**UNITED      STATES**

**SECURITIES      AND EXCHANGE COMMISSION**

**WASHINGTON,      DC 20549**

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**FORM      10-QSB/A**

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**x    Quarterly      Report under Sections 13 or 15(d) of **

**the      Securities Exchange Act of 1934 for the quarterly period ended**
**March      31, 2006**

**o    Transition      Report under Sections 13 or 15(d) of the Securities Exchange Act of      1934**

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**Key      Hospitality Acquisition Corporation**

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** **

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**Explanatory      Note:**

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**KEY        HOSPITALITY ACQUISITION CORPORATION**

**MARCH        31, 2006 QUARTERLY REPORT ON FORM 10-QSB**

**TABLE        OF CONTENTS**

|                    |                                                                                                                                                                                 |   | PAGE   |
|-------------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------|
|                    |                                                                                                                                                                                 |   |   |
| PART                I - | FINANCIAL INFORMATION                                                                                                                                                                |   | F-1    |
|                    |                                                                                                                                                                                 |   |   |
| ITEM                1.  | Financial                Statements                                                                                                                                                  |   | F-1    |
|                    |                                                                                                                                                                                 |   |   |
|                    | Balance Sheet as of March 31, 2006              (unaudited)                                                                                                                          |   | F-1    |
|                    |                                                                                                                                                                                 |   |   |
|                    | Statement of Operations for the three              months              ended March 31, 2006and the period from April 25, 2005 (Inception) to              March 31, 2006 (unaudited) |   | F-2    |
|                    |                                                                                                                                                                                 |   |   |
|                    | Statement of Stockholders Equity for              the              period from April 25, 2005 (Inception)to March 31, 2006              (unaudited)                                  |   |   |
|                    |                                                                                                                                                                                 |   |   |
|                    | Statement of Cash Flows for the period              from              April 25, 2005 (inception)to March 31, 2006 (unaudited)                                                        |   | F-3    |
|                    |                                                                                                                                                                                 |   |   |
|                    | Notes to Financial Statements                                                                                                                                                        |   | F-4    |
|                    |                                                                                                                                                                                 |   |   |
| ITEM                2.  | Management’s                Discussion and Analysis or Plan of Operation                                                                                                       |   | 3      |
|                    |                                                                                                                                                                                 |   |   |
| ITEM                3.  | Controls                and Procedures                                                                                                                                               |   | 7      |
|                    |                                                                                                                                                                                 |   |   |
| PART II -               | OTHER INFORMATION                                                                                                                                                                    |   | 8      |
|                    |                                                                                                                                                                                 |   |   |
| ITEM                1.  | Legal                Proceedings                                                                                                                                                     |   | 8      |
|                    |                                                                                                                                                                                 |   |   |
| ITEM                2.  | Unregistered Sales of Equity Securities              and              Use of Proceeds                                                                                                |   | 8      |
|                    |                                                                                                                                                                                 |   |   |
| ITEM                3.  | Defaults                Upon Senior Securities                                                                                                                                       |   | 8      |
|                    |                                                                                                                                                                                 |   |   |
| ITEM                4.  | Submission                of Matters to a Vote of Security Holders                                                                                                                   |   | 8      |
|                    |                                                                                                                                                                                 |   |   |
| ITEM                5.  | Other                Information                                                                                                                                                     |   | 8      |
|                    |                                                                                                                                                                                 |   |   |
| ITEM                6.  | Exhibits                and Reports on Form 8-K                                                                                                                                      |   | 8      |

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**PART      I **
**—      FINANCIAL INFORMATION**

