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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549



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FORM 10-Q



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

For The Quarterly Period Ended June 30, 2006

OR



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

For The Transition Period from __________ to ______________

Commission File Number
000-51506



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Boulder
Specialty Brands, Inc.

(Exact name of registrant as specified in its charter)



|                                                  |  |                                     
|------------------------------------------------- |  | ------------------------------------
|Delaware                                          |  | 20-2949397                          
|(State of or other jurisdiction of incorporation) |  | (I.R.S. Employer Identification No.)



|                                             |  |           
|-------------------------------------------- |  | ----------
|6106 Sunrise Ranch Drive, Longmont, Colorado |  | 80503     
|(Address of principal executive offices)     |  | (Zip code)

Registrants telephone number, including area code: (303) 682-1982

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934
during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x    No ̈.

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of accelerated filer and large accelerated filer in
Rule 12b-2 of the Exchange Act.

Large accelerated filer ̈Accelerated filer ̈Non-accelerated filer x

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

At August 1, 2006 the Registrant had
outstanding 15,951,050 shares of Common Stock.



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##### Table of Contents

BOULDER SPECIALTY BRANDS, Inc.

INDEX



|                              |  |               |  |                                                                                                                                                                            |  |     
|----------------------------- |  | ------------- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ----
|                              |  |               |  |                                                                                                                                                                            |  | Page
|                              | 
|Part I. Financial Information |  |              
|                              |  |               | 
|                              |  | Item 1.       |  | Financial Statements                                                                                                                                                       |  |     
|                              |  |               | 
|                              |  |               |  | Balance Sheets at June 30, 2006 (unaudited) and December 31, 2005                                                                                                          |  | 2   
|                              |  |               | 
|                              |  |               |  | Unaudited Statements of Operations for the three months ended June 30, 2006 and June 30, 2005, for the six months ended June 30, 2006, and from inception to June 30, 2006 |  | 3   
|                              |  |               | 
|                              |  |               |  | Unaudited Statement of Changes in Stockholders Equity from inception to June 30, 2006                                                                                     |  | 4   
|                              |  |               | 
|                              |  |               |  | Unaudited Statements of Cash Flows for the six months ended June 30, 2006 and June 30, 2005, and from inception to June 30, 2006                                           |  | 5   
|                              |  |               | 
|                              |  |               |  | Notes to Unaudited Financial Statements                                                                                                                                    |  | 6   
|                              |  |               | 
|                              |  | Item 2.       |  | Managements Discussion and Analysis of Financial Condition and Results of Operations                                                                                      |  | 15  
|                              |  |               | 
|                              |  | Item 3.       |  | Quantitative and Qualitative Disclosure About Market Risk                                                                                                                  |  | 17  
|                              |  |               | 
|                              |  | Item 4.       |  | Controls and Procedures                                                                                                                                                    |  | 18  
|                              | 
|Part II. Other Information    |  |              
|                              |  |               | 
|                              |  | Item 1.       |  | Legal Proceedings                                                                                                                                                          |  | 18  
|                              |  |               | 
|                              |  | Item 1A.      |  | Risk Factors                                                                                                                                                               |  | 18  
|                              |  |               | 
|                              |  | Item 2.       |  | Unregistered Sales of Equity Securities and Use of Proceeds                                                                                                                |  | 20  
|                              |  |               | 
|                              |  | Item 3.       |  | Defaults Upon Senior Securities                                                                                                                                            |  | 20  
|                              |  |               | 
|                              |  | Item 4.       |  | Submission of Matters to a Vote of Security Holders                                                                                                                        |  | 20  
|                              |  |               | 
|                              |  | Item 5.       |  | Other Information                                                                                                                                                          |  | 20  
|                              |  |               | 
|                              |  | Item 6.       |  | Exhibits                                                                                                                                                                   |  | 20  
|                              |  |              
|                              |  | Signatures    |  | 21                                                                                                                                                                        
|                              |  |              
|                              |  | Exhibit Index |  | 22                                                                                                                                                                        



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##### Table of Contents

Part I. Financial Information



|Item 1. | Financial Statements
|------- | --------------------

BOULDER SPECIALTY BRANDS, Inc.

(a development stage company)

Balance Sheets



|                                                                                                                                                   |  |                           |             |                             |   |             |  
|-------------------------------------------------------------------------------------------------------------------------------------------------- |  | ------------------------- | ----------- | --------------------------- | - | ----------- | -
|                                                                                                                                                   |  | (Unaudited) June 30, 2006 |             | As RestatedDecember 31,2005 |  
|Assets                                                                                                                                             |  |                           |             |                             |   |             |  
|Current assets                                                                                                                                     |  |                           |             |                             |   |             |  
|Cash and cash equivalents                                                                                                                          |  | $                         | 1,426,373   |                             | $ | 1,548,609   |  
|Investments held in trust - restricted                                                                                                             |  |                           | 99,712,509  |                             |   | 98,354,755  |  
|Accrued interest receivable in trust                                                                                                               |  |                           | 25,320      |                             |   | 23,420      |  
|Prepaid and other current assets                                                                                                                   |  |                           | 168,502     |                             |   | 352,840     |  
|Deferred tax asset                                                                                                                                 |  |                           | 234,529     |                             |   |            |  
|                                                                                                                                                   |  |                           |             |                             |   |             |  
|Total current assets                                                                                                                               |  |                           | 101,567,233 |                             |   | 100,279,624 |  
|Other assets                                                                                                                                       |  |                           | 189,123     |                             |   | 800         |  
|                                                                                                                                                   |  |                           |             |                             |   |             |  
|Total assets                                                                                                                                       |  | $                         | 101,756,356 |                             | $ | 100,280,424 |  
|                                                                                                                                                   |  |                           |             |                             |   |             |  
|Liabilities and Stockholders Equity                                                                                                               |  |                           |             |                             |   |             |  
|Current liabilities                                                                                                                                |  |                           |             |                             |   |             |  
|Accounts payable and accrued expenses                                                                                                              |  | $                         | 629,617     |                             | $ | 841,812     |  
|Advances from stockholders                                                                                                                         |  |                           | 136,093     |                             |   | 74,669      |  
|Deferred underwriting fees                                                                                                                         |  |                           | 3,573,035   |                             |   | 3,573,035   |  
|Income taxes payable                                                                                                                               |  |                           | 666,644     |                             |   |            |  
|Derivative liabilities                                                                                                                             |  |                           | 14,802,574  |                             |   | 17,018,480  |  
|                                                                                                                                                   |  |                           |             |                             |   |             |  
|Total current liabilities                                                                                                                          |  |                           | 19,807,963  |                             |   | 21,507,996  |  
|Common stock, subject to possible conversion, 2,550,892 shares at conversion value                                                                 |  |                           | 19,661,116  |                             |   | 19,661,116  |  
|Deferred interest income                                                                                                                           |  |                           | 118,451     |                             |   |            |  
|Commitments and contingencies                                                                                                                      |  |                           |             |                             |   |             |  
|Stockholders equity                                                                                                                               |  |                           |             |                             |   |             |  
|Preferred stock, $.0001 par value, 1,000,000 shares authorized; none issued or outstanding                                                         |  |                           |            |                             |   |            |  
|Common stock, $.0001 par value, 75,000,000 shares authorized; 15,951,050 shares issued and outstanding (including 2,550,892 subject to
conversion) |  |                           | 1,595       |                             |   | 1,595       |  
|Additional paid-in capital                                                                                                                         |  |                           | 59,741,972  |                             |   | 59,746,819  |  
|Deficit accumulated during the development stage                                                                                                   |  |                           | 2,425,259   |                             |   | (637,102    | )
|                                                                                                                                                   |  |                           |             |                             |   |             |  
|Total stockholders equity                                                                                                                         |  |                           | 62,168,826  |                             |   | 59,111,312  |  
|                                                                                                                                                   |  |                           |             |                             |   |             |  
|Total liabilities and stockholders equity                                                                                                         |  | $                         | 101,756,356 |                             | $ | 100,280,424 |  
|                                                                                                                                                   |  |                           |             |                             |   |             |  

See accompanying notes to unaudited financial statements



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##### Table of Contents

BOULDER SPECIALTY BRANDS, Inc.

