure you that ourmanagement, when evaluating a prospective target acquisition, will properlyascertain or assess all of the significant risk factors. We also cannot assureyou that an investment in our units will ultimately prove to be more favorableto investors than a direct investment, if such opportunity were available, in atarget acquisition. Except for the limitation that a target acquisition have afair market value of at least 80% of our net assets (excluding the amount heldin the trust account representing a portion of the underwriters’ discount) atthe time of the acquisition, we will have virtually unrestricted flexibility inidentifying and selecting a prospective acquisition candidate.

***There may be tax consequences associated with ouracquisition, holding and disposition of target companies and assets.***

We may incur significant taxes in connection witheffecting acquisitions; holding, receiving payments from, and operating targetcompanies and assets; and disposing of target companies and assets.

***We may issue shares of our capital stock to complete abusiness combination, which would reduce the equity interest of ourstockholders and likely cause a change in control of our ownership.***

Our fourth amended and restated certificate ofincorporation authorizes the issuance of up to 100,000,000 shares of commonstock, par value $0.0001 per share, and 5,000 shares of preferred stock, parvalue $0.0001 per share. There are 70,687,500 authorized but unissued shares ofour common stock available for issuance (including appropriate reservation forthe issuance of shares upon full exercise of our outstanding warrants) and5,000 shares of preferred stock available for issuance. Although we have nocommitment to do so, we are likely to issue a substantial number of additionalshares of our common or preferred stock, or a combination of common andpreferred stock, to complete a business combination. The issuance of additionalshares of our common stock or any number of shares of our preferred stock:

·                                          maysignificantly reduce the equity interest of investors;

·                                          maysubordinate the rights of holders of common stock if preferred stock is issuedwith rights senior to those afforded to our common stock;

·                                          willlikely cause a change in control if a substantial number of our shares ofcommon stock are issued, which may affect, among other things, our ability touse our net operating loss carry forwards, if any, and could result in theresignation or removal of our present officers and directors; and

·                                          mayadversely affect prevailing market prices for our common stock.

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***We may issue debt securities, which could limit our abilityto operate our business and return value to our stockholders.***

If we issue debt securities, it could result in:

·      Default and foreclosure on our assets ifour operating revenues after a business combination are insufficient to pay ourdebt obligations;

·      Acceleration of our obligations to repaythe indebtedness even if we have made all principal and interest payments whendue if the debt security contains covenants that require the maintenance ofcertain financial ratios or reserves and any such covenant is breached withouta waiver or renegotiation of that covenant;

·      Our immediate payment of all principal andaccrued interest, if any, if the debt security is payable on demand;

·      Our inability to obtain additionalfinancing, if necessary, if the debt security contains covenants restrictingour ability to obtain additional financing while such security is outstanding;

·      Our inability to pay dividends on ourcommon stock;

·      Using a substantial portion of our cashflow to pay principal and interest on our debt, which will reduce the fundsavailable for dividends on our common stock, working capital, capitalexpenditures, acquisitions and other general corporate purposes;

·      Limitations on our flexibility in planningfor and reacting to changes in our business and in the industry in which weoperate;

·      Increased vulnerability to adverse changesin general economic, industry and competitive conditions and adverse changes ingovernment regulation;

·      Limitations on our ability to borrowadditional amounts for working capital, capital expenditures, acquisitions,debt service requirements, execution of our strategy and other purposes; and

·      Other disadvantages compared to ourcompetitors who have less debt.

***Our ability to successfully consummate a businesscombination and to be successful thereafter will be dependent upon the effortsof our management.***

Our ability to successfully consummate a businesscombination will be dependent upon the efforts of our current key personnel.The future role of our current key personnel following a business combination,however, cannot presently be fully ascertained. None of our current keypersonnel have entered into either employment or consulting agreements with usand they may only remain with the combined company upon the consummation of abusiness combination if they are able to negotiate and agree to mutuallyacceptable employment or consultancy terms, which terms would be determined atsuch time by the respective parties and disclosed to stockholders at the timewe seek approval for the initial business combination. Furthermore, we will notbe able to grant shares of common stock or options to our current key personnelprior to the earlier of the completion of a business combination or the totalrelease of funds in the trust account, which may affect our hiring andretention efforts. Even if our current key personnel remain with us following abusiness combination, there is no assurance that the business combination willbe successful. For example, Mr. McCourt was the Chief Executive Officerand Chairman of RCN Corporation in May 2004 when it went through a voluntaryreorganization under Chapter 11 of the U.S. Bankruptcy Code. Additionally,we may also employ other personnel following a business combination, includingthe management associated with the acquisition candidate.

***Our officers and directors will allocate some portion oftheir time to other businesses, thereby causing conflicts of interest in theirdetermination as to how much time to devote to our affairs. This conflict ofinterest could have a negative impact on our ability to consummate a businesscombination.***

Our officers and directors are not required to committheir full time to our affairs, which could create a conflict of interest whenallocating their time between our operations and their other commitments. We donot intend to have any full time employees prior to the consummation of abusiness combination. All of our officers and directors are not obligated todevote any specific number of hours to our affairs. If an officer or directoris required to devote more substantial amounts of time to his or her otherbusinesses and affairs, it could limit his or her ability to devote time to ouraffairs and could have a negative impact on our ability to consummate abusiness combination. We cannot assure you that these conflicts will beresolved in our favor.

***Our officers and directors currently are, and may in thefuture become affiliated with additional entities that are, engaged in businessactivities similar to those intended to be conducted by us and, accordingly,may have conflicts of interest in determining to which entity a particularbusiness opportunity should be presented.***

Some of our officers and directors are affiliated withentities in the telecommunications and media industry. David C. McCourt,our President, Chief Executive Officer and Chairman, is the Chairman andinterim Chief Executive Officer and Chief Operating Officer of Narrowstep,Inc., a 

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company thatprovides television services over the Internet and Roger L. Werner, Jr.,one of our directors, is Chairman of Werner Telesport, LLC, a sportsprogramming production company, and serves as a director of Narrowstep, Inc.and WATV Productions, a vehicle enthusiasts production company. In additionPaul N. D’Addario, a director, is the founder and Senior Managing Director ofPalisades Ventures, a technology and media growth fund.

Several of our officers are also officers of GranahanMcCourt Capital, LLC, a private investment firm founded by Mr. McCourtfocused on making minority investments in, and advising, companies in thetelecommunications and media industries. Mr. McCourt is Chairman and ChiefExecutive Officer, Mr. Bar-Cohen is President and Chief Operating Officer,and Ms. Ito is Chief Administrative Officer. To the extent a businesspresents mutually exclusive opportunities including both the possibility ofbeing acquired by us and the possibility of a minority investment by or anadvising contract with Granahan McCourt Capital, LLC our officers could faceconflicts of interest in determining to which entity a particular businessopportunity should be presented.

None of our officers or directors have been orcurrently are a principal of, or affiliated or associated with, a blank checkcompany. However, all of our officers and directors currently are, and may inthe future become affiliated with additional entities, including other “blankcheck” companies. Additionally, our officers and directors may become aware ofbusiness opportunities that may be appropriate for presentation to us and theother entities to which they owe fiduciary duties. Accordingly, our officersand directors may have conflicts of interest in determining to which entity aparticular business opportunity should be presented. We cannot assure you thatany of these conflicts will be resolved in our favor.

***If we seek to effect a business combination with an entitythat is directly or indirectly affiliated with one or more of our officers anddirectors, conflicts of interest could arise.***

Our officers and directors either currently have ormay in the future have affiliations with companies in the telecommunicationsand media industries. If we were to seek a business combination with a targetbusiness with which one or more of our officers or directors may be affiliated,conflicts of interest could arise in connection with negotiating the terms ofand completing the business combination. Conflicts that may arise may not beresolved in our favor. In the event we pursue a business combination with anentity with which one or more of officers and directors is affiliated, we wouldobtain an opinion from an independent investment banking firm regarding thefairness to our stockholders from a financial point of view of the businesscombination. Our officers and directors are not currently aware of any specificopportunities to consummate a business combination with any entities with whichthey are affiliated, whether by virtue of the sale of assets, spin-off,divestiture or otherwise, and there have been no preliminary discussions orindications of interest with any such entity or entities. Although we will notbe specifically focusing on or targeting any transaction with any entitiesaffiliated with any of our officers and directors, and we are unaware of anysuch actual or potential transaction as of the date of this prospectus, wewould consider such a transaction after the offering if any such opportunitywere presented to us. It is possible that we could consider an opportunity withentities affiliated with any of our officers and directors without firstseeking to consummate a business combination with an entity that is not affiliatedwith any of our officers and directors.

***Our current officers and directors may resign uponconsummation of a business combination.***

Upon consummation of a business combination, the roleof our officers and directors in the target business cannot presently be fullyascertained. We may employ other personnel following the business combination.If we acquire a target business in an all cash transaction, it would be morelikely that our management team and certain of our directors would remain withus if they chose to do so. If a business combination were structured as amerger whereby the stockholders of the target company were to control thecombined company, following a business combination, it may be less likely thatour management team would remain with the combined company unless it wasnegotiated as part of the transaction via the acquisition agreement, anemployment agreement or other arrangement. If, as a condition to a potentialbusiness combination, our management team negotiates to be retained after theconsummation of the business combination, such negotiations may result in aconflict of interest. In making the determination as to whether currentmanagement should remain with us following the business combination, we willanalyze the experience and skill set of the target business’ management andnegotiate, as part of the business combination, that certain of our managementteam and directors remain if it is believed that it is in the best interests ofthe combined company after the consummation of the business combination.

***The 2,812,500 shares of common stock owned by ourofficers and directors will not participate in liquidation distributions, and aconflict of interest may arise in determining whether a particular targetacquisition is appropriate for a business combination.***

Our officers and directors own, in the aggregate,2,812,500 shares of our common stock and the 4,000,000 warrants purchasedin the private placement, but have waived their right to receive distributions(other than with respect to any units they purchase in our initial publicoffering or units, warrants or common stock they purchase in the aftermarket)upon our dissolution and liquidation prior to a business combination. Suchshares and warrants owned by our officers and directors will be worthless if wedo not consummate a business combination. The personal and financial interestsof our officers and directors may influence their motivation in identifying andselecting a target business and completing a business combination in a timelymanner. Consequently, our officers’ and directors’ discretion in identifyingand selecting a suitable target business may result in a conflict of interestwhen determining whether the terms, conditions and timing of a particularbusiness combination are appropriate and in our public stockholders’ bestinterest.

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***There is no guarantee that a market for our securities willbe maintained, which would adversely affect the liquidity and price of oursecurities.***

Investors have access to information from only arelatively short period of our prior market history.  The price of our securities may varysignificantly due to reports of operating losses, one or more potentialbusiness combinations, the filing of periodic reports with the SEC and generalmarket or economic conditions. Furthermore, an active trading market for oursecurities may not be sustained. You may be unable to sell your securitiesunless a market can be sustained.

***If our common stock becomes subject to the SEC’s penny stockrules, broker-dealers may experience difficulty in completing customertransactions and trading activity in our securities may be adversely affected.***

If at any time we have net tangible assets of$5,000,000 or less and our common stock has a market price per share of lessthan $5.00, transactions in our common stock will be subject to the “pennystock” rules promulgated under the Securities Exchange Act of 1934, as amended.Under these rules, broker-dealers who recommend such securities to personsother than institutional accredited investors must:

·      make a special written suitabilitydetermination for the purchaser;

·      receive the purchaser’s written agreementto the transaction prior to sale;

·      provide the purchaser with risk disclosuredocuments which identify certain risks associated with investing in “pennystocks” and which describe the market for these “penny stocks” as well as apurchaser’s legal remedies; and

·      obtain a signed and dated acknowledgmentfrom the purchaser demonstrating that the purchaser has actually received therequired risk disclosure document before a transaction in a “penny stock” canbe completed.

If our common stock becomes subject to these rules,broker-dealers may find it difficult to effectuate customer transactions andtrading activity in our securities may be adversely affected. As a result, themarket price of our securities may be depressed, and you may find it moredifficult to sell our securities.

***Initially, we may only be able to complete one businesscombination, which may cause us to be solely dependent on a single business anda limited number of products or services.***

The net proceeds from our initial public offeringprovided us with approximately $81,050,000, which, along with $4,000,000 of theproceeds from the private placement and the $3,600,000 underwriters’ deferreddiscount (an aggregate of $88,650,000), is held in the trust account and may beused by us to complete a business combination. Our business combination must bewith a business having a fair market value of at least 80% of our net assets(excluding the amount held in the trust account representing a portion of theunderwriters’ discount) at the time of such business combination. We have nolimitation on our ability to raise additional funds through the private sale ofsecurities or the incurrence of indebtedness that would enable us to effect abusiness combination with an operating business having a fair market value inexcess of 80% of our net assets (excluding the amount held in the trust accountrepresenting a portion of the underwriters’ discount) at the time of such abusiness combination. Consequently, initially it is probable that we will havethe ability to complete only a single business combination. We may not be ableto acquire more than one target business because of various factors, includinginsufficient financing or the difficulties involved in consummating thecontemporaneous acquisition of more than one operating company. Therefore, it isprobable that we will have the ability to complete a business combination withonly a single operating business, which may have only a limited number ofproducts or services. The resulting lack of diversification may:

·      result in our dependency upon the performanceof a single or small number of operating businesses;

·      result in our dependency upon thedevelopment or market acceptance of a single or limited number of products,processes or services; and

·      subject us to numerous economic,competitive and regulatory developments, any or all of which may have asubstantial adverse impact upon the particular industry in which we may operatesubsequent to a business combination.

In this case, we will not be able to diversify ouroperations or benefit from the possible spreading of risks or offsetting oflosses, unlike other entities that may have the resources to complete severalbusiness combinations in different industries or different areas of a singleindustry so as to diversify risks and offset losses. Further, the prospects forour success may be entirely dependent upon the future performance of theinitial target business or businesses we acquire.

***The ability of our stockholders to exercise their conversionrights may not allow us to effectuate the most desirable business combinationor optimize our capital structure.***

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When we seek stockholder approval of any businesscombination, we will offer each public stockholder (but not our existingstockholders with respect to any shares they owned prior to our initial publicoffering) the right to have his, her or its shares of common stock converted tocash if the stockholder votes against the business combination and the businesscombination is approved and completed. An existing stockholder who acquiresshares in the offering or thereafter in the open market, however, would be apublic stockholder with respect to such shares and retains the right toexercise the conversion rights attributable to such shares. Such holder mustboth vote against such business combination and then exercise his, her or itsconversion rights to receive a pro rata share of the trust account.Accordingly, if our business combination requires us to use substantially allof our cash to pay the purchase price, because we will not know how manystockholders may exercise such conversion rights, we may either need to reservepart of the trust account for possible payment upon such conversion, or we mayneed to arrange third party financing to help fund our business combination in casea larger percentage of stockholders exercise their conversion rights than weexpect. Therefore, we may not be able to consummate a business combination thatrequires us to use all of the funds held in the trust account as part of thepurchase price, or we may end up having to incur an amount of leverage that isnot optimal for our business combination. This may limit our ability toeffectuate the most attractive business combination available to us.

