UNITED
STATES


SECURITIES
AND EXCHANGE COMMISSION


WASHINGTON,
D.C. 20549




FORM
10-Q






x
            Quarterly
      Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of
      1934for
      the quarterly period ended June 30,2008.




or




o
            Transition
      Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of
      1934for the
      transition period from ___________ to
      _____________ .








Commission
File Number: 000-51854






Phoenix
India Acquisition Corp.


(Exact
name of registrant as specified in its charter)





Delaware
            20-3195916(State or Other Jurisdiction of
            (I.R.S.
      EmployerIncorporation
      or Organization)
            Identification
      No.)




590
Madison Avenue, 6th Floor, New York, New York, 10022


(Address
of Principal Executive Offices including Zip Code)




(212)
734-4600


(Registrant’s
Telephone Number, Including Area Code)










Indicate
by check mark whether the Registrant (1) has filed all reports required to be
filed by Section 13 or 15(d) of the Exchange Act during the 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 o




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. (Check
one):




Large Accelerated Filer  o


Accelerated Filer  o


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 o




There
were 8,966,796 shares of the Registrant’s common stock issued and
outstanding as of June 30, 2008.












Phoenix
India Acquisition Corp. Index to Form 10-Q






PagePart
      I.
            Financial
      InformationItem
      1.   Financial Statements (unaudited)Balance
      Sheets
            3Statements
      of Operations
            4Statement
      of Stockholders’ Equity
            5Statements
      of Cash Flows
            6Notes
      to Financial Statements
            7Item
      2.    Management’s Discussion and Analysis of Financial
      Condition and Results of Operations
            10Item
      3.    Quantitative and Qualitative Disclosures about Market
      Risk
            11Item
      4.    Controls and Procedures
            12Part
      II.
            Other
      Information
            12Item
      1.    Legal Proceedings
            12Item
      1A. Risk Factors
            12Item
      2.    Unregistered Sales of Equity Securities and Use of
      Proceeds
            21Item
      3.    Defaults Upon Senior Securities
            21Item
      4T.  Submission of Matters to a Vote of Security
    Holders
            21Item
      5.    Other Information
            21Item
      6.    Exhibits
            21SIGNATURES
            21










- 2
-


PART
I - FINANCIAL INFORMATION




Item
1 - Financial Statements




PHOENIX
INDIA ACQUISITION CORP.
 (a
corporation in the development stage)
  BALANCE
SHEETS






June
      30,
                2008
              
              
              December
      31,
                2007(Unaudited)
              
              
              (Audited)AssetsCurrent
      assets:Cash
              
              $
              2,259
              
              
              $
              227,322Cash
      held in trust account
              
              
              —
              
              
              
              57,715,997Accrued
      interest receivable
              
              
              —
              
              
              
              116,279Prepaid
      expenses
              
              
              —
              
              
              
              13,750Refundable
      income taxes paid
              
              
              422,155
              
              
              
              —Total
      current assets
              
              $
              424,414
              
              
              $
              58,073,348Liabilities
      and Stockholders’ Equity (Deficit)Current
      and total liabilities:Accounts
      payable and accrued expenses
              
              $
              536,961
              
              
              $
              433,080Income
      taxes payable
              
              
              —
              
              
              
              671,408Notes
      payable, stockholders
              
              
              85,282
              
              
              
              —Deferred
      underwriting fees
              
              
              —
              
              
              
              2,265,500Total
      current and total liabilities
              
              
              622,243
              
              
              
              3,369,988Common
      stock subject to redemption, 1,415,2219 shares at redemption value of
      $7.65
              
              
              —
              
              
              
              11,403,213Shareholders’
      Equity:Preferred
      stock, $0.0001 par value, authorized 1,000,000 shares; none
      issued
              
              —
              
              
              
              —Common
      stock, $0.0001 par value, authorized 89,000,000 shares, issued and
      outstanding 8,966,796 shares
              
              
              897
              
              
              
              897Paid-in
      capital in excess of par
              
              
              —
              
              
              
              41,327,209Earnings
      (Deficit) accumulated during the development stage
              
              
              (198,726
              )
              
              
              1,972,041Total
      stockholders’ equity
              
              
              (197,829
              )
              
              
              43,300,147Total
      liabilities and stockholders’ equity (deficit)
              
              
              424,414
              
              
              
              58,073,348













See
accompanying notes to financial statements
  - 3
-


PHOENIX
INDIA ACQUISITION CORP.
 (a
corporation in the development stage)
  STATEMENT
OF OPERATIONS
    For theperiod
      fromJuly
      13, 2005Three
      months ended June 30,
              
              
              Six
      months ended June 30,
              
              
              (inception)
      to2008
              
              
              2007
              
              
              2008
              
              
              2007
              
              
              June
      30, 2008Revenues:Interest
      income
              
              $
              —
              
              
              $
              743,667
              
              
              $
              495,001
              
              
              $
              1,472,818
              
              
              $
              5,460,926Expenses:General
      and administrative expenses
              
              
              279,699
              
              
              
              120,075
              
              
              
              811,803
              
              
              
              240,447
              
              
              
              2,345,379Total
      expenses
              
              
              279,699
              
              
              
              120,075
              
              
              
              811,803
              
              
              
              240,447
              
              
              
              2,345,379Income
      before provision for income (loss)taxes
              
              
              (279,699
              )
              
              
              623,592
              
              
              
              (316,802
              )
              
              
              1,232,371
              
              
              
              3,115,547Provision
      for income taxes
              
              
              —
              
              
              
              218,257
              
              
              
              —
              
              
              
              431,330
              
              
              
              1,460,308Net
      income (loss)
              
              $
              (279,699
              )
              
              $
              405,335
              
              
              $
              (316,802
              )
              
              $
              801,041
              
              
              $
              1,655,239Weighted
      average shares outstanding:Basic
              
              
              8,966,796
              
              
              
              8,966,796
              
              
              
              8,966,796
              
              
              
              8,966,796
              
              
              
              6,994,782Diluted
              
              
              8,966,796
              
              
              
              14,897,217
              
              
              
              8,966,796
              
              
              
              14,858,252
              
              
              
              12,092,031Net
      income (loss) per share, basic
              
              $
              (0.03
              )
              
              $
              0.05
              
              
              $
              (0.04
              )
              
              $
              0.09
              
              
              $
              0.24Net
      income (loss) per share, diluted
              
              $
              (0.03
              )
              
              $
              0.03
              
              
              $
              (0.04
              )
              
              $
              0.05
              
              
              $
              0.14
















See
accompanying notes to financial statements




- 4
-
 
 PHOENIX
INDIA ACQUISITION CORP.
 (a
corporation in the development stage)
  STATEMENTS
OF STOCKHOLDERS’ EQUITY
 For
the period from July 13, 2005 (inception) to June 30, 2007
 (UNAUDITED)