(a development stage company)

Statements of Operations (Unaudited)



|                                                        |  |                                |            |   |                                       |   |           |                              |  |   |                                         |   |  |   |            |  
|------------------------------------------------------- |  | ------------------------------ | ---------- | - | ------------------------------------- | - | --------- | ---------------------------- |  | - | --------------------------------------- | - |  | - | ---------- | -
|                                                        |  | Three monthsendedJune 30, 2006 |            |   | May 31,2005(inception)to June 30,2005 |   |           | Six monthsendedJune 30, 2006 |  |   | May 31, 2005(inception) toJune 30, 2006 |  
|Formation and operating costs                           |  | $                              | 506,705    |   |                                       | $ | 685       |                              |  | $ | 730,334                                 |   |  | $ | 839,888    |  
|Expenses settled with founders stock                    |  |                                |           |   |                                       |   |          |                              |  |   |                                        |   |  |   | 2,359,856  |  
|                                                        |  |                                |            |   |                                       |   |           |                              |  |   |                                         |   |  |   |            |  
|Operating loss                                          |  |                                | (506,705   | ) |                                       |   | (685      | )                            |  |   | (730,334                                | ) |  |   | (3,199,744 | )
|Interest income                                         |  |                                | 945,329    |   |                                       |   |          |                              |  |   | 2,008,904                               |   |  |   | 2,032,646  |  
|Gain on derivative liability                            |  |                                | 3,062,602  |   |                                       |   |           |                              |  |   | 2,215,906                               |   |  |   | 4,024,472  |  
|                                                        |  |                                |            |   |                                       |   |           |                              |  |   |                                         |   |  |   |            |  
|Income (loss) before income taxes                       |  |                                | 3,501,226  |   |                                       |   | (685      | )                            |  |   | 3,494,476                               |   |  |   | 2,857,374  |  
|Income tax expense                                      |  |                                | 147,778    |   |                                       |   |          |                              |  |   | 432,115                                 |   |  |   | 432,115    |  
|                                                        |  |                                |            |   |                                       |   |           |                              |  |   |                                         |   |  |   |            |  
|Net income (loss)                                       |  | $                              | 3,353,448  |   |                                       | $ | (685      | )                            |  | $ | 3,062,361                               |   |  | $ | 2,425,259  |  
|                                                        |  |                                |            |   |                                       |   |           |                              |  |   |                                         |   |  |   |            |  
|Basic and diluted net income (loss) per share           |  | $                              | 0.23       |   |                                       | $ | (0.00     | )                            |  | $ | 0.21                                    |   |  | $ | 0.28       |  
|                                                        |  |                                |            |   |                                       |   |           |                              |  |   |                                         |   |  |   |            |  
|Weighted average shares outstanding - basic and diluted |  |                                | 14,355,945 |   |                                       |   | 3,190,210 |                              |  |   | 14,355,945                              |   |  |   | 8,744,881  |  
|                                                        |  |                                |            |   |                                       |   |           |                              |  |   |                                         |   |  |   |            |  

See accompanying notes to unaudited financial statements



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BOULDER SPECIALTY BRANDS, Inc.

(a development stage company)

Statement of Changes in Stockholders Equity (Unaudited)

For the period from May 31, 2005 (inception) to June 30, 2006



|                                                                                                                                         |  |              |  |                                      |       |  |                                                          |             |   |                                 |   |           |   |  |   |             |  
|---------------------------------------------------------------------------------------------------------------------------------------- |  | ------------ |  | ------------------------------------ | ----- |  | -------------------------------------------------------- | ----------- | - | ------------------------------- | - | --------- | - |  | - | ----------- | -
|                                                                                                                                         |  | Common Stock |  | AdditionalPaid-In CapitalAs Restated |       |  | DeficitAccumulatedDuring
theDevelopmentStage As Restated |             |   | StockholdersEquity As Restated |  
|                                                                                                                                         |  | Shares       |  | Amount                               |       |  |                                                         
|Initial capital from founding stockholders for cash                                                                                      |  | 3,190,210    |  | $                                    | 319   |  | $                                                        | 24,681      |   |                                 |   |          |   |  | $ | 25,000      |  
|Sale of 12,760,840 units, net of underwriting discount and offering expenses (including 2,550,892 shares subject to possible
conversion) |  | 12,760,840   |  |                                      | 1,276 |  |                                                          | 94,150,444  |   |                                 |   |          |   |  |   | 94,151,720  |  
|Proceeds subject to possible conversion of 2,550,892 shares                                                                              |  |             |  |                                      |      |  |                                                          | (19,661,116 | ) |                                 |   |          |   |  |   | (19,661,116 | )
|Reduction of equity related to warrant liability                                                                                         |  |              |  |                                      |       |  |                                                          | (18,827,046 | ) |                                 |   |           |   |  |   | (18,827,046 | )
|Proceeds from the issuance of warrants                                                                                                   |  |             |  |                                      |      |  |                                                          | 1,700,000   |   |                                 |   |          |   |  |   | 1,700,000   |  
|Expenses settled with founders stock                                                                                                     |  |             |  |                                      |      |  |                                                          | 2,359,856   |   |                                 |   |          |   |  |   | 2,359,856   |  
|Net loss                                                                                                                                 |  |             |  |                                      |      |  |                                                          |            |   |                                 |   | (637,102  | ) |  |   | (637,102    | )
|                                                                                                                                         |  |              |  |                                      |       |  |                                                          |             |   |                                 |   |           |   |  |   |             |  
|Balance at December 31, 2005                                                                                                             |  | 15,951,050   |  |                                      | 1,595 |  |                                                          | 59,746,819  |   |                                 |   | (637,102  | ) |  |   | 59,111,312  |  
|Finalization of offering costs incurred                                                                                                  |  |              |  |                                      |       |  |                                                          | (4,847      | ) |                                 |   |           |   |  |   | (4,847      | )
|Net income                                                                                                                               |  |              |  |                                      |       |  |                                                          |             |   |                                 |   | 3,062,361 |   |  |   | 3,062,361   |  
|                                                                                                                                         |  |              |  |                                      |       |  |                                                          |             |   |                                 |   |           |   |  |   |             |  
|Balance at June 30, 2006 (unaudited)                                                                                                     |  | 15,951,050   |  | $                                    | 1,595 |  | $                                                        | 59,741,972  |   |                                 | $ | 2,425,259 |   |  | $ | 62,168,826  |  
|                                                                                                                                         |  |              |  |                                      |       |  |                                                          |             |   |                                 |   |           |   |  |   |             |  

See accompanying notes to unaudited financial statements



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BOULDER SPECIALTY BRANDS, Inc.