**ITEM      1.    **
**FINANCIAL      STATEMENTS**

**KEY        HOSPITALITY ACQUISITION CORPORATION**

**CONDENSED        BALANCE SHEET**

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| **BALANCE                  SHEET**                                                                                                                                                                                         |   |           |       |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|----------------|------------|
|                                                                                                                                                                                                                       |   |           |       |
| **ASSETS**                                                                                                                                                                                                                 |   | **(Restated)** |       |
|                                                                                                                                                                                                                       |   | **3/31/2006**  |       |
| **Current                  assets**                                                                                                                                                                                        |   |           |       |
| Cash                                                                                                                                                                                                                       |   | $              | 807,304    |   |
|                                                                                                                                                                                                                       |   |           |       |   |
| Prepaid                  expenses                                                                                                                                                                                          |   |           | 84,180     |   |
| Total                  current assets                                                                                                                                                                                      |   |           | 891,484    |   |
|                                                                                                                                                                                                                       |   |           |       |   |
| **Other                  assets,**                                                                                                                                                                                         |   |           |       |   |
| cash                  and cash equivalents held in trust fund                                                                                                                                                              |   |           | 47,590,533 |   |
|                                                                                                                                                                                                                       |   |           |       |   |
| Total                  assets                                                                                                                                                                                              |   | $              | 48,482,017 |   |
|                                                                                                                                                                                                                       |   |           |       |   |
| **LIABILITIES                  AND STOCKHOLDERS’ EQUITY**                                                                                                                                                            |   |           |       |   |
|                                                                                                                                                                                                                       |   |           |       |   |
| **Current                  liabilities**                                                                                                                                                                                   |   |           |       |   |
| Accrued                  accounting fees                                                                                                                                                                                   |   |           | 4,000      |   |
| Income                  taxes payable*** ***                                                                                                                                                                          |   |           | 150,000    |   |
| Derivative                  liability                                                                                                                                                                                      |   |           | 6,579,000  |   |
| Total                  current liabilities                                                                                                                                                                                 |   |           | 6,733,000  |   |
|                                                                                                                                                                                                                       |   |           |       |   |
| Common                  stock, subject to possible redemption, 1,289,355 shares at                                                                                                                                         |   |           |       |   |
| redemption                  value plus interest income of $129,567 (net of taxes)                                                                                                                                     |   |           | 9,500,379  |   |
|                                                                                                                                                                                                                       |   |           |       |   |
| **Stockholders’                  equity**                                                                                                                                                                            |   |           |       |   |
| Preferred                  stock, $.001 par value, authorized 1,000,000 shares; none                  issued                                                                                                               |   |           |       |   |
| Common                  stock, $.001 par value, authorized 50,000,000 shares; issued                  andoutstanding 7,949,995 shares (which includes the 1,289,355                  sharessubject to possible redemption) |   |           | 7,950      |   |
| Paid-in                  capital in excess of par                                                                                                                                                                          |   |           | 33,060,355 |   |
|                                                                                                                                                                                                                       |   |           |       |   |
| Deficit                  accumulated during the development stage                                                                                                                                                          |   |           | (819,667   | ) |
| Total                  stockholders’ equity                                                                                                                                                                          |   |           | 32,248,638 |   |
|                                                                                                                                                                                                                       |   | $              | 48,482,017 |   |

*See      accompanying notes to financial      statements.*

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**KEY        HOSPITALITY ACQUISITION CORPORATION**

**CONDENSED      STATEMENTS OF OPERATIONS**

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| **Statement                of Operations**                                                                          |   |                         |       |                              |   |
|---------------------------------------------------------------------------------------------------------------------|--------|------------------------------|------------|-----------------------------------|--------|
|                                                                                                                |   | **(Restated)**               |       | **(Restated)**                    |   |
|                                                                                                                |   | **1/1/06                to** |       | **4/25/2005**                     |   |
|                                                                                                                |   | **3/31/06**                  |       | **(Inception)                to** |   |
|                                                                                                                |   | **Q1**                       |       | **3/31/2006**                     |   |
|                                                                                                                |   |                         |       |                              |   |
| **Interest                income**                                                                                  |   | $                            | 478,126    |                              | $      | 784,418 |   |
| **Loss                from warrant liability**                                                                      |   |                         | (1,096,500 | )                                 |   | (1,096,500 | ) |
|                                                                                                                |   |                         |       |                              |   |   |   |
| **Operating                costs**                                                                                  |   |                         | 49,168     |                              |   | 168,018 |   |
|                                                                                                                |   |                         |       |                              |   |   |   |
| **Net                loss before income taxes**                                                                     |   | $                            | (667,542   | )                                 | $      | (480,100 | ) |
|                                                                                                                |   |                         |       |                              |   |   |   |
| **Income                taxes**                                                                                     |   |                         | 150,000    |                              |   | 210,000 |   |
|                                                                                                                |   |                         |       |                              |   |   |   |
| **Net                loss**                                                                                         |   | $                            | (817,542   | )                                 | $      | (690,100 | ) |
|                                                                                                                |   |                         |       |                              |   |   |   |
| **Interest                loss attributable to common stock to possible****conversion**                             |   |                         | 81,955     |                              |   | 129,567 |   |
|                                                                                                                |   |                         |       |                              |   |   |   |
|                                                                                                                |   |                         |       |                              |   |   |   |
| **Net                loss allocable to common stockholders not subject to****possible                  conversion** |   | $                            | (899,497   | )                                 | $      | (819,667 | ) |
|                                                                                                                |   |                         |       |                              |   |   |   |
|                                                                                                                |   |                         |       |                              |   |   |   |
| **Weighted                average shares outstanding basic and diluted**                                            |   |                         | 7,949,995  |                              |   | 4,387,163 |   |
|                                                                                                                |   |                         |       |                              |   |   |   |
| **Net                loss per share basic and diluted**                                                             |   | **$**                        | **(0.10**  | **)**                             | **$**  | **(0.16** | **)** |

