**UNITED
      STATES**


**SECURITIES
      AND EXCHANGE COMMISSION**


WASHINGTON,
      D.C. 20549




**FORM
      10-Q**




(Mark
      One)




x
            
            Quarterly
                report under Section 13 or 15(d) of the Securities Exchange Act of
                1934
              
              For
                the quarterly period endedApril
                30, 2008




o
            Transition
                report under Section 13 or 15(d) of the Securities Exchange Act of
                1934
              
              For
                the transition period from _____________ to
                _____________




Commission
      File Number: 000-51869




**SouthPeak
                Interactive Corporation**
              (formerly
                known as Global Services Partners Acquisition
                Corp.)


(Exact
      Name of Small Business Issuer as Specified in Its Charter)




Delaware
            20-3290391(State
                or other Jurisdiction of
              Incorporation
                or Organization)
            (I.R.S.
                Employer
              Identification
                No.)




2900
                Polo Parkway, Suite 200, Midlothian, Virginia
                23113


(Address
      of Principal Executive Office)  (Zip
      Code)




(804)
                378-5100


(Issuer'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 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 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 Act. (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 o No x




As
      of June 13, 2008, 35,920,100 shares of common stock, par value
      $.0001 per share, and 12,984,833 shares of  Series A Convertible Preferred
      Stock, par value $.0001 per share, were issued and outstanding.




Transitional
      Small Business Disclosure Format (check one): Yes o No x
















TABLE
      OF CONTENTS


**Page**PART
                    I - FINANCIAL INFORMATIONItem
                  1. Consolidated Financial StatementsCondensed
                  Consolidated Balance Sheets, April 30, 2008 (Unaudited) and July
                  31, 2007
              2Unaudited
                  Condensed Consolidated Statements of Operations, for the three
                  months
                  ended April 30, 2008 and 2007 and the nine months ended April 30,
                  2008 and 2007 and the period from August 10, 2005 (inception) to
                  April 30,
                  2008 (Unaudited)
              3Condensed
                  Consolidated Statements of Stockholders’ Equity (deficit), from August 10,
                  2005 (inception) to July 31, 2007 and nine months ended April 30,
                  2008 (Unaudited)
              4Condensed
                  Consolidated Statements of Cash Flows for the nine months ended April
                  30, 2008 and 2007 and the period from August 10, 2005 (inception)
                  to April
                  30, 2008 (Unaudited)
              5Notes
                  to Unaudited Condensed Consolidated Financial Statements
              6Item
                  2. Management's Discussion and Analysis of Financial Condition
                  and Results
                  of Operations
              14Item
                  3. Quantitative and Qualitive Disclosures About Market
                  Risk
              15Item
                  4. Controls and Procedures
              16PART
                  II - OTHER INFORMATIONItem 1.
                Legal
                Proceedings
              17Item 1A.
                Risk
                Factors
              17Item 2.
                Unregistered
                Sales of Equity Securities and Use of Proceeds
              29Item 6.
                Exhibits
              30Signatures
              31
 
 1
 **PART
          I**
  **Item
          1. *Consolidated Financial Statements.***


**SouthPeak
      Interactive Corporation**




**Condensed
      Consolidated Balance Sheets**


**April 30, 2008**
              
              **July 31, 2007****(Unaudited)**
              
              **(Audited)****ASSETS****Current
                  Assets:**Cash
                  and cash equivalents
              
              $
              43,470
              
              $
              995,386Investment
                  held in trust, including interest receivable of $0 and $84,647
                  respectively (Notes 1 and 3)
              
              
              -
              
              
              31,430,580Prepaid
                  expenses
              
              
              2,077
              
              
              41,000Total
                  current assets
              
              
              45,547
              
              
              32,466,966Deferred
                  acquisition costs
              
              
              -
              
              
              17,404**Total
                  assets**
              
              $
              45,547
              
              $
              32,484,370**LIABILITIES
                  AND STOCKHOLDER'S EQUITY (DEFICIT)****Current
                  Liabilities:**Accrued
                  acquisition costs
              
              $
              41,570
              
              $
              -Accounts
                  payable and accrued expenses
              
              
              109,334
              
              
              78,047Total
                  current liabilities
              
              
              150,904
              
              
              78,047**Common
                  stock, Class B subject to possible conversion**(0
                  and 1,195,402 shares at conversion value) (Note 1)
              