***Because of our limited resources and the significant competitionfor business combination opportunities, we may not be able to consummate abusiness combination during the prescribed time period.***

We expect to encounter intense competition from otherentities having a business objective similar to ours, including privateinvestors (which may be individuals or investment partnerships), other blankcheck companies, and operating businesses competing for the types of businessesthat we intend to primarily focus on. Many of these individuals and entities arewell established and have extensive experience in identifying and effecting,directly or indirectly, acquisitions of companies in the telecommunications andmedia industries. Many of these competitors possess greater technical, humanand other resources, or more local industry knowledge, than we do and ourfinancial resources will be relatively limited when contrasted with those ofmany of these competitors. Accordingly, our ability to compete with respect tothe acquisition of certain target acquisitions that are sizable will be limitedby our available financial resources. This inherent competitive limitationgives others an advantage in pursuing the acquisition of certain targetacquisitions. Furthermore, the obligation we have to seek stockholder approvalof a business combination may delay the consummation of a transaction.Additionally, the warrants underlying units issued in connection with ourinitial public offering and the warrants issued in connection with the privateplacement and their dilutive effect they may not be viewed favorably by certaintarget acquisitions. Also, our obligation to convert into cash the shares ofcommon stock in certain instances may reduce the resources available for abusiness combination. Any of these obligations may place us at a competitivedisadvantage in successfully negotiating a business combination.

***We may have insufficient resources to cover our operatingexpenses and the expenses of consummating a business combination.***

As of December 31, 2006, we had approximately$1,662,056 remaining from the proceeds of our initial public offering outsidethe trust account to cover our operating expenses until October, 2008,including expenses incurred in connection with a business combination, basedupon our management’s estimate of the amount required for these purposes. Thisestimate may prove inaccurate, especially if a portion of the availableproceeds is used to make a down payment or pay exclusivity or similar fees inconnection with a business combination or if we expend a significant portion ofthe available proceeds in pursuit of a business combination that is notconsummated. If we do not have sufficient proceeds available to cover ourexpenses, we may be forced to obtain additional financing.

We may not be able to obtain additional financing andneither our sponsor, Mr. McCourt, nor other members of our management teamis obligated to provide any additional financing. If we do not have sufficientproceeds and are unable to obtain additional financing, we may be forced toliquidate prior to consummating a business combination.

***Our existing stockholders, including all of our officers anddirectors, control a substantial interest in us and thus may influence certainactions requiring a stockholder vote.***

Our existing stockholders, including all of ourofficers and directors, own 20% of our issued and outstanding shares of commonstock. In addition, there is no restriction on the ability of our existingstockholders to purchase units or shares of our common stock either in ourinitial public offering or in the open market after completion of the offering.If they were to do so, the percentage of our outstanding common stock held byour existing stockholders would increase. Our board of directors will bedivided into three classes, each of which generally will serve for a term ofthree years, with only one class of directors being elected in each year. Theremay not be an annual meeting of stockholders to elect new directors prior to theconsummation of a business combination, in which case all of the currentdirectors will continue in office at least until the consummation of thebusiness combination. If there is an annual meeting, as a consequence of this “staggered”board of directors, only a minority of the board of directors would beconsidered for election. As a result, our officers and directors may exertconsiderable influence on actions requiring a stockholder vote, including theelection of officers and directors, amendments to our fourth amended andrestated certificate of incorporation, the approval of benefit plans, mergers,and similar transactions. Moreover, except to the extent stockholder proposalsare properly and timely submitted, our directors will determine which matters,including prospective business combinations, to submit to a stockholder vote.As a result, they will exert substantial control over actions requiring astockholder vote both before and following a business combination.

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In connection with the stockholder vote required for abusiness combination, all of our existing stockholders, including all of ourofficers and directors, have agreed to vote all of the shares of common stockowned by them immediately prior to the offering in accordance with the majorityof the shares of common stock voted by the public stockholders.

In addition, our existing stockholders have agreed tovote all of the shares owned by them in favor of our dissolution in the eventwe are unable to timely complete a business combination.

***Our outstanding warrants may have an adverse effect on themarket price of our common stock and make it more difficult to effect abusiness combination.***

We have issued and outstanding warrants to purchase upto 15,250,000 shares of common stock.  Tothe extent we issue shares of common stock to effect a business combination,the potential for the issuance of a substantial number of additional sharesupon exercise of these warrants could make us a less attractive acquisitionvehicle in the eyes of a target acquisition. Such warrants, when exercised,will increase the number of issued and outstanding shares of our common stockand reduce the value of the shares issued to complete the business combination.Therefore, our outstanding warrants may make it more difficult to effectuate abusiness combination or increase the cost of acquiring the targetacquisition.  Additionally, the sale, oreven the possibility of sale, of the shares underlying the warrants could havean adverse effect on the market price for our securities or on our ability toobtain future financing.  If and to theextent our warrants are exercised, you may experience dilution to yourholdings.

***The exercise by our existing stockholders of theirregistration rights may have an adverse effect on the market price of ourcommon stock and the existence of the registration rights may make it moredifficult to effect a business combination.***

Our existing stockholders are entitled to make ademand that we file a registration statement to register their shares ofcommon stock held prior to our initial public offering and the warrants sold inthe private placement, including any shares of common stock issuable uponexercise of such warrants, at any time commencing 90 days prior to theexpiration of the transfer restrictions on such securities. If our existingstockholders exercise their registration rights with respect to all of theirshares of common stock, including those underlying the warrants issued in theprivate placement, then there will be an additional 6,812,500 shares, oran additional 60.6% of the post-offering shares of our common stock, eligiblefor trading in the public market (assuming no exercise of the underwriters’over-allotment option and no exercise of warrants by our public stockholders).The presence of these additional shares of common stock trading in the publicmarket may have an adverse effect on the market price of our common stock. Inaddition, the existence of the registration rights may make it more difficultto effectuate a business combination or increase the cost of acquiring thetarget acquisition, as the stockholders of the target acquisition may bediscouraged from entering into a business combination with us or may request ahigher price for their securities because of the potential effect the exerciseof the registration rights may have on the trading market for our common stock.

***If we are deemed to be an investment company, we may berequired to institute burdensome compliance requirements and our activities maybe restricted, which may make it difficult for us to complete a businesscombination, or we may be required to incur additional expenses if we areunable to dissolve after the expiration of the allotted time periods.***

If we are deemed to be an investment company under theInvestment Company Act of 1940, we may be subject to certain restrictions thatmay make it more difficult for us to complete a business combination,including:

·      restrictions on the nature of ourinvestments; and

·      restrictions on the issuance ofsecurities.

Inaddition, we may have imposed upon us certain burdensome requirements,including:

·      registration as an investment company;

·      adoption of a specific form of corporatestructure; and

·      reporting, record keeping, voting, proxy,compliance policies and procedures and disclosure requirements and other rulesand regulations.

To this end, the proceeds from our initial publicoffering held in the trust account may be invested by the trust agent only inUnited States “government securities” within the meaning ofSection 2(a)(16) of the Investment Company Act of 1940 with a maturity of180 days or less, or in money market funds meeting certain conditionsunder Rule 2a-7 promulgated under the Investment Company Act of 1940. Byrestricting the investment of the proceeds to these instruments, we intend tomeet the requirements for the exemption provided in Rule 3a-1 promulgatedunder the Investment Company Act of 1940.

In addition, if we do not complete a businesscombination by April 24, 2008 (18 months after the consummation of ourinitial public offering) or by October 24, 2008 (24 months from theconsummation of our initial public offering if a letter of intent, agreement inprinciple or 

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definitive agreementhas been executed by April 24, 2008 and the business combination has not yetbeen consummated), our fourth amended and restated certificate of incorporation(a) provides that our corporate powers will automatically thereafter belimited to acts and activities relating to dissolving and winding up ouraffairs, including liquidation, and (b) requires that, within 15 daysafter the expiration of the allotted time periods, our board of directors adopta resolution finding our dissolution advisable and that it provide notice assoon as possible thereafter of a special meeting of stockholders to vote on ourdissolution. If our stockholders do not approve our dissolution in a timelymanner or at all, we will not be able to liquidate and distribute the trustaccount to holders of our common stock sold in our initial public offering foran extended period of time or indefinitely, and, consequently, we may be deemedto be an investment company.

If we are deemed to be an investment company at anytime, we will be required to comply with additional regulatory requirementsunder the Investment Company Act of 1940 which would require additionalexpenses for which we have not budgeted.

***We may or may not obtain an opinion from an unaffiliatedthird party as to the fair market value of the target acquisition or that theprice we are paying for the business is fair to our stockholders.***

We are not required to obtain an opinion from anunaffiliated third party that either the target acquisition we select has afair market value in excess of 80% of our net assets (excluding the amount heldin the trust account representing a portion of the underwriters’ discount) orthat the price we are paying is fair to stockholders. If no opinion isobtained, our stockholders will be relying on the judgment or our board ofdirectors.

***The American Stock Exchange may require us to submit a newlisting application, subject to the initial listing requirements, in connectionwith a business combination, or may delist our securities from trading on itsexchange, which could limit investors’ ability to effect transactions in oursecurities and subject us to additional trading restrictions.***

Our securities are listed on the American StockExchange, a national securities exchange. We cannot assure you that oursecurities will continue to be listed on the American Stock Exchange in thefuture. In addition, in connection with a business combination, it is likelythat the American Stock Exchange may require us to file a new listingapplication and meet its initial listing requirements, as opposed to its morelenient continued listing requirements. We cannot assure you that we will beable to meet those initial listing requirements at that time.

If the American Stock Exchange delists our securitiesfrom trading on its exchange in the future, we could face significant materialadverse consequences, including:

·      a limited availability of marketquotations for our securities;

·      determination that our common stock is a “pennystock,” which would require brokers trading in our common stock to adhere tomore stringent rules and possibly resulting in a reduced level of tradingactivity in the secondary trading market for our common stock;

·      more limited amount of news and analyst coveragefor us;

·      decreased ability to issue additionalsecurities or obtain additional financing in the future; and

·      decreased ability of our security holdersto sell their securities in certain states.

***If we are unable to maintain a current prospectus relatingto the common stock underlying our warrants, our warrants may have no value andthe market for our warrants may be limited.***

Our warrants are not exercisable unless, at the timeof exercise, a post-effective amendment to the registration statement, or a newregistration statement, is effective which includes a current prospectusrelating to the common stock issuable upon exercise of the warrants and thecommon stock underlying the warrants has been registered or qualified or deemedto be exempt under the securities laws of the state of residence of the holdersof our warrants. Under the terms of the warrant agreement between ContinentalStock Transfer & Trust Company, as warrant agent, and us, we haveagreed to use our best efforts to maintain a current prospectus relating to thecommon stock issuable upon exercise of our warrants until the expiration of ourwarrants. However, we cannot assure you that we will be able to do so. Inaddition, the warrant agreement provides that we are not required to net-cashsettle the warrants if we are unable to maintain a current prospectus. If theprospectus relating to the common stock issuable upon exercise of the warrantsis not current or if the common stock is not qualified or exempt from qualificationin the jurisdictions in which the holders of the warrants reside, our warrantsmay not be exercisable before they expire. Thus, our warrants may be deprivedof any value and the market for our warrants may be limited. Even if warrantholders are not able to exercise their warrants because there is no currentprospectus or the common stock is not qualified or exempt from qualification inthe jurisdictions in which the holders of the warrants reside, we can exerciseour redemption rights.

***We may choose to redeem our outstanding warrants at a timethat is disadvantageous to our warrant holders.***

We may redeem the warrants issued as a part of ourunits (including the warrants sold in the private placement) at any time afterthe warrants become exercisable in whole and not in part, at a price of $0.01per warrant, upon a minimum of 30 days’ prior written notice of 

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redemption, if andonly if, the last sales price of our common stock equals or exceeds $11.50 pershare for any 20 trading days within a 30 trading day period ending threebusiness days before we send the notice of redemption. Redemption of thewarrants could force the warrant holders (i) to exercise the warrants andpay the exercise price therefor at a time when it may be disadvantageous for theholders to do so, (ii) to sell the warrants at the then current marketprice when they might otherwise wish to hold the warrants or (iii) toaccept the nominal redemption price which, at the time the warrants are calledfor redemption, is likely to be substantially less than the market value of thewarrants.

***Provisions in our charter documents and Delaware law mayinhibit a takeover of us, which could limit the price investors might bewilling to pay in the future for our common stock and could entrenchmanagement.***

Our fourth amended and restated certificate ofincorporation and bylaws contain provisions that may discourage unsolicitedtakeover proposals that stockholders may consider to be in their bestinterests. These provisions include a staggered board of directors and theability of the board of directors to designate the terms of and issue newseries of preferred stock. Our board of directors is divided into threeclasses, each of which will generally serve for a term of three years with onlyone class of directors being elected in each year. As a result, at any annualmeeting only a minority of the board of directors will be considered forelection. Since our “staggered board” would prevent our stockholders fromreplacing a majority of our board of directors at any annual meeting, it mayentrench management and discourage unsolicited stockholder proposals that maybe in the best interests of stockholders.

We are also subject to anti-takeover provisions underDelaware law, which could delay or prevent a change of control. Together theseprovisions may make more difficult the removal of management and may discouragetransactions that otherwise could involve payment of a premium over prevailingmarket prices for our securities.

**Risks Related to Doing BusinessOutside the United States**

***Since we may acquire a target business that is locatedoutside the United States, we may encounter risks specific to one or morecountries in which we ultimately operate.***

We may acquire a business or businesses with somerelationship to countries outside of the United States. If we acquire a companythat has operations outside the United States, we will be exposed to risks thatcould negatively impact our future results of operations following a businesscombination. The additional risks we may be exposed to in these cases includebut are not limited to:

·      tariffs and trade barriers;

·      regulations related to customs andimport/export matters;

·      tax issues, such as tax law changes andvariations in tax laws as compared to the United States;

·      cultural and language differences;

·      foreign exchange controls;

·      the possibility of our assets beingnationalized;

·      crime, strikes, riots, civil disturbances,terrorist attacks and wars; and

·      deterioration of political relations withthe United States.

***Foreign currency fluctuations could adversely affect ourbusiness and financial results.***

A target business with which we combine may dobusiness and generate sales within other countries. Foreign currency fluctuationsmay affect the costs that we incur in such international operations. It is alsopossible that some or all of our operating expenses may be incurred in non-U.S.dollar currencies. The appreciation of non-U.S. dollar currencies in thosecountries where we have operations against the U.S. dollar would increase ourcosts and could harm our results of operations and financial condition.

***Because we must furnish our stockholders with targetbusiness financial statements prepared in accordance with and reconciled toU.S. generally accepted accounting principles, we will not be able to completea business combination with some prospective target businesses unless theirfinancial statements are first reconciled to U.S. generally accepted accountingprinciples.***

The federal securities laws require that a businesscombination meeting certain financial significance tests include historicaland/or pro forma financial statement disclosure in periodic reports and proxymaterials submitted to stockholders. Because our initial business combinationmust be with a target business that has a fair market value equal to at least80% of our net assets at the time of such business 

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combination (allof our assets, including the funds held in the trust account other than thedeferred underwriting discount, less our liabilities), we will be required toprovide historical and/or pro forma financial information to our stockholderswhen seeking approval of a business combination with one or more target businesses.These financial statements must be prepared in accordance with, or bereconciled to, U.S. generally accepted accounting principles and the historicalfinancial statements must be audited in accordance with the standards of thePublic Company Accounting Oversight Board (United States), or PCAOB. If aproposed target business, including one located outside of the United States,does not have financial statements that have been prepared in accordance with,or that can be reconciled to, U.S. generally accepted accounting principles andaudited in accordance with the standards of the PCAOB, we will not be able toacquire that proposed target business. These financial statement requirementsmay limit the pool of potential target businesses with which we may combine.