*See      accompanying notes to financial      statements.*

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**KEY          HOSPITALITY ACQUISITION CORPORATION**

**CONDENSED      STATEMENTS OF CASH FLOWS**

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|                                                                                                                 |   | **(Restated)**                     |         | **(Restated)**                      |   |
|----------------------------------------------------------------------------------------------------------------------|--------|------------------------------------|--------------|-------------------------------------|--------|
|                                                                                                                 |   |                               |         | **4/25/2005**                       |   |
|                                                                                                                 |   | **Quarter                  ended** |         | **(Inception)                  to** |   |
|                                                                                                                 |   | **3/31/2006**                      |         | **3/31/2006**                       |   |
| **Cash                  flows from operating activities**                                                            |   |                               |         |                                |   |
| Net                  loss                                                                                            |   | $                                  | (817,542     | )                                   | $      | (690,100 | ) |
|                                                                                                                 |   |                               |         |                                |   |   |   |
| Increase                  (decrease) in cash attributable to change in                                               |   |                               |         |                                |   |   |   |
| Derivative                  liabilities                                                                              |   |                               | 1,096,500    |                                |   | 1,096,500 |   |
| Prepaid                  expenses                                                                                    |   |                               | 15,028       |                                |   | (84,180 | ) |
| Accrued                  legal fees                                                                                  |   |                               | (25,000      | )                                   |   |   |   |
| Accrued                  accounting fees                                                                             |   |                               | (20,000      | )                                   |   | 4,000 |   |
| Accrued                  franchise taxes                                                                             |   |                               | (52,700      | )                                   |   |   |   |
| Income                  taxes payable                                                                                |   |                               | 90,000       |                                |   | 150,000 |   |
| **Net                  cash provided by operating activities**                                                       |   |                               | 286,286      |                                |   | 476,220 |   |
|                                                                                                                 |   |                               |         |                                |   |   |   |
| Net                    cash used in investing activity,cash and cash equivalents                  held in trust fund |   |                               | (409,818     | )                                   |   | (47,590,533 | ) |
|                                                                                                                 |   |                               |         |                                |   |   |   |
| **Cash                  flows from financing activities**                                                            |   |                               |         |                                |   |   |   |
| Proceeds                  from sale of common stock                                                                  |   |                               |         |                                |   | 25,000 |   |
| Proceeds                  from notes payable, stockholders                                                           |   |                               |         |                                |   | 151,000 |   |
| Payment                  of notes payable, stockholders                                                              |   |                               |         |                                |   | (151,000 | ) |
| Gross                  proceeds of public offering                                                                   |   |                               |         |                                |   | 51,600,000 |   |
| Payment                  of costs of public offering                                                                 |   |                               |         |                                |   | (3,703,483 | ) |
| Sale                  of option                                                                                      |   |                               |    |                                |   | 100 |   |
| **Net                  cash provided by financing activities**                                                       |   |                               | -            |                                |   | 47,921,617 |   |
|                                                                                                                 |   |                               |         |                                |   |   |   |
| **Net                  (decrease) increase in cash**                                                                 |   |                               | (123,532     | )                                   |   | 807,304 |   |
| **Cash,                  beginning of period**                                                                       |   |                               | 930,836      |                                |   | - |   |
| **Cash,                  end of period**                                                                             |   | $                                  | 807,304      |                                | $      | 807,304 |   |
|                                                                                                                 |   |                               |         |                                |   |   |   |
| **Supplemental                  schedule of non-cash financing activity:**                                           |   |                               |         |                                |   |   |   |
|                                                                                                                 |   |                               |         |                                |   |   |   |
| Interest                  income attributable to common stocksubject to possible                  conversion         |   | $                                  | 81,955       |                                | $      | 129,567 |   |

*See      accompanying notes to financial      statements.*

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**KEY          HOSPITALITY ACQUISITION CORPORATION**

**NOTES          TO CONDENSED FINANCIAL STATEMENTS**

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**1.    **
**Basis      of presentation**

**2.    **
**Nature      of operations and summary of significant accounting      policies**

*Nature      of Operations*

*Net      Income Per Common Share*

*Use      of Estimates*

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**KEY        HOSPITALITY ACQUISITION CORPORATION**

**NOTES        TO CONDENSED FINANCIAL STATEMENTS**

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**3.    Restatement      of previously issued financial statements**