(a development stage company)

Statements of Cash Flows (Unaudited)



|                                                                                |  |                              |             |   |                                       |   |          |                                                    |  |   |              |  
|------------------------------------------------------------------------------- |  | ---------------------------- | ----------- | - | ------------------------------------- | - | -------- | -------------------------------------------------- |  | - | ------------ | -
|                                                                                |  | Six monthsended June 30,2006 |             |   | May 31,2005(inception)to June 30,2005 |   |          | As RestatedMay 31, 2005(inception) toJune 30, 2006 | 
|Cash flows from operating activities                                            |  |                              |             |   |                                       |   |          |                                                    |  |   |              |  
|Net income (loss)                                                               |  | $                            | 3,062,361   |   |                                       | $ | (685     | )                                                  |  | $ | 2,425,259    |  
|Adjustments to reconcile net loss to net cash provided by operating activities: |  |                              |             |   |                                       |   |          |                                                    |  |   |              |  
|Expenses settled with founders stock                                            |  |                              |            |   |                                       |   |          |                                                    |  |   | 2,359,856    |  
|Deferred income taxes                                                           |  |                              | (234,529    | ) |                                       |   |          |                                                    |  |   | (234,529     | )
|Accrued interest receivable in trust                                            |  |                              | (1,900      | ) |                                       |   |          |                                                    |  |   | (25,320      | )
|Decrease in derivative liabilities                                              |  |                              | (2,215,906  | ) |                                       |   |          |                                                    |  |   | (4,024,472   | )
|Deferred interest income                                                        |  |                              | 118,451     |   |                                       |   |          |                                                    |  |   | 118,451      |  
|Changes in operating assets and liabilities:                                    |  |                              |             |   |                                       |   |          |                                                    |  |   |              |  
|Prepaid assets and other current assets                                         |  |                              | 184,338     |   |                                       |   |          |                                                    |  |   | (168,502     | )
|Accounts payable and accrued expenses                                           |  |                              | (80,230     | ) |                                       |   | 28,050   |                                                    |  |   | 381,353      |  
|Income taxes payable                                                            |  |                              | 666,644     |   |                                       |   |          |                                                    |  |   | 666,644      |  
|                                                                                |  |                              |             |   |                                       |   |          |                                                    |  |   |              |  
|Net cash used in operating activities                                           |  |                              | 1,499,229   |   |                                       |   | 27,365   |                                                    |  |   | 1,498,740    |  
|Cash flow from investing activities                                             |  |                              |             |   |                                       |   |          |                                                    |  |   |              |  
|Proceeds from maturity of Treasury Bills - held in Trust                        |  |                              | 98,354,251  |   |                                       |   |          |                                                    |  |   | 98,354,251   |  
|Purchase of Treasury Bills - held in trust                                      |  |                              | (99,712,236 | ) |                                       |   |          |                                                    |  |   | (198,066,487 | )
|(Increase) decrease in cash held in trust                                       |  |                              | 231         |   |                                       |   |          |                                                    |  |   | (273         | )
|Payments for other assets                                                       |  |                              |            |   |                                       |   |          |                                                    |  |   | (800         | )
|                                                                                |  |                              |             |   |                                       |   |          |                                                    |  |   |              |  
|Net cash used in investing activities                                           |  |                              | (1,357,754  | ) |                                       |   | 0        |                                                    |  |   | (99,713,309  | )
|Cash flow from financing activities                                             |  |                              |             |   |                                       |   |          |                                                    |  |   |              |  
|Proceeds form notes payable to stockholders                                     |  |                              |            |   |                                       |   | 200,000  |                                                    |  |   | 200,000      |  
|Payments on notes payable to stockholders                                       |  |                              |            |   |                                       |   |          |                                                    |  |   | (200,000     | )
|Increase in advances from stockholders                                          |  |                              | 61,424      |   |                                       |   | 4,669    |                                                    |  |   | 136,093      |  
|Proceeds from sale of shares of common stock                                    |  |                              |            |   |                                       |   | 25,000   |                                                    |  |   | 25,000       |  
|Gross proceeds from public offering                                             |  |                              |            |   |                                       |   |          |                                                    |  |   | 102,086,720  |  
|Proceeds from sale of warrants                                                  |  |                              |            |   |                                       |   |          |                                                    |  |   | 1,700,000    |  
|Payments for offering costs                                                     |  |                              | (325,135    | ) |                                       |   | (170,374 | )                                                  |  |   | (4,306,871   | )
|                                                                                |  |                              |             |   |                                       |   |          |                                                    |  |   |              |  
|Net cash provided (used) by financing activities                                |  |                              | (263,711    | ) |                                       |   | 59,295   |                                                    |  |   | 99,640,942   |  
|                                                                                |  |                              |             |   |                                       |   |          |                                                    |  |   |              |  
|Net increase (decrease) in cash                                                 |  |                              | (122,236    | ) |                                       | $ | 86,660   |                                                    |  |   | 1,426,373    |  
|Cash - Beginning of period                                                      |  |                              | 1,548,609   |   |                                       |   |         |                                                    |  |   |             |  
|                                                                                |  |                              |             |   |                                       |   |          |                                                    |  |   |              |  
|Cash - End of period                                                            |  | $                            | 1,426,373   |   |                                       | $ | 86,660   |                                                    |  | $ | 1,426,373    |  
|                                                                                |  |                              |             |   |                                       |   |          |                                                    |  |   |              |  
|Supplemental schedule of non-cash financing activities                          |  |                              |             |   |                                       |   |          |                                                    |  |   |              |  
|Accrual of deferred acquisition costs                                           |  | $                            | 188,323     |   |                                       | $ |         |                                                    |  | $ |             |  
|                                                                                |  |                              |             |   |                                       |   |          |                                                    |  |   |              |  
|Accrual of deferred underwriting fees                                           |  | $                            |            |   |                                       | $ |         |                                                    |  | $ | 3,573,035    |  
|                                                                                |  |                              |             |   |                                       |   |          |                                                    |  |   |              |  
|Accrual of derivative liability associated with warrants                        |  | $                            |            |   |                                       | $ |         |                                                    |  | $ | 18,827,046   |  
|                                                                                |  |                              |             |   |                                       |   |          |                                                    |  |   |              |  

See accompanying notes to unaudited financial statements



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##### Table of Contents

BOULDER SPECIALTY BRANDS, Inc.

(a development stage company)

Notes to Unaudited Financial Statements

Note 1
 Basis of Presentation

These unaudited condensed financial statements have been prepared in accordance with accounting
principles generally accepted in the United States for interim financial information and the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and notes required by accounting
principles generally accepted in the United States of America. These financial statements should be read in conjunction with the audited financial statements that were included in the Companys Form 10-K/A for the year ended December 31,
2005.

In the opinion of management, all adjustments, consisting only of normal recurring adjustments, except as disclosed herein,
considered necessary for a fair statement of our financial position, the results of our operations and cash flows, and the changes in stockholders equity have been included in these unaudited condensed financial statements.

Operating results for the interim periods presented are not necessarily indicative of the results that may be expected for the remainder of the fiscal
year ending December 31, 2006.

Note 2  Organization and Nature of Business Operations

Boulder Specialty Brands, Inc. (the Company) was incorporated in Delaware on May 31, 2005 as a blank check company whose
objective is to acquire one or more operating businesses in the food or beverage industries through a merger, stock exchange, asset acquisition or similar business combination.

All activity from May 31, 2005 (inception) through June 30, 2006 relates to the Companys formation, initial public offering (the
Offering) described below and in Note 4, and search for a business combination, described below. The Company has selected December 31, as its fiscal year end.

The registration statement for the Offering was declared effective on December 16, 2005. The Company consummated the Offering on December 21,
2005, and received net proceeds of approximately $96 million. The Companys management has broad discretion with respect to the specific application of the net proceeds of the Offering, although substantially all of the net proceeds of the
Offering are intended to be generally applied toward consummating a business combination with an operating company. As used herein, a Target Business shall mean one or more businesses in the food or beverage industries that at the time
of the Companys initial business combination has a fair market value of at least 80% of the balance in the trust account (excluding deferred underwriting discounts and commissions of approximately $3.6 million) described below and a
Business Combination shall mean the initial combination of the Company of such Target Business that meets the fair market value criterion above.

The Companys efforts in identifying a prospective Target Business have been and will be limited to businesses in the food and beverage industries. The Company may explore opportunities in the food and beverage
industries in both domestic and international markets.



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##### Table of Contents

BOULDER SPECIALTY BRANDS, Inc.