**Risks Associated with theTelecommunications and Media Industries**

***We may be subject to significant regulatory requirements inconnection with our efforts to consummate a business combination with a companyin the telecommunications and media industries, which may result in our failureto consummate our initial business combination within the required time frameand may force us to liquidate.***

Acquisitions of telecommunications and media companiesare often subject to significant regulatory requirements and consents, and wewill not be able to consummate a business combination with certain types oftelecommunications and media companies without complying with applicable lawsand regulations and obtaining required governmental or client consents. We maynot receive any such required approvals or we may not receive them in a timelymanner, including as a result of factors or matters beyond our control.Satisfying any requirements of regulatory agencies may delay the date of ourcompletion of our initial business combination beyond the required time frame.If we fail to consummate our initial business combination within the requiredtime frame we may be forced to dissolve and liquidate.

***Our investments in telecommunications and media companiesmay be extremely risky due, in part, to market conditions, and we could loseall or part of our investments.***

An investment in telecommunications and mediacompanies may be extremely risky relative to an investment in companiesoperating in other industries.

Telecommunications and media companies typically havelimited operating histories, narrower product lines and smaller market sharesthan larger businesses, which tend to render them more vulnerable tocompetitors’ actions and market conditions, as well as general economicdownturns. In addition, telecommunications and media companies generally haveless predictable operating results, may from time to time be parties tolitigation, may be engaged in rapidly changing businesses with products subjectto a substantial risk of obsolescence, and may require substantial additionalcapital to support their operations, finance expansion or maintain theircompetitive position.

In recent years, a number of internet companies havefiled for bankruptcy or liquidated, and many large companies whose purchasesaffect the demand for products and services in the telecommunications and mediaindustries have experienced financial difficulties, which may result indecreased demand for such products and services in the future. Our investmentsin the telecommunications and media industries may be extremely risky and wecould lose all or part of our investments.

***The information available regarding telecommunications andmedia companies is limited which could result in poor investment decisions onour part and we could lose all or part of our investments.***

Many telecommunications and media companies areprivately owned and there is generally little publicly available informationabout these businesses; therefore, we may not learn all of the materialinformation we need to know regarding these businesses. As a result, we maymake investment decisions based on incomplete information or we may be unawareof material problems in a business in which we invest, which make ourinvestments extremely risky.

***If we make an investment in a telecommunications and mediacompany that is dependent on current management, the loss of such managementmay materially affect results of operations.***

Telecommunications and media companies are oftendependent on the management talents and efforts of a small group of persons;therefore, the death, disability, resignation or termination of one or more ofthese persons could have a material adverse impact on the operations of any telecommunicationsand media companies we may acquire.

***The telecommunications and media industries are highlycyclical, which may materially affect our future performance and ability tosell our products or services and, in turn, hurt our profitability.***

Customers of telecommunications and media products andservices tend to defer purchases during periods of economic weakness, optinginstead to continue to use what they already own. As a consequence, revenuesand earnings for telecommunications and media companies may fluctuate more thanthose of less economically sensitive companies. Due to the cyclical nature ofthe telecommunications and media industries, inventories may not always beproperly balanced, resulting in lost sales when there are shortages orwrite-offs when there are excess 

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inventories. Thismay materially adversely affect the business, financial condition, and resultsof operations of any target businesses that we may acquire. Moreover, many ofthe customers of telecommunications and media products and services also may besubject to similar cycles and less able to pay for such products and servicesduring periods of economic weakness.

***If we are unable to keep pace with the changes in thetelecommunications and media industries, the products of any target businessthat we acquire could become obsolete and it could materially hurt our resultsof operations.***

The telecommunications and media industries aregenerally characterized by intense, rapid changes, often resulting in productobsolescence or short product life cycles. Our ability to compete after theconsummation of a business combination will be dependent upon our ability tokeep pace with changes in the industry. If we are ultimately unable to adaptour operations as needed, our business, financial condition and results ofoperations following a business combination will be materially adverselyaffected.

***The telecommunications and media industries are highlycompetitive and we may not be able to compete effectively which couldmaterially adversely affect our revenues and profitability upon consummation ofa business combination.***

The telecommunications and media industries arerapidly evolving and intensely competitive. We expect competition to intensifyin the future. Many of the competitors we will face upon consummation of abusiness combination will have significantly greater financial, technical,manufacturing, marketing and other resources than we do. Competing with thesecompanies after a business combination will require investment by us inengineering, research and development and marketing. We may not have theresources to make these investments and may not be successful in making theseinvestments. In addition, the management of our competitors may have greateroperating resources and experience in their respective industries. Some ofthese competitors may also offer a wider range of services than we can and mayhave greater name recognition and a larger client base. For example, cablenetwork operators and communications operators are increasingly offeringsimilar products in an effort to become an all-in-one provider of voice, highspeed internet access and video services to customers. These competitors may beable to respond more quickly and effectively to new or changing opportunities,technologies and client requirements. They may also be able to undertake moreextensive promotional activities, offer more attractive terms to clients, andadopt more aggressive pricing policies. If we are unable to compete effectivelyfollowing a business combination, our business, financial condition, results ofoperations and prospects could be materially adversely affected.

***We may not be able to comply with government regulationsthat may be adopted with respect to the telecommunications and mediaindustries.***

The telecommunications and media industries havehistorically been subject to substantial government regulation. The FederalCommunications Commission, or FCC, is continuing implementation of theCommunications Act of 1996, which, when fully implemented, may significantlyimpact the telecommunications and media industries and change federal, stateand local laws and regulations regarding the provision of cable, internet andtelephony services. After we complete a business combination, these regulationsmay materially affect the types of products or services we may offer, the rateswe are permitted to charge and our method of operation. We cannot assure youthat regulations currently in effect or adopted in the future will not have amaterial adverse affect on our ability to acquire a particular target or theoperations of a business acquired by us.

***We may be unable to protect or enforce the intellectualproperty rights of any target businesses that we acquire.***

After completing a business combination, theprocurement and protection of trademarks, copyrights, patents, domain names,trade dress, and trade secrets will likely be critical to our success. We willlikely rely on a combination of copyright, trademark, trade secret laws andcontractual restrictions to protect any proprietary technology and rights thatwe may acquire. Despite our efforts to protect those proprietary technology andrights, we may not be able to prevent misappropriation of those proprietaryrights or deter independent development of technologies that compete with thebusiness we acquire. Our competitors may claim that we are infringing on theirintellectual property rights and seek damages, the payment of royalties,licensing fees and/or an injunction against the sale of our products orservices. Litigation may be necessary in the future to enforce our intellectualproperty rights, to protect our trade secrets, or to determine the validity andscope of the proprietary rights of others. It is also possible that thirdparties may claim we have infringed their patent, trademark, copyright or otherproprietary rights. Claims or litigation, with or without merit, could resultin substantial costs and diversions of resources, either of which could have amaterial adverse effect on our competitive position and business. Depending onthe target business or businesses that we acquire, it is likely that we willhave to protect copyrights, trademarks, patents, and domain names in anincreasing number of jurisdictions, a process that is expensive and may not besuccessful in every location. With respect to certain proprietary rights, suchas trademarks and copyrighted materials, of the target business or businessesthat we will acquire, we expect that the target business or businesses willhave entered into license agreements in the past and will continue to enterinto such agreements in the future. These licensees may take actions thatmaterially diminish the value of such target business or businesses’ proprietaryrights or cause material harm to such target business or businesses’reputation.

***Government regulation of the telecommunications and mediaindustries and the uncertainty over government regulation of the Internet couldharm our operating results and future prospects.***

Certain segments of the telecommunications and mediaindustries historically have been subject to substantial government regulation,both in the United States and overseas. If we complete a business combinationwith a target business or businesses in these industries, changes in 

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regulatoryrequirements in the United States or other countries could affect the sales ofour products, limit the growth of the markets we serve, or require costlyalterations of current or future products. Future changes in tariffs byregulatory agencies or application of tariff requirements to currentlyuntariffed services could affect the sales of our products for certain classesof customers.

On the other hand, few laws or regulations currentlyapply directly to access of or commerce on the Internet. New regulationsgoverning the Internet and Internet commerce, if adopted, could have an adverseeffect on our business, operating results, and financial condition following abusiness combination. New regulations governing the Internet and Internetcommerce could include matters such as changes in encryption requirements,sales taxes on Internet product sales, and access charges for Internet serviceand/or content and/or commerce providers.

**ITEM 1B.**      **UNRESOLVEDSTAFF COMMENTS**

Not applicable.

**ITEM 2.**         **PROPERTIES**

We do not own any real estate or other physicalproperties. Our headquarters are located at 179 Stony Brook Road, Hopewell, NJ08525. Under an office administration agreement between Granahan McCourtCapital LLC, a private investment firm, and us, Granahan McCourt Capital LLCfurnishes us with office facilities, equipment and clerical services at thefacilities in exchange for a payment of $10,000 per month. We believe, based onour management’s experience, that our office facilities are suitable andadequate for our business as it is presently conducted.

**ITEM 3.**         **LEGALPROCEEDINGS**

None.

**ITEM 4.**         **SUBMISSIONOF MATTERS TO A VOTE OF SECURITY HOLDERS**

None.

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**PART II**
| **ITEM 5.** | **MARKET  FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER  PURCHASES OF EQUITY SECURITIES** |
|------------------|-------------------------------------------------------------------------------------------------------------------------|

** **

**Market Information**

Our units, which consist of one share of our commonstock, par value $0.0001 per share, and one warrant to purchase one share ofour common stock, trade on the American Stock Exchange under the symbol “GHN.U.”Our warrants and common stock have traded separately on the American StockExchange under the symbols “GHN.WS” and “GHN,” respectively, since November 27,2006. Each warrant entitles the holder to purchase from us one share of ourcommon stock at an exercise price of $6.00 commencing on the later of ourconsummation of an initial business combination or October 18, 2007. Ourwarrants will expire at 5:00 p.m., New York City time, on October 18, 2010, orearlier upon redemption.

Thefollowing table sets forth, for the calendar quarter indicated, the high andlow sales prices per unit, warrant and share of common stock, respectively, asreported on the AMEX. The quotations listed below reflect interdealer prices,without retail markup, markdown or commission and may not necessarily representactual transactions.
| ** **                                              | ** ** | **Units(1)** | ** ** | **Warrants(2)** | ** ** | **Common Stock(3)** | ** ** |
|---------------------------------------------------------|------------|--------------|------------|-----------------|------------|--------------------------|------------|
| **Quarter ended**                                  | ** ** | **High**     | ** ** | **Low**         | ** ** | **High**                 | ** ** | **Low** | ** ** | **High** | ** ** | **Low** | ** ** |
| First Quarter*                                          |       | —       |       | —          |       | —                   |       | — |   | — |   | — |   |
| Second Quarter*                                         |       | —       |       | —          |       | —                   |       | — |   | — |   | — |   |
| Third Quarter *                                         |       | —       |       | —          |       | —                   |       | — |   | — |   | — |   |
| Fourth Quarter (October  19, 2006 to December 31, 2006) |       | $            | 8.05       |            | $          | 7.65                     |       | $ | 0.65 |   | $ | 0.50 |   | $ | 7.55 |   | $ | 7.30 |   |
|                                                         |            |              |            |                 |            |                          |            |  |  |  |  |  |  |  |  |  |  |  |  |

----

| (1) | Represents the  high and low sales prices from our initial public offering on  October 19, 2006 through December 31, 2006.                                |
|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (2) | Represents the  high and low sales prices from November 27, 2006, the date that our warrants  first became separately tradable, through December 31, 2006.     |
| (3) | Represents the  high and low sales prices from November 27, 2006, the date that our common  stock first became separately tradable, through December 31, 2006. |
| *   | No amounts are  included as none of our securities commenced trading on the AMEX prior to  October 19, 2006.                                                   |

**Holders**

As of March29, 2007, we had approximately 1 holder of record of our units, 8 holders ofrecord of our common stock and 1 holder of record of our warrants.

**Dividends**

Wehave not paid any dividends on our common stock to date and do not intend topay dividends prior to the completion of a business combination. The payment ofdividends in the future will be contingent upon our revenues and earnings, ifany, capital requirements and general financial condition subsequent tocompletion of a business combination. The payment of any dividends subsequentto a business combination will be within the discretion of our then board ofdirectors. It is the present intention of our board of directors to retain allearnings, if any, for use in our business operations and, accordingly, ourboard does not anticipate declaring any dividends in the foreseeable future.If, after we consummate a business combination, we become a holding companywith a risk-bearing operating company subsidiary, the ability of thatsubsidiary to pay dividends to our stockholders, either directly or through us,may be limited by statute or regulation.

**Performance**

Thegraph below compares the cumulative total return of our common stock fromNovember 27, 2006 through December 31, 2006 with the cumulative totalreturn of companies comprising the S&P 500 Index and a peer group selectedby us. The graph plots the growth in value of an initial investment of $100 ineach of our common stock, the S&P 500 Index and the peer group selected byus over the indicated time periods, and assuming reinvestment of all dividends,if any, paid on our the securities. We have not paid any cash dividends and,therefore, the cumulative total return calculation for us is based solely uponstock price appreciation and not upon reinvestment of cash dividends. The stockprice performance shown on the graph is not necessarily indicative of futureprice performance.

Ourpeer group is comprised of the following companies that were blank checkcompanies and that, as of the measurement dates, had neither completed abusiness combination nor announced a business combination:  HD Partners Acquisition Corporation, AffinityMedia International Corp., Marathon Acquisition Corporation, RhapsodyAcquisition Corporation and Fortissimo Acquisition Corp.

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Recent Sales ofUnregistered Securities

OnJuly 20, 2006, we sold 3,234,375 shares of our common stock (after givingeffect to a subsequent 0.72 for 1 reverse stock split) to the parties set forthbelow for $2,000 in cash, at a purchase price of $0.000618 per share, withoutregistration under the Securities Act:
| **Stockholders**        | ** ** | **Number  of Shares** | ** ** |
|-------------------------|------------|----------------------------|------------|
| David C. McCourt        |       | 2,574,900                  |       |
| Barry S.  Sternlicht    |       | 32,400                     |       |
| George J. Tenet         |       | 32,400                     |       |
| Roger L. Werner         |       | 32,400                     |       |
| Paul N.  D’Addario |       | 32,400                     |       |
| Barak Bar-Cohen         |       | 72,000                     |       |
| Ellyn M. Ito            |       | 36,000                     |       |

 

Such shares were issuedin connection with our organization pursuant to the exemption from registrationcontained in Section 4(2) of the Securities Act.

OnOctober 18, 2006, David C. McCourt, purchased from us an aggregate of 4,000,000warrants in a private placement, at a purchase price of $1.00 per warrant foran aggregate price of $4,000,000. Such warrants were issued pursuant to anexemption from registration contained in Section 4(2) of the Securities Actas they were sold in a transaction not involving a public offering.