EarningsCommon
      Stock
              
              
              Paid-in
              
              
              AcccumulatedPar
      Value
              
              
              Capital
      in
              
              
              During
      the
              
              
              Total$0.0001
              
              
              Excess
      of
              
              
              Development
              
              
              Stockholders’Shares
              
              
              Amount
              
              
              Par
              
              
              Stage
              
              
              EquityStock
      issuance
              
              
              1,562,500
              
              
              
              157
              
              
              
              24,843
              
              
              
              —
              
              
              
              25,000Net
      loss
              
              
              —
              
              
              
              —
              
              
              
              —
              
              
              
              (3,000
              )
              
              
              (3,000
              )Balance, at December 31,
      2005 (Audited)
              
              
              1,562,500
              
              
              
              157
              
              
              
              24,843
              
              
              
              (3,000
              )
              
              
              22,000Stock
      issuance on April 5, 2006 @$8.00
              
              
              6,156,250
              
              
              
              616
              
              
              
              49,249,384
              
              
              
              —
              
              
              
              49,250,000Stock
      issuance on April 5, 2006 @$8.00
              
              
              923,437
              
              
              
              92
              
              
              
              7,387,404
              
              
              
              —
              
              
              
              7,387,496Stock
      issuance on March 30, 2006 @$8.00
              
              
              93,750
              
              
              
              9
              
              
              
              749,991
              
              
              
              —
              
              
              
              750,000Proceeds
      from exercise of options on April 5, 2006
              
              
              230,859
              
              
              
              23
              
              
              
              3,671
              
              
              
              —
              
              
              
              3,694Expenses
      of offerings
              
              
              —
              
              
              
              —
              
              
              
              (4,684,871
              )
              
              
              —
              
              
              
              (4,684,871
              )Less:
      Proceeds subject to possible redemption of 1,415,229 shares, 19.99% of
      public shares are subject to redemption $7.65 per share
              
              
              —
              
              
              
              —
              
              
              
              (10,826,505
              )
              
              
              —
              
              
              
              (10,826,505
              )Net
      income
              
              
              —
              
              
              
              —
              
              
              
              —
              
              
              
              678,140
              
              
              
              678,140Balance, at December 31,
      2006  (Audited)
              
              
              8,966,796
              
              
              
              897
              
              
              
              41,903,917
              
              
              
              675,140
              
              
              
              42,579,954Adjustment
      in value of shares subject to possible conversion
              
              
              —
              
              
              
              —
              
              
              
              (576,708
              )
              
              
              —
              
              
              
              (576,708
              )Net
      income
              
              
              —
              
              
              
              —
              
              
              
              —
              
              
              
              1,296,901
              
              
              
              1,296,901Balance, at December 31,
      2007 (Audited)
              
              
              8,966,796
              
              
              
              897
              
              
              
              41,327,209
              
              
              
              1,972,041
              
              
              
              43,300,147Deferred
      underwriting fees written-off
              
              
              —
              
              
              
              —
              
              
              
              2,265,500
              
              
              
              —
              
              
              
              2,265,500Distribution
              
              
              —
              
              
              
              —
              
              
              
              (43,592,709
              )
              
              
              (1,853,965
              )
              
              
              (45,446,674
              )Net
      loss Jan 08 - June 08
              
              
              —
              
              
              
              —
              
              
              
              —
              
              
              
              (316,802
              )
              
              
              (316,802
              )Balance, at June,
      2008  (Unaudited)
              
              
              8,966,796
              
              
              
              897
              
              
              
              —
              
              
              
              (198,726
              )
              
              
              (197,829
              )






See
accompanying notes to financial statements
  - 5
-
 
 PHOENIX
INDIA ACQUISITION CORP.
 (a
corporation in the development stage)
  STATEMENTS
OF CASH FLOW
 (UNAUDITED)







For
      periodfrom
      July 13,2005For
      the Six Months Ended
              
              
              (inception)
      toJune
      30,
              
              
              June
      30,2008
              
              
              2007
              
              
              2008Cash
      flows from operating activitiesNet
      income (loss)
              
              $
              (316,802
              )
              
              $
              801,042
              
              
              $
              1,655,239Adjustment
      to reconcile net loss to net cash provided by operating
      activities:Increase
      in accrued interest receivable
              
              
              116,279
              
              
              
              (278
              )
              
              
              —Increase
      in prepaid expenses
              
              
              13,750
              
              
              
              (25,750
              )
              
              
              —(Decrease)
      increase in accounts payable and accrued expenses
              
              
              103,881
              
              
              
              (84,116
              )
              
              
              498,162Income
      taxes payable
              
              
              (671,408
              )
              
              
              (205,671
              )
              
              
              —Increase
      in refundable income taxes
              
              
              (422,155
              )
              
              
              —
              
              
              
              (422,155
              )Net
      cash used in operating activities
              
              
              (1,176,455
              )
              
              
              485,227
              
              
              
              1,731,246Cash
      flows from investing activities:Return
      of Trust Deposits
              
              
              57,715,997
              
              
              
              —
              
              
              
              57,715,997Payment
      to trust account
              
              
              —
              
              
              
              (1,469,755
              )
              
              
              (57,715,997
              )Net
      cash used in investing activities
              
              
              57,715,997
              
              
              
              (1,469,755
              )
              
              
              —Cash
      flows from financing activities:Proceeds
      from notes payable, stockholders
              
              
              85,282
              
              
              
              —
              
              
              
              85,282Gross
      proceeds from public offering
              
              
              —
              
              
              
              —
              
              
              
              56,637,496Gross
      proceeds from private offering
              
              
              —
              
              
              
              —
              
              
              
              750,000Proceeds
      from exercise of management options
              
              
              —
              
              
              
              —
              
              
              
              3,697Payment
      of offering costs
              
              
              —
              
              
              
              —
              
              
              
              (2,156,809
              )Proceeds
      from sale of common stock
              
              
              —
              
              
              
              —
              
              
              
              25,000Repayment
      of public & Private offering, stockholders
              
              
              (56,849,887
              )
              
              
              —
              
              
              
              (56,849,887
              )Payment
      of deferred offering costs
              
              
              —
              
              
              
              —
              
              
              
              (223,766
              )Net
      cash provided from financing activities
              
              
              (56,764,605
              )
              
              
              —
              
              
              
              (1,728,987
              )Net
      increase in cash
              
              
              (225,063
              )
              
              
              (984,528
              )
              
              
              2,259Cash,
      beginning of period
              
              
              227,322
              
              
              
              1,085,202
              
              
              
              —Cash,
      end of period
              
              $
              2,259
              
              
              $
              100,674
              
              
              $
              2,259Cash
      paid during the period for:Interest
              
              $
              —
              
              
              $
              —
              
              
              
              —Income
      taxes
              
              $
              671,408
              
              
              $
              —
              
              
              $
              1,460,308Supplemental
      non-cash financing transactionsAccrual
      of costs of public offering
              
              $
              —
              
              
              $
              —
              
              
              $
              2,265,500Write-off
      deferred underwriting fees
              
              $
              (2,265,500
              )
              
              $
              —
              
              
              $
              (2,265,500
              )






See
accompanying notes to financial statements
  - 6
-


NOTES
TO UNAUDITED FINANCIAL STATEMENTS


June
30, 2008







1.
            Basis of
      Presentation





The
financial statements for the three months ended June 30, 2008 are unaudited. In
the opinion of management, all adjustments (consisting only of normal recurring
accruals) have been made that are necessary to present fairly the financial
position of Phoenix India Acquisition Corp. (the “Company”) as of June 30, 2008
and the results of its operations and its cash flows for the three months ended
March 31, 2008 and period from July 13, 2005 (inception) to June 30, 2008 in
conformity with generally accepted accounting principles. Operating results for
the interim period are not necessarily indicative of the results to be expected
for the full year.