              
              -
              
              
              6,282,974**Commitments**(Note 5)**Stockholders'
                  Equity**(Deficit) (Notes 2, 6 and 8):Preferred
                  stock, par value $.0001 per share, 5,000 shares authorized, 0 shares
                  issued
              
              
              -
              
              
              -Common
                  stock, par value $.0001 per share, 24,000,000 shares authorized,
                  1,920,100
                  and 920,100 shares issued and outstanding, respectively
              
              
              192
              
              
              92Common
                  stock, Class B, par value $.0001 per share, 7,000,000 shares authorized,
                  0
                  and 4,784,598 shares issued and outstanding (excluding 1,195,402
                  shares
                  subject to possible conversion)
              
              
              -
              
              
              478Additional
                  paid-in-capital
              
              
              2,552,878
              
              
              25,468,527Retained
                  earnings (deficit) accumulated in the development
                  stage
              
              
              (2,658,427
              )
              
              654,252Total
                  stockholders' equity (deficit)
              
              
              (105,357
              )
              
              26,123,349**Total
                  liabilities and stockholders' equity** (deficit)
              
              $
              45,547
              
              $
              32,484,370




*The
      accompanying notes should be read in conjunction with the unaudited condensed
      consolidated financial statements*





2


**SouthPeak
      Interactive Corporation**


****


**Condensed
      Consolidated Statements of Operations**


**(Unaudited)**


**For the three months ended**
              
              **For the nine months ended**
              
              **From August 10,**
                **2005 (inception) to****April 30, 2008**
              
              **April 30, 2007**
              
              **April 30, 2008**
              
              **April 30, 2007**
              
              **April 30, 2008****Operating
                  expenses:**Professional
                  fees
              
              $
              74,314
              
              $
              44,714
              
              $
              240,685
              
              $
              150,313
              
              $
              559,054Transaction
                  costs (Note 1)
              
              
              1,071,570
              
              
              -
              
              
              1,703,770
              
              
              -
              
              
              1,703,770General
                  and administrative expenses (Notes 4 & 5)
              
              
              43,157
              
              
              61,171
              
              
              148,326
              
              
              210,519
              
              
              449,413**Loss
                  from operations**
              
              
              (1,189,041
              )
              
              (105,885
              )
              
              (2,092,781
              )
              
              (360,832
              )
              
              (2,712,237
              )**Interest
                  income**
              
              
              149,057
              
              
              245,848
              
              
              649,061
              
              
              749,755
              
              
              1,922,769**Income
                  (loss) before provision for income taxes**
              
              
              (1,039,984
              )
              
              139,963
              
              
              (1,443,720
              )
              
              388,923
              
              
              (789,468
              )**Provision
                  for income taxes**(Note 4)
              
              
              -
              
              
              -
              
              
              -
              
              
              -
              
              
              -**Net
                  income (loss) for the period**
              
              
              (1,039,984
              )
              
              139,963
              
              
              (1,443,720
              )
              
              388,923
              
              
              (789,468
              )Accretion
                  of Trust Fund relating to Class B common stock subject to possible
                  conversion
              
              
              (29,644
              )
              
              (48,094
              )
              
              (127,412
              )
              
              (144,732
              )
              
              (373,606
              )**Net
                  income (loss) attributable to other Class B stockholders and common
                  stockholders**
              
              $
              (1,069,628
              )
              $
              91,869
              
              $
              (1,571,132
              )
              $
              244,191
              
              $
              (1,163,074
              )**Class
                  B common shares outstanding subject to possible
                  conversion**
              
              
              1,115,709
              
              
              1,195,402
              
              
              1,169,225
              
              
              1,195,402**Net
                  income (loss) per Class B common share subject to possible conversion,**basic and diluted
              
              $
              0.03
              
              $
              0.04
              
              $
              0.11
              
              $
              0.12**Weighted
                  average number of common shares outstanding,**basic and
                  diluted
              
              
              5,452,391
              
              
              5,704,698
              
              
              5,599,926
              
              
              5,704,698**Net
                  income (loss) per share,**basic and diluted
              
              $
              (0.20
              )
              $
              0.02
              
              $
              (0.28
              )
              $
              0.04


*The
      accompanying notes should be read in conjunction with the unaudited condensed
      consolidated financial statements*