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**KEY            HOSPITALITY ACQUISITION CORPORATION**

**NOTES            TO CONDENSED FINANCIAL STATEMENTS**

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***Balance        Sheet Impact***
** **

| **BALANCE                  SHEET**                                                                                                                                                                                         |   |                               |        |            |   |          |   |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|------------------------------------|-------------|-----------------|--------|---------------|--------|
|                                                                                                                                                                                                                       |   | **As                  Previously** |        |            |   |          |   |
| **ASSETS**                                                                                                                                                                                                                 |   | **Reported**                       |        |            |   | **Restated**  |   |
|                                                                                                                                                                                                                       |   | **3/31/06**                        |        | **Adjustments** |   | **3/31/2006** |   |
| **Current                  assets**                                                                                                                                                                                        |   |                               |        |            |   |          |   |
| Cash                                                                                                                                                                                                                       |   | $                                  | 807,304     |            |   |          |   | $ | 807,304 |   |
|                                                                                                                                                                                                                       |   |                               |        |            |   |          |   |   |   |   |
| Prepaid                  expenses                                                                                                                                                                                          |   |                               | 84,180      |            |   |          |   |   | 84,180 |   |
| Total                  current assets                                                                                                                                                                                      |   |                               | 891,484     |            |   |          |   |   | 891,484 |   |
|                                                                                                                                                                                                                       |   |                               |        |            |   |          |   |   |   |   |
| **Other                  assets,**                                                                                                                                                                                         |   |                               |        |            |   |          |   |   |   |   |
| cash                  and cash equivalents held in trust fund                                                                                                                                                              |   |                               | 47,590,533  |            |   |          |   |   | 47,590,533 |   |
|                                                                                                                                                                                                                       |   |                               |        |            |   |          |   |   |   |   |
| Total                  assets                                                                                                                                                                                              |   | $                                  | 48,482,017  |            |   |          |   | $ | 48,482,017 |   |
|                                                                                                                                                                                                                       |   |                               |        |            |   |          |   |   |   |   |
| **LIABILITIES                  AND STOCKHOLDERS’ EQUITY**                                                                                                                                                            |   |                               |        |            |   |          |   |   |   |   |
|                                                                                                                                                                                                                       |   |                               |        |            |   |          |   |   |   |   |
| **Current                  liabilities**                                                                                                                                                                                   |   |                               |        |            |   |          |   |   |   |   |
| Accrued                  accounting fees                                                                                                                                                                                   |   | $                                  | 4,000       |            | $      | -             |   | $ | 4,000 |   |
| Income                  taxes payable*** ***                                                                                                                                                                          |   |                               | 150,000     |            |   |          |   |   | 150,000 |   |
| Derivative                  liability                                                                                                                                                                                      |   |                               |        |            |   | 6,579,000     |   |   | 6,579,000 |   |
| Total                  current liabilities                                                                                                                                                                                 |   |                               | **154,000** |            |   | **6,579,000** |   |   | **6,733,000** |   |
|                                                                                                                                                                                                                       |   |                               |        |            |   |          |   |   |   |   |
| Common                    stock, subject to possible redemption, 1,289,355 shares atredemption                    value plus interest income of $129,567 (net of                    taxes)                            |   |                               | 9,370,812   |            |   | 129,567       |   |   | 9,500,379 |   |
|                                                                                                                                                                                                                       |   |                               |        |            |   |          |   |   |   |   |
| **Stockholders’                  equity**                                                                                                                                                                            |   |                               |        |            |   |          |   |   |   |   |
| Preferred                  stock, $.001 par value, authorized 1,000,000 shares; none                  issued                                                                                                               |   |                               |        |            |   |          |   |   |   |   |
| Common                  stock, $.001 par value, authorized 50,000,000 shares; issued                  andoutstanding 7,949,995 shares (which includes the 1,289,355                  sharessubject to possible redemption) |   |                               | 7,950       |            |   |          |   |   | 7,950 |   |
| Paid-in                  capital in excess of par                                                                                                                                                                          |   |                               | 38,542,855  |            |   | (5,482,500    | )      |   | 33,060,355 |   |
|                                                                                                                                                                                                                       |   |                               |        |            |   |          |   |   |   |   |
| Retained                  earnings                                                                                                                                                                                         |   |                               | 406,400     |            |   | (1,226,067    | )      |   | (819,667 | ) |
| Total                  stockholders’ equity                                                                                                                                                                          |   |                               | 38,957,205  |            |   | (6,708,567    | )      |   | 32,248,638 |   |
|                                                                                                                                                                                                                       |   | $                                  | 48,482,017  |            | $      | -             |   | $ | 48,482,017 |   |