The$4,000,000 proceeds from the issuance and sale of the private placementwarrants were placed in a trust account and will be part of the liquidatingdistribution to our public stockholders in the event of liquidation prior toour business combination or in the event that less than 20% of our publicstockholders elect to convert their shares of common stock in connection with abusiness combination.

Theprivate placement warrants have terms and provisions that are identical tothose of the warrants sold as part of our units but will not be transferable orsalable by Mr. McCourt until after the consummation of the initial businesscombination, except that Mr. McCourt is permitted to transfer the warrants soldin the private placement in certain limited circumstances, such as by will inthe event of his death or to other of the Company’s officers anddirectors.  However, the transfereesreceiving such private placement warrants will be subject to the same salerestrictions imposed on Mr. McCourt. In the event of liquidation prior to ourinitial business combination, the private placement warrants will expireworthless.

**Use of Proceedsfrom our Initial Public Offering and Private Placement**

On October24, 2006, we closed our initial public offering of 11,250,000 units with eachunit consisting of one share of our common stock and one warrant to purchaseone share of our common stock at an exercise price of $6.00 per share. All ofthe units registered were sold, at an offering price of $8.00 per unit, andgenerated gross proceeds of $90,000,000. The securities sold in our initialpublic offering were registered under the Securities Act of 1933 on aregistration statement on Form S-1 (No. 333-136048). The Securities andExchange Commission declared the registration statement effective on October18, 2006. Deutsche Bank Securities Inc. served as the lead underwriter in ourinitial public offering.

Of thegross proceeds from the Offering: (i) we deposited $88,650,000 into a trustaccount at JP Morgan Chase Bank, NA, maintained by Continental Stock Transfer& Trust Company, as trustee, which amount included $3,600,000 of contingentunderwriting discount and $4,000,000 that we received from the sale of warrantsto David C. McCourt, our President, CEO and Chairman; (ii) the underwritersreceived $2,700,000 as underwriting discount (excluding the contingentunderwriting discount); and (iii) we used $707,915 for offering expenses. Noneof the offering expenses were paid directly or indirectly to any of ourofficers, directors or 10% stockholders. The net proceeds deposited into thetrust account remain on deposit in the trust account, except for a withdrawalof $55,000 to pay estimated state income tax, and earned $575,114 in interestthrough December 31, 2006.

Followingthe consummation of our initial public offering through December 31, 2006, weincurred an aggregate of $223,518 in additional expenses, which consists ofapproximately $30,249 for director and officer insurance and other insurance,$66,639 for legal and accounting fees unrelated to our initial public offering,$75,659 for Delaware franchise taxes, $24,516 paid to Granahan McCourt Capital,LLC, through December 31, 2006 for our office space and other general andadministrative services and $26,455 for other expenses. Through December31, 2006, we earned interest income of $12,104 on funds held outside the trustaccount. We also accrued an income tax benefit of $52,600. The net remainingproceeds from the initial public offering after deducting the underwritingdiscounts and commissions, the offering 

21

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expenses and all otherexpenditures through December 31, 2006 were approximately $90,832,170, whichconsists of $1,662,056 of cash held outside the trust account and $89,170,114held in the trust account, including accrued interest.

 
| ** ITEM 6.** | **SELECTED  FINANCIAL DATA** |
|------------------------|------------------------------|

Thefollowing table summarizes the relevant financial data for our business andshould be read in conjunction with our financial statements, and the notes andschedules related thereto, which are included in this report. To date, ourefforts have been limited to organizational activities and activities relatingto our initial public offering and sourcing a suitable business combinationcandidate.
| ** **                                                                          | ** ** | **Period from  July 10, 2006  (inception) to  December 31, 2006** | ** ** |
|-------------------------------------------------------------------------------------|------------|-------------------------------------------------------------------------------------------------|------------|
| Revenues                                                                            |       | $                                                                                               | —     |   |
| Operating loss                                                                      |       | $                                                                                               | (223,518   | ) |
| Interest income                                                                     |       | $                                                                                               | 587,218    |   |
| Net income                                                                          |       | $                                                                                               | 416,301    |   |
| Net income  attributable to common stockholders                                     |       | $                                                                                               | 312,044    |   |
| Basic and  diluted net income per share                                             |       | $                                                                                               | 0.05       |   |
| Weighted average  shares outstanding                                                |       | 6,803,341                                                                                       |       |
| Working capital  (excludes assets held in trust and deferred underwriting fees)     |       | $                                                                                               | 1,754,602  |   |
| Total assets                                                                        |       | $                                                                                               | 91,146,703 |   |
| Common stock,  subject to possible conversion, 2,249,999 shares at conversion value |       | $                                                                                               | 17,834,249 |   |
| Stockholders’ equity                                                           |       | $                                                                                               | 69,577,067 |   |

 
| ** ITEM 7.** | **MANAGEMENT’S  DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS** |
|------------------------|-------------------------------------------------------------------------------------------------|

**Management’sDiscussion and Analysis of Financial Condition and Results of Operations**

We area blank check company organized under the laws of the State of Delaware onJuly 10, 2006. We were formed for the purpose of acquiring, or acquiringcontrol of, one or more assets or operating businesses in thetelecommunications and media industries through a merger, capital stockexchange, asset or stock acquisition or other similar businesstransaction.  We have not generatedrevenue to date other than interest income. We are considered to be in thedevelopment stage and are subject to the risks associated with activities ofdevelopment stage companies. Since our initial public offering in October,2006, we have been actively engaged in identifying a suitable businesscombination candidate. We have met with potential target companies, serviceprofessionals and other intermediaries to discuss our company, the backgroundof our management and our combination preferences. However, we have notconsummated any business combination. We have selected December 31 as ourfiscal year end. Our securities trade on the American Stock Exchange.

OnOctober 24, 2006, we consummated our initial public offering of 11,250,000units and received gross proceeds of $90,000,000. The underwriters were paidfees of 3% of the gross proceeds, or $2,700,000, and have agreed to defer anadditional $3,600,000 of their underwriting fees until the consummation of abusiness combination. Upon the closing of the offering, $88,650,000 was placedin the trust account, including $3,600,000 of deferred underwriting fees and$4,000,000 from the sale of warrants in a private placement. The balance in thetrust account including accrued interest on December 31, 2006 was $89,170,114.

Weintend to use substantially all of the net proceeds of our initial publicoffering to acquire a target business, including identifying and evaluatingprospective acquisition candidates, selecting the target business, andstructuring, negotiating and consummating the business combination. To theextent that our capital stock is used in whole or in part as consideration toeffect a business combination, the proceeds held in the trust account as wellas any other net proceeds not expended will be used to finance the operationsof the business we acquire.

Forthe period from July 10, 2006 (inception) through December 31, 2006, we had anoperating loss of $223,518 attributable to organization, formation and generaland administrative expenses. We also accrued $3,600,000 of deferred offeringcosts, which are payable only upon the consummation of a business combinationand which were unpaid as of December 31, 2006.

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Thenet proceeds of the offering that were not deposited in the trust account willbe used to pay business, legal, and accounting due diligence costs incurred inconnection with prospective business combinations and to pay continuing generaland administrative expenses.

Webelieve that we have sufficient available funds outside of the trust account tooperate through October, 2008, assuming that a business combination is notconsummated during that time. We do not believe we will need to raiseadditional funds during this time in order to meet the expenditures required tomeet our operating expenses. However, we may issue additional capital stock,debt or a combination of capital stock and debt to complete one or morebusiness combinations.

**CriticalAccounting Policies**

Thepreparation of financial statements and related disclosures in conformity withgeneral accepting accounting principles in the United States requiresmanagement to make estimates and assumptions that affect the reported amountsof assets, liabilities, and disclosure of contingent assets and liabilities atthe date of the financial statements, and revenues and expenses during theperiods reported. Actual results could materially differ from those estimates.We have determined that we currently are not subject to any critical accountingpolicies.
| ** ITEM 7A.** | **  QUANTITATIVE  AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK** |
|-------------------------|-----------------------------------------------------------------------------|

Todate, our efforts have been limited to organizational activities and activitiesrelating to our initial public offering and the identification of a targetbusiness. We have neither engaged in any operations nor generated any revenues.As the proceeds from our initial public offering held in trust have beeninvested in short term investments, our only market risk exposure relates tofluctuations in interest.

As ofDecember 31, 2006, $89,170,114 of the net proceeds of our initial publicoffering (including accrued interest) was held in trust for the purposes ofconsummating a business combination. Continental Stock Transfer & Trust Company, the trustee, hasinvested the money held in the trust account at JPMorgan Chase Bank, NA, in theLehman Brothers Tax Free Money Market Fund which invests in securities exemptfrom federal income taxes.  As ofDecember 31, 2006, the effective, annualized, federal tax-free interestrate payable on our investment was 3.675%.

Wehave not engaged in any hedging activities since our inception on July 10,2006. We do not expect to engage in any hedging activities with respect to themarket risk to which we are exposed.

**ITEM 8.          FINANCIAL STATEMENTS AND SUPPLEMENTARYDATA**

Financialstatements are attached hereto beginning on Page F-1.
| ** ITEM 9.** | **CHANGES  IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE** |
|------------------------|-------------------------------------------------------------------------------------------|

 

None.
| ** ITEM 9A.** | **  CONTROLS  AND PROCEDURES** |
|-------------------------|------------------------------------------|

 

Wemaintain disclosure controls and procedures designed to ensure that informationrequired to be disclosed in our periodic filings with the SEC under theExchange Act, including this report, is recorded, processed, summarized andreported on a timely basis. These disclosure controls and procedures includecontrols and procedures designed to ensure that information required to bedisclosed under the Exchange Act is accumulated and communicated to ourmanagement on a timely basis to allow decisions regarding required disclosure.Management, including our chief executive officer and chief financial officer,has evaluated the effectiveness of the design and operation of our disclosurecontrols and procedures (as defined under Rules 13a-15(e) and 15(d)-15(e) ofthe Exchange Act) as of December 31, 2006. Based upon that evaluation,management has concluded that our disclosure controls and procedures wereeffective as of the end of the period covered by this report. During our fiscalquarter ended December 31, 2006, there was no change in our internal controlover financial reporting that has materially affected, or is reasonably likelyto materially affect, our internal control over financial reporting.  This annual report does not include a reportof management’s assessment regarding internal control over financial reportingor an attestation report of the company’s registered public accounting firm dueto a transition period established by rules of the Securities and ExchangeCommission for newly public companies.
| ** ITEM 9B.** | **  OTHER  INFORMATION** |
|-------------------------|------------------------------------|

 

None.

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**PART III**

**ITEM 10.**             DIRECTORS ANDEXECUTIVE OFFICERS OF THE REGISTRANT

**Board of Directorsand Executive Officers**

Ourcurrent directors and executive officers are as follows:
| **Name**               | ** ** | **Age** | ** ** | **Position**                                                      |
|------------------------|------------|---------|------------|-------------------------------------------------------------------|
| David C. McCourt       |       | 50      |       | Chairman and Chief Executive Officer and Chief  Operating Officer |
| Barry S. Sternlicht    |       | 46      |       | Director                                                          |
| George J. Tenet        |       | 54      |       | Director                                                          |
| Roger L. Werner, Jr.   |       | 57      |       | Director                                                          |
| Paul N. D’Addario |       | 53      |       | Director                                                          |
| Barak Bar-Cohen        |       | 36      |       | Chief Financial Officer                                           |
| Ellyn M. Ito           |       | 37      |       | Chief Administrative Officer                                      |

 

**David C. McCourt**has served as our President, Chief ExecutiveOfficer and Chairman of the Board since our inception. In addition,Mr. McCourt is the Founder, Chief Executive Officer and Chairman of theBoard of Granahan McCourt Capital, LLC, a private investment firm focused onmaking minority investments and advising companies in the telecommunicationsand media industries, a position he has held since January 2005. Over the last25 years, Mr. McCourt has been a pioneer across the telecommunications andmedia industries, founding or acquiring over ten companies in four countries inNorth America and Europe. Under his leadership, these companies completedcapital raising and merger transactions valued in excess of $7.0 billion. In1985, Mr. McCourt established Discovery TV, an independent televisionstation in Grenada producing a range of programming for the Caribbean market.In 1987, Mr. McCourt founded a competitive telephone company, CorporateCommunications Network. Corporate Communications Network was later merged witha subsidiary of MFS Communications to create MFS/McCourt. MFS Communicationswas later sold to Worldcom. In the early 1990’s Mr. McCourt formed apartnership based in London, England called McCourt Kiewit International thatdesigned and built telecommunication systems across Europe. In 1993,Mr. McCourt formed a $196 million partnership with Peter Kiewit Sons,Inc. and acquired control of C-TEC, a diversified telecommunications companybased out of Wilkes-Barre, Pennsylvania. Under Mr. McCourt’s leadership asChief Executive Officer and Chairman, C-TEC recapitalized its balance sheet anddivested its non-strategic assets. In September 1997, C-TEC completed a taxfree transaction splitting the company into three publicly traded companies:Cable Michigan, Commonwealth Telephone Company, and RCN Corporation.Mr. McCourt was Chief Executive Officer and Chairman of Cable Michiganfrom 1993 to 1999, he was Chief Executive Officer and Chairman of CommonwealthTelephone Company from 1997 to 2000, served as Chairman from 2000 until 2003and was Chief Executive Officer and Chairman of RCN Corporation from 1997through 2004, the latter of which was reorganized under Chapter 11 of theU.S. Bankruptcy Code in 2004. RCN Corporation is a facilities-based competitiveprovider of bundled phone, cable and high speed internet services deliveredover its own fiber-optic local network to consumers located in the Boston, NewYork, Philadelphia, Chicago, San Francisco and Los Angeles metropolitanmarkets. Mr. McCourt has received numerous awards over his careerincluding “Entrepreneur of the Year” by Ernst & Young, LLP as well as theAmerican Irish Historical Society Gold Medal Award. In 2005, Mr. McCourtreceived an Emmy Award for his role as Executive Producer of the award-winningchildren’s show “Reading Rainbow.” Mr. McCourt is on the National AdvisoryBoard of JPMorgan Chase Bank, the North American Advisory Board of the MichaelSmurfit Graduate School of Business at University College in Dublin, Ireland,the Board of Overseers of the Robert Wood Johnson Medical School of theUniversity of Medicine and Dentistry in New Jersey, and is the Chairman and interimChief Executive Officer and Chief Operating Officer of Narrowstep, Inc. — atelevision over the internet company. Mr. McCourt holds a B.A. fromGeorgetown University and is a frequent public speaker and contributor tonational and international publications on business and regulatory issues inthe telecommunications and media industries.