2.
            Nature of
      Operations and Summary of Significant Accounting
      Policies`





Introduction





We were a
blank check company organized under the laws of Delaware incorporated on July
13, 2005 in order to serve as a vehicle for the acquisition of an operating
business through a merger, capital stock exchange, asset acquisition or other
similar business combination. We intended to focus our efforts on identifying
within the information technology, information technology enabled service and
information technology enabled products (IT/ITES/ITEP) industries, a prospective
target business (or businesses), including those in the knowledge process
outsourcing, or KPO, and business process outsourcing, or BPO, sectors operating
in India.





On March
1, 2008, the board of directors changed the direction of the Company and the
Company entered into a Share Subscription Agreement (the “Subscription
Agreement”) and a Shareholders Agreement (the “Shareholder Agreement”) with
Citius Power Limited, a limited liability company incorporated under the laws of
the Republic of Mauritius (“Citius Mauritius” or “Target”) and all of the
existing shareholders of Citius Mauritius pursuant to which we will subscribe
for 4,500,000 (Four Million Five Hundred Thousand) convertible preference shares
(the “Convertible Preference Shares”) of Citius Mauritius, representing 65% of
the equity shares of Citius Mauritius on an as converted fully diluted basis.
Citius Mauritius through its 99.99% subsidiary, Citius Power Limited (“Citius
India”) will acquire, own and operate already installed or build to own wind
energy assets in India. The Subscription Agreement and the Shareholder Agreement
expired on May 15, 2008.





On March
1, 2008, our Board of Directors agreed to seek an amendment to the Company’s
charter by holding a special shareholders meeting for the sole purpose of
considering and voting upon a proposal to remove Article SIXTH and toe
redesignate Articles SEVENTH, EIGHT, AND NINTH as Articles SIXTH, SEVENTH, and
EIGHTH, respectively (the “Amendment”).





On March
7, 2008 the Company filed the preliminary proxy with the Securities Exchange
Commission whereby the record date for the special meeting was set for March 10,
2008. On or about March 21, 2008, the proxies were first being mailed to
stockholders.





On March
26, 2008, the Company’s Board of Directors voted to liquidate the trust for the
benefit of stockholders excluding management. The Company’s officers notified
American Stock Transfer & Trust Company, the trustee to liquidate the trust
assets. The liquidation date was set for April 20, 2008 and funds were
remitted to the stockholders by the trustee on April 21, 2008. The actual
per-share redemption price was equal to the amount in the trust account
(exclusive of the proceeds of the private placement) net of taxes divided by the
number of shares sold in our public offering. After taking into any account
interest earned on the trust account, the per-share redemption price was
approximately $8.03.





On April
8, 2008, the Company held its special shareholders meeting. A majority of the
stockholders of the Company approved the proposed amendment of the Certificate
of Incorporation and removed Article SIXTH and redesignated Articles SEVENTH,
EIGHT, AND NINTH as Articles SIXTH, SEVENTH, and EIGHTH, respectively. As a
result, the Company does not have to be liquidated and will continue its efforts
of closing on the announced transaction with the Target by raising new capital
through a private placement or pursue other transactions.









- 7
-


On April
21, 2008, the trustee distributed all of the monies held in the trust account to
all unitholders and shareholders with redemption right. The net cash per share
or unit that was distributed was $8.03.





Cash and
cash equivalents




The
Company considers all highly liquid investments with original maturities of
three months or less to be cash equivalents. The Company maintains cash balances
with financial institutions, which, at times, may exceed the Federal Deposit
Insurance Corporation limit. The Company has not experienced any losses to date
as a result of this policy, and management believes there is little risk of
loss.




Net
Income (Loss) Per Common Share




Net
income (loss) per share is computed by dividing net income by the
weighted-average number of shares of common stock outstanding during the
period.




Derivative
Financial Instrument




As
described in Note 5, the Company has granted a Purchase Option to a
representative of its underwriters. Based on Emerging Issues Task Force 00-19,
Accounting for Derivative Financial Instruments Indexed to, and Potentially
Settle in, a Company’s Own Stock, the sale of the Purchase Option was reported
in permanent equity and accordingly, there is no impact on the Company’s
financial position and results of operations, except for the $100 in proceeds
from the sale. Subsequent changes in fair value will not be recognized as long
as the Purchase Option continues to be classified as an equity
instrument.




The
Company has determined, based on the Black-Scholes option pricing formula, the
fair value of the Purchase Option at date of issuance, was $6.04 per share or
approximately $2,602,859 in total, using a risk-free interest rate of 5.0%,
expected life of five years and estimated volatility of 100.0%.




The
volatility estimate of 100.0% is based on information current available to
management. Although an expected life of five years was used in the calculation,
if the Company does not consummate a business combination within the prescribed
time period and the Company liquidates, the Company believes the option will
become worthless.




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 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.




The
effective tax rate differs from the statutory rate of 35.5% due to primarily all
interest income being generated from tax-exempt securities.








- 8
-


Recent
Accounting Pronouncements




The
Company 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.






3.
            Income
      Taxes





Effective
January 1, 2007, we adopted the provisions of Financial Accounting Standards
Board (FASB) Interpretation No. 48, “Accounting for Uncertainty in Income Taxes,
an interpretation of FASB Statement No. 109” (FIN 48). FIN 48 clarifies the
accounting for uncertainty in income taxes recognized in the Company’s financial
statements in accordance with FASB 1099, “Accounting for Income Taxes,” and
prescribes a recognition threshold and measurement process for financial
statement recognition and measurement of a tax position taken or expected to be
taken in a tax return. FIN 48 also provides guidance on recognition,
classification, interest and penalties, accounting in interim periods,
disclosure and transition.





Management
has evaluated and concluded that there are no significant tax provisions
requiring recognition in the Company’s financial statements as of January 1,
2008. The evaluation was performed for the tax years ended December 31, 2007 and
2006, which remain subject to examination for Federal and state purposes as of
June 30, 2008.





The
Company’s policy is to classify assessments, if any, for tax related interest as
interest expenses and penalties as general and administrative
expenses.






4.
            Notes
      Payable, Stockholders




As of
June 30, 2008, the Company issued unsecured promissory notes to management of
the Company totaling $85,282. The Notes bear interest at the rate of 4% per
annum and are due upon demand.