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**KEY          HOSPITALITY ACQUISITION CORPORATION**

**NOTES          TO CONDENSED FINANCIAL STATEMENTS**

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|                                                                                                                          |   | **As                      Previously**    |      |            |   |                                    |   |
|-------------------------------------------------------------------------------------------------------------------------------|--------|-------------------------------------------|-----------|-----------------|--------|-----------------------------------------|--------|
|                                                                                                                          |   | ** **Reported****                    |      |            |   | **Restated**                            |   |
|                                                                                                                          |   | **4/25/2005**                             |      |            |   | **4/25/2005**                      |   |
|                                                                                                                          |   | **(Inception)                        to** |      |            |   | **(Inception)                      to** |   |
|                                                                                                                          |   | **3/31/06**                               |      | **Adjustments** |   | **3/31/06**                             |   |
|                                                                                                                          |   |                                      |      |            |   |                                    |   |
| **Interest                    income**                                                                                        |   | $                                         | 784,418   |            | $      | -                                       |   | $ | 748,418 |   |
| **Gain                    (Loss) from Warrant Liability**                                                                     |   |                                      |      |            |   | (1,096,500                              | )      |   | (1,096,500 | ) |
|                                                                                                                          |   |                                      |      |            |   |                                    |   |   |   |   |
| **Operating                    costs**                                                                                        |   |                                      | 168,018   |            |   | -                                       |   |   | 168,018 |   |
|                                                                                                                          |   |                                      |      |            |   |                                    |   |   |   |   |
| **Net                    income before income taxes**                                                                         |   |                                      | 616,400   |            |   | (1,096,500                              | )      |   | (480,100 | ) |
|                                                                                                                          |   |                                      |      |            |   |                                    |   |   |   |   |
| **Income                    taxes**                                                                                           |   |                                      | 210,000   |            |   | -                                       |   |   | 210,000 |   |
|                                                                                                                          |   |                                      |      |            |   |                                    |   |   |   |   |
| **Net                    income**                                                                                             |   | $                                         | 406,400   |            | $      | (1,096,500                              | )      | $ | (690,100 | ) |
|                                                                                                                          |   |                                      |      |            |   |                                    |   |   |   |   |
| **Interest                    income attributable to common stock to possible****conversion**                                 |   |                                      |      |            |   | 129,567                                 |   |   | 129,567 |   |
|                                                                                                                          |   |                                      |      |            |   |                                    |   |   |   |   |
| **Net                    income allocable to common stockholders not subject to****possible                      conversion** |   |                                      | -         |            |   | (819,667                                | )      | $ | (819,667 | ) |
|                                                                                                                          |   |                                      |      |            |   |                                    |   |   |   |   |
| **Weighted                    average shares outstanding basic and diluted**                                                  |   |                                      | 4,387,163 |            |   | -                                       |   |   | 4,387,163 |   |
|                                                                                                                          |   |                                      |      |            |   |                                    |   |   |   |   |
| **Net                    income per share basic and diluted**                                                                 |   | **$**                                     | **0.09**  |            | **$**  | **(0.25**                               | **)**  | **$** | **(0.16** | **)** |