(a development stage company)

Notes to Unaudited Financial Statements

Note 2  Organization and Nature of Business Operations (continued)

Approximately 96% of the proceeds of the Offering were placed in a trust account invested until the earlier of (i) the consummation of the
Companys first Business Combination or (ii) the liquidation of the Company. The proceeds in the trust account include 3.5% of the gross proceeds representing deferred underwriting discounts and commissions that will be released to the
underwriters on completion of a Business Combination. The remaining proceeds outside of the trust account, together with interest income on the balance in the trust account, net of income taxes on such interest, of up to $750,000 that is releasable
to the Company, may be used to pay for business, legal and accounting due diligence on prospective acquisitions and continuing general and administrative expenses. The $750,000 from the trust account is available to the Company for use in due
diligence and for general and administrative expenses.

The Company will seek stockholder approval before it will effect any Business
Combination, even if the Business Combination would not ordinarily require stockholder approval under applicable state law. In connection with the stockholder vote required to approve any Business Combination, all of the Companys initial
stockholders, including its officers and directors (Initial Stockholders), have agreed to vote the shares of common stock owned by them immediately before the Offering in accordance with the majority of the shares of common stock voted
by the Public Stockholders. Public Stockholders are the holders of common stock sold as part of the Units in the Offering or in the aftermarket. The Company will proceed with a Business Combination only if a majority of the shares of
common stock voted by the Public Stockholders are voted in favor of the Business Combination and Public Stockholders owning less than 20% of the shares sold in the Public Offering exercise their conversion rights. If a majority of the shares of
common stock voted by the Public Stockholders are not voted in favor of a proposed initial Business Combination before June 16, 2007 (or before December 16, 2007 if a letter of intent, agreement in principle or definitive agreement has
been executed by June 16, 2007 and the Business Combination has not yet been consummated by June 16, 2007), the Company may combine with another Target Business meeting the fair market value criterion described above.

Public Stockholders voting against a Business Combination will be entitled to convert their stock into a pro rata share of the total amount on deposit in
the trust account, before payment of underwriting discounts and commissions and including any interest earned on their portion of the trust account net of income taxes payable thereon, and net of any interest income (less income taxes payable) of up
to $750,000 on the balance of the trust account previously released to the Company, if a Business Combination is approved and completed. Public Stockholders who convert their stock into their share of the trust account will continue to have the
right to exercise any Warrants they may hold.

The Company will dissolve and promptly distribute only to its Public Stockholders the amount
in the trust account less any income taxes payable on interest income and interest income previously released to the Company, as described above, plus any remaining net assets if the Company does not effect a Business Combination by June 16,
2007 (or by December 16, 2007 if a letter of intent, agreement in principle or definitive agreement has been executed by June 16, 2007 and the Business Combination has not yet been consummated by June 16, 2007). In the event of
liquidation, it is likely that the per share value of the residual assets remaining available for distribution (including trust account assets) will be less than the initial public offering price per share in the Offering (assuming no value is
attributed to the Warrants contained in the Units sold in the Offering discussed in Note 4).



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BOULDER SPECIALTY BRANDS, Inc.

(a development stage company)

Notes to Unaudited Financial Statements

Note 3  Summary of Significant Accounting Policies

Cash and Cash Equivalents

The Company considers all highly liquid investments with original maturities of three months or less to be cash equivalents. As of June 30, 2006, and periodically from completion of its initial public offering, the Company has
maintained balances in various operating accounts in excess of federally insured limits.

Investments Held in Trust

At June 30, 2006, the investments held in trust consisted principally of short term Treasury Bills. The Company has the ability
and the intent to hold its investments until maturity. In accordance with Statement of Financial Accounting Standards (SFAS) No. 115, the Company carries its investments at amortized cost.

Other Assets

Other
assets consist primarily of deferred acquisition costs of $188,323. These costs relate to ongoing due diligence.

Accounting for Warrants  Derivative Liability

On December 21, 2005, the Company consummated its initial public
offering of 12,760,840 Units. Each Unit consists of one share of common stock and one redeemable common stock purchase Warrant. Each Warrant entitles the holder to purchase from the Company one share of its common stock at an exercise price of
$6.00. In addition, certain initial shareholders of the Company purchased 1,000,000 warrants for $1.70 per warrant with an exercise price of $6.00 per share.

Emerging Issues Task Force Issue No. 00-19, Accounting for Derivative Financial Instruments Indexed to and Potentially Settled in, a Companys Own Stock (EITF 00-19), requires freestanding
contracts that are settled in a companys own stock, including common stock warrants, to be designated as an equity instrument, asset or a liability. Under the provisions of EITF 00-19, a contract designated as an asset or a liability must be
carried at fair value on a companys balance sheet, with any changes in fair value recorded in the companys results of operations. A contract designated as an equity instrument must be included within equity, and no fair value adjustments
are required from period to period. In accordance with EITF 00-19, the 12,760,840 Warrants issued in the Offering to purchase common stock are separately accounted for as liabilities and the 1,000,000 warrants issued to initial shareholders to
purchase common stock are accounted for as equity.

Statement of Financial Accounting Standard No. 133 (SFAS
No. 133), Accounting for Derivative Instruments and Hedging Activities, as amended, requires all derivatives to be recorded on the balance sheet at fair value. Furthermore, paragraph 11 (a) of SFAS No. 133 precludes
contracts issued or held by a reporting entity that are both (1) indexed to its own stock and (2) classified as stockholders equity in its statement of financial position from being treated as derivative instruments. While the
Warrants to purchase the additional 12,760,840 shares are indexed to the Companys common stock, the fact that the shares underlying the Warrants require future registration in accordance with the warrant agreement, requires the Company to
classify these instruments as a liability in accordance with EITF 00-19 paragraph 14. This derivative liability will be adjusted to fair value, and any changes will be recorded as non-operating gains or losses.



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BOULDER SPECIALTY BRANDS, Inc.

(a development stage company)

Notes to Unaudited Financial Statements

Note 3  Summary of Significant Accounting Policies (continued)

Accounting for Warrants  Derivative Liability (continued)

The Warrants sold as part of the Units in our Offering began separate trading from the Units in January 2006 and the price is quoted on the Over the
Counter Bulletin Board (OTCBB). Consequently, the fair value of these Warrants is estimated as the market price of a Warrant at each period end. To the extent that the market price increases or decreases, the Companys derivative
liabilities will also increase or decrease, with a corresponding effect on the Companys consolidated statement of operations. The fair value at June 30, 2006 was calculated to be $14,802,574, or approximately $1.16 per warrant. This
compares to a valuation of $17,865,176, or approximately $ 1.40 per warrant and $17,018,480, or approximately $1.33 per warrant, when valued at March 31, 2006 and December 31, 2005, respectively. The net change in the valuation from
March 31, 2006 through June 30, 2006 of $3,062,602 was recorded as a non-operating gain for the three months ended June 30, 2006. For the six months ended June 30, 2006, the change in valuation from December 31, 2005
resulted in a non-operating gain of $2,215,906 being recognized. For the period from May 31, 2005 (inception) through June 30, 2006, $4,024,472 was recognized as a non-operating gain.

Prior to January 2006, the Company performed a valuation of the warrants to purchase 12,760,840 shares. The pricing model the Company used for
determining fair value of the warrants is the Black-Scholes Pricing Model. Valuations derived from this model are subject to ongoing internal and external verification and review. The model used market-sourced inputs such as interest rates, market
prices and volatilities. Selection of these inputs involves managements judgment and may impact net income. The Company used volatility rates based upon a peer group of ten publicly traded food products companies in the Dow Jones U.S. Small
Cap Index. The volatility factor used in Black-Scholes had a significant effect on the resulting valuation of the derivative liabilities on the Companys balance sheet. The volatility as calculated at December 31, 2005 approximated at
17.65%. The Company used a risk-free interest rate, which is the rate on U.S. Treasury instruments, for a security with a maturity that approximated the estimated remaining contractual life of the derivative.