5.
            Related
      Party Transaction




The
Company has agreed to pay Phoenix Capital Partners LLC, a company of which an
executive officer is the sole member, an administrative fee of $5,000 per month
for office space and general and administrative services from the effective date
of the Public Offering through the acquisition date of a target business. This
agreement expired as of March 31, 2008.







6.
            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.






7.
            Per
      Share Information




In
accordance with SFAS No. 128, “Earnings Per Share”, basic earnings per common
share (“Basic EPS”) is computed by dividing the net income by the
weighted-average number of shares outstanding. Diluted earnings per common share
(“Diluted EPS”) are computed by dividing the net income by the weighted-average
number of common shares and dilutive common share equivalents and warrants then
outstanding. SFAS No. 128 requires the presentation of both Basic EPS and
Diluted EPS on the face of the Company’s Condensed Statements of Income. Common
share equivalents totaling 860,074 were excluded from the computation with
respect to the three months ended June 30, 2008 and for the period since
inception on July 13, 2005 to June 30, 2008, as their impact would have been
anti-dilutive.









- 9
-


The
following table sets forth the computation of basic and diluted per share
information:




PHOENIX
INDIA ACQUISITION CORP.


(a
corporation in the development stage)
  EARNINGS
PER SHARE
 (UNAUDITED)






For
      the periodfrom
      April 13, 2005Three
      Months Ended June 31,
              
              
              Six
      Months Ended June 31,
              
              
              to2008
              
              
              2007
              
              
              2008
              
              
              2007
              
              
              June
      30, 2008Numerator:Net
      Income (loss)
              
              $
              (279,699
              )
              
              $
              405,335
              
              
              $
              (316,802
              )
              
              $
              801,041
              
              
              $
              1,655,239Denominator:Weighted-average
      common shares outstanding
              
              
              8,966,796
              
              
              
              8,966,796
              
              
              
              8,966,796
              
              
              
              8,966,796
              
              
              
              6,994,782Dilutive
      effect of warrants
              
              
              —
              
              
              
              5,930,421
              
              
              
              —
              
              
              
              5,891,456
              
              
              
              5,097,249Weighted-average
      common shares outstanding, assuming dilution
              
              
              8,966,796
              
              
              
              14,897,217
              
              
              
              8,966,796
              
              
              
              14,858,252
              
              
              
              12,092,031Net Income Per
      Share:Basic
              
              $
              (0.03
              )
              
              $
              0.05
              
              
              $
              (0.04
              )
              
              $
              0.09
              
              
              $
              0.24Diluted
              
              
              (0.03
              )
              
              $
              0.03
              
              
              
              (0.04
              )
              
              $
              0.05
              
              
              $
              0.14









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




Forward
Looking Statements




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





Critical
Accounting Policies.




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 at the date of the financial statements and the reported amounts of
expenses during the reporting period. Actual results could differ from those
estimates.




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.








- 10
-


Overview




We were
organized as a Delaware corporation on July 13, 2005, to serve as a vehicle to
acquire, through a merger, capital stock exchange, asset acquisition or other
similar business combination, an operating business. We can pursue an
acquisition of a target for cash, our capital stock, debt or a combination of
cash, capital stock and debt, in effecting a business combination.




Results
of Operations for the Three Months and Six Months Ending June 30,
2008




For the
three and six months ending June 30, 2008, we had a net loss of $279,699 and
$316,802, respectively primarily as a result of interest income received on
funds held in trust offset in part by consulting and professional fees and other
operating expenses.
  For the
three month period ending June 30, 2008, the trust account earned no
interest.  For the six month period ending June 30, 2008, the trust
account earned $495,001 in interest.




Liquidity
and Capital Resources.




On April
5, 2006, we consummated our initial public offering of 7,079,687 units
(including 923,437 units subject to the underwriters’ over-allotment option) and
a private placement of 93,750 units sold to the existing officers and directors
through an entity they own. Each unit consists of one share of common stock and
one redeemable common stock purchase warrant. Each warrant entitles the holder
to purchase from us one share of our common stock at an exercise price of
$5.00.




Our net
proceeds from the sale of our units, including amounts from exercise of the
underwriters’ over-allotment option and the private placement, after deducting
certain offering expenses of approximately $722,713, (including the proceeds
from the underwriters’ overallotment), and underwriting discounts of
approximately $1,699,124, were approximately $55,350,000. Of this amount, on
April 21, 2008, approximately $58,214,833 less taxes held in trust was
distributed by the trustee to the shareholders with redemption rights at $8.03
per share and/or unit.




Commencing
April 5, 2005 and ending upon the consummation of the transaction, we incur a
fee of $5,000 per month for office space and certain other additional general
and administrative services from Phoenix Capital Partners LLC, an affiliate of
which Ramesh Akella (our President, Chief Strategy Officer and Director) is the
managing member.




We have
granted a purchase option to the representative of the underwriter at the
closing of the Offering on April 5, 2006 to acquire 430,937 units at $8.80 per
unit for $100. The fair value of the purchase option was estimated at $6.04 per
share or approximately $2,602,859 in the aggregate. The purchase option was
accounted for as an equity instrument in permanent equity. Accordingly, there
was no impact on our financial position or results of operations, except for
recording the $100 proceeds from the sale.




On April
21, 2008, the trustee distributed $8.03 per share and/or unit to shareholders
with redemption rights.





Off-Balance
Sheet Arrangements.




We have
never entered into any off-balance sheet financing arrangements and have never
established any special purpose entities. We have not guaranteed any debt or
commitments of other entities or entered into any options on non-financial
assets.






Item 3.  
Quantitative and Qualitative Disclosures About Market Risk




Market
risk is the sensitivity of income to changes in interest rates, foreign
exchanges, commodity prices, equity prices, and other market-driven rates or
prices. We are not presently engaged in and, if a suitable business target is
not identified by us prior to the prescribed liquidation date of the trust fund,
we may not engage in, any substantive commercial business. Accordingly, we are
not and, until such time as we consummate a business






- 11
-


combination,
we will not be, exposed to risks associated with foreign exchange rates,
commodity prices, equity prices or other market-driven rates or prices. The net
proceeds of our initial public offering held in the trust fund have been
invested only in money market funds meeting certain conditions under Rule 2a-7
promulgated under the Investment Company Act of 1940 or United States treasury
bills. Given our limited risk in our exposure to these money market funds and
treasury bills, we do not view the interest rate risk to be
significant.







Item
4T. Controls and Procedures.