----

**KEY          HOSPITALITY ACQUISITION CORPORATION**

**NOTES          TO CONDENSED FINANCIAL STATEMENTS**

----

|                                                                                                                      |   | **As                  Previously** |      |            |   |                           |   |
|---------------------------------------------------------------------------------------------------------------------------|--------|------------------------------------|-----------|-----------------|--------|--------------------------------|--------|
|                                                                                                                      |   | **Reported**                       |      |            |   | **Restated**                   |   |
|                                                                                                                      |   | **1/1/06                  to**     |      |            |   | **1/1/06                  to** |   |
|                                                                                                                      |   | **3/31/06**                        |      |            |   | **3/31/06**                    |   |
|                                                                                                                      |   | **Q1**                             |      | **Adjustments** |   | **Q1**                         |   |
|                                                                                                                      |   |                               |      |            |   |                           |   |
| **Interest                  income**                                                                                      |   | $                                  | 478,126   |            | $      | -                              |   | $ | 478,126 |   |
| **Gain(Loss)                  from Warrant Liability**                                                                    |   |                               |      |            |   | (1,096,500                     | )      |   | (1,096,500 | ) |
|                                                                                                                      |   |                               |      |            |   |                           |   |   |   |   |
| **Operating                  costs**                                                                                      |   |                               | 49,168    |            |   | -                              |   |   | 49,168 |   |
|                                                                                                                      |   |                               |      |            |   |                           |   |   |   |   |
| **Net                  income before income taxes**                                                                       |   |                               | 428,958   |            |   | (1,096,500                     | )      |   | (667,542 | ) |
|                                                                                                                      |   |                               |      |            |   |                           |   |   |   |   |
| **Income                  taxes**                                                                                         |   |                               | 150,000   |            |   | -                              |   |   | 150,000 |   |
|                                                                                                                      |   |                               |      |            |   |                           |   |   |   |   |
| **Net                  income**                                                                                           |   | $                                  | 278,958   |            | $      | (1,096,500                     | )      | $ | (817,542 | ) |
|                                                                                                                      |   |                               |      |            |   |                           |   |   |   |   |
| **Interest                  income attributable to common stock to possible****conversion**                               |   |                               |      |            |   | 81,955                         |   |   | 81,955 |   |
|                                                                                                                      |   |                               |      |            |   |                           |   |   |   |   |
| **Net                  income allocable to common stockholders not subject to****possible                    conversion** |   |                               | -         |            |   | (899,497                       | )      | $ | (899,497 | ) |
|                                                                                                                      |   |                               |      |            |   |                           |   |   |   |   |
| **Weighted                  average shares outstanding basic and diluted**                                                |   |                               | 7,949,995 |            |   | -                              |   |   | 7,949,995 |   |
|                                                                                                                      |   |                               |      |            |   |                           |   |   |   |   |
| **Net                  income per share basic and diluted**                                                               |   | **$**                              | **0.04**  |            | **$**  | **(0.14**                      | **)**  | **$** | **(0.10** | **)** |

**4.    Initial      public offering**

**5.    Income      taxes**

----

**ITEM      2.    **
**MANAGEMENT’S      DISCUSSION AND ANALYSIS OR PLAN OF OPERATION**

**Overview**

**Restatement      of Financial Statements**

----

**Balance      Sheet Impact**

| **BALANCE                    SHEET**                                                                                                                                                                                             |   |                                 |        |            |   |          |   |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------------------------------------|-------------|-----------------|--------|---------------|--------|
|                                                                                                                                                                                                                             |   | **As                    Previously** |        |            |   |          |   |
| **ASSETS**                                                                                                                                                                                                                       |   | **Reported**                         |        |            |   | **Restated**  |   |
|                                                                                                                                                                                                                             |   | **3/31/06**                          |        | **Adjustments** |   | **3/31/2006** |   |
| **Current                    assets**                                                                                                                                                                                            |   |                                 |        |            |   |          |   |
| Cash                                                                                                                                                                                                                             |   | $                                    | 807,304     |            |   |          |   | $ | 807,304 |   |
|                                                                                                                                                                                                                             |   |                                 |        |            |   |          |   |   |   |   |
| Prepaid                    expenses                                                                                                                                                                                              |   |                                 | 84,180      |            |   |          |   |   | 84,180 |   |
| Total                    current assets                                                                                                                                                                                          |   |                                 | 891,484     |            |   |          |   |   | 891,484 |   |
|                                                                                                                                                                                                                             |   |                                 |        |            |   |          |   |   |   |   |
| **Other                    assets,**                                                                                                                                                                                             |   |                                 |        |            |   |          |   |   |   |   |
| cash                    and cash equivalents held in trust fund                                                                                                                                                                  |   |                                 | 47,590,533  |            |   |          |   |   | 47,590,533 |   |
|                                                                                                                                                                                                                             |   |                                 |        |            |   |          |   |   |   |   |
| Total                    assets                                                                                                                                                                                                  |   | $                                    | 48,482,017  |            |   |          |   | $ | 48,482,017 |   |
|                                                                                                                                                                                                                             |   |                                 |        |            |   |          |   |   |   |   |
| **LIABILITIES                    AND STOCKHOLDERS’ EQUITY**                                                                                                                                                                |   |                                 |        |            |   |          |   |   |   |   |
|                                                                                                                                                                                                                             |   |                                 |        |            |   |          |   |   |   |   |
| **Current                    liabilities**                                                                                                                                                                                       |   |                                 |        |            |   |          |   |   |   |   |
| Accrued                    accounting fees                                                                                                                                                                                       |   | $                                    | 4,000       |            | $      | -             |   | $ | 4,000 |   |
| Income                    taxes payable*** ***                                                                                                                                                                              |   |                                 | 150,000     |            |   |          |   |   | 150,000 |   |
| Derivative                    liability                                                                                                                                                                                          |   |                                 |        |            |   | 6,579,000     |   |   | 6,579,000 |   |
| Total                    current liabilities                                                                                                                                                                                     |   |                                 | **154,000** |            |   | **6,579,000** |   |   | **6,733,000** |   |
|                                                                                                                                                                                                                             |   |                                 |        |            |   |          |   |   |   |   |
| Common                        stock, subject to possible redemption, 1,289,355 shares atredemption                        value plus interest income of $129,567 (net of                        taxes)                      |   |                                 | 9,370,812   |            |   | 129,567       |   |   | 9,500,379 |   |
|                                                                                                                                                                                                                             |   |                                 |        |            |   |          |   |   |   |   |
| **Stockholders’                    equity**                                                                                                                                                                                |   |                                 |        |            |   |          |   |   |   |   |
| Preferred                    stock, $.001 par value, authorized 1,000,000 shares; none                    issued                                                                                                                 |   |                                 |        |            |   |          |   |   |   |   |
| Common                    stock, $.001 par value, authorized 50,000,000 shares; issued                    andoutstanding 7,949,995 shares (which includes the 1,289,355                    sharessubject to possible redemption) |   |                                 | 7,950       |            |   |          |   |   | 7,950 |   |
| Paid-in                    capital in excess of par                                                                                                                                                                              |   |                                 | 38,542,855  |            |   | (5,482,500    | )      |   | 33,060,355 |   |
|                                                                                                                                                                                                                             |   |                                 |        |            |   |          |   |   |   |   |
| Retained                    earnings                                                                                                                                                                                             |   |                                 | 406,400     |            |   | (1,226,067    | )      |   | (819,667 | ) |
| Total                    stockholders’ equity                                                                                                                                                                              |   |                                 | 38,957,205  |            |   | (6,708,567    | )      |   | 32,248,638 |   |
|                                                                                                                                                                                                                             |   | $                                    | 48,482,017  |            | $      | -             |   | $ | 48,482,017 |   |