**Barak Bar-Cohen**has served as our Chief Financial Officersince our inception. Mr. Bar-Cohen has been President and Chief OperatingOfficer of Granahan McCourt Capital, LLC since January 2005. From April1999 through December 2004, Mr. Bar-Cohen served in several seniormanagement roles at RCN Corporation. From October 2003 throughDecember 2004, Mr. Bar-Cohen served as Vice President of CustomerService, Marketing and Public Relations at RCN where his responsibilities includedmanaging all customer care and direct marketing functions at corporate and inthe markets across the company. From January 2002 throughSeptember 2003, Mr. Bar-Cohen served as Vice President of FinancialOperations at RCN where his responsibilities included managing the New Yorkmarket. Prior to 2002, Mr. Bar-Cohen held roles as Director of CorporateInitiatives at RCN, where he implemented cost savings initiatives across thecompany, as well as Product Manager of Internet Product Development. From February 1997through August 1998, Mr. Bar-Cohen was Vice President of InvestmentBanking at Zannex Investments, a boutique investment firm based in Tel-Aviv,Israel, where he raised seed-funding for technology start-up companies. From1992 through 1996, Mr. Bar-Cohen worked as a Senior Associate at Putnam,Hayes & Bartlett, a world-wide economic consulting firm based out ofWashington, DC, where he specialized in financial analysis of securities fraudlitigation cases as well as quantitative analysis of mergers and acquisitionsfor electric utilities and energy companies. Mr. Bar-Cohen holds a B.A. inEconomics with Honors from Brandeis University as well as an M.B.A. from theTuck School of Business at Dartmouth College.

**Ellyn M. Ito**has served as our Chief Administrative Officersince our inception. Ms. Ito has been Chief Administrative Officer ofGranahan McCourt Capital, LLC, a position she has held since March 2005.From August 2003 through December 2004, Ms. Ito served as

** **

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**SeniorVice President of Employee Services at RCN Corporation. In this role, Ms. Itowas responsible for all corporate compliance, compensation, benefits, payroll,staffing and recruiting functions across the company. From November 1999through July 2003, Ms. Ito was Director of Corporate StaffDevelopment and Director, Staffing at RCN Corporation. From October 1998 toOctober 1999, Ms. Ito was a Management Consultant for Ernst andYoung, LLC, serving clients within their Finance, Technology and AdministrationGroup. Prior to this role, Ms. Ito ran her own independent consultingpractice, working with Fortune 500 clients such as MetLife, HarvardManagement, Sun Life Financial, New England Financial, and Putnam Investmentsin addressing their talent acquisition and human capital management.Ms. Ito is the recipient of the “Top Human Resource Business Leader for2004” Award from the Society of Human Resources Management Organization andholds a B.A. from the University of Colorado.**

**Barry S. Sternlicht**has served as a director since our inception.He is Chairman and Chief Executive Officer of Starwood Capital Group, a privatereal estate investment firm he formed in 1991. From 1995 through 2004,Mr. Sternlicht was Chairman and CEO of Starwood Hotels & ResortsWorldwide, Inc., a company he founded in 1995. Mr. Sternlicht is atrustee of Brown University. He serves on the Board of Directors of NationalGolf, The Estée Lauder Companies, the National Advisory Board of JPMorgan ChaseBank, the Advisory Board of Eurohypo Bank, the Juvenile Diabetes ResearchFoundation’s National Leadership Advocacy Program, Kids in Crisis, the BusinessCommittee for the Arts, and the Center for Christian-Jewish Understanding.Mr. Sternlicht received his B.A., magna cum laude, with honors from BrownUniversity. He earned an M.B.A. with distinction from Harvard Business School.

**George J. Tenet**has served as a director since our inception.Since July 2004, Mr. Tenet currently serves as a distinguishedprofessor at Georgetown University. From July 1997 through June 2004,Mr. Tenet has served as the Director of the U.S. Central IntelligenceAgency. Prior to that, Mr. Tenet served in other government positions,including as Deputy Director of the C.I.A., Special Assistant to the Presidentand Senior Director for Intelligence Programs at the National Security Counciland Staff Director of the Senate Select Committee on Intelligence. Mr. Tenetserves as a member of the Board of: L-1 Identity Solutions Inc., GuidanceSoftware and the British defense firm, QinetiQ. In addition he is the Chairman of the CIA Memorial Foundation.  Mr. Tenet holds a B.S.F.S. from theGeorgetown University School of Foreign Service and an M.I.A. from the Schoolof International Affairs at Columbia University.

**Roger L. Werner, Jr.**has served as a director since our inception. From 1995 to until 2001, hedeveloped and served as the President and CEO of Speedvision and Outdoor lifecable television networks. From 1990 to 1994, Mr. Werner served asPresident and CEO of Daniels Programming Ventures, LLC, where he managedDaniels interest with Prime Ticket (now Fox Sports West), and Prime SportsNetwork Group, a joint venture with Liberty Media, along with a number of othersports media properties. From 1982 to 1988 he was the Chief Operating Officerof ESPN and from 1988 through 1990 he was its Chief Executive Officer. Prior tojoining ESPN, he served as Engagement Manager for McKinsey and Company from1979 to 1982. Mr. Werner serves on the Board of Directors of WATVProductions, Outdoor Channel Holdings Inc. and Narrowstep, Inc. and is theCEO of Outdoor Channel Holdings Inc. He is a graduate of Trinity College,Hartford, Connecticut and holds an M.B.A. from the University of Virginia.

**Paul N. D’Addario**has served as a director since our inception.  Mr. D’Addario is the Founder and SeniorManaging Director of Palisades Ventures, a technology and media growthfund.  Mr. D’Addario was the formersenior member of the Media Telecom Group of Credit Suisse First Boston from2000 to 2004, and prior to this, held several positions within Donaldson,Lufkin & Jenrette Securities since the spring of 1987, including ManagingDirector & Principal from 1994 to 2000. At DLJ, Mr. D’Addario also served as Head of New Media and Head of WestCoast Media and managed a number of financings and M&A deals for majormedia, technology and entertainment companies including: Crown Media Holdings,Inc. and IMAX Corp.  Mr. D’Addario is aboard observer for Omneon Video Networks, a provider of media server solutionsfor the broadcast and video industry, a board member of Language Weaver, asoftware company that specializes in statistical machine translation softwareand Showtime Arabia, a pay TV platform in the Middle East.  Prior to his employment by DLJ, Mr. D’Addariowas in the M&A Group of Weil, Gotshal & Manges LLP.  Mr. D’Addario received a B.A. from BostonCollege, a M.Sc. from the London School of Economics and a J.D. from VillanovaLaw School.

**Number and Termsof Directors**

Theterm of office of the first class of directors, consisting of Messrs. Wernerand D’Addario, will expire at our first annual meeting of stockholders in 2007.The term of office of the second class of directors, consisting of Messrs.  Tenet and Sternlicht, will expire at thesecond annual meeting in 2008. The term of office of the third class ofdirectors, consisting of Mr. McCourt, will expire at the third annual meetingin 2009. All of our directors have served as directors since the inception ofour company.

**DirectorIndependence**

Ourboard of directors has determined that Barry S. Sternlicht, George J. Tenet,Roger L. Werner, Jr. and Paul N. D’Addario, a majority of the directors on ourboard, are “independent directors” as defined in Rule 10A-3 of theSecurities Exchange Act of 1934, as amended, and the rules of the AmericanStock Exchange. By “independent director,” we mean a person other than anofficer or employee of ours or any other individual having a relationship,which, in the opinion of our board of directors would interfere with thedirector’s exercise of independent judgment in carrying out theresponsibilities of a director. Our independent directors will have regularlyscheduled meetings at which only independent directors are present.

Asprovided in our by-laws, any affiliated transactions will be on terms no lessfavorable to us than could be obtained from independent parties. Any affiliatedtransactions must be approved by a majority of our independent directors andour directors who do not have a pecuniary interest in the transaction, ineither case who had access, at our expense, to attorneys or independent legalcounsel. Whether or not independent, our directors will be our fiduciaries and,as such, must exercise discretion over future transactions consistent withtheir responsibilities as

25

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fiduciaries. Moreover, weintend to obtain estimates from unaffiliated third parties for similar goods orservices, taking into account, in addition to price, the quality of the goodsor services to be provided by such third parties to ascertain whether suchtransactions with affiliates are on terms that are no less favorable to us thanare otherwise available from unaffiliated third parties.

**Committees of theBoard of Directors**

Ourboard of directors has established the following standing committees: auditcommittee and nominating and corporate governance committee.

**Audit Committee**

Our board of directors has an audit committee, whichreports to the board of directors. The audit committee consists of Mr. D’Addario,as chairman, and Messrs. Sternlicht and Werner. The audit committee isresponsible for approving our independent accountants, reviewing with ourindependent accountants the plans and results of the audit engagement,approving professional services provided by our independent accountants, reviewingthe independence of our independent accountants and reviewing the adequacy ofour internal accounting controls.

Each of the members of the audit committee is “financiallyliterate,” meaning that they are able to read and understand fundamental financialstatements, including a company’s balance sheet, income statement and cash flowstatement. In addition, the audit committee has, and will continue to have, atleast one member who has past employment experience in finance or accounting,requisite professional certification in accounting, or other comparableexperience or background that results in the individual’s financialsophistication. The board of directors has determined that Mr. D’Addariosatisfies the definition of financial sophistication, qualifies as an “auditcommittee financial expert,” as defined under the SEC’s rules and regulationsand is independent, as defined by our listing standards.

**Nominating andCorporate Governance Committee**

The members of the nominating and corporate governancecommittee are Messrs. Tenet, Sternlicht and Werner. Mr. Tenet serves aschairman of the nominating and corporate governance committee. The nominatingand corporate governance committee is responsible for selecting, researchingand nominating directors for election by our stockholders, selecting nomineesto fill vacancies on the board or a committee of the board, developing andrecommending to the board a set of corporate governance principles andoverseeing the evaluation of the board and our management.

Theguidelines for selecting nominees, which are specified in the NominatingCommittee Charter, generally provide that persons to be nominated should beactively engaged in business endeavors, have an understanding of financialstatements, corporate budgeting and capital structure, be familiar with therequirements of a publicly traded company, be familiar with industries relevantto our business endeavors, be willing to devote significant time to theoversight duties of the board of directors of a public company, and be able topromote a diversity of views based on the person’s education, experience andprofessional employment.  The nominatingcommittee evaluates each individual in the context of the board as a whole,with the objective of recommending a group of that can best implement ourbusiness plan, perpetuate our business and represent stockholder interests. Thenominating committee may require certain skills or attributes, such asfinancial or accounting experience, to meet specific board needs that arisefrom time to time. The nominating committee does not distinguish among nomineesrecommended by stockholders and other persons.

**Section 16(a)Beneficial Ownership Reporting Compliance**

Section 16(a)of the Exchange Act requires our officers, directors and persons who own morethan 10% of a registered class of our equity securities to file reports ofownership and changes in ownership with the SEC. Officers, directors and 10%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, we believethat, during the fiscal year ended December 31, 2006, all 16(a) filingrequirements applicable to our officers, directors and greater than 10%beneficial owners were met in a timely manner.

**Code of Ethics**

Ourboard of directors has adopted a code of ethics, which establishes standards ofethical conduct applicable to all our directors, officers and employees. Thiscode of ethics addresses conflicts of interest, compliance with disclosurecontrols and procedures and internal control over financial reporting,corporate opportunities and confidentiality requirements. The audit committeeis responsible for applying and interpreting our code of ethics in situationswhere questions are presented to it.

Ourcode of ethics may be viewed and copied at the SEC’s Public Reference Room inWashington, D.C. Information about the SEC’s Public Reference Room may beobtained by calling the SEC at 1-800-SEC-0330. Our code of ethics also may beavailable on the SEC’s website, http://www.sec.gov, or be obtained, afterpaying a duplicating fee, by electronic request to publicinfo@sec.gov, or bywriting to: SEC’s Public Reference Room, 100 F Street, NE, Washington, D.C.20549.

Weundertake to provide without charge to any person, upon written or verbalrequest of such person, a copy of the our code of ethics. Requests for a copyshould be directed in writing to Granahan McCourt Acquisition Corporation, 179Stony Brook Road, Hopewell, NJ 08525, Attention: Barak Bar-Cohen or bytelephone to (609) 333-1200.

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**Promoters**

Weconsider Mr. McCourt to be our promoter as the term is defined within the rulespromulgated by the SEC under the Securities Act.

**ITEM 11.**             EXECUTIVECOMPENSATION

**CompensationDiscussion and Analysis**

No executive officer has received any cashcompensation for services rendered to us. Commencing on October 18, 2006, theeffective date of the registration statement through the consummation of a businesscombination, pursuant to a letter agreement, we will pay Granahan McCourtCapital, LLC a fee of $10,000 per month for providing us with administrativeservices. Other than the fees payable to Granahan McCourt Capital, LLC pursuantto the agreement described above, no compensation of any kind, including finder’s,consulting fees or other similar compensation, will be paid by us or any otherentity to any of our existing officers, directors, existing stockholders or anyof their respective affiliates, prior to or in connection with a businesscombination. However, such individuals and entities will be reimbursed for anyout-of-pocket expenses incurred in connection with activities on our behalfsuch as identifying potential target businesses and performing due diligence onsuitable business combinations. There is no limit on the amount of theseout-of-pocket expenses and there will be no review of the reasonableness of theexpenses by anyone other than our board of directors, which includes personswho may seek reimbursement, or a court of competent jurisdiction if suchreimbursement is challenged. Because of the foregoing, we will generally nothave the benefit of independent directors examining the propriety of expensesincurred on our behalf and subject to reimbursement. In addition,Mr. McCourt may, in his sole discretion, transfer our securities held byhim to our existing officers and directors who participate in the dealsourcing, due diligence, structuring and negotiating of a business combination.The compensation of our Chief Executive Officer and other officers will bedetermined by a majority of our independent directors in accordance withSection 805 of the American Stock Exchange Company Guide.

**CompensationCommittee Interlocks and Insider Participation**

Our board of directors has not established acompensation committee of the board of directors.  The compensation of our Chief ExecutiveOfficer and other officers will be determined by a majority of our independentdirectors in accordance with Section 805 of the American Stock Exchange CompanyGuide.

No members of our board of directors has arelationship that would constitute an interlocking relationship with executiveofficers or directors of the company or another entity.

**CompensationCommittee Report**

Ourboard of directors has not established a compensation committee of the board ofdirectors.** **Thecompensation of our Chief Executive Officer and other officers will bedetermined by a majority of our independent directors in accordance withSection 805 of the American Stock Exchange Company Guide.

Ourboard of directors has reviewed and discussed the discussion and analysis ofour compensation which appears above with management, and, based on such reviewand discussion, the board of directors determined that the above disclosure beincluded in this Annual Report on Form 10-K.

The independent members of our board of directors are:

Barry S. SternlichtGeorge J. TenetRoger L. Werner, Jr.Paul N. D’Addario

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** **
| **ITEM 12.** | ** ** | **SECURITY  OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER  MATTERS** |
|-------------------|------------|------------------------------------------------------------------------------------------------------|

The followingtable sets forth certain information regarding beneficial ownership of ourcommon stock as of March  30, 2007, by each person who is known by us toown beneficially more than 5% of the outstanding shares of common stock.

| Name of Beneficial Owner(1) | ** ** | **Amount of  Beneficial  Ownership  of Common  Stock** | ** ** | **Percent of  Common  Stock(2)** | ** ** |
|--------------------------------------------|------------|-------------------------------------------------------------|------------|---------------------------------------|------------|
| *5%  Stockholders*                         |       |                                                        |       |                                  |       |   |   |
| David C.  McCourt(3)                       |       | 2,574,900                                                   |       |                                  | 18.3       | % |   |
| Fir Tree, Inc.(4)                          |       | 1,031,400                                                   |       |                                  | 7.3        | % |   |
| Sapling, LLC(4)                            |       | 827,102                                                     |       |                                  | 5.9        | % |   |

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(1)             Exceptas set forth in the footnotes to this table, the persons named in the tableabove have sole voting and dispositive power with respect to all shares shownas beneficially owned by them.

