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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 March 31, 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)



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|                                                  |  |                                     
|------------------------------------------------- |  | ------------------------------------
|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



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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 May 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 March 31, 2006 (unaudited) and December 31, 2005                                                |  | 1   
|              |  |                       | 
|              |  |                       |  | Unaudited Statements of Operations for the three months ended March 31, 2006 and from inception to March 31, 2006 |  | 2   
|              |  |                       | 
|              |  |                       |  | Unaudited Statement of Changes in Stockholders Equity from inception to March 31, 2006                           |  | 3   
|              |  |                       | 
|              |  |                       |  | Unaudited Statements of Cash Flows for the three months ended March 31, 2006 and from inception to March 31, 2006 |  | 4   
|              |  |                       | 
|              |  |                       |  | Notes to Unaudited Financial Statements                                                                           |  | 5   
|              |  |                       | 
|              |  | Item 2.               |  | Managements Discussion and Analysis of Financial Condition and Results of Operations                             |  | 11  
|              |  |                       | 
|              |  | Item 3.               |  | Quantitative and Qualitative Disclosure About Market Risk                                                         |  | 13  
|              |  |                       | 
|              |  | Item 4.               |  | Controls and Procedures                                                                                           |  | 13  
|              |  |                      
|Part II.      |  | Other Information     |  |                                                                                                                  
|              |  |                       | 
|              |  | Item 1.               |  | Legal Proceedings                                                                                                 |  | 14  
|              |  |                       | 
|              |  | Item 2.               |  | Unregistered Sales of Equity Securities and Use of Proceeds                                                       |  | 14  
|              |  |                       | 
|              |  | Item 3.               |  | Defaults Upon Senior Securities                                                                                   |  | 14  
|              |  |                       | 
|              |  | Item 4.               |  | Submission of Matters to a Vote of Security Holders                                                               |  | 14  
|              |  |                       | 
|              |  | Item 5.               |  | Other Information                                                                                                 |  | 14  
|              |  |                       | 
|              |  | Item 6.               |  | Exhibits                                                                                                          |  | 14  
|              | 
|Signatures    |  | 15                   
|              | 
|Exhibit Index |  | 16                   



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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