Our
management is responsible for establishing and maintaining a system of
disclosure controls and procedures (as defined in Rule 13a-15(e) and 15d-15(e)
under the Exchange Act) that is designed to ensure that information required to
be disclosed by us in the reports that we file or submit under the Exchange Act
is recorded, processed, summarized and reported, within the time periods
specified in the Commission’s rules and forms. Disclosure controls and
procedures include, without limitation, controls and procedures designed to
ensure that information required to be disclosed by an issuer in the reports
that it files or submits under the Exchange Act is accumulated and communicated
to the issuer’s management, including our principal executive officer or
officers and principal financial officer or officers, or persons performing
similar functions, as appropriate to allow timely decisions regarding required
disclosure.
  In
accordance with Exchange Act Rules 13a-15 and 15d-15, we completed an evaluation
under the supervision and with the participation of our President and Chief
Strategy Officer of the effectiveness of the design and operation of our
disclosure controls and procedures as of the end of the period covered by this
Quarterly Report. Based on that evaluation, the Company’s President and Chief
Strategy Officer, concluded that our disclosure controls and procedures as of
June 30, 2008 had deficiencies that caused the Company’s controls and procedures
to be ineffective. These deficiencies consisted of inadequate staffing and
supervision that could lead to the untimely identification and resolution of
accounting and disclosure matters and failure to perform timely and effective
reviews. Management is presently evaluating its options with its auditor to
address these deficiencies. During the period covered by this Quarterly Report
on Form 10-Q, there has been no change in our internal control over financial
reporting that has materially affected, or is reasonably likely to materially
affect, our internal control over financial reporting.






PART
II - OTHER INFORMATION




Item
1.    Legal Proceedings.




None




Item
1A. Risk Factors.





Risks associated with our
business





We
are a development stage company with no operating history and, accordingly, our
stockholders will not have any basis on which to evaluate our ability to achieve
our business objective.




We are a
development stage company with no operating results to date. Since we do not
have an operating history, our stockholders will have no basis upon which to
evaluate our ability to achieve our business objective, which is to acquire one
or more operating businesses. We will not generate any revenues until, at the
earliest, after the consummation of a business combination.




Since
we have not closed on the selected target business with which to complete a
business combination, investors are unable to currently ascertain the merits or
risks of the target business’ operations.





Since we
have not yet closed on the target business, investors have no current basis to
evaluate the possible merits or risks of the target business’ operations. To the
extent we close on a transaction with an entity in its development stage, we may
be affected by numerous risks inherent in the business operations of those
entities. Although our management will endeavor to evaluate the risks inherent
in a particular target business, we cannot assure our stockholders that we will
properly ascertain or assess all of the significant risk factors.





We
will issue shares of our capital stock or convertible debt securities to
complete a business combination, which would reduce the equity interest of our
stockholders and likely cause a change in control of our ownership.





Our
certificate of incorporation authorizes the issuance of up to 89,000,000 shares
of common stock, par value $.0001 per share, and 1,000,000 shares of blank check
preferred stock, par value $.0001 per share. As of March 31, 2008, there
were 80,033,234 authorized but unissued shares of our common stock available
for


- 12
-


issuance
(after appropriate reservation for the issuance of shares upon full exercise of
our outstanding warrants) and all of the 1,000,000 shares of blank check
preferred stock available for issuance. We will issue a substantial number of
additional shares of our common stock or blank check preferred stock, or a
combination of common and blank check preferred stock, to complete a business
combination. The issuance of additional shares of our common stock or any number
of shares of our blank check preferred stock:




·
            Will
      significantly reduce the equity interest of current
      stockholders;





·
            Will
      cause a change in control if a substantial number of our shares of common
      stock are issued, which may affect, among other things, our ability to use
      our net operating loss carry forwards, if any, and most likely also result
      in the resignation or removal of our present officers and
      directors;





·
            Will
      reduce or limit the voting power or other rights of holders of our common
      stock if we issue preferred stock with dividend, liquidation, compensation
      or other rights superior to the common stock; and





·
            Will
      reduce the prevailing market prices for our common stock warrants and
      units.





Similarly,
if we issue debt securities, it could result in:





·
            Default
      and foreclosure on our assets if our operating cash flow after a business
      combination were insufficient to pay our debt
  obligations;





·
            Acceleration
      of our obligations to repay the indebtedness even if we have made all
      principal and interest payments when due if the debt security contained
      covenants that required the maintenance of certain financial ratios or
      reserves and any such covenant were breached without a waiver or
      renegotiation of that covenant;





·
            Our
      immediate payment of all principal and accrued interest, if any, if the
      debt security was payable on demand; and





·
            Our
      inability to obtain additional financing, if necessary, if the debt
      security contained covenants restricting our ability to obtain additional
      financing while such security was
outstanding.





We may choose to redeem our
outstanding warrants at a time that is disadvantageous to the
warrant holders.





Subject
to there being a current prospectus under the Securities Act of 1933, we
may redeem all of our outstanding warrants at any time after they become
exercisable at a price of $.01 per warrant, upon a minimum of 30 days
prior written notice of redemption, if and only if, the last sale price of
our common stock equals or exceeds $11.50 per share for any 20 trading days
within a 30 trading day period ending three business days before we send the
notice of redemption. Calling all of our outstanding warrants for redemption
could force the warrant holders:





·
            To
      exercise the warrants and pay the exercise price for such warrants at
      a time when it may be disadvantageous for the holders to do
      so;





·
            To
      sell the warrants at the then current market price when they might
      otherwise wish to hold the warrants; or





·
            To
      accept the nominal redemption price which, at the time the warrants
      are called for redemption, is likely to be substantially less than
      the market value of
the warrants.





- 13
-


Our
warrant holders may not be able to exercise their warrants, which may create
liability for us.




Holders of
the our warrants issued in our initial public offering and private placement
will be able to receive shares upon exercise of the warrants only if (i) a
current registration statement under the Securities Act of 1933 relating to the
shares of its common stock underlying the warrants is then effective and (ii)
such shares are qualified for sale or exempt from qualification under the
applicable securities laws of the states in which the various holders of
warrants reside. Although we have agreed to use our best efforts to maintain a
current registration statement covering the shares underlying the warrants
to the extent required by federal securities laws, and we intend to comply
with such agreement, we cannot assure that it will be able to do so. In
addition, some states may not permit us to register the shares issuable
upon exercise of its warrants for sale. The value of the warrants will be
greatly reduced if a registration statement covering the shares issuable upon
the exercise of the warrants is not kept current or if the securities are
not qualified, or exempt from qualification, in the states in which the
holders of warrants reside. Holders of warrants who reside in jurisdictions
in which the shares underlying the warrants are not qualified and in which
there is no exemption will be unable to exercise their warrants and would
either have to sell their warrants in the open market or allow them to
expire unexercised. If and when the warrants become redeemable by us, we may
exercise our redemption right even if we are unable to qualify the
underlying securities for sale under all applicable state securities laws.
Since our obligations in this regard are subject to a “best efforts” standard,
it is possible that, even if we are able to successfully assert a defense to a
claim by warrant holders due to the impossibility of registration, a court may
impose monetary damages on us to compensate warrant holders due to the change in
circumstances that led to us being unable to fulfill our
obligations.




We do not have an Audit Committee
composed solely of independent directors and therefore our financial statements have not
been subject to independent review.





We do not
have an audit committee. Pursuant to SEC regulations, the entire Board of
Directors of a company without an audit committee acts as the audit committee.
All of the members of our Board of Directors are also officers and therefore not
independent. Therefore, we do not have solely independent directors reviewing
our financial statements, making it more difficult for us to discover if there
was any fraud in connection with the preparation of our financial
statements.