3


**SouthPeak
      Interactive Corporation**


****


**Condensed
      Consolidated Statements of Stockholders’ Equity (Deficit)**




**Retained earnings (deficit)****Additional**
              
              
              **accumulated in****Common Stock**
              
              
              **Common Stock, Class B**
              
              
              **Paid -In**
              
              
              **the development****Shares**
              
              
              **Amount**
              
              
              **Shares**
              
              
              **Amount**
              
              
              **Capital**
              
              
              **stage**
              
              
              **Total****Balance,
                  August 10, 2005 (inception)**
              
              
              -
              
              $
              -
              
              
              -
              
              $
              -
              
              $
              -
              
              $
              -
              
              $
              -Issuance
                  of Common Stock to initial stockholder
              
              
              100
              
              
              
              
              
              
              
              
              
              
              
              500
              
              
              
              
              
              500Issuance
                  of 3,075,000 W arrants at $0.05 Per Warrant
              
              
              -
              
              
              -
              
              
              -
              
              
              -
              
              
              153,750
              
              
              -
              
              
              153,750Sale
                  of 460,000 Series A Units and 2,990,000
                Series
                  B Units through public offering net of underwriter's discount and
                  offering
                  expenses and net of proceeds of $6,036,780 allocable to 1,195,402
                  shares
                  of common stock, Class B subject to possible conversion
              
              
              920,000
              
              
              92
              
              
              4,784,598
              
              
              478
              
              
              25,560,371
              
              
              -
              
              
              25,560,941Proceeds
                  from sale of underwriters' purchase option
              
              
              -
              
              
              -
              
              
              -
              
              
              -
              
              
              100
              
              
              -
              
              
              100Accretion
                  relating to Class B common stock subject to possible
                  conversion
              
              
              -
              
              
              -
              
              
              -
              
              
              -
              
              
              (50,100
              )
              
              -
              
              
              (50,100
              )Net
                  income for the period
              
              
              -
              
              
              -
              
              
              -
              
              
              -
              
              
              -
              
              
              153,457
              
              
              153,457**Balance,
                  July 31, 2006**
              
              
              920,100
              
              $
              92
              
              
              4,784,598
              
              $
              478
              
              $
              25,664,621
              
              $
              153,457
              
              $
              25,818,648Accretion
                  relating to Class B common stock subject to possible
                  conversion
              
              
              -
              
              
              -
              
              
              -
              
              
              -
              
              
              (196,094
              )
              
              -
              
              
              196,094Net
                  income for the year
              
              
              -
              
              
              -
              
              
              -
              
              
              -
              
              
              -
              
              
              500,795
              
              
              500,795**Balance,
                  July 31, 2007**
              
              
              920,100
              
              $
              92
              
              
              4,784,598
              
              $
              478
              
              $
              25,468,527
              
              $
              654,252
              
              $
              26,123,349Accretion
                  relating to Class B common stock subject to possible conversion
                  (unaudited)
              
              
              -
              
              
              -
              
              
              -
              
              
              -
              
              
              (127,412
              )
              
              -
              
              
              (127,412
              )Net
                  loss for the nine months ended April 30, 2008 (Unaudited)
              
              
              -
              
              
              -
              
              
              -
              
              
              -
              
              
              -
              
              
              (1,443,720
              )
              
              1,443,720Net
                  loss from inception before reclassification of interest earned
                  on trust account
              
              
              -
              
              
              -
              
              
              -
              
              
              -
              
              
              -
              
              
              (789,468
              )
              
              -Reclassification
                  of interest earned on trust account since inception to additional
                  paid in
                  capital (unaudited)
              
              
              -
              
              
              -
              
              
              -
              
              
              -
              
              
              1,868,959
              
              
              (1,868,959
              )
              
              -Return
                  and concollation of Class B Common Stock (unaudited)
              
              
              -
              
              
              -
              
              
              (4,784,598
              )
              
              (478
              )
              
              478
              
              
              -
              
              
              -Redemption
                  of Class B common stock (unaudited)
              
              
              -
              
              
              -
              
              
              -
              
              
              -
              
              
              (25,657,574
              )
              
              -
              
              
              (25,657,574
              )Issuance
                  of 1,000,000 shares in connection with merger transaction ($1 per
                  share
                  value) (unaudited)
              