(2)             Amountand applicable percentage of ownership is based on 14,062,500 shares of ourcommon stock outstanding on March 30, 2007.

(3)             Thebusiness address of David C. McCourt is 179 Stony Brook Road, Hopewell, NJ08525.

(4)             Thebusiness address of Sapling, LLC and Fir Tree, Inc. is 505 Fifth Avenue, NewYork, New York 10017.  Fir Tree, Inc. isthe investment manager for each of Sapling, LLC and Fir Tree Recovery MasterFund, L.P. and has been granted investment discretion over portfolioinvestments held by each of them. Sapling, LLC and Fir Tree Recovery Master Fund, L.P. are the beneficialowners of 827,102 shares of Common Stock and 204,298 shares of our commonstock, respectively. Fir Tree, Inc. may be deemed to beneficially own theshares of our common stock held by Sapling, LLC and Fir Tree Recovery MasterFund, L.P. as a result of being the investment manager of Sapling, LLC and FirTree Recovery Master Fund, L.P.  Sapling,LLC and Fir Tree Recovery Master Fund, L.P. are the beneficial owners of 5.9%and 1.5%, respectively, of the outstanding shares of our common stock.Collectively, Sapling, LLC and Fir Tree Recovery Master Fund, L.P. beneficiallyown 1,031,400 shares of common stock of the Company, which represent 7.3% ofthe shares of common stock outstanding. Sapling, LLC may direct the vote and disposition of 827,102 shares ofour common stock. Fir Tree Recovery Master Fund, L.P. may direct the vote anddisposition of 204,298 shares of our common stock.  Fir Tree, Inc. has been granted investmentdiscretion over the shares of our common stock held by Sapling, LLC and Fir TreeRecovery Master Fund, L.P. The foregoing information was derived from aSchedule 13G filed with the SEC on February 14, 2007.

Thefollowing table sets forth certain information regarding beneficial ownershipof our common stock and warrants as of March 30, 2007, by (i) each ofour executive officers for the fiscal year ended December 31, 2006,(ii) each of our directors, and (iii) all directors and executiveofficers as a group. Our warrants become exercisable on the later of thecompletion of our initial business combination and October 18, 2007. Thesewarrants expire on October 18, 2010, or earlier upon redemption.
| **Name of Beneficial Owner(1)**  | ** ** | **Amount of  Beneficial  Ownership of  Common Stock(1)** | ** ** | **Percent of  Common  Stock** | ** ** |
|-------------------------------------------------|------------|-------------------------------------------------------------------------|------------|------------------------------------|------------|
| *Executive Officers*                            |       |                                                                    |       |                               |       |
| David C. McCourt(2)                             |       | 2,574,900                                                               |       | 18.3 %                             |       |
| Barak Bar-Cohen(2)                              |       | 72,000                                                                  |       | *                                  |       |
| Ellyn M. Ito(2)                                 |       | 36,000                                                                  |       | *                                  |       |
| *Directors*                                     |       |                                                                    |       |                               |       |
| Barry S. Sternlicht(3)                          |       | 32,400                                                                  |       | *                                  |       |
| George J. Tenet(4)                              |       | 32,400                                                                  |       | *                                  |       |
| Paul N. D’Addario(5)                       |       | 32,400                                                                  |       | *                                  |       |
| Roger L. Werner, Jr.(6)                         |       | 32,400                                                                  |       | *                                  |       |
| All executive officers and directors as a group |       | 2,812,500                                                               |       | 20.0 %                             |       |

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*                    Less than 1.0%

(1)             All ownership isdirect beneficial ownership.

(2)             Business address is179 Stony Brook Road, Hopewell, NJ 08525.

(3)             Business address is591 W. Putnam Ave., Greenwich, CT 06830.

(4)             Business address isSchool of Foreign Service, Georgetown University, ICC Building, Washington,D.C. 20057.

(5)             Business address is11766 Wilshire Blvd., Ste. 890, Los Angeles, CA 90025.

(6)             Business address is10 Barnstable Lane, Greenwich, CT 06830.

**ITEM 13.**             CERTAIN RELATIONSHIPSAND RELATED TRANSACTIONS

**CertainRelationships and Related Transactions**

Priorto our initial public offering, we privately sold to our officers and directors3,234,375 shares of our common stock for $2,000 in cash, at a price of$0.000618 per share. In connection with out initial public offering, we alsosold to Mr. McCourt, our President, CEO and

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Chairman, in a privateplacement concurrently with the initial public offering 4,000,000 warrantsfor $4,000,000 in cash, at a price of $1.00 per warrant.

The holders of the majority of the shares and warrantssold to our existing stockholders prior to our initial public offering(including the warrants, and the shares underlying the warrants, purchased inthe private placement) are entitled to make up to two demands that we register theseshares, warrants and the shares of common stock underlying such warrantspursuant to an agreement dated October 18, 2006. The holders of the majority ofthese securities can elect to exercise these registration rights at any timecommencing 90 days prior to the date upon which they will first becomeeligible for resale. In addition, these security holders have certain “piggy-back”registration rights with respect to registration statements filed subsequent tothe date they become eligible for resale. We will bear the expenses incurred inconnection with the filing of any of these registration statements.

The payment to Granahan McCourt Capital, LLC of amonthly fee of $10,000 is for certain administrative services, including officespace, utilities and secretarial support. David C. McCourt is the Chairman andCEO of Granahan McCourt Capital, LLC and, as a result, will benefit from thetransaction with Granahan McCourt Capital, LLC. However, this arrangement issolely for our benefit and is not intended to provide Mr. McCourtcompensation in lieu of a salary.

We will reimburse our officers and directors, subjectto board approval, for any reasonable out-of-pocket business expenses incurredby them in connection with certain activities on our behalf such as identifyingand investigating possible target acquisitions and business combinations. Thereis no limit on the amount of out-of-pocket expenses reimbursable by us, whichwill be reviewed only by our board or a court of competent jurisdiction if suchreimbursement is challenged.

Other than the $10,000 per month administrative feepayable to Granahan McCourt Capital, LLC and reimbursable out-of-pocketexpenses payable to our officers and directors, no compensation or fees of anykind, including finder’s and consulting fees, will be paid to any of ourexisting stockholders, officers or directors who owned our common stock priorto our initial public offering, or to any of their respective affiliates orfamily members for services rendered to us prior to or with respect to theinitial transaction. However, Mr. McCourt may, in his sole discretion,transfer our securities held by him to our existing officers and directors whoparticipate in the deal sourcing, due diligence, structuring and negotiating ofa business combination.

David C. McCourt advanced a total of $218,000 inexchange for a promissory note from us. The promissory note was repaid uponconsummation of the initial public offering.

Since the underwriters’ over-allotment option was notexercised, on January 16, 2007 we repurchased 421,875 shares of our commonstock from David C. McCourt for $261.

All ongoing and future transactions between us and anyof our officers and directors or their respective affiliates, including loansby our officers and directors, will be on terms believed by us to be no lessfavorable than are available from unaffiliated third parties. Such transactionsor loans, including any forgiveness of loans, will require prior approval by amajority of our uninterested “independent” directors (to the extent we haveany) or the members of our board who do not have an interest in thetransaction, in either case who had access, at our expense, to our attorneys orindependent legal counsel. We will not enter into any such transaction unless ourdisinterested “independent” directors (or, if there are no “independent”directors, our disinterested directors) determine that the terms of suchtransaction are no less favorable to us than those that would be available tous with respect to such a transaction from unaffiliated third parties.

None of our directors or officers, nor any of theirassociated persons have any direct or indirect affiliation or association witha member of the National Association of Securities Dealers, Inc.

**Conflicts of Interest**

Potential investorsshould be aware of the following potential conflicts of interest:

·                  None of ourofficers and directors are required to commit their full time to our affairsand, accordingly, they may have conflicts of interest in allocating their timeamong various business activities.

·                  In the course oftheir other business activities, our officers and directors may become aware ofinvestment and business opportunities which may be appropriate for presentationto us as well as the other entities with which they are affiliated. Ourofficers and directors may have conflicts of interest in determining to whichentity a particular business opportunity should be presented.

·      Our officers and directors may in thefuture become affiliated with entities, including other blank check companies,engaged in business activities similar to those intended to be conducted by us.Some of our officers and directors are affiliated with entities in thetelecommunications and media industries. David C. McCourt, our President,Chief Executive Officer and Chairman, is the Chairman and interim ChiefExecutive Officer and Chief Operating Officer of Narrowstep, Inc., acompany that provides television services over the internet, and Roger L.Werner, Jr., one of our directors, is Chairman of WernerTelesport, LLC, a sports programming and production company, and serves asa director of Narrowstep, Inc. and WATV Productions, an event and televisionproduction company. In

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additionPaul N. D’Addario is the founder and Senior Managing Director of PalisadesVentures, a technology and media growth fund.

·                  Our officers anddirectors own 2,812,500 shares of our common stock, and our sponsor,Mr. McCourt, purchased 4,000,000 warrants in a private placement prior tothe consummation of our initial public offering. Except under limitedcircumstances, these securities are transferable only if a business combinationis successfully completed and will be worthless if a business combination isnot consummated. Consequently, our officers and directors may have a conflictof interest in determining whether a particular target acquisition isappropriate to effect a business combination. Additionally, certain members ofmanagement may enter into consulting or employment agreements with us as partof a business combination, pursuant to which they may be entitled tocompensation for their services. The personal and financial interests of ourdirectors and officers may influence their motivation in identifying andselecting a target acquisition, timely completing a business combination andsecuring the release of their stock.

·      Other than with respect to our initialbusiness combination, we have not adopted a policy that expressly prohibits ourofficers and directors from having a direct or indirect pecuniary interest inany investment to be acquired or disposed of by us or in any transaction towhich we are a party or have an interest. Nor do we have a policy thatexpressly prohibits any such persons from engaging for their own account inbusiness activities of the types conducted by us. Accordingly, such parties mayhave an interest in certain transactions in which we are involved, and may alsocompete with us.

In general, officers and directors of a corporationincorporated under the laws of the State of Delaware are required to presentbusiness opportunities to a corporation if:

·      the corporation could financiallyundertake the opportunity;

·      the opportunity is within the corporation’sline of business; and

·      it would not be fair to the corporationand its stockholders for the opportunity not to be brought to the attention ofthe corporation.

Accordingly, as a result of multiple businessaffiliations, our officers and directors may have similar legal obligationsrelating to presenting business opportunities meeting the above-listed criteriato multiple entities. In addition, conflicts of interest may arise when ourboard evaluates a particular business opportunity with respect to theabove-listed criteria. We cannot assure you that any of the above mentionedconflicts will be resolved in our favor.

In order to minimize potential conflicts of interestwhich may arise from multiple corporate affiliations, each of our officers anddirectors has agreed, until the earliest of a business combination, ourdissolution and liquidation or such time as he or she ceases to be an officeror director, to present to us for our consideration, prior to presentation toany other entity, any business opportunity which may reasonably be required tobe presented to us under Delaware law, subject to any pre-existing fiduciaryand contractual obligations he or she might have.

As each of our officers and directors is currentlyinvolved in other business enterprises, each has certain pre-existing fiduciaryand contractual obligations to other entities that may cause him to haveconflicts of interest in determining to which entity he presents a specificbusiness opportunity. To the extent that one of our officers or directorsidentifies a business opportunity that may be suitable for an entity that he orshe has a pre-existing fiduciary or contractual obligation to, he or she mayhonor his pre-existing fiduciary or contractual obligation to this entity.Accordingly, consistent with our code of ethics, he or she may not presentopportunities to us that otherwise may be attractive to such entity unless suchentity has declined to accept such opportunities.

In connection with the vote required for any businesscombination, all of our existing stockholders, including all of our officersand directors, have agreed to vote their respective shares of common stockowned by them immediately prior to our initial public offering in accordancewith the vote of a majority of the shares of common stock voted by the publicstockholders. In addition, they have agreed to waive their respective rights toparticipate in any liquidation distribution with respect to the shares ofcommon stock acquired by them prior to such offering. An existing stockholderwho acquires shares in or after our initial public offering, however, would bea public stockholder with respect to these shares and retains the right toparticipate in any liquidation distribution with respect to such shares.

To further minimize potential conflicts of interest,we have agreed that we will not consummate a business combination with any ofour existing stockholders, including our officers and directors, or any oftheir respective affiliates without first obtaining an opinion from anindependent investment banking firm regarding the fairness to our stockholdersfrom a financial point of view of the business combination.

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**ITEM 14.**             PRINCIPAL ACCOUNTANTFEES AND SERVICES

**Audit andNon-Audit Fees**

The following table sets forth the fees billed oranticipated for the periods indicated for professional services rendered byPressman Ciocca Smith LLP, our independent registered public accounting firm.

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| ** **             | ** ** | **Fiscal Year Ended  December 31, 2006** | ** ** | **Fiscal Year Ended  December 31, 2005** | ** ** |
|------------------------|------------|--------------------------------------------------------------|------------|--------------------------------------------------------------|------------|
| Audit Fees(1)          |       | $                                                            | 77,032     |                                                         | N/A        |   |
| Audit-Related  Fees(2) |       | $                                                            | —     |                                                         | N/A        |   |
| Tax Fees(3)            |       | $                                                            | 11,774     |                                                         | N/A        |   |
| All Other Fees         |       | $                                                            | —     |                                                         | N/A        |   |
| Total                  |       | $                                                            | 88,806     |                                                         | N/A        |   |

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(1)             Auditfees related to professional services rendered in connection with our initialpublic offering (financial statements included in our Registration Statement onForm S-1 and our Current Report on Form 8-K filed with the SEC on October 27,2006), aggregating $55,539, for the audit of our financial statements for theperiod from July 10, 2006 (date of inception) to December 31, 2006,estimated to be $16,000, and for the quarterly review of financial statementsincluded in our quarterly report on Form 10-Q for the quarterly period endedSeptember 30, 2006, $5,493.

(2)             Audit-relatedfees include professional services related to the audit of our financial statementsand consultation on accounting standards or transactions.

(3)             Taxfees relate to professional services rendered for tax compliance, tax adviceand tax planning.

**Approval ofIndependent Registered Public Accounting Firm Services and Fees**

The Audit Committee is responsible for appointing,setting compensation, and overseeing the work of the independent auditor. Inrecognition of this responsibility, the Audit Committee has established apolicy to pre-approve all audit and permissible non-audit services provided bythe independent auditor.

In addition to retaining Pressman Ciocca Smith LLP toaudit our financial statements for the period July 10, 2006 (date of inception)through December 31, 2006, we may retain Pressman Ciocca Smith LLP toprovide advisory services and due diligence work in connection with prospectivebusiness combinations to us in our 2007 fiscal year. We understand the need forPressman Ciocca Smith LLP to maintain objectivity and independence in its auditof our financial statements.