Following
a business combination, we may be liable to our clients for damages caused by
disclosure of confidential information or system failures.





Following
a business combination, we may have access to, or will be required to collect
and store, confidential client and customer data in connection with our
outsourcing services. Following a business combination, many of our client
agreements may not limit our potential liability for breaches of
confidentiality. If any person, including any of our employees, penetrates our
network security or misappropriates sensitive data, we could be subject to
significant liability from our clients or from our clients’ customers for
breaching contractual confidentiality provisions or privacy laws. Following a
business combination, unauthorized disclosure of sensitive or confidential
client and customer data, whether through breach of our computer systems,
systems failure or otherwise, could damage our reputation and cause us to lose
clients.





We
may be unable to obtain additional financing, if required, to complete the
contemplated transaction or to fund the operations and growth of the target
business, which could compel us to restructure the transaction.





If we
have insufficient funds to complete the proposed transaction through our private
placement efforts, we will be required to seek additional financing. We cannot
assure our stockholders that such financing would be available on acceptable
terms, if at all. To the extent that additional financing proves to be
unavailable when needed to consummate the proposed transaction, we would be
compelled to restructure the transaction or abandon it altogether and seek an
alternative target business candidate. In addition, we may not have a sufficient
amount of working capital available to finding an alternate 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 addition, if we consummate an alternate business combination, we
may require additional financing to fund the










- 14
-


operations
or growth of the target business. The failure to secure additional financing
could limit the development or growth of the target business. None of our
officers, directors or stockholders is required to provide any financing to us
in connection with or after a business combination.





Our
ability to successfully effect a transaction with any target company and to be
successful afterward will be totally dependent upon the efforts of our
management, some of whom may join us following such transaction and whom we
would have only a limited ability to evaluate. It is also possible that one or
more of our current officers and directors will resign upon the completion of
such transaction.





Our
ability to successfully effect our investment in any target will be totally
dependent upon the efforts of the members of our management team. The future
role of our management following the transaction, however, cannot presently be
fully ascertained. Although we expect our officers and directors to remain
associated with us following the transaction, we may employ other personnel
following the business combination. Moreover, our current management will only
be able to remain with the combined company after the transaction if they are
able to negotiate and agree to mutually acceptable employment terms as part of
any such transaction, which terms would be disclosed to stockholders in any
statement relating to such transaction. In making the determination as to
whether current management should remain with us following the transaction,
management will analyze the experience and skill set of the target business’
management and negotiate that certain members of current management remain, if
it is believed to be in the best interests of the combined company subsequent to
the transaction. The terms of any employment or consulting arrangements of our
current management with the combined company post-transaction will be determined
at the time the transaction closes. Since our current management will be
negotiating the terms of the transaction as well as the terms of their
employment or consulting arrangements, our current management may have a
conflict of interest in negotiating terms favorable to the company in the
agreement and at the same time negotiating terms in their employment or
consulting arrangements that are favorable to them. Although management intends
to fully exercise its fiduciary duty to negotiate terms that will be in the best
interests of the combined-company and its public stockholders, members of
management may be negotiating terms in their employment or consulting agreements
that are favorable to them. While we intend to closely scrutinize any additional
individuals we engage after a business combination, we cannot assure our
stockholders that our assessment of these individuals will prove to be correct.
These individuals may be unfamiliar with the requirements of operating a public
company, as well as United States securities laws, which could cause us to have
to expend time and resources helping them become familiar with such laws. This
could be expensive and time-consuming and could lead to various regulatory
issues, which may result in our operations becoming less efficient.




Our
officers and directors will allocate their time to other businesses, thereby
causing conflicts of interest in their determination as to how much time to
devote to our affairs. This could have a negative impact on our ability to
consummate a business combination.





Our
officers and directors are not required to commit their full time to our
affairs, which may result in a conflict of interest in allocating their time
between our operations and other businesses. We do not intend to have any
full-time employees prior to the consummation of a business combination. Our
officers are engaged in several other business endeavors and are not obligated
to contribute any specific number of hours per week to our affairs. While it is
our officers’ intention to devote substantial business time to identifying
potential target businesses and consummating a business combination, their other
business affairs could require them to devote more substantial amounts of time
to such affairs, thereby limiting their ability to devote time to our affairs.
This could have a negative impact on our ability to consummate a business
combination.





Our
officers and directors may in the future become affiliated with entities engaged
in business activities similar to those intended to be conducted by us and,
accordingly, may have conflicts of interest in determining to which entity a
particular business opportunity should be presented.





Although
none of our officers, directors or affiliates have previously been associated
with any “blank check” companies, our officers and directors may in the future
become affiliated with entities, including other “blank check” companies,
engaged in business activities similar to those intended to be conducted by us.
Additionally, our officers and directors may become aware of business
opportunities which may be appropriate for presentation to us as well as the
other entities with which they are or may be affiliated. Further, certain of our






- 15
-


officers
and directors are currently involved in merchant banking/private equity
businesses. Due to these existing affiliations, they may have fiduciary
obligations to present potential business opportunities to those entities prior
to presenting them to us which could cause additional conflicts of interest.
Accordingly, they may have conflicts of interest in determining to which entity
a particular business opportunity should be presented.




Our
directors may not be considered “independent” under the policies of the North
American Securities Administrators Association, Inc.




Under the
policies of the North American Securities Administrators Association, Inc., an
international organization devoted to investor protection, because each of our
directors owns shares of our securities and may receive reimbursement for
out-of-pocket expenses incurred by him in connection with activities on our
behalf, such as identifying potential target businesses and performing due
diligence on suitable business combinations, state securities administrators
could take the position that such individuals are not “independent.” If this
were the case, they would take the position that we would not have the benefit
of independent directors examining the propriety of expenses incurred on our
behalf and subject to reimbursement. Additionally, there is no limit on the
amount of out-of-pocket expenses that could be incurred, and there will be no
review of the reasonableness of the expenses by anyone other than our board of
directors, which would include persons who may seek reimbursement, or a court of
competent jurisdiction if such reimbursement is challenged. Although we believe
that all actions taken by our directors on our behalf will be in our best
interests, whether or not they are deemed to be “independent,” we cannot assure
our stockholders that this will actually be the case. If actions are taken, or
expenses are incurred that are actually not in our best interests, our revenues
and profits could be reduced, and the price of our stock held by the public
stockholders could decrease.





Risks associated in
India





Exchange
controls in India may limit our ability to utilize our cash flow effectively
following a business combination.




Following
a business combination, we will be subject to India’s rules and regulations on
currency conversion. In India, the Foreign Exchange Management Act, or FEMA,
regulates the conversion of the Indian rupee into foreign currencies. Following
a business combination, we will likely be a FEMA company as a result of our
ownership structure. Such companies are permitted to operate in India without
any special restrictions, effectively placing them on par with wholly Indian
owned companies. However, we cannot assure our stockholders that the Indian
authorities will eliminate or continue to relax foreign currency restrictions.
Any future restrictions on currency exchanges may limit our ability to use our
cash flow for the distribution of dividends to our shareholders or to fund
operations we may have outside of India.