              
              1,000,000
              
              
              100
              
              
              -
              
              
              -
              
              
              999,900
              
              
              -
              
              
              1,000,000**Balance,
                  April 30, 2008 (Unaudited)**
              
              
              1,920,100
              
              $
              192
              
              
              -
              
              $
              -
              
              $
              2,552,878
              
              $
              (2,658,427
              )
              $
              (105,357
              )


*The
      accompanying notes should be read in conjunction with the Unaudited condensed
      consolidated financial statements*





4


**SouthPeak
      Interactive Corporation**


****


**Condensed
      Consolidated Statements of Cash Flows**


**(Unaudited)**


**For the nine**
                **months ended**
                **April 30, 2008**
              
              **For the nine**
                **months ended**
                **April 30, 2007**
              
              **From August 10,**
                **2005 (inception) to**
                **April 30, 2008****CASH
                  FLOW FROM OPERATING ACTIVITIES**Net
                  income for the period
              
              $
              (1,443,720
              )
              $
              388,923
              
              $
              (789,468
              )Adjustments
                  to reconcile net income to net cash used in operating
                  activities:Non
                  cash charge related to issuance of common stock
              
              
              1,000,000
              
              
              -
              
              
              1,000,000Gain
                  on maturity of securities held in trust fund
              
              
              (722,027
              )
              
              (640,766
              )
              
              (1,868,960
              )Change
                  in operating assets and liabilities:Interest
                  receivable on investment held in Trust Fund
              
              
              84,647
              
              
              (83,252
              )
              
              -Prepaid
                  expenses
              
              
              38,923
              
              
              (50,875
              )
              
              (2,077
              )Accounts
                  payable, accrued expenses and accrued and deffered acquisition
                  costs
              
              
              90,261
              
              
              (88,845
              )
              
              150,904**Net
                  cash used in operating activities**
              
              
              (951,916
              )
              
              (474,815
              )
              
              (1,509,601
              )**CASH
                  FLOW FROM INVESTING ACTIVITIES**Purchase
                  of securities held in trust fund
              
              
              (285,759,580
              )
              
              (183,981,743
              )
              
              (777,536,933
              )Maturity
                  of securities held in trust fund
              
              
              285,759,580
              
              
              183,981,743
              
              
              747,337,933Redemption
                  of Trust Account
              
              
              32,067,959
              
              
              -
              
              
              32,067,959**Net
                  cash provided by (used in) investing activities**
              
              
              32,067,959
              
              
              -
              
              
              1,868,959**CASH
                  FLOW FROM FINANCING ACTIVITIES**Proceeds
                  from issuance of common stock to initial stockholder
              
              
              -
              
              
              -
              
              
              500Proceeds
                  from issuance of warrants
              
              
              -
              
              
              -
              
              
              153,750Proceeds
                  from notes payable to initial security holders
              
              
              -
              
              
              -
              
              
              52,500Registration
                  costs paid
              
              
              -
              
              
              -
              
              
              (89,909
              )Repayment
                  of notes payable to initial security holders
              
              
              -
              
              
              -
              
              
              (52,500
              )Proceeds
                  from sale of underwriters' purchase option
              
              
              -
              
              
              -
              
              
              100Redemption
                  of Class B Common Stock
              
              
              (32,067,959
              )
              
              -
              
              
              (32,067,959
              )Portion
                  of net proceeds from sale of Series B units through public offering
                  allocable to shares of common stock, Class B subject to possible
                  conversion
              
              
              -
              
              
              -
              
              
              6,036,780Net
                  proceeds from sale of units through public offering allocable to
                  stockholders' equity
              
              
              -
              
              
              -
              
              
              25,650,850**Net
                  cash (used in) provided by financing activities**
              
              
              (32,067,959
              )
              
              -
              
              
              (315,888
              )**Net
                  increase (decrease) in cash and cash equivalents**
              
              
              (951,916
              )
              
              (474,815
              )
              
              43,470**Cash
                  and cash equivalents**Beginning
                  of period
              
              
              995,386
              
              
              1,583,911
              
              
              -End
                  of period
              
              $
              43,470
              
              $
              1,109,096
              
              $
              43,470**Supplemental
                  disclosure of non-cash financing activities:**Fair
                  value of underwriter purchase option included in offering
                  costs
              