Deferred Interest Income

Deferred interest income consists of the 19.99% of interest earned on investments held in trust, less allocable income taxes, net of the interest income (less income taxes payable) of $750,000 on the balance of the trust account previously
released to the Company, which is subject to the right of conversion.



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BOULDER SPECIALTY BRANDS, Inc.

(a development stage company)

Notes to Unaudited Financial Statements

Note 3  Summary of Significant Accounting Policies (continued)

Income (Loss) per Share of Common Stock

Income (Loss) per share is computed by dividing net income or loss applicable to common stockholders by the weighted average shares of common stock outstanding for the period. No effect has been given to 1,595,105
common shares that have been placed in escrow and will not be released from escrow until an initial Business Combination has been completed and the last sales price of the Companys common stock thereafter equals or exceeds $11.50 per share for
any 20 trading days within any 30 day trading period beginning after completion of an initial Business Combination. Such shares are considered contingently issuable shares under SFAS No. 128 and are not considered outstanding for purposes of
computing income or loss per share of common stock. The effect of 12,760,840 outstanding warrants, issued in connection with the initial public offering described in Note 4, and an additional 1,000,000 outstanding warrants, issued to certain
stockholders as described in Note 5, has not been considered in the diluted income (loss) per share since the warrants are contingently exercisable.

Use of Estimates

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

Income
Taxes

Deferred income taxes are provided for the differences between the basis of assets and liabilities for financial reporting and
income tax purposes. A valuation allowance is established when necessary to reduce deferred tax assets to the amount expected to be realized. For the three and six month period ended June 30, 2006, the effective tax rate was higher than the
statutory tax rate primarily due to the effect of the change in derivative liabilities.

Recently Issued Accounting
Pronouncements

In December 2004, the Financial Accounting Standards Board (FASB) issued SFAS No. 123R, Share-Based
Payment. SFAS No. 123R replaced SFAS No. 123 and superseded APB 25. SFAS No. 123R will require compensation cost related to equity-based payment transactions to be recognized in financial statements. SFAS No. 123R
requires measurement of the cost of equity-based payment transactions to employees at the estimated fair value of the award on the grant date and recognition of expense over the requisite service or vesting period. SFAS No. 123R requires
implementation using a modified version of prospective application, under which compensation expense for the unvested portion of previously granted awards and all new awards will be recognized on or after the date of adoption. SFAS No. 123R
also allows companies to adopt SFAS No. 123R by restating previously issued financial statements, basing the amounts on the expense previously calculated and reported in the pro forma footnote disclosures required under SFAS No. 123. The
provisions of SFAS No. 123R have been adopted by the Company effective for the fiscal year beginning January 1, 2006. The impact on the Companys financial statements will correlate directly with the number of options, if any, issued
by the Company. The Company has no option plans authorized or existing at June 30, 2006.



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BOULDER SPECIALTY BRANDS, Inc.

(a development stage company)

Notes to Unaudited Financial Statements

Note 3  Summary of Significant Accounting Policies (continued)

Recently Issued Accounting Pronouncements (continued)

In July 2006, the FASB issued FASB Interpretation No. 48, Accounting for Uncertainty in Income Taxesan interpretation of FASB Statement No. 109(FIN 48), which clarifies
the accounting for uncertainty in tax positions. This Interpretation requires the Company recognize in its financial statements, the impact of a tax position, if that position is more likely than not of being sustained on audit, based on the
technical merits of the position. The provisions of FIN 48 are effective as of the beginning of the Companys 2007 fiscal year, with the cumulative effect of the change in accounting principle recorded as an adjustment to opening retained
earnings. The Company is currently evaluating the impact of adopting FIN 48 on its financial statements.

In March 2006, Statement
No. 156, Accounting for Servicing of Financial Assets, an amendment of FASB Statement No. 140 (FAS 156), was released. FAS 156 amends Statement No. 140, Accounting for Transfers and
Servicing of Financial Assets and Extinguishments of Liabilities (FAS 140), to require that all separately recognized servicing assets and liabilities in accordance with FAS 140 be initially measured at fair value, if
practicable. Furthermore, this standard permits, but does not require, fair value measurement for separately recognized servicing assets and liabilities in subsequent reporting periods. FAS 156 is also effective for the Company beginning
January 1, 2007; however, the standard is not expected to have any impact on the Companys financial position, results of operation or cash flows.

In February 2006, the FASB issued SFAS 155, Accounting for Certain Hybrid Financial Instruments which amends SFAS 133, Accounting for Derivative Instruments and Hedging
Activities and SFAS 140, Accounting for Transfers and Servicing of Financial Assets and Extinguishments of Liabilities. SFAS 155 simplifies the accounting for certain derivatives embedded in other financial
instruments by allowing them to be accounted for as a whole if the holder elects to account for the whole instrument on a fair value basis. SFAS 155 also clarifies and amends certain other provisions of SFAS 133 and SFAS 140.
SFAS 155 is effective for all financial instruments acquired, issued or subject to a remeasurement event occurring in fiscal years beginning after September 15, 2006. The Company is currently evaluating the effect that the adoption of
SFAS 155 will have on its financial statements.

In May 2005, the FASB issued SFAS No. 154, Accounting Changes and Error
Corrections, which replaces Accounting Principles Board Opinion No. 20, Accounting Changes and SFAS No. 3, Reporting Accounting Changes in Interim Financial Statements and requires the
retrospective application to prior periods financial statements for changes in accounting principle, unless it is impracticable to determine either the period-specific effects or the cumulative effect of the change. The retrospective
application of the change would be limited to the direct effects of the change, and indirect effects would be recognized in the period of the accounting change.

Other than the aforementioned, management does not believe that any recently issued, but not yet effective, accounting standards if currently adopted would have a material effect on the accompanying financial statements.



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BOULDER SPECIALTY BRANDS, Inc.

(a development stage company)

Notes to Unaudited Financial Statements

Note 4  Initial Public Offering

In the Offering, the Company sold to the public 12,760,840 units (Units) at a price of $8.00 per unit. Each Unit consists of one share of the
Companys common stock, $0.0001 par value, and one Redeemable Common Stock Purchase Warrant (Warrant). Each Warrant will entitle the holder to purchase from the Company one share of common stock at an exercise price of $6.00
commencing the later of the completion of a Business Combination with a Target Business or December 16, 2006, and expiring December 16, 2009, unless earlier redeemed. A 30-day option to purchase up to an additional 1,914,126 units granted
to the underwriters to cover any over-allotments expired unexercised on January 20, 2006. The Warrants will be redeemable at a price of $0.01 per Warrant upon 30 days notice after the Warrants become exercisable, only in the event that the last
sale price of the common stock is at least $11.50 per share for any 20 trading days within a 30 trading day period ending on the third business day prior to the date on which notice of redemption is given.

The Company agreed to pay the Underwriters of the Offering fees equal to 7.0% of the gross proceeds; the Underwriters have agreed to defer 3.5% of their
fees until consummation of a Business Combination. The Company will pay the deferred fees out of the proceeds of the Offering held in trust.

Note 5  Notes Payable to Stockholders and Related Party Transactions

The Company
issued an aggregate of $200,000 in unsecured promissory notes to two Initial Stockholders on June 21, 2005. The notes were paid in full during December 2005.

The Company has agreed to pay up to $10,000 a month in total for office space and general and administrative services to affiliates of two of the Initial Stockholders. Services commenced on the effective date of the
Offering and will terminate upon the earlier of (i) the consummation of a Business Combination, or (ii) the liquidation of the Company. Approximately $5,200 was incurred under this arrangement in 2005, and $65,200 from inception through
June 30, 2006.