Returns
on investment in Indian companies may be decreased by withholding and other
taxes.





Following
a business combination, investments we may make in India could incur tax risk
unique to investment in India and in developing economies in general. Income
that might otherwise not be subject to withholding of local income tax under
normal international conventions may be subject to withholding of Indian income
tax. Under treaties with India and under local Indian income tax law income is
generally sourced in India and subject to Indian tax if paid from India. This is
true whether or not the services or the earning of the income would normally be
considered as from sources outside India in other contexts. Additionally, proof
of payment of withholding taxes may be required as part of the remittance
procedure. Following a business combination, any withholding taxes paid by us on
income from our investments in India may or may not be creditable on our income
tax returns.





Following
a business combination, we intend to avail ourselves of income tax treaties with
India to seek to minimize any Indian withholding tax or local tax otherwise
imposed. However, there is no assurance that the Indian tax authorities will
recognize application of such treaties to achieve a minimization of Indian
tax.







- 16
-


India
has different corporate disclosure, governance and regulatory requirements than
those in the United States which may make it more difficult or complex to
consummate a business combination.





Companies
in India are subject to accounting, auditing, regulatory and financial standards
and requirements that differ, in some cases significantly, from those applicable
to public companies in the United States, which may make it more difficult or
complex to consummate a business combination. In particular, the assets and
profits appearing on the financial statements of an Indian company may not
reflect its financial position or results of operations in the way they would be
reflected had such financial statements been prepared in accordance with U.S.
GAAP. Moreover, companies in India are subject to a different regulatory scheme
than United States companies with respect to such matters as insider trading
rules, tender offer regulation, shareholder proxy requirements and the timely
disclosure of information. Accordingly, appropriate adjustments to the financial
statements of an Indian company may be required in order to appropriately
determine the underlying valuation of the Indian company.





Legal
principles relating to corporate affairs and the validity of corporate
procedures, directors’ fiduciary duties and liabilities and shareholders’ rights
for Indian corporations may differ from those that may apply in the United
States, which may make the consummation of a business combination with an Indian
company more difficult than a business combination with a company based in the
United States.





Foreign
currency fluctuations could cause a business combination to be more
expensive.





Because
our business objective is to acquire one or more operating businesses with
primary operations in India, changes in the U.S. dollar-Indian rupee exchange
rate may affect our ability to achieve such objective. The exchange rate between
the Indian rupee and the U.S. dollar has changed substantially in the last two
decades and may fluctuate substantially in the future. If the U.S. dollar
declines in value against the Indian rupee, any business combination will be
more expensive and therefore more difficult to complete. Furthermore, we may
incur costs in connection with conversions between U.S. dollars and Indian
rupees, which may make it more difficult to consummate a business
combination.





Certain
sectors of the Indian economy are subject to government regulations that limit
foreign ownership, which limits our ability to achieve our business objective
which is to acquire one or more operating businesses with primary operations in
India.





The
Indian government prohibits investments in certain sectors and limits the
ownership in certain other sectors. We intend to avoid sectors in which foreign
investment is disallowed. This could limit the possible number of acquisitions
that are available for investment. The Indian government also regulates
investments in certain other sectors (e.g., banking) by increasing the amount of
ownership over time. The management team will evaluate the risk associated with
investments in sectors in which ownership is restricted. However, there can be
no guarantee that management will be correct in its assessment of political and
policy risk associated with investments in general and in particular in sectors
that are regulated by the Indian government. Any changes in policy could limit
our ability to achieve our business objective which is to acquire one or more
operating businesses with primary operations in India.





If the
relevant Indian authorities find us or the target business with which we
ultimately complete a business combination to be in violation of any existing or
future Indian laws or regulations, they would have broad discretion in dealing
with such a violation, including, without limitation:





·
            Levying
      fines;





·
            Revoking
      our business and other licenses;
and





·
            Requiring
      that we restructure our ownership or
operations.









- 17
-


The
requirement that Indian companies provide accounting statements that are in
compliance with United States Generally Accepted Accounting Principles (GAAP)
may limit the potential number of acquisition targets.





To meet
the requirements of the United States Federal securities laws, in order to seek
stockholder approval of a business combination, a proposed target business will
be required to have certain financial statements which are prepared in
accordance with, or which can be reconciled to, GAAP and audited in accordance
with U.S. Generally Accepted Auditing Standards (GAAS). GAAP and GAAS compliance
may limit the potential number of acquisition targets.





If
political relations between the U.S. and India weaken, it could make a target
business’ operations less attractive.





The
relationship between the United States and India may deteriorate over time.
Changes in political conditions in India and changes in the state of
Indian-United States relations are difficult to predict and could result in
restrictions on our future operations or cause potential target businesses to
become less attractive. This could lead to a decline in our profitability
following a business combination.





Because
the Indian judiciary will determine the scope and enforcement under Indian law
of almost all of our target business’ material agreements, we may be unable to
enforce our rights inside and outside of India following a business
combination.





Indian
law will govern almost all of our target business’ material agreements, some of
which may be with Indian governmental agencies. Therefore a target business or
businesses may not be able to enforce their material agreements and certain
remedies may not be available outside of India.





The
laws of India may not protect intellectual property rights to the same extent as
those of the United States, and we may be unsuccessful in protecting
intellectual property rights following a business combination and may also be
subject to third party claims of intellectual property
infringement.





The one
or more businesses we acquire will likely rely on a combination of patent,
copyright, trademark and design laws, trade secrets, confidentiality procedures
and contractual provisions to protect its intellectual property. However, the
laws of India may not protect proprietary rights to the same extent as laws in
the United States. Therefore, efforts to protect such intellectual property may
not be adequate. Furthermore, competitors may independently develop similar
technology or duplicate its products or services. Unauthorized parties may
infringe upon or misappropriate its products, services or proprietary
information.





Risks
Related to Our Business and Operations Following the Transaction




As
a result of an acquisition, our stockholders will be solely dependent on a
single business




As a
result of an acquisition, our stockholders will be solely dependent upon the
performance of the target and its business. As a result, following a transaction
we will be subject to a number of risks that relate generally to the renewable
energy industry in India.




Because
after the consummation the transaction a significant portion of our assets may
be located outside of the United States and/or Europe, it may be difficult for
investors to enforce their legal rights against such assets




After the
consummation of the transaction a significant portion of our assets may be
located outside of the United States, or Europe. As a result, it may not be
possible for investors in the United States and /or Europe to enforce their
legal rights, to effect service of process upon our directors or officers, or to
enforce judgments of United States, or European courts predicated upon civil
liabilities and criminal penalties of our directors and officers under
applicable securities laws.