              $
              -
              
              $
              -
              
              $
              360,000Accretion
                  relating to class B common stock subject to possible
                  conversion
              
              $
              127,412
              
              $
              144,732
              
              $
              373,606Issuance
                  of common stock relating to transaction costs
              
              
              1,000,000
              
              
              -
              
              
              1,000,000


*The
      accompanying notes should be read in conjunction with the unaudited condensed
      consolidated financial statements*





5


**SouthPeak
      Interactive Corporation**


****


**Notes
      to Unaudited Condensed Consolidated Financial Statements**




**NOTE
      1** – **ORGANIZATION
      AND ACTIVITIES**




SouthPeak
      Interactive Corporation (the “Company”) was incorporated in Delaware on August
      10, 2005 under the name Global Services Partners Acquisition Corp. to serve
      as a
      vehicle to effect a merger, capital stock exchange, asset acquisition or other
      similar business combination with an unidentified operating business (a “Target
      Business”).





The
      Company is considered to be a development stage company and as such the
      financial statements presented herein are presented in accordance with Statement
      of Financial Accounting Standards ("SFAS") No. 7, Accounting and Reporting
      by
      Development Stage Enterprises.




***Recent
      Events***




On
        May
        12, 2008, the Company acquired all of the outstanding membership interests
        of SouthPeak Interactive, L.L.C. (“SouthPeak LLC”) pursuant to the
        Membership Interest Purchase Agreement (“Purchase Agreement”). As a condition to
        closing the Purchase Agreement, the Company completed a merger with its
        wholly-owned subsidiaries pursuant to which the Company changed its name
        to
        SouthPeak Interactive Corporation. At the closing of the transactions
        contemplated by the Purchase Agreement, the Company issued 35,000,000 shares
        of
        the Company’s common stock (including the 1,000,000 issued on April 25, 2008) to
        the members of SouthPeak LLC in exchange for SouthPeak LLC’s membership
        interests. The
        transaction will be accounted for as a reverse acquisition, equivalent to
        a
        recapitalization, through the issuance of stock by SouthPeak for the net
        monetary assets of the Company. The net monetary assets of the Company will
        be
        recorded as of the transaction date at their respective historical costs,
        which
        is considered to be the equivalent of fair value. No goodwill or intangible
        assets will be recorded as a result of the transaction. This transaction,
        which occurred subsequent to April 30, 2008, has not been reflected in the
        accompanying financial statements.
  ***History***


In
      October 18, 2007, the Company entered into a letter of intent
      with SouthPeak LLC in anticipation of completing a business combination by
      April 25, 2008.





The business combination was
      subject to, among other things, the approval of the Company’s Class B
      stockholders. Between April 24 and 25, 2008, at a special meeting of the
      Company's stockholders, the proposal approving the business combination with
      SouthPeak LLC contained in the Company’s Definitive Proxy was not approved by
      the holders of a majority of shares of the Company’s Class B common stock.




In
      accordance with the Company’s certificate of incorporation, as a result of the
      Company not consummating a business combination on or before April 25, 2008,
      effective on that date, each share of the Company’s Class B common stock was
      cancelled and automatically converted into the right to receive a pro rata
      portion of the trust account maintained by the Company since its initial public
      offering for the benefit of the Class B common stock. Accordingly, the Company’s Series B Units were mandatorily separated
      into their component parts: two warrants to purchase Common Stock and rights
      to
      receive the distribution on Class B shares. The
      Company directed the trustee of the trust account to distribute to all holders
      of its Class B common stock, in proportion to their respective equity interest
      in the Class B common stock, an aggregate sum equal to the amount in the trust
      account, inclusive of any interest. The amount of $32,067,959 comprised of
      proceeds from the Company’s initial public offering placed in trust of
      $30,199,000 and interest of $1,868,959 earned thereon ($5.36 per Class B share),
      was distributed to Class B shareholders. Effective as of the close of business
      April 25, 2008, the Company’s Series B Common Stock and Class B Units were
      no longer quoted on the Over -The-Counter bulletin board and were no longer
      traded or tradable.