----

**Statement      of Operations Impact**

|                                                                                                                          |   | **As                      Previously**    |      |            |   |                                    |   |
|-------------------------------------------------------------------------------------------------------------------------------|--------|-------------------------------------------|-----------|-----------------|--------|-----------------------------------------|--------|
|                                                                                                                          |   | ** **Reported****                    |      |            |   | **Restated**                            |   |
|                                                                                                                          |   | **4/25/2005**                             |      |            |   | **4/25/2005**                      |   |
|                                                                                                                          |   | **(Inception)                        to** |      |            |   | **(Inception)                      to** |   |
|                                                                                                                          |   | **3/31/06**                               |      | **Adjustments** |   | **3/31/06**                             |   |
|                                                                                                                          |   |                                      |      |            |   |                                    |   |
| **Interest                    income**                                                                                        |   | $                                         | 784,418   |            | $      | -                                       |   | $ | 748,418 |   |
| **Gain                    (Loss) from Warrant Liability**                                                                     |   |                                      |      |            |   | (1,096,500                              | )      |   | (1,096,500 | ) |
|                                                                                                                          |   |                                      |      |            |   |                                    |   |   |   |   |
| **Operating                    costs**                                                                                        |   |                                      | 168,018   |            |   | -                                       |   |   | 168,018 |   |
|                                                                                                                          |   |                                      |      |            |   |                                    |   |   |   |   |
| **Net                    income before income taxes**                                                                         |   |                                      | 616,400   |            |   | (1,096,500                              | )      |   | (480,100 | ) |
|                                                                                                                          |   |                                      |      |            |   |                                    |   |   |   |   |
| **Income                    taxes**                                                                                           |   |                                      | 210,000   |            |   | -                                       |   |   | 210,000 |   |
|                                                                                                                          |   |                                      |      |            |   |                                    |   |   |   |   |
| **Net                    income**                                                                                             |   | $                                         | 406,400   |            | $      | (1,096,500                              | )      | $ | (690,100 | ) |
|                                                                                                                          |   |                                      |      |            |   |                                    |   |   |   |   |
| **Interest                    income attributable to common stock to possible****conversion**                                 |   |                                      |      |            |   | 129,567                                 |   |   | 129,567 |   |
|                                                                                                                          |   |                                      |      |            |   |                                    |   |   |   |   |
| **Net                    income allocable to common stockholders not subject to****possible                      conversion** |   |                                      | -         |            |   | (819,667                                | )      | $ | (819,667 | ) |
|                                                                                                                          |   |                                      |      |            |   |                                    |   |   |   |   |
| **Weighted                    average shares outstanding basic and diluted**                                                  |   |                                      | 4,387,163 |            |   | -                                       |   |   | 4,387,163 |   |
|                                                                                                                          |   |                                      |      |            |   |                                    |   |   |   |   |
| **Net                    income per share basic and diluted**                                                                 |   | **$**                                     | **0.09**  |            | **$**  | **(0.25**                               | **)**  | **$** | **(0.16** | **)** |