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**PART IV**

**ITEM 15.**   **EXHIBITS AND FINANCIAL STATEMENT SCHEDULES**

**(a)(1)Financial Statements**

See financial statements commencing on page F-1hereof.

**(a)(2)Financial Statement Schedules**

No financial statement schedules are filed herewithbecause (i) such schedules are not required or (ii) the informationrequired has been presented in the aforementioned financial statements.

**(a)(3)Exhibits**

Exhibits marked with an asterisk (*) areincorporated by reference to documents previously filed by us with the SEC, asexhibits to our registration statement on Form S-1 (File No. 333-136048).All other documents listed are filed with this report.

**EXHIBIT INDEX**
| Exhibit No. | ** ** | **Description**                                                                                                                                           | ** ** |
|-------------|------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------|------------|
| *1.1        |       | Form of Underwriting  Agreement                                                                                                                           |       |
| *3.1        |       | Form of Fourth  Amended and Restated Certificate of Incorporation of the Registrant                                                                       |       |
| *3.2        |       | By-laws of the  Registrant                                                                                                                                |       |
| *4.1        |       | Specimen Unit  Certificate                                                                                                                                |       |
| *4.2        |       | Specimen Common  Stock Certificate                                                                                                                        |       |
| *4.3        |       | Specimen Warrant  Certificate                                                                                                                             |       |
| *4.4        |       | Form of Warrant  Agreement between Continental Stock Transfer & Trust Company and the  Registrant                                                     |       |
| *10.1       |       | Subscription  Agreement, dated July 20, 2006 between the Registrant and David C.  McCourt                                                       |       |
| *10.2       |       | Subscription  Agreement, dated July 20, 2006 between the Registrant and Barry S.  Sternlicht                                                    |       |
| *10.3       |       | Subscription  Agreement, dated July 20, 2006 between the Registrant and George J.  Tenet                                                        |       |
| *10.4       |       | Subscription  Agreement, dated July 20, 2006 between the Registrant and Roger L.  Werner, Jr.                                                   |       |
| *10.5       |       | Subscription  Agreement, dated July 20, 2006 between the Registrant and Paul N.  D’Addario                                                 |       |
| *10.6       |       | Subscription  Agreement, dated July 20, 2006 between the Registrant and Barak  Bar-Cohen                                                             |       |
| *10.7       |       | Subscription  Agreement, dated July 20, 2006 between the Registrant and Ellyn M.  Ito                                                           |       |
| *10.8       |       | Form of  Investment Management Trust Agreement between the Registrant and Continental  Stock Transfer & Trust Company                                 |       |
| *10.9       |       | Administrative  Services Letter Agreement, dated July 24, 2006 between the Registrant  and Granahan McCourt Capital, LLC.                            |       |
| *10.10      |       | Promissory Note,  dated July 17, 2006, in the principal amount of $218,000 issued by the  Registrant to David C. McCourt                                  |       |
| *10.11      |       | Form of  Registration Rights Agreement between the Registrant and the existing  stockholders                                                              |       |
| *10.12      |       | Second Amended  and Restated Placement Warrant Purchase Agreement between the Registrant and  David C. McCourt                                            |       |
| *10.13      |       | Form of Letter  Agreement between each Insider, the Registrant and Deutsche Bank  Securities Inc.                                                    |       |
| *14         |       | Code of Ethics                                                                                                                                            |       |
| 24          |       | Power of Attorney  (contained in signature page)                                                                                                          |       |
| 31.1        |       | Certificate  Pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934 of the  Principal Executive Officer                                     |       |
| 31.2        |       | Certificate Pursuant to Rule 13a-14(a) under  Securities Exchange Act of 1934 of the Principal Financial Officer                                          |       |
| 32.1        |       | Certificate  Pursuant to 18 U.S.C. Section 1350, As Adopted Pursuant to Section 906 of the  Sarbanes-Oxley Act of 2002 of the Principal Executive Officer |       |
| 32.2        |       | Certificate  Pursuant to 18 U.S.C. Section 1350, As Adopted Pursuant to Section 906 of the  Sarbanes-Oxley Act of 2002 of the Principal Financial Officer |       |

 

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**SIGNATURES**

Pursuant to the requirements of Section 13 orSection 15(d) of the Securities Exchange Act of 1934, this Registrant hasduly caused this report to be signed on its behalf by the undersigned,thereunto duly authorized.
|            |                                         |                                                 |
|------------|----------------------------------------------|------------------------------------------------------|
| ** ** | **GRANAHAN MCCOURT ACQUISITION CORPORATION** |
|       |                                         |                                                 |   |
|       | By:                                          |  /s/ David C.  McCourt                          |
|       | Name:                                        | **David  C. McCourt**                                |
|       | Title:                                       | **President,  Chief Executive Officer and Chairman** |
|            |                                              |                                                      |  |  |

Date: April 2, 2007

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**POWER OF ATTORNEY AND SIGNATURES**

Each of the undersigned officers and directors ofGranahan McCourt Acquisition Corporation hereby severally constitute andappoint David C. McCourt, our true and lawful attorney, with full power to him,to sign for us in our names in the capacities indicated below, all amendmentsto this Annual Report on Form 10-K, and generally to do all things in our namesand on our behalf in such capacities to enable Granahan McCourt AcquisitionCorporation to comply with the provisions of the Securities Exchange Act of1934, as amended, and all requirements of the Securities and ExchangeCommission.

Pursuant to the requirements of the SecuritiesExchange Act of 1934, this report has been signed below by the followingpersons on behalf of the registrant and in the capacities indicated on this 2ndday of April, 2007.
| **Name**                   | ** ** | **Capacity**                                                            |
|----------------------------|------------|-------------------------------------------------------------------------|
|                       |       |                                                                    |
| /s/ David C. McCourt       |       |                                                                    |
| David C. McCourt           |       | President,  CEO and Chairman of the Board (principal executive officer) |
|                       |       |                                                                    |
| /s/ Barak  Bar-Cohen       |       |                                                                    |
| Barak Bar-Cohen            |       | Treasurer  and CFO (principal financial and accounting officer)         |
|                       |       |                                                                    |
| /s/ Barry S. Sternlicht    |       |                                                                    |
| Barry S. Sternlicht        |       | Director                                                                |
|                       |       |                                                                    |
| /s/ George J. Tenet        |       |                                                                    |
| George J. Tenet            |       | Director                                                                |
|                       |       |                                                                    |
| /s/ Paul N. D’Addario |       |                                                                    |
| Paul N. D’Addario     |       | Director                                                                |
|                       |       |                                                                    |
| /s/ Roger L. Werner, Jr.   |       |                                                                    |
| Roger L. Werner, Jr.       |       | Director                                                                |

 

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**FINANCIALSTATEMENTSGranahan McCourt Acquisition Corporation(A Development Stage Company)Index of Financial Statements**
|                                                                                                                         | ** ** | **Page** | ** ** |
|-------------------------------------------------------------------------------------------------------------------------|------------|----------|------------|
| **Report  of Independent Registered Public Accounting Firm**                                                            |       | F-2      |       |
| ** **                                                                                                              |       |     |       |
| **Financial Statements**                                                                                                |       |     |       |
| ** **                                                                                                              |       |     |       |
| Balance Sheet as of  December 31, 2006                                                                                  |       | F-3      |       |
|                                                                                                                    |       |     |       |
| Statement  of Operations for the period from July 10, 2006 (date of inception) through  December 31, 2006               |       | F-4      |       |
|                                                                                                                    |       |     |       |
| Statement of Stockholders’ Equity for the period from  July 10, 2006 (date of inception) through December 31, 2006 |       | F-5      |       |
|                                                                                                                    |       |     |       |
| Statement  of Cash Flows for the period from July 10, 2006 (date of inception) through  December 31, 2006               |       | F-6      |       |
|                                                                                                                    |       |     |       |
| Notes  to Financial Statements for the period from July 10, 2006 (date of inception)  through December 31, 2006         |       | F-7      |       |

 

F-1

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**Report of Independent RegisteredPublic Accounting Firm**

To The Board ofDirectors and StockholdersGranahan McCourt Acquisition Corporation

We have audited the accompanying balance sheet ofGranahan McCourt Acquisition Corporation (a development stage company) (the “Company”)as of December 31, 2006 and the related statements of operations, stockholders’equity and cash flows for the period from July 10, 2006 (date of inception)through December 31, 2006.  Thesefinancial statements are the responsibility of the Company’s management.  Our responsibility is to express an opinionon these financial statements based on our audit.

We conducted our audit in accordance with thestandards of the Public Company Accounting Oversight Board (United States).  Those standards require that we plan andperform the audit to obtain reasonable assurance about whether the financialstatements are free of material misstatement. The Company is not required to have, nor were we engaged to perform, anaudit of its internal control over financial reporting.  Our audit included consideration of internalcontrol over financial reporting as a basis for designing audit procedures thatare appropriate in the circumstances, but not for the purpose of expressing anopinion on the effectiveness of the Company’s internal control over financialreporting.  Accordingly, we express nosuch opinion.  An audit also includesexamining, on a test basis, evidence supporting the amounts and disclosures inthe financial statements, assessing the accounting principles used andsignificant estimates made by management, as well as evaluating the overallfinancial statement presentation.  Webelieve that our audit provides a reasonable basis for our opinion.

In our opinion, the financial statements referred toabove present fairly, in all material respects, the financial position ofGranahan McCourt Acquisition Corporation as of December 31, 2006 and theresults of its operations and its cash flows for the period from July 10, 2006(date of inception) through December 31, 2006 in conformity with accountingprinciples generally accepted in the United States of America.

/s/ PressmanCiocca Smith LLP

Huntingdon Valley,PennsylvaniaMarch 20, 2007

F-2

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**GranahanMcCourt Acquisition Corporation(A Development Stage Company)Balance SheetDecember 31, 2006**
| Assets                                                                                                                                                                     |   | ** ** | ** ** |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|------------|------------|
| Current assets                                                                                                                                                             |   | ** ** | ** ** |
| Cash and cash equivalents                                                                                                                                                  |   | $          | 1,662,056  | ** ** |
| Cash and cash equivalents in trust account                                                                                                                                 |   | 88,909,820 | ** ** |
| Accrued interest receivable in trust account                                                                                                                               |   | 260,294    | ** ** |
| Accrued interest receivable - other                                                                                                                                        |   | 4,622      | ** ** |
| Prepaid expenses                                                                                                                                                           |   | 202,311    | ** ** |
| Prepaid taxes                                                                                                                                                              |   | 21,000     | ** ** |
|                                                                                                                                                                       |   | ** ** | ** ** |
| Total current assets                                                                                                                                                       |   | 91,060,103 | ** ** |
|                                                                                                                                                                       |   | ** ** | ** ** |
| Deferred tax  asset                                                                                                                                                        |   | 86,600     | ** ** |
|                                                                                                                                                                       |   | ** ** | ** ** |
|                                                                                                                                                                       |   | $          | 91,146,703 | ** ** |
|                                                                                                                                                                       |   | ** ** | ** ** |
| Liabilities and  stockholders’ equity                                                                                                                                 |   | ** ** | ** ** |
| Current  liabilities                                                                                                                                                       |   | ** ** | ** ** |
| Accounts payable and accrued expenses                                                                                                                                      |   | $          | 59,728     | ** ** |
| Franchise tax payable                                                                                                                                                      |   | 75,659     | ** ** |
| Deferred underwriting fees                                                                                                                                                 |   | 3,600,000  | ** ** |
|                                                                                                                                                                       |   | ** ** | ** ** |
| Total current liabilities                                                                                                                                                  |   | 3,735,387  | ** ** |
|                                                                                                                                                                       |   | ** ** | ** ** |
| Common stock,  subject to possible conversion, 2,249,999 shares at conversion value                                                                                        |   | 17,834,249 | ** ** |
|                                                                                                                                                                       |   | ** ** | ** ** |
| Commitments and  contingencies                                                                                                                                             |   | ** ** | ** ** |
|                                                                                                                                                                       |   | ** ** | ** ** |
| Stockholders’  equity                                                                                                                                                 |   | ** ** | ** ** |
| Preferred stock, $0.0001 par value, 5,000 shares  authorized, no shares issued and outstanding                                                                             |   | —     | ** ** |
| Common stock, $0.0001 par value, 100,000,000 shares  authorized 14,484,375 shares issued and outstanding (which includes 2,249,999  shares subject to possible conversion) |   | 1,448      | ** ** |
| Additional paid-in capital                                                                                                                                                 |   | 69,159,318 | ** ** |
| Retained earnings accumulated during the development  stage                                                                                                                |   | 416,301    |       |
|                                                                                                                                                                       |   | 69,577,067 | ** ** |
|                                                                                                                                                                       |   | ** ** | ** ** |
|                                                                                                                                                                       |   | $          | 91,146,703 | ** ** |

 

**See accompanyingnotes.**

F-3

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**GranahanMcCourt Acquisition Corporation(A Development Stage Company)Statement of OperationsPeriod from July 10, 2006 (Date of Inception) Through December 31, 2006**
| Revenues                                                                            |   | $         | —  |   |
|-------------------------------------------------------------------------------------|--------|-----------|---------|--------|
| General and  administrative expenses                                                |   | 223,518   |    |
| Operating loss                                                                      |   | (223,518  | )       |
| Interest income                                                                     |   | 587,219   |    |
| Income before  income taxes                                                         |   | 363,701   |    |
| Income taxes  (benefit)                                                             |   | (52,600   | )       |
| Net income                                                                          |   | 416,301   |    |
| Accretion of  trust account relating to common stock subject to possible conversion |   | (104,257  | )       |
| Net income  attributable to common stockholders                                     |   | $         | 312,044 |   |
| Weighted average  number of common shares outstanding — basic and diluted      |   | 6,803,341 |    |
| Basic and  diluted net income per share                                             |   | $         | 0.05    |   |

** **

**Seeaccompanying notes.**

F-4

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**GranahanMcCourt Acquisition Corporation(A Development Stage Company)Statement of Stockholders’ EquityPeriod from July 10, 2006 (Date of Inception) Through December 31, 2006**
| ** **                                                                          | ** ** | ** **            | ** ** | ** **  | ** ** | ** **      | ** ** | **Retained  Earnings  Accumulated** | ** ** | ** **  | ** ** |
|-------------------------------------------------------------------------------------|------------|-----------------------|------------|-------------|------------|-----------------|------------|-------------------------------------|------------|-------------|------------|
| ** **                                                                          | ** ** | ** **            | ** ** | ** **  | ** ** | **Additional**  | ** ** | **During the**                 | ** ** | **Total**   | ** ** |
| ** **                                                                          | ** ** | **Common Stock** | ** ** | **Paid-In** | ** ** | **Development** | ** ** | **Stockholders’**              | ** ** |
| ** **                                                                          | ** ** | **Shares**            | ** ** | **Amount**  | ** ** | **Capital**     | ** ** | **Stage**                           | ** ** | **Equity**  | ** ** |
| Balance at July  10, 2006 (Date of Inception)                                       |       | —                |       | $           | —     |            | $          | —                              |       | $           | —     |   | $ | — |   |
| Issuance of  common stock to initial stockholders                                   |       | 3,234,375             |       | 323         |       | 1,677           |       | —                              |       | 2,000       |       |
| Issuance of  warrants in private placement                                          |       | —                |       | —      |       | 4,000,000       |       | —                              |       | 4,000,000   |       |
| Sale of  11,250,000 units, net of underwriters’ discount and offering expenses |       | 11,250,000            |       | 1,125       |       | 82,991,890      |       | —                              |       | 82,993,015  |       |
| Net proceeds  subject to possible conversion of 2,249,999 shares                    |       | —                |       | —      |       | (17,729,992     | )          | —                              |       | (17,729,992 | )          |
| Accretion of trust  fund relating to common stock subject to possible conversion    |       | —                |       | —      |       | (104,257        | )          | —                              |       | (104,257    | )          |
| Net income for  the period                                                          |       | —                |       | —      |       | —          |       | 416,301                             |       | 416,301     |       |
| Balance, December 31,  2006                                                         |       | 14,484,375            |       | $           | 1,448      |            | $          | 69,159,318                          |       | $           | 416,301    |   | $ | 69,577,067 |   |