|                                                                                                                                                   |  |                |             |   |                   |   |             |  
|-------------------------------------------------------------------------------------------------------------------------------------------------- |  | -------------- | ----------- | - | ----------------- | - | ----------- | -
|                                                                                                                                                   |  | March 31, 2006 |             |   | December 31, 2005 |  
|                                                                                                                                                   |  | (Unaudited)    |             |   |                   |  
|Assets                                                                                                                                             |  |                |             |   |                   |   |             |  
|Current assets                                                                                                                                     |  |                |             |   |                   |   |             |  
|Cash and cash equivalents                                                                                                                          |  | $              | 868,836     |   |                   | $ | 1,548,609   |  
|Investments held in trust - restricted                                                                                                             |  |                | 98,354,755  |   |                   |   | 98,354,755  |  
|Accrued interest receivable in trust                                                                                                               |  |                | 1,078,344   |   |                   |   | 23,420      |  
|Prepaid assets                                                                                                                                     |  |                | 259,740     |   |                   |   | 352,840     |  
|                                                                                                                                                   |  |                |             |   |                   |   |             |  
|Total current assets                                                                                                                               |  |                | 100,561,675 |   |                   |   | 100,279,624 |  
|Other assets                                                                                                                                       |  |                | 800         |   |                   |   | 800         |  
|                                                                                                                                                   |  |                |             |   |                   |   |             |  
|Total assets                                                                                                                                       |  | $              | 100,562,475 |   |                   | $ | 100,280,424 |  
|                                                                                                                                                   |  |                |             |   |                   |   |             |  
|Liabilities and Stockholders Equity                                                                                                               |  |                |             |   |                   |   |             |  
|Current liabilities                                                                                                                                |  |                |             |   |                   |   |             |  
|Accounts payable and accrued expenses                                                                                                              |  | $              | 269,423     |   |                   | $ | 841,812     |  
|Advances from stockholders                                                                                                                         |  |                | 92,990      |   |                   |   | 74,669      |  
|Deferred underwriting fees                                                                                                                         |  |                | 3,573,035   |   |                   |   | 3,573,035   |  
|Deferred tax liability                                                                                                                             |  |                | 284,336     |   |                   |   |            |  
|                                                                                                                                                   |  |                |             |   |                   |   |             |  
|Total current liabilities                                                                                                                          |  |                | 4,219,784   |   |                   |   | 4,489,516   |  
|                                                                                                                                                   |  |                |             |   |                   |   |             |  
|                                                                                                                                                   |  |               
|Common stock, subject to possible conversion, 2,550,892 shares at conversion value                                                                 |  |                | 19,661,116  |   |                   |   | 19,661,116  |  
|                                                                                                                                                   |  |               
|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                                                                                                                         |  |                | 78,570,039  |   |                   |   | 78,573,865  |  
|Deficit accumulated during the development stage                                                                                                   |  |                | (1,890,059  | ) |                   |   | (2,445,668  | )
|                                                                                                                                                   |  |                |             |   |                   |   |             |  
|Total stockholders equity                                                                                                                         |  |                | 76,681,575  |   |                   |   | 76,129,792  |  
|                                                                                                                                                   |  |                |             |   |                   |   |             |  
|Total liabilities and stockholders equity                                                                                                         |  | $              | 100,562,475 |   |                   | $ | 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 monthsendedMarch 31, 2006 |            |   | May 31, 2005(inception) toMarch 31, 2006 |  
|Formation and operating costs                           |  | $                               | 223,630    |   |                                          | $ | 333,185    |  
|Expenses settled with founders stock                    |  |                                 |           |   |                                          |   | 2,359,856  |  
|                                                        |  |                                 |            |   |                                          |   |            |  
|Operating loss                                          |  |                                 | (223,630   | ) |                                          |   | (2,693,041 | )
|Interest income                                         |  |                                 | 1,063,575  |   |                                          |   | 1,087,318  |  
|                                                        |  |                                 |            |   |                                          |   |            |  
|Income (loss) before income taxes                       |  |                                 | 839,945    |   |                                          |   | (1,605,723 | )
|Income tax expense                                      |  |                                 | 284,336    |   |                                          |   | 284,336    |  
|                                                        |  |                                 |            |   |                                          |   |            |  
|Net income (loss)                                       |  | $                               | 555,609    |   |                                          | $ | (1,890,059 | )
|                                                        |  |                                 |            |   |                                          |   |            |  
|Basic and diluted net income (loss) per share           |  | $                               | 0.04       |   |                                          | $ | (0.27      | )
|                                                        |  |                                 |            |   |                                          |   |            |  
|Weighted average shares outstanding - basic and diluted |  |                                 | 14,355,945 |   |                                          |   | 7,070,761  |  
|                                                        |  |                                 |            |   |                                          |   |            |  

See accompanying notes to unaudited financial statements



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##### Table of Contents

BOULDER SPECIALTY BRANDS, INC.

(a development stage company)

Statement of Changes in Stockholders Equity (Unaudited)

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



|                                                                                                                                         |  |              |  |        |                                              |                           |   |                     |   |  |   |            |   |  |   |             |  
|---------------------------------------------------------------------------------------------------------------------------------------- |  | ------------ |  | ------ | -------------------------------------------- | ------------------------- | - | ------------------- | - |  | - | ---------- | - |  | - | ----------- | -
|                                                                                                                                         |  | Common Stock |  |        | DeficitAccumulatedDuring theDevelopmentStage |                           |   | StockholdersEquity |  
|                                                                                                                                         |  | Shares       |  | Amount |                                              | AdditionalPaid-In Capital |   |                     |  
|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 | )
|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 for the period                                                                                                                  |  |             |  |        |                                             |                           |   |                    |   |  |   | (2,445,668 | ) |  |   | (2,445,668  | )
|                                                                                                                                         |  |              |  |        |                                              |                           |   |                     |   |  |   |            |   |  |   |             |  
|Balance at December 31, 2005                                                                                                             |  | 15,951,050   |  |        | 1,595                                        |                           |   | 78,573,865          |   |  |   | (2,445,668 | ) |  |   | 76,129,792  |  
|Finalization of offering costs incurred                                                                                                  |  |              |  |        |                                              |                           |   | (3,826              | ) |  |   |            |   |  |   | (3,826      | )
|Net income for the period                                                                                                                |  |              |  |        |                                              |                           |   |                     |   |  |   | 555,609    |   |  |   | 555,609     |  
|                                                                                                                                         |  |              |  |        |                                              |                           |   |                     |   |  |   |            |   |  |   |             |  
|Balance at March 31, 2006 (unaudited)                                                                                                    |  | 15,951,050   |  | $      | 1,595                                        |                           | $ | 78,570,039          |   |  | $ | (1,890,059 | ) |  | $ | 76,681,575  |  
|                                                                                                                                         |  |              |  |        |                                              |                           |   |                     |   |  |   |            |   |  |   |             |  

See accompanying notes to unaudited financial statements



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BOULDER SPECIALTY BRANDS, INC.