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Because
the Indian judiciary will determine the scope and enforcement under Indian law
of almost all of the material agreements entered into by the target (prior to
the transaction) or us (following the transaction and completion of the reverse
merger), we may be unable to enforce our rights inside and outside of
India




Indian
law will govern almost all of our material agreements, some of which may be with
Indian governmental agencies. Therefore, we may not be able to enforce these
material agreements and certain remedies may not be available outside of
India.




Our
liquidity or ability to raise capital may be limited




The
successful execution of the Company’s business strategy depends on its continued
access to financing. In addition, the target must also have access to liquidity
to invest as equity or subordinated debt to meet its capital needs. The Company
relies upon access to the capital markets and the possible cash flow from its
other operations, if any, to fund asset growth and to provide sources of
liquidity. There can be no assurance that the target’s funding relationships
with commercial banks, investment banks and financial services companies will
continue. If these credit facilities are not extended and we cannot find
alternative funding sources on satisfactory terms, or at all, the Company may be
materially adversely affected.




Risks
Related to India




Investments
in India involve certain risks and special considerations. Such risks include
but are not limited to: (a) social, economic and political uncertainty,
including war; (b) the ability to sustain strong economic growth;
(c) greater price fluctuations and market volatility than in developed
markets; (d) less liquidity and smaller capitalization of securities
markets than in certain industrialized markets; (e) currency exchange rate
fluctuations; (f) interest rate fluctuations; (g) government
involvement in and control over the economy; (h) government decisions to
discontinue support of economic reform programs; (i) differences in
accounting, auditing and financial reporting standards; and (j) the
effectiveness of the Indian legal system.




Political
instability could adversely affect business and economic conditions in India
generally and the Company’s business, results of operations and financial
condition in particular




The
Company’s subsidiary operates in India, with all of its assets and employees
located in India. The financial performance of the Company will be affected by
changes in exchange rates and controls, interest rates, governmental policies,
including taxation policies, as well as political, social and economic
developments affecting India.




During
the past decade, the Indian Government has generally pursued policies of
economic liberalization, including significantly relaxing restrictions on the
private sector. Nevertheless, the role of the Union and State Governments in the
Indian economy as producers, consumers and regulators has remained significant.
There can be no assurance that these liberalization policies will continue in
the future. Government corruption scandals and protests against privatization
have occurred in the past and could slow down the pace of liberalization and
deregulation. The rate of economic liberalization could change, and specific
laws and policies affecting foreign investment, currency exchange rates and
other matters affecting investment in India could also change. A significant
change in the liberalization and deregulation policies could adversely affect
business and economic conditions in India generally, and the Company’s business
and financial condition and prospects in particular.




Regional
conflicts, terrorist attacks or natural disasters could adversely affect the
Indian economy, disrupt the Company’s operations and cause the Company’s
business to suffer




South
Asia has from time to time experienced instances of civil unrest, terrorism and
hostilities among neighbouring countries, notably involving India and Pakistan.
The governments of India and Pakistan have recently been engaged in conciliatory
efforts. However, any deterioration in relations between India and its
neighbours, and military activity or terrorist attacks in the future could
influence the Indian economy by disrupting communications and making travel more
difficult and such political tensions could create a perception that investments
in Indian










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companies
involve higher degrees of risk. Further, in December 2004, certain parts of
India were severely affected by a tsunami triggered by an earthquake in the
Indian Ocean, causing widespread physical and economic devastation.




Financial
instability in other countries may cause increased volatility in Indian
financial markets




The
Indian market and the Indian economy are influenced by economic and market
conditions in other countries, particularly emerging market countries in Asia.
Financial instability in Asia and elsewhere in the world in recent years has
affected the Indian economy. Although economic conditions are different in each
country, investors’ reactions to developments in one country can have adverse
effects on the securities of companies in other countries, including India. A
loss of investor confidence in the financial systems of other emerging markets
may cause increased volatility in Indian financial markets and, indirectly, in
the Indian economy in general. Any worldwide financial instability could also
have a negative impact on the Indian economy. Financial disruptions may occur
again and could harm the Company’s business and its future financial
performance.




A
slowdown in economic growth in India could affect the financial condition of the
Company




The
Company’s financial performance and the quality and growth of its business are
dependent in part on the health of the overall Indian economy. The Indian
economy has grown 8.4% second quarter of fiscal year 2008, and more strongly in
prior quarters. A slowdown in the Indian economy could adversely affect the
Company’s business. The demand for electricity in India is closely linked to
economic growth. As the economy grows, economic activities, such as industrial
production and personal consumption, also tend to expand, which increases the
demand for electricity. Conversely, in economic downturns, activities such as
industrial production and consumer demand decline or stagnate, causing demand
for electricity to decrease. If the Indian economy does not continue to grow at
its current rate, or if there is an economic downturn, demand for electricity
generally and demand for renewable energy sources such as wind in particular are
likely to decrease. A sustained economic downturn would have a material adverse
effect on the business, financial condition and results of operations of the
Company.




Increasing
employee compensation in India may reduce the Company’s profit
margins




Employee
compensation in India has historically been significantly lower than employee
compensation in the United States and Western Europe for comparably skilled
professionals, which has been one of India’s competitive strengths. However,
employee compensation in India is increasing at a faster rate than in the United
States and Western Europe, which could result in increased costs relating to
scientists and engineers, managers and other mid-level professionals. While the
Company intends to outsource the majority of the operational aspects of its
business to contractors, any changes in employee compensation are likely to
result in higher services fees being payable to contractors, which in turn will
negatively affect the Company’s financial condition.




Any
downgrading of India’s debt rating by an international rating agency could have
a negative impact on the Company’s access to capital markets on acceptable
terms




Any
adverse revisions to India’s credit ratings for domestic and international debt
by international rating agencies may adversely impact the Company’s ability to
raise additional financing, and the interest rates and other commercial terms at
which such additional financing is available. This would have a material adverse
effect on the Company’s business and future financial performance including its
ability to obtain financing for capital expenditures.




Accounting,
disclosure and regulatory standards




Accounting,
financial and other reporting standards in India although rigorous, may be
different when compared with international financial reporting standards,
including accounting for depreciation, deferred taxation and foreign exchange
transactions. Accordingly, the Company may not have adequate information while
evaluating acquisition decisions to accurately assess all accrued liabilities
which may be imposed on the Company after its acquisition of particular
assets.










- 20
-


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




Not
applicable.






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.




(b)
Exhibits




31
            Certification
      of Principal Executive Officer and Principal Financial Officer pursuant to
      Rule 13a-14(a) of the Securities Exchange Act, as
  amended.




32
            Certification
      of the Principal Executive Officer and Principal Financial Officer
      pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the
      Sarbanes-Oxley Act of 2002.













SIGNATURES




In
accordance with the requirements of the Exchange Act, the registrant caused this
report to be signed on its behalf by the undersigned, thereunto duly
authorized.






PHOENIX
      INDIA ACQUISITION CORP.Date:  
       September 19, 2008
              By:
              /s/ Ramesh
      AkellaRamesh
      AkellaPresident,
      Chief Strategy Officer and Director
                (Principal
      Executive Officer and Principal Financial Officer)










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