Five of the Initial Stockholders have made advances to the Company to cover expenditures. The balance outstanding was
$136,093 at June 30, 2006 and $74,669 at December 31, 2005.

Certain stockholders, five of whom are directors and one senior
advisor, purchased an aggregate of 1,000,000 warrants concurrently with the closing of the Offering at a price of $1.70 per warrant directly from the Company. They have agreed that these warrants purchased by them will not be sold or transferred
until completion of a Business Combination.

One of the founding stockholders has issued an option to purchase 61,927 of common shares that
they currently hold individually at $.0082 per share to the Companys former legal counsel. The Company reflected the difference between the fair value of the option and the $.0082 as an offering cost. Since the issuance of the option was an
offering cost, there was no impact on net income or total stockholders equity.



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BOULDER SPECIALTY BRANDS, Inc.

(a development stage company)

Notes to Unaudited Financial Statements

Note 5  Notes Payable to Stockholders and Related Party Transactions (continued)

During September 2005, founding stockholders sold 39,878 shares of common stock to a Company director at the founders purchase price of $0.00784 per
share. In November 2005, founding stockholders sold to a former consultant and new Company director 300,255 shares of common stock at the founders purchase price of $0.00784 per share. The Company had previously entered into a consulting agreement
with the former consultant that was rescinded. Additionally, the founding stockholders in November and December 2005 sold an additional 16,158 and 37,532 shares, respectively, of common stock to an existing stockholder and consultant at the founders
purchase price of $0.00784 per share. The Company recorded an expense in the financial statements for the aforementioned sales of common stock by founders for the difference between the estimated fair value of the shares sold and the founders price,
which totaled $2,359,856 for the fiscal year ended December 31, 2005.

Note 6  Commitment and Contingency

As part of an indemnity arrangement between one of the underwriters and the Company, the Company has agreed to pay certain legal fees and expenses, up to
$500,000, associated with any controversy that may arise in connection with one of the underwriters enforcement of rights to collect underwriting related compensation. The Company has been advised by the underwriters that a distribution has
been made and while there is agreement on much of the compensation allocations, there are open issues that need to be resolved by them and that discussions remain ongoing, although there can be no assurances that a final resolution on the open
issues will be achieved and that the provisions of the indemnity will not be triggered. If a claim were made against the Company under this indemnity agreement, it could reduce the amount of either proceeds not held in trust or proceeds held in
trust. If an amount for this potential claim is paid out of proceeds held in trust, two of the Initial Stockholders may be personally liable for such amounts.

Note 7  Common Stock

Common Stock Subject to Possible Conversion

As stated in Note 1, Public Stockholders voting against a Business Combination will be entitled to convert their stock into a pro rata share of the total
amount on deposit in the trust account, before payment of underwriting discounts and commissions and including any interest earned on their portion of the trust account net of income taxes payable thereon, and net of the interest income (less income
taxes payable) of $750,000 on the balance of the trust account previously released to the Company, if a Business Combination is approved and completed. Accordingly, Public Stockholders holding 19.99% of the aggregate number of shares owned by all
Public Stockholders may seek conversion of their shares in the event of a Business Combination. Such Public Stockholders are entitled to receive their per share interest in the funds held in trust (such fund, the Trust Fund) computed
without regard to the shares held by Initial Stockholders. At June 30, 2006 and December 31, 2005, $19,661,116, representing 2,550,892 common shares, has been classified as common stock subject to possible conversion. At June 30,
2006, interest earned on the portion of the trust subject to conversion equaled $118,451, after reduction for income taxes.



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BOULDER SPECIALTY BRANDS, Inc.

(a development stage company)

Notes to Unaudited Financial Statements

Note 7  Common Stock (continued)

Common Stock in Escrow

All of the shares the Companys common stock outstanding prior to the
date of the Offering have been placed in escrow with an escrow agent. The shares of common stock are subject to release from escrow in two equal increments: 1) 1,595,105 shares on December 16, 2008; and, 2) 1,595,105 shares upon completion of
an initial Business Combination and the last sale price of the Companys common stock thereafter equals or exceeds $11.50 per share for any 20 trading days within any 30 trading day period beginning after completion of an initial Business
Combination.

Because the shares placed in escrow are subject to the completion of a Business Combination and the attainment of a sales
price equal to or greater than $11.50, as discussed above, are to be released to the existing stockholders (all of whom are officers and/or directors or are a related party to an officer and director) upon meeting these performance and market
conditions, we may be required to recognize a charge based on the fair value of the shares at the time the shares are released from the escrow. The amount of such charge could be equal to the number of shares times the market value at such date.
Based on the target price of $11.50, such charge would be approximately $18,343,707.

Note 8  Preferred Stock

The Company is authorized to issue 1,000,000 shares of preferred stock with such designations, voting and other rights and
preferences as may be determined from time to time by the Board of Directors.



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|Item 2. | Managements Discussion and Analysis of Financial Condition and Results of Operations
|------- | -------------------------------------------------------------------------------------

Overview

We were incorporated in
Delaware on May 31, 2005 as a blank check company formed to complete a Business Combination with one or more operating businesses. We intend to focus our efforts to conclude a Business Combination on target businesses in the food and beverage
industries. While we may seek to effect a Business Combination with more than one target business, our initial Business Combination must be with a target business having a fair market value of at least 80% of the balance in the trust account
(excluding deferred underwriting discounts and commissions of approximately $3.6 million) at the time of our initial Business Combination.

A registration statement for our Offering, SEC file number 333-126364, was declared effective on December 16, 2005. On December 21, 2005, we sold 12,760,840 units in the offering. Each of our units consists of one share of our
common stock, $.0001 par value per share, and one redeemable common stock purchase warrant. Each warrant entitles the holder to purchase from us one share of common stock at an exercise price of $6.00. We received net proceeds of approximately
$95,852,000 (excluding deferred underwriting discounts and commissions of approximately $3.6 million) from our Offering.

Since the
completion of our Offering, we have contacted and continue to contact those industry professionals who we believe can be of strategic assistance in sourcing potential deals for us, including, investment bankers, business consultants,
accountants and lawyers. Through the relationships of our board of directors, officers and directors and senior advisors, we have also made contact with certain large national and international concerns to determine if they
have any interest in divesting any of their existing interests. We have also sought out family owners and institutional owners of food and beverage concerns and investment bankers or business brokerage companies that are active in the food and
beverage markets.

Results of Operations and Known Trends or Future Events

We have neither engaged in any operations nor generated any revenues to date. Our only activities since inception have been organizational activities and
those necessary to prepare for our Offering, and thereafter, certain expenses related to pursuing acquisitions of target businesses. We will not generate any operating revenues until after completion of a Business Combination. We have generated
non-operating income in the form of gains on changes in the value of derivative liabilities and interest income on cash and cash equivalents and short term investments.

Net income of $3,353,448 for the three months ended June 30, 2006 consists of interest income primarily on the Trust Fund investment of $937,324 along with $8,005 of other interest income, a gain on derivative
liabilities of $3,062,602 reduced by $30,000 for a monthly administrative services agreement, $226,337 for professional fees, $85,695 for consulting expenses, $89,760 for insurance, primarily officer liability insurance, $28,156 for franchise taxes,
$38,053 for travel expenses, $8,704 for other expenses and income tax expense of $147,778.

For the six months ended June 30, 2006,
net income equaled $3,062,361. Interest income on the Trust Fund investment was $1,991,197, along with $17,707 of other interest income and a non-operating gain on derivative liabilities of $2,215,906. Expenses included $60,000 for a monthly
administrative services agreement, $243,370 for professional fees, $129,496 for consulting expenses, $178,533 for insurance, primarily officer liability insurance, $28,156 for franchise taxes, $68,955 for travel expenses, $21,824 for other expenses
and income tax expense of $432,115.