(a development stage company)

Statements of Cash Flows (Unaudited)



|                                                                                |  |                                 |            |   |                                          |   |             |  
|------------------------------------------------------------------------------- |  | ------------------------------- | ---------- | - | ---------------------------------------- | - | ----------- | -
|                                                                                |  | Three monthsendedMarch 31, 2006 |            |   | May 31, 2005(inception) toMarch 31, 2006 |  
|Cash flows from operating activities                                            |  |                                 |            |   |                                          |   |             |  
|Net income (loss)                                                               |  | $                               | 555,609    |   |                                          | $ | (1,890,059  | )
|Adjustments to reconcile net loss to net cash provided by operating activities: |  |                                 |            |   |                                          |   |             |  
|Expenses settled with founders stock                                            |  |                                 |           |   |                                          |   | 2,359,856   |  
|Deferred income taxes                                                           |  |                                 | 284,336    |   |                                          |   | 284,336     |  
|Accrued interest receivable in trust                                            |  |                                 | (1,054,924 | ) |                                          |   | (1,078,344  | )
|Changes in operating assets and liabilities:                                    |  |                                 |            |   |                                          |   |             |  
|Prepaid assets                                                                  |  |                                 | 93,100     |   |                                          |   | (259,740    | )
|Accounts payable and accrued expenses                                           |  |                                 | (193,182   | ) |                                          |   | 268,402     |  
|                                                                                |  |                                 |            |   |                                          |   |             |  
|Net cash used in operating activities                                           |  |                                 | (315,061   | ) |                                          |   | (315,549    | )
|Cash flow from investing activities                                             |  |                                 |            |   |                                          |   |             |  
|Purchase of Treasury Bills - held in trust                                      |  |                                 |           |   |                                          |   | (98,354,251 | )
|Increase in cash held in trust                                                  |  |                                 |           |   |                                          |   | (504        | )
|Payments for other assets                                                       |  |                                 |           |   |                                          |   | (800        | )
|                                                                                |  |                                 |            |   |                                          |   |             |  
|Net cash used in investing activities                                           |  |                                 |           |   |                                          |   | (98,355,555 | )
|Cash flow from financing activities                                             |  |                                 |            |   |                                          |   |             |  
|Proceeds form notes payable to stockholders                                     |  |                                 |           |   |                                          |   | 200,000     |  
|Payments on notes payable to stockholders                                       |  |                                 |           |   |                                          |   | (200,000    | )
|Increase in advances from stockholders                                          |  |                                 | 18,321     |   |                                          |   | 92,990      |  
|Proceeds from sale of shares of common stock                                    |  |                                 |           |   |                                          |   | 25,000      |  
|Gross proceeds from public offering                                             |  |                                 |           |   |                                          |   | 102,086,720 |  
|Proceeds from sale of warrants                                                  |  |                                 |           |   |                                          |   | 1,700,000   |  
|Payments for offering costs                                                     |  |                                 | (383,033   | ) |                                          |   | (4,364,770  | )
|                                                                                |  |                                 |            |   |                                          |   |             |  
|Net cash provided (used) by financing activities                                |  |                                 | (364,712   | ) |                                          |   | 99,539,940  |  
|                                                                                |  |                                 |            |   |                                          |   |             |  
|Net increase (decrease) in cash                                                 |  |                                 | (679,773   | ) |                                          |   | 868,836     |  
|Cash - Beginning of period                                                      |  |                                 | 1,548,609  |   |                                          |   |            |  
|                                                                                |  |                                 |            |   |                                          |   |             |  
|Cash - End of period                                                            |  | $                               | 868,836    |   |                                          | $ | 868,836     |  
|                                                                                |  |                                 |            |   |                                          |   |             |  
|Supplemental schedule of non-cash financing activities                          |  |                                 |            |   |                                          |   |             |  
|Accrual of deferred offering costs                                              |  | $                               | 1,021      |   |                                          | $ | 1,021       |  
|                                                                                |  |                                 |            |   |                                          |   |             |  
|Accrual of deferred underwriting fees                                           |  | $                               |           |   |                                          | $ | 3,573,035   |  
|                                                                                |  |                                 |            |   |                                          |   |             |  

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 financial statements have been prepared in accordance with accounting principles
generally accepted in the United States of America 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 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 the financial position of the Company as of March 31, 2006, the results of its operations and cash flows for the three months ended March 31, 2006 and for the period from May 31, 2005
(inception) to March 31, 2006, and the results of its changes in stockholders equity from May 31, 2005 (inception) to March 31, 2006 have been included in these unaudited 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 March 31, 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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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 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 March 31, 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 March 31, 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.