 

**Seeaccompanying notes.**

F-5

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**Granahan McCourt Acquisition Corporation(A Development Stage Company)Statement of Cash FlowsPeriod from July 10, 2006 (Date of Inception) Through December 31, 2006**
| **Cash  flows from operating activities:**                                               | ** ** | ** **  | ** ** |
|------------------------------------------------------------------------------------------|------------|-------------|------------|
| Net income                                                                               |       | $           | 416,301    |   |
| Adjustments to reconcile net income to net cash  (used in) operating activities:         |       |        |       |
| Interest earned on cash held in trust                                                    |       | (575,114    | )          |
| Deferred tax                                                                             |       | (86,600     | )          |
| Changes in operating assets and liabilities:                                             |       |        |       |
| Accrued interest receivable—other                                                   |       | (4,622      | )          |
| Prepaid expenses                                                                         |       | (202,311    | )          |
| Prepaid taxes                                                                            |       | (21,000     | )          |
| Accounts payable and accrued expenses                                                    |       | 59,728      |       |
| Franchise tax payable                                                                    |       | 75,659      |       |
|                                                                                     |       |        |       |
| Net cash (used in) operating activities                                                  |       | (337,959    | )          |
|                                                                                     |       |        |       |
| **Cash  flows from investing activities:**                                               | ** ** | ** **  | ** ** |
| Cash and cash equivalents deposited in trust account                                     |       | (88,650,000 | )          |
| Cash withdrawn from trust for income tax payment                                         |       | 55,000      |       |
|                                                                                     |       |        |       |
| Net cash (used in) investing activities                                                  |       | (88,595,000 | )          |
|                                                                                     |       |        |       |
| **Cash  flows from financing activities:**                                               | ** ** | ** **  | ** ** |
| Proceeds from offering, net                                                              |       | 86,593,015  |       |
| Proceeds from note payable to stockholder                                                |       | 218,000     |       |
| Repayment of note payable to stockholder                                                 |       | (218,000    | )          |
| Proceeds from issuance of common stock to initial  stockholders                          |       | 2,000       |       |
| Proceeds from issuance of warrants                                                       |       | 4,000,000   |       |
|                                                                                     |       |        |       |
| Net cash provided by financing activities                                                |       | 90,595,015  |       |
|                                                                                     |       |        |       |
| Net increase in cash and cash equivalents                                                |       | 1,662,056   |       |
|                                                                                     |       |        |       |
| Cash and cash  equivalents, beginning                                                    |       | —      |       |
|                                                                                     |       |        |       |
| Cash and cash  equivalents, ending                                                       |       | $           | 1,662,056  |   |
|                                                                                     |       |        |       |
| Supplemental disclosure of taxes paid and non-cash  investing and financing transactions |       |        |       |
| Cash paid for income taxes                                                               |       | $           | 55,000     |   |
| Deferred underwriting fees                                                               |       | 3,600,000   |       |
| Accretion of  trust fund relating to common stock subject to possible conversion         |       | 104,257     |       |

 

**Seeaccompanying notes.**

 

F-6

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**Granahan McCourt Acquisition Corporation****(A Development Stage Company)****Notes to Financial Statements****Period from July 10, 2006 (Date of Inception)Through December 31, 2006**

**Note A—Organization and Business Operations**

Granahan McCourt Acquisition Corporation (the “Company”)was incorporated in Delaware on July 10, 2006 as a blank check company for thepurpose of acquiring, or acquiring control of, one or more assets or operatingbusinesses in the telecommunications and media industries through a merger,capital stock exchange, asset or stock acquisition or other similar businesstransaction (“Business Combination”).  Asof December 31, 2006, the Company had not commenced any operations.  All activity through December 31, 2006relates to the Company’s formation, the sale of shares of common stock in aprivate placement, and the initial public offering (the “Offering”) describedbelow.  The Company has selected December31 as its fiscal year end.

The registration statement for the Company’s initialpublic offering was declared effective on October 18, 2006.  The Company consummated the Offering of11,250,000 Units (as defined in Note C) on October 24, 2006 for net proceeds ofapproximately $83 million.  On October24, 2006, the Company consummated a private placement of 4 million warrants(the “Private Placement”) for an aggregate purchase price of $4 million.

The Company’s management has broad discretion withrespect to the specific application of the net proceeds of the Offering and thePrivate Placement, although substantially all of the net proceeds of theOffering and the Private Placement are intended to be generally applied towardconsummating a Business Combination. Furthermore, there is no assurance that the Company will be able tosuccessfully effect a Business Combination. Upon the closing of the Private Placement and the Offering, $88.65million (including $3.6 million of underwriters’ fees which have been deferredby the underwriters as described in Note C) was placed in a trust account (“TrustAccount”) and invested in United States “government securities” within themeaning of Section 2(a)(16) of the Investment Company Act of 1940 having amaturity of 180 days or less, or in money market funds meeting certainconditions under Rule 2a-7 promulgated under the Investment Company Act of 1940until the earlier of (i) the consummation of its first Business Combination inwhich the fair market value of the assets or operating businesses acquired isat least 80% of the balance in the Trust Account (excluding deferredunderwriters’ discount) and (ii) liquidation of the Company.  The remaining proceeds may be used to pay forbusiness, legal and accounting due diligence on prospective acquisitions andcontinuing general and administrative expenses.

The Company, after signing a definitive agreement forthe acquisition of a target business, will submit such transaction forstockholder approval.  In the event that20% or more of the outstanding stock (excluding, for this purpose, those sharesof common stock issued prior to the Offering) vote against the BusinessCombination and exercise their conversion rights described below, the BusinessCombination will not be consummated. Accordingly, Public Stockholders holding 19.99% of the aggregate numberof shares owned by all Public Stockholders may seek conversion of their sharesin the event of a Business Combination. Such Public Stockholders are entitled to receive their per shareinterest in the Trust Fund computed without regard to the shares held byinitial stockholders.  In this respect,$17,834,249 (including accretion of $104,257) has been classified as commonstock subject to possible conversion at December 31, 2006.  Public Stockholders who convert their stockinto an allocable share of the Trust Account will still have the right toexercise the warrants that they received as part of the Units and still hold.

In the event that the Company does not consummate aBusiness Combination within 18 months from the date of the consummation of theOffering, or 24 months from the consummation of the Offering if certainextension criteria have been satisfied, the proceeds held in the Trust Accountwill be distributed to the Company’s public stockholders, excluding theexisting stockholders to the extent of their initial stock holdings.  In the event of such distribution, the pershare value of the residual assets remaining available for distribution(including Trust Account assets) may be less than the initial public offeringprice per share in the Offering (assuming no value is attributed to theWarrants contained in the Units to be offered in the Offering discussed in NoteC).

**Note B—Summary of Significant Accounting Policies**

Cash and Cash Equivalents

The Company considers all marketable debt securitieswith original maturities of three months or less to be cash equivalents.

F-7

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Use of Estimates

The preparation of financial statements in conformitywith accounting principles generally accepted in the United States of Americarequires management to make estimates and assumptions that affect the reportedamounts of assets and liabilities and disclosure of contingent assets andliabilities at the date of the financial statements and reported amounts ofrevenues and expenses during the reporting period.  Actual results could differ from thoseestimates.

Income Taxes

Deferred income taxes are provided for the differencesbetween the bases of assets and liabilities for financial reporting and incometax purposes.  A valuation allowance isestablished when necessary to reduce deferred tax assets to the amount expectedwhen realized.

Net Income Per Common Share

Basic net income per share is calculated by dividingnet income attributable to (1) common stockholders and (2) common stockholderssubject to possible conversion by their weighted average number of commonshares outstanding during the period. Calculation of the weighted average common shares outstanding during theperiod is comprised of 3,234,375 initial shares outstanding throughout the periodfrom July 10, 2006 to December 31, 2006 and an additional 11,250,000 shares(including 2,249,999 subject to possible conversion) outstanding after theeffective date of the Offering in October 2006. No effect has been given to potential issuances of common stock fromwarrants in the diluted computation, as the effect would not be dilutive.

Recently Issued Accounting Standards

Management does not believe that any recently issued,but not yet effective, accounting standards if currently adopted would have amaterial effect on the accompanying financial statements.

**Note C—Offering**

In the Offering, effective October 24, 2006, theCompany sold to the public 11,250,000 units (“Units”).  The underwriters were paid fees equal to 3%of the gross proceeds of the Offering, or $2,700,000, at the closing of theOffering and have agreed to defer an additional $3,600,000 (the “Deferred Fees”)of their underwriting fees until the consummation of a BusinessCombination.  Upon the consummation of aBusiness Combination, the Company will pay such Deferred Fees out of theproceeds of the Offering held in the Trust Account.  The underwriters will not be entitled to anyinterest accrued on the Deferred Fees. The underwriters have agreed to forfeit any rights to, or claimsagainst, such proceeds if the Company does not successfully complete a BusinessCombination.

Each Unit consists of one share of the Company’scommon stock, $0.0001 par value, and one redeemable common stock purchasewarrant (each a “Warrant”).  Each Warrantwill entitle the holder to purchase from the Company one share of common stockat an exercise price of $6.00 commencing on the later of (a) the completion ofa Business Combination with a target business and (b) October 18, 2007.  The Warrants will expire on October 18,2010.  No warrant may be exercisedunless, at the time of exercise, a post effective amendment to the registrationstatement, or a new registration statement, is effective that includes acurrent prospectus relating to the common stock issuable upon exercise of thewarrant and the common stock underlying the warrant has been registered,qualified or deemed to be exempt under the securities laws of the state ofresidence of the holder of the warrant. The Company is not required to net-cash settle any warrant if it isunable to maintain a current prospectus. The Warrants will be redeemable at a price of $0.01 per Warrant upon 30days notice after the Warrants become exercisable, only in the event that thelast sale price of the common stock is at least $11.50 per share for any 20 tradingdays within a 30 trading day period ending three business days prior to thedate on which notice of redemption is given. The Company does not need the consent of the underwriters in order toredeem the outstanding Warrants.

Mr. David C. McCourt purchased from the Company in aprivate placement 4,000,000 warrants, at a purchase price of $1.00 per warrant,for an aggregate purchase price of $4,000,000. The $4,000,000 proceeds from the private placement were placed in theTrust Account and are part of the liquidating distribution to the publicstockholders in the event of a liquidation prior to a BusinessCombination.  The warrants sold in theprivate placement can be exercised on a cashless basis.  The warrants sold in the private placementhave terms and provisions that are otherwise identical to those of the warrantsbeing sold in the Offering but the warrants issued in connection with theprivate placement will not be transferable by Mr. McCourt until after theconsummation of the initial Business Combination, except that Mr. McCourt ispermitted to transfer the warrants sold in the private placement in certainlimited circumstances, such as by will in the event of his death or to other ofthe Company’s officers and directors. However, the transferees receiving such warrants will be subject to thesame transfer restrictions imposed on Mr. McCourt.  In the event of liquidation prior to aBusiness Combination, the warrants to be sold in the private placement will beworthless.

Commencing on November 27, 2006, the holders of theCompany’s units may elect to separately trade the common stock and warrantsincluded in such units.  Those units notseparated continue to trade on the American Stock Exchange under the symbolGHN.U, and each of the common stock and warrants trade on the American StockExchange under the symbols GHN and GHN.WS, respectively.

**Note D—Note Payable to Stockholder**

The Company issued a $218,000 unsecured promissorynote to one stockholder, David C. McCourt, on July 17, 2006.  The note was non-interest bearing and waspayable on the earlier of July 17, 2007 and the consummation of the Company’sOffering.  In conjunction with the closeof the Offering on October 24, 2006, the Company repaid the note.

F-8

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**Note E—Commitments**

Pursuant to an administrative services agreement,commencing on October 18, 2006, the effective date of the registrationstatement for the Offering (See Note C), through the earlier of theconsummation of a Business Combination or the liquidation of the Company, theCompany pays a fee of $10,000 per month to an affiliate of Mr. McCourt forcertain administrative services, including office space, utilities andsecretarial support.  An amount of$24,516 is included in general and administrative expenses for the period endedDecember 31, 2006 for such services.

In connection with the Offering, the Company committedto pay a 7% fee of the gross offering amount to the underwriters, of which 4%($3,600,000) of the total gross offering amount is deferred until theconsummation of a Business Combination.

**Note F—Common Stock**

On October 24, 2006, the Company effected a 0.72 to 1reverse stock split of its common stock. Following this reverse stock split, and prior to the Offering, therewere 3,234,375 shares of common stock outstanding.  All references in the accompanying financialstatements to the number of shares of common stock and loss per share have beenretroactively restated to reflect the reverse stock split.

**Note G—Preferred Stock**

The Company is authorized to issue 5,000 shares ofblank check preferred stock with such designation, voting and other rights andpreferences as may be determined from time to time by the Board of Directors.

**Note H—Income Taxes**

Provision for income tax expense (benefit) consists ofthe following components:

| **Current:**             |   |    |    |
|--------------------------|--------|---------|---------|
|  Federal            |   | $       | —  |   |
|  State (New Jersey) |   | 34,000  |    |
|                     |   | 34,000  |    |
| **Deferred:**            |   |    |    |
|  Federal            |   | (86,600 | )       |
|  State              |   | —  |    |
| ** **               |   | (86,600 | )       |
| ** **               |   | $       | (52,600 | ) |

 

The total provision for income taxes for the periodended December 31, 2006, differs from that amount which would be computed byapplying the U.S. Federal income tax rate to income before income taxes asfollows:

| Statutory federal income tax  rate              |   | 34  | %      |
|-------------------------------------------------|--------|-----|--------|
| Interest income  exempt from federal income tax |   | (54 | )      |
| Effect of state  income tax                     |   | 6   |   |
|                                            |   | (14 | %)     |

 

At December 31, 2006, the Company recorded a deferredtax asset in the amount of $86,600, which is comprised entirely of the taxeffect of a net operating loss carryforward for Federal income tax purpose ofapproximately $254,800.  The carryforwardwill expire in 2026, if not utilized.

**Note I—Subsequent Event**

Since the underwriters’ over-allotment option was notexercised, on January 16, 2007 the Company repurchased 421,875 shares of commonstock from David C. McCourt, President, Chief Executive Officer and Chairman ofthe Company, at a total aggregate cost of $261.

F-9

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