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Net income of $2,425,259 for the period from May 31, 2005 (inception) to June 30, 2006
consists of $2,359,856 for stock related compensation expense, $65,200 for a monthly administrative services agreement, $258,369 for professional fees, $129,496 for consulting fees, $195,300 for insurance, primarily officer liability insurance,
$98,571 for franchise taxes, $70,703 for travel expenses, $22,249 for other expenses and $432,115 of income tax expense offset by interest income on the Trust Fund investment of $2,014,617 along with $18,029 of other interest income and a
non-operating gain on derivative liabilities of $4,024,472.

Liquidity and Capital Resources

Our net proceeds from (i) the sale of the units, after deducting offering expenses of approximately $788,900 and underwriting discounts of
approximately $7.1 million (including deferred underwriting discounts and commissions of approximately $3.6 million), and (ii) the sale of the founding director warrants concurrent with the closing of our Offering for a purchase price of $1.7
million, was approximately $99.5 million. Of this amount, approximately $98.4 million is being held in trust, which includes $3.6 million of deferred underwriting discounts and commissions. The remaining $1.1 million will not be held in trust. At
June 30, 2006 we had approximately $1.43 million available for due diligence and operating expenses. This amount includes the $750,000 of interest income, net of income taxes, released from the trust account. At June 30, 2006, we have
incurred $188,323 in investigatory and due diligence costs on targeted businesses, which have been capitalized pending resolution of ongoing discussions with a potential target business. We believe we will expend the entire amount of funds not held
in trust on operating and due diligence costs, including legal and accounting fees, to complete a merger. If we are unsuccessful in consummating a merger in 2006, it is likely that we will have to obtain additional funds in order to continue to
operate.

We will use substantially all of the net proceeds of our Offering to acquire one or more target businesses in the food or
beverage industries, including identifying and evaluating prospective target businesses, selecting one or more target businesses, and structuring, negotiating and consummating the Business Combination. To the extent we use our capital stock in whole
or in part as consideration for a Business Combination, the proceeds held in the trust account (less underwriting discounts and commissions and amounts paid to any public stockholders who exercise their conversion rights) as well as any other net
proceeds not expended prior to that time will be used to finance the operations of a target business or businesses.

We may need to raise
additional funds through a private offering of debt or equity securities if such funds were required to consummate a Business Combination that is presented to us. Subject to compliance with applicable securities laws, we would only consummate such
financing simultaneously with the consummation of a Business Combination.

It is possible that we could use a portion of the funds not in
the trust account to make a deposit, down payment or fund a no-shop provision with respect to a particular proposed Business Combination. In the event we were ultimately required to forfeit such funds (whether as a result of our breach
of the agreement relating to such payment or otherwise), we may not have a sufficient amount of working capital available outside of the trust account to pay expenses related to finding a suitable Business Combination without securing additional
financing. If we were unable to secure additional financing, we would most likely fail to consummate a Business Combination in the allotted time and would be forced to liquidate.

Prior to our Offering, our liquidity were satisfied through receipt of $25,000 in stock subscriptions from our initial stockholders and advances from
Messrs. Hughes and Lewis that are more fully described below.



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In addition, five of our stockholders, including Messrs, Hughes and Lewis, advanced to us additional funds which were
used to pay a portion of the expenses related to our formation, initial public offering and travel. These advances were non-interest bearing, unsecured and payable upon demand. At June 30, 2006, $136,093 was payable to the stockholders.

As part of the indemnity arrangement between one of the underwriters and us, we agreed to pay certain legal fees and expenses, up to a
total of $500,000, associated with any controversy that may arise in connection with the underwriters enforcement of rights to collect underwriting related compensation. We have been advised by the underwriters that a distribution has been
made and that while there is agreement on much of the compensation allocations, there are open issues that need to be resolved by them and that discussions remain ongoing, although there can be no assurances that a final resolution on the open
issues will be achieved and that the provisions of the indemnity will not be triggered. If a claim were made against us under this indemnity agreement, it could reduce the amount of either proceeds not held in trust or proceeds held in trust. If an
amount for this potential claim is paid out of the proceeds held in trust, Messrs. Hughes and Lewis may be personally liable for such amounts.

Forward
Looking Statements

Certain information included in this Managements Discussion and Analysis of Financial Condition and
Results of Operations, contains forward-looking statements made in reliance upon the safe harbor provisions of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended
(the Exchange Act). These statements may be identified by the use of words, such as anticipate, estimates, should, expect, guidance, project, intend,
plan, believe and other words and terms of similar meaning, in connection with any discussion of the Companys future business, results of operations, liquidity and operating or financial performance. Such
forward-looking statements involve significant material known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements to be materially different from any future results, performance or
achievements expressed or implied by such forward-looking statements. These risk factors should be considered in connection with any written or oral forward-looking statement that we or any person acting on our behalf may issue in this document or
otherwise, now or in the future. Further, certain information contained in this document is a reflection of our intention as of the date of this filing and is based upon, among other things, the existing regulatory environment, industry conditions,
market conditions and prices, the economy in general and our assumptions as of such date. We may change our intentions based upon any changes in such factors, in our assumptions or otherwise.

We undertake no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events or
otherwise. We cannot assure you that any future results, performance or achievements will be achieved. For a discussion of certain of these risks, uncertainties and other factors, see Risk Factors and Cautionary Note Regarding
Forward-Looking Statements included in our Annual Report on Form 10-K/A for the fiscal year ended December 31, 2005.



|Item 3. | Quantitative and Qualitative Disclosures About Market Risk
|------- | ----------------------------------------------------------

Market risk is the sensitivity of income to changes in interest rates, foreign exchanges, commodity prices, equity prices, and other market-driven rates or prices. We are not presently engaged in, and if a suitable business target is not
identified by us prior to the prescribed liquidation of the trust account we may not engage in, any substantive commercial business. Accordingly, the risks associated with foreign exchange rates, commodity prices, and equity prices are not
significant. The net proceeds of our Offering held in the Trust Fund and not immediately required have been invested only in United States government securities, defined as any Treasury Bill issued by the United States having a maturity
of one hundred and eighty days or less. We have issued warrants that are accounted for as derivative liabilities. One of the factors determining the fair value of the liability is the risk-free interest rate. Given our limited risk due to our
exposure to short-term U.S. Treasury Bills, we do not view the interest rate risk to be significant. We do not enter into derivatives or other financial instruments for trading or speculative purposes.



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|Item 4. | Controls and Procedures
|------- | -----------------------

Disclosure controls and
procedures. An evaluation was carried out under the supervision and with the participation of our management, including the Principal Executive Officer and the Principal Financial Officer, of the effectiveness of our disclosure controls and
procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) as of the end of the period covered by this report. Based on that evaluation, these officers have concluded that our disclosure controls and procedures were effective to ensure
that information required to be disclosed by us in reports that we file or submit under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in the rules and forms of the Securities and Exchange
Commission.

Changes in internal control over financial reporting. During the fiscal quarter to which this report relates, there
have been no changes in our internal control over financial reporting or in other factors that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Part II. Other Information



|Item 1. | Legal Proceedings.
|------- | ------------------

There are no
material legal proceedings pending against us.

Item 1A. Risk Factors.

An investment in our securities involves a high degree of risk. Other than as set
forth below, there have been no material changes to the risk factors previously reported under Item 1A of the Companys Annual Report on Form 10-K/A for the fiscal year ended December 31, 2005. The information presented below
updates, and should be read in conjunction with, the risk factors and other information contained in the Companys Annual Report of Form 10-K/A. You should carefully consider all of the material risks described below and in the Form 10-K/A
before making a decision to invest in our securities. If any of the events described herein or therein occur, our business, financial conditions and results of operations may be materially adversely affected. In that event, the trading price of our
securities could decline, and you could lose all or part of your investment

Our stockholders may be held liable for claims by third
parties against us to the extent of distributions received by them.