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 of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of 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 month period ended March 31, 2006, the reversal of the valuation
allowance for the deferred tax asset and the increase in the deferred tax liability were the result of certain items of interest income and operating expense being recognized in the current period for financial reporting purposes, but which are
deferred until a later period for income tax purposes.



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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

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 March 31, 2006.

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.

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.



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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

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 $35,200 from inception through March 31, 2006.

Four of
the Initial Stockholders have made advances to the Company to cover expenditures. The balance outstanding was $74,669 at December 31, 2005 and $92,990 at March 31, 2006.

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.

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.



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BOULDER SPECIALTY BRANDS, INC.

(a development stage company)

Notes to Unaudited Financial Statements



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 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. 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 March 31, 2006 and December 31, 2005, $19,661,116, representing 2,550,892 common shares, has been classified as common stock subject to possible conversion.

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 and
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 interest income on cash and cash equivalents and short term investments.

Net income of $555,609 for
the three months ended March 31, 2006 consists of interest income primarily on the Trust Fund investment of $1,053,874 along with $9,701 of other interest income reduced by $30,000 for a monthly administrative services agreement, $17,032 for
professional fees, $ 43,801 for consulting expenses, $88,772 for officer liability insurance, $32,650 for travel expenses, $11,375 for other expenses and income tax expense of $284,336.

Net loss of $1,890,059 for the period from May 31, 2005 (inception) to March 31, 2006 consists of $2,359,856 for stock related
compensation expense, $35,200 for a monthly administrative services agreement, $32,032 for professional fees, $43,801 for consulting fees, $105,540 for officer liability insurance, $70,415 for franchise taxes, $32,650 for travel expenses, $13,547
for other expenses and $284,336 of income tax expense offset by interest income on the Trust Fund investment of $1,077,294 along with $10,024 of other interest income.

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



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includes $3.6 million of deferred underwriting discounts and commissions. The remaining $1.1 million will not be held in trust. 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 the target business or businesses.

Prior to our Offering, our liquidity needs 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.

In addition, four of our stockholders, including Messrs, Hughes and
Lewis, advanced to us an additional $92,990 which was 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 March 31,
2006, the entire balance was outstanding.

We believe the funds available to us outside of the trust account, together with interest
income, net of income taxes on such interest, of up to $750,000 on the balance of the trust account to be released to us for working capital requirements, will be sufficient to allow us to operate for at least the next 24 months, assuming a Business
Combination is not completed during that time. Our primary liquidity requirements include approximately $600,000 for expenses for the due diligence and investigation of a target business or businesses; approximately $500,000 for legal, accounting
and other expenses associated with structuring, negotiating and documenting an initial Business Combination; $240,000 for administrative services and support payable equally to Hughes Consulting, Inc. and Jeltex Holdings, LLC, affiliates of Messrs.
Hughes and Lewis, representing an aggregate of $10,000 per month for up to 24 months; $50,000 for legal and accounting fees relating to our SEC reporting obligations; and approximately $380,000 for general working capital that will be used for
miscellaneous expenses and reserves, including approximately $360,000 for director and officer liability insurance premiums. Of these amounts, we will fund $375,000 for due diligence, market research and reimbursement of out-of-pocket costs and
$325,000 for legal, accounting and other non-due diligence expenses, and other expenses that may exceed our current estimates, from interest income, net of income taxes, on the balance of the trust account released to us.

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.

We do not
believe we will need to raise additional funds following this offering in order to meet the expenditures required for operating our business. However, we may need to raise additional funds through a private offering of debt or equity securities if
such funds 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



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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.

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 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. 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.



|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.



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Part II. Other Information



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

There are no
material legal proceedings pending against us.



|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 March 31, 2006.

For information on our use of proceeds from our initial public offering, please see Item 2 of Part I.



|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 16 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.



|
|

|             |  |  |  |                                                                                 
|------------ |  |  |  | --------------------------------------------------------------------------------
|May 15, 2006 |  |  |  | Boulder Specialty Brands, Inc. (Registrant)                                     
|             |  | 
|             |  |  |  | /s/ James E. Lewis                                                              
|             |  |  |  | James E. Lewis                                                                  
|             |  |  |  | Vice Chairman                                                                   
|             |  |  |  | (Authorized officer of Registrant and principalfinancial 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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