6




**SouthPeak
      Interactive Corporation**


****


**Notes
      to Unaudited Condensed Consolidated Financial Statements**




**NOTE
      1 – ORGANIZATION AND ACTIVITIES (CONTINUED)**




On
      April
      25, 2008, subsequent to the termination of the special meeting, the Company
      entered into an agreement with SouthPeak LLC and the members of SouthPeak LLC
      (the “Agreement”) pursuant to which the members of SouthPeak LLC agreed to enter
      into a new definitive agreement with the Company to exchange their membership
      interests in SouthPeak LLC for shares of the Company’s common stock. In order to
      facilitate the consummation of the acquisition of SouthPeak LLC, the Company
      issued 1,000,000 shares of its common stock to the managing member of SouthPeak
      LLC as advance consideration in exchange for SouthPeak LLC’s and its members’
continued exclusive relationship with the Company. If the closing of a
      definitive agreement as contemplated under the Agreement did not occur on or
      before May 15, 2008 (subject to the unilateral right of SouthPeak LLC to extend
      such date to May 30, 2008), the shares, at the option of the Company, were
      to be
      immediately cancelled.




***Organization***




The
      registration statement for the Company's initial public offering (“Offering”)
      was declared effective on April 18, 2006. The Company consummated the Offering
      on April 25, 2006 for net proceeds of approximately $31.6 million. The Company’s
      management had broad authority with respect to the application of the proceeds
      of the Offering although substantially all of the proceeds of the Offering
      were
      intended to be applied generally toward consummating a merger, capital stock
      exchange, asset acquisition or other similar transaction with a Target Business
      (a “Business Combination”). Pending such a Business Combination, substantially
      all of the proceeds of the initial public offering were held in trust (“Trust
      Fund”) to be returned to the holders of Class B Common Stock if a Business
      Combination was not consummated in 24 months (April 25, 2008), subsequent to
      the
      Offering (the “Target Business Acquisition Period”). In the event there is no
      Business Combination, the Company will dissolve and any remaining net assets,
      after the distribution of the Trust Fund to Class B stockholders, would be
      distributed to the holders of common stock sold in the Offering.




Both
      the
      Company’s common stock and Class B common stock had one vote per share. However,
      the Class B common stockholders could, and the common stockholders could not,
      vote in connection with a Business Combination. Further, since a Business
      Combination was not consummated during the Target Business Acquisition Period
      as
      noted above, the Trust Fund was distributed pro-rata to all of the Class B
      common stockholders and their Class B common shares were cancelled and returned
      to the status of authorized but unissued shares. Common stockholders did not
      receive any of the proceeds from the Trust Fund.





**Going
      concern consideration** —
As
      indicated in the accompanying financial statements, at April 30, 2008, the
      Company had current assets of $45,547 (including cash of $43,470), current
      liabilities of $150,904 and a working capital deficiency of $105,357. These
      factors, among others, indicate that the Company may be unable to continue
      operations as a going concern unless further financing is consummated.
      (Note 8)




7




**SouthPeak
      Interactive Corporation**


****


**Notes
      to Unaudited Condensed Consolidated Financial Statements**





**NOTE
      2 - OFFERING**




In
      the
      Offering, effective April 18, 2006 (closed on April 25, 2006), the Company
      sold
      to the public an aggregate of 460,000 Series A Units (the “Series A Units” or a
“Series A Unit”) and 2,990,000 Series B Units (the “Series B Units” or a “Series
      B Unit”) at a price of $8.50 and $10.10 per unit, respectively, inclusive of an over-allotment
      option issued to the underwriters to purchase additional Series A Units and
      Series B Units, which was exercised in full. Proceeds from the Offering totaled
      approximately $31.6 million, which was net of approximately
      $2.5 million in underwriting and other expenses incurred through April 25,
      2006,
      the consummation of the offering. Each Series A Unit consists of two shares
      of
      the Company’s common stock, and ten Class Z Warrants. Each Series B Unit
      consists of two shares of the Company's Class B common stock, and two Class
      W
      Warrants.