We will dissolve and liquidate if we do not complete a
business combination by June 21, 2007 (or by December 21, 2007 if certain extension criteria are satisfied). Under the Delaware General Corporation Law, stockholders may be held liable for claims by third parties against a corporation to
the extent of distributions received by them in a dissolution. If the corporation complies with certain procedures set forth in Section 280 of the Delaware General Corporation Law intended to ensure that it makes reasonable provision for all
claims against it, including a 60-day notice period during which any third-party claims can be brought against the corporation, a 90-day period during which the corporation may reject any claims brought, and an additional 150-day waiting period
before any liquidating distributions are made to stockholders, any liability of stockholders with respect to a liquidating distribution is limited to the lesser of such stockholders pro rata share of the claim or the amount distributed to the
stockholder, and any liability of the stockholder would be barred after the third anniversary of the dissolution. Although we will seek stockholder approval to liquidate the trust account to our public stockholders as part of our plan of dissolution
and liquidation, we do not intend to comply with those procedures. Because we will not be complying with Section 280, we will seek stockholder approval to comply with Section 281(b) of the



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Delaware General Corporation Law, requiring us to adopt a plan of dissolution that will provide for our payment, based on facts known to us at such time, of
(i) all existing claims, (ii) all pending claims and (iii) all claims that may be potentially brought against us within the subsequent 10 years. However, because we are a blank check company, rather than an operating company, and our
operations will be limited to searching for prospective target businesses to acquire, the only likely claims to arise would be from our vendors (such as accountants, lawyers, investment bankers, etc.) or potential target businesses. We intend to
have all vendors and prospective target businesses execute agreements with us waiving any right, title, interest or claim of any kind in or to any monies held in the trust account. As a result, the claims that could be made against us are
significantly limited and the likelihood that any claim that would result in any liability extending to the trust is minimal. However, because we will not be complying with Section 280, our public stockholders could potentially be liable for
any claims to the extent of distributions received by them in dissolution and any such liability of our stockholders will likely extend beyond the third anniversary of such dissolution. Accordingly, we cannot assure you that third parties will not
seek to recover from our public stockholders amounts owed to them by us.

We will dissolve and liquidate if we do not consummate a
business combination

Pursuant to our amended and restated certificate of incorporation, if we do not complete a business
combination by June 21, 2007, or by December 21, 2007 if the extension criteria have been satisfied, we will dissolve, liquidate and wind up. We view this obligation to dissolve and liquidate as an obligation to our public stockholders and
neither we nor our board of directors will take any action to amend or waive any provision of our certificate of incorporation to allow us to survive for a longer period of time if it does not appear we will be able to consummate a business
combination within the foregoing time periods. Upon dissolution, we will distribute to all of our public stockholders, in proportion to their respective equity interest, an aggregate sum equal to the amount in the trust account (net of taxes payable
or amounts previously released to us). Our initial stockholders have waived their rights to participate in any liquidation distribution with respect to their initial shares and have agreed to vote in favor of any plan of dissolution and liquidation
which we will present to our stockholders for vote. There will be no distribution from the trust account with respect to our warrants which will expire worthless. We will pay the costs of our dissolution and liquidation of the trust account from our
remaining assets outside of the trust fund, and we estimate such costs to be between $50,000 and $75,000. Upon notice from us, the trustee of the trust account will liquidate the investments constituting the trust account and will turn over the
proceeds to our transfer agent for distribution to our public stockholders as part of our stockholder-approved plan of dissolution and liquidation. Concurrently, we shall pay, or reserve for payment, from funds held outside of the trust account if
available, our liabilities and obligations, although we cannot give you assurances that there will be sufficient funds for such purpose. The amounts held in the trust account may be subject to claims by third parties, such as vendors, prospective
target business or other entities, if we do not obtain waivers in advance from such third parties prior to such parties providing us with services or entering into arrangements with them.

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

We currently believe that any plan of dissolution and liquidation subsequent to the expiration dates described above would proceed
in approximately the following manner:



| |  |  | our board of directors will, consistent with its obligations described in our amended and restated certificate of incorporation to dissolve, prior to the passing of the such
deadline, convene and adopt a specific plan of dissolution and liquidation which it will then vote to recommend to our stockholders; at such time it will also cause to be prepared a preliminary proxy statement setting out such plan of dissolution
and liquidation as well as the boards recommendation of such plan;
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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| |  |  | upon such deadline, we would file our preliminary proxy statement with the Securities and Exchange Commission;
| | - |  | --------------------------------------------------------------------------------------------------------------



| |  |  | if the Securities and Exchange Commission does not review the preliminary proxy statement, then, approximately 10 days following the passing of such deadline, we will mail the proxy
statements to our stockholders, and approximately 30 days following the passing of such deadline we will convene a meeting of our stockholders, at which they will either approve or reject our plan of dissolution and liquidation; and
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | if the Securities and Exchange Commission does review the preliminary proxy statement, we currently estimate that we will receive their comments approximately 30 days following the
passing of such deadline. We will mail the proxy statements to our stockholders following the conclusion of the comment and review process (the length of which we cannot predict with any certainty, and which may be substantial) and we will convene a
meeting of our stockholders at which they will either approve or reject our plan of dissolution and liquidation.
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

In the
event we seek stockholder approval for a plan of dissolution and liquidation and do not obtain such approval, we will nonetheless continue to pursue stockholder approval for our dissolution. Our powers following the expiration of the permitted time
periods for consummating a business combination will thereafter be limited to acts and activities relating to dissolving and winding up our affairs, including liquidation. The funds held in our trust account may not be distributed except upon our
dissolution and, unless and until such approval is obtained from our stockholders, the funds held in our trust account will not be released. Consequently, holders of a majority of our outstanding stock must approve our dissolution in order to
receive the funds held in our trust account and the funds will not be available for any other corporate purpose.

These procedures, or a
vote to reject any plan of dissolution and liquidation by our stockholders, may result in substantial delays in the liquidation of our trust account to our public stockholders as part of our plan of dissolution and liquidation.



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

There were no unregistered sales of any of our equity securities during the quarter ended June 30, 2006.



|Item 3. | Defaults Upon Senior Securities.
|------- | --------------------------------

Not applicable.



|Item 4. | Submission of Matters to a Vote of Security Holders.
|------- | ----------------------------------------------------

Not applicable.



|Item 5. | Other Information.
|------- | ------------------

Not
applicable.



|Item 6. | Exhibits
|------- | --------

See Exhibit index on page 22 of this
quarterly report on Form 10-Q.



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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly
caused this report to be signed on its behalf by the undersigned, Registrants principal financial officer, thereunto duly authorized.



|                |  |  |  |  |  |                                             |  |                                                                                                               
|--------------- |  |  |  |  |  | ------------------------------------------- |  | --------------------------------------------------------------------------------------------------------------
|August 14, 2006 |  |  |  |  |  | Boulder Specialty Brands, Inc. (Registrant)
|                |  |  |  | 
|                |  |  |  |  |  |                                             |  | /s/ James E. Lewis                                                                                            
|                |  |  |  |  |  |                                             |  | James E. Lewis Vice Chairman (Authorized officer of Registrant and principal financial and accounting
officer)



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|            |  |                                                                                                                                                                          
|----------- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit No. |  | Description of Exhibit                                                                                                                                                   
|            | 
|31.1        |  | Certification of Principal Executive Officer Pursuant to Exchange Act Rules 13a-14(a) and 15d-14(a), As Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
|            | 
|31.2        |  | Certification of Principal Financial Officer Pursuant to Exchange Act Rules 13a-14(a) and 15d-14(a), As Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
|            | 
|32.1        |  | Certification of Principal Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002                    
|            | 
|32.2        |  | Certification of Principal Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002                    



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