----

|                                                                                                                          |   | **As                    Previously** |      |            |   |                             |   |
|-------------------------------------------------------------------------------------------------------------------------------|--------|--------------------------------------|-----------|-----------------|--------|----------------------------------|--------|
|                                                                                                                          |   | **Reported**                         |      |            |   | **Restated**                     |   |
|                                                                                                                          |   | **1/1/06                    to**     |      |            |   | **1/1/06                    to** |   |
|                                                                                                                          |   | **3/31/06**                          |      |            |   | **3/31/06**                      |   |
|                                                                                                                          |   | **Q1**                               |      | **Adjustments** |   | **Q1**                           |   |
|                                                                                                                          |   |                                 |      |            |   |                             |   |
| **Interest                    income**                                                                                        |   | $                                    | 478,126   |            | $      | -                                |   | $ | 478,126 |   |
| **Gain(Loss)                    from Warrant Liability**                                                                      |   |                                 |      |            |   | (1,096,500                       | )      |   | (1,096,500 | ) |
|                                                                                                                          |   |                                 |      |            |   |                             |   |   |   |   |
| **Operating                    costs**                                                                                        |   |                                 | 49,168    |            |   | -                                |   |   | 49,168 |   |
|                                                                                                                          |   |                                 |      |            |   |                             |   |   |   |   |
| **Net                    income before income taxes**                                                                         |   |                                 | 428,958   |            |   | (1,096,500                       | )      |   | (667,542 | ) |
|                                                                                                                          |   |                                 |      |            |   |                             |   |   |   |   |
| **Income                    taxes**                                                                                           |   |                                 | 150,000   |            |   | -                                |   |   | 150,000 |   |
|                                                                                                                          |   |                                 |      |            |   |                             |   |   |   |   |
| **Net                    income**                                                                                             |   | $                                    | 278,958   |            | $      | (1,096,500                       | )      | $ | (817,542 | ) |
|                                                                                                                          |   |                                 |      |            |   |                             |   |   |   |   |
| **Interest                    income attributable to common stock to possible****conversion**                                 |   |                                 |      |            |   | 81,955                           |   |   | 81,955 |   |
|                                                                                                                          |   |                                 |      |            |   |                             |   |   |   |   |
| **Net                    income allocable to common stockholders not subject to****possible                      conversion** |   |                                 | -         |            |   | (899,497                         | )      | $ | (899,497 | ) |
|                                                                                                                          |   |                                 |      |            |   |                             |   |   |   |   |
| **Weighted                    average shares outstanding basic and diluted**                                                  |   |                                 | 7,949,995 |            |   | -                                |   |   | 7,949,995 |   |
|                                                                                                                          |   |                                 |      |            |   |                             |   |   |   |   |
| **Net                    income per share basic and diluted**                                                                 |   | **$**                                | **0.04**  |            | **$**  | **(0.14**                        | **)**  | **$** | **(0.10** | **)** |

**Results        of Operations and Liquidity and Capital Resources**

----

**ITEM      3.    **
**CONTROLS      AND PROCEDURES**

----

**PART      II —**
**OTHER      INFORMATION**

**ITEM      1.    **
**LEGAL      PROCEEDINGS**

**ITEM      2.    **
**UNREGISTERED      SALES OF EQUITY SECURITIES AND USE OF PROCEEDS**

**ITEM      3.    **
**DEFAULTS      UPON SENIOR SECURITIES**

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

**ITEM      5.    **
**OTHER      INFORMATION**

**ITEM      6.    **
**EXHIBITS**

| **Exhibit              No.** | **Description              of              Exhibits**                   |
|------------------------------|-------------------------------------------------------------------------|
|                         |                                                                    |
| 31.1                         | Section                302 Certification of Principal Executive Officer |
| 31.2                         | Section                302 Certification of Principal Financial Officer |
| 32.1                         | Section                906 Certification                                |

----

**SIGNATURES**

|                                   |                                                                                  |                                            |
|----------------------------------------|---------------------------------------------------------------------------------------|-------------------------------------------------|
|                                   | **KEY                HOSPITALITY ACQUISITION CORPORATION**                            |
|                              |                                                                             |                                       |
| Date:                December 22, 2006 | By:                                                                         | /s/ Jeffrey              S. Davidson  |
|                                   | Jeffrey              S. Davidson                                                 |
|                                   | *Co-Chairman                of the Board and**Chief                Executive Officer* |

----