**NOTE
      3** - **SUMMARY
      OF SIGNIFICANT ACCOUNTING POLICIES**




**Interim
      Financial Statements** - The
      accompanying unaudited condensed consolidated financial statements have been
      prepared pursuant to the rules and regulations of the Securities and Exchange
      Commission and should be read in conjunction with the Company’s audited
      financial statements and footnotes thereto for the period from inception (August
      10, 2005) to July 31, 2007 included in the Company’s Form 10-K filed on October
      29, 2007. Certain information and footnote disclosures normally included in
      financial statements prepared in accordance with accounting principles generally
      accepted in the United States of America have been omitted pursuant to such
      rules and regulations. However, the Company believes that the disclosures are
      adequate to make the information presented not misleading. The financial
      statements reflect all adjustments (consisting primarily of normal recurring
      adjustments) that are, in the opinion of management, necessary for a fair
      presentation of the Company’s financial position and results of operations. The
      operating results for the three and nine months ended April 30, 2008 and 2007
      and for the period from inception (August 10, 2005) to April 30, 2008 are not
      necessarily indicative of the results to be expected for any other interim
      period of any future year.





**Cash
      and Cash Equivalents** -
      Included in cash and cash equivalents are deposits with financial institutions
      as well as short-term money market instruments with maturities of three months
      or less when purchased.




**Basis
      of Presentation of Condensed Consolidated Financial Statements** -
      The
      condensed consolidated financial statements include the accounts of the
      Company’s subsidiaries. There were no intercompany transactions and balances to
      be eliminated.




**Concentration
      of Credit Risk** -
      Financial instruments that potentially subject the Company to a significant
      concentration of credit risk consist primarily of cash and cash equivalents.
      The
      Company has maintained deposits in federally insured financial institutions
      in
      excess of federally insured limits. However, management believes the Company
      is
      not exposed to significant credit risk due to the financial position of the
      depository institutions in which those deposits are held.





**Transaction
      Costs** -
      Costs
      related to proposed acquisitions are capitalized and in the event the
      acquisition does not occur, the costs are expensed. As of April 30, 2008, the
      Company has expensed $1,703,770 ($1,000,000 of which pertains to the advance
      consideration given to SouthPeak LLC Member) in acquisition costs as the
      proposed transaction will be treated as a reverse acquisition. (See Note
      1).





**Investments
      Held in Trust/Income Taxes** –
Through
      April 25, 2008, the Company’s restricted investment held in the Trust Fund were
      comprised of Commonwealth of Virginia securities with maturities of up to 30
      days. The amounts that were held in the Trust Fund recognized interest income
      of
      $148,296, $637,380, $240,590 and $724,018 for the three and nine months ended
      April 30, 2008 and 2007, respectively, and $1,868,959 from inception (August
      10,
      2005) to April 30, 2008, which was included in interest income on the
      accompanying statement of operations. Such securities generated current income
      which was exempt from federal income tax and the tax imposed by the Commonwealth
      of Virginia and therefore no provision for income taxes was required for the
      nine months ended April 30, 2008.




8


**SouthPeak
      Interactive Corporation**


****


**Notes
      to Unaudited Condensed Consolidated Financial Statements**




**NOTE
      3 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)**




**Net
      Income (loss) Per Share** - Net
      income per share is computed based on the weighted average number of shares
      of
      common stock and Class B common stock outstanding.




Basic
      earnings (loss) per share is computed by dividing income (loss) available to
      common stockholders by the weighted average common shares outstanding for the
      period. Basic net income per share, subject to possible conversion, is
      calculated by dividing accretion relating to Class B common stock subject to
      possible conversion by the number of Class B common shares outstanding subject
      to possible conversion. Diluted earnings per share reflects the potential
      dilution that could occur if securities or other contracts to issue common
      stock
      were exercised or converted into common stock or resulted in the issuance of
      common stock that then shared in the earnings of the entity. Since the effect
      of
      outstanding warrants to purchase common stock and the Underwriter Purchase
      Option (“UPO”) are antidilutive, they have been excluded from the Company’s
      computation of net income per share.




As
      a
      result of the Company’s distribution of the Trust Fund to the Class B Common
      Stockholders the amounts in the Trust Fund were returned to the Class B Common
      Stockholders including all interest income earned thereon on April 30, 2008.
      Due
      to the distribution to Class B common shareholders made in April 2008 and the
      inclusion therein of $1,868,959 of interest earned on the Trust Fund to April
      30, 2008 discussed in Note 1, the amounts disclosed as earnings (loss) per
      share
      on the statements of operations are not representative of the actual per share
      earnings (loss) of the Class B common stock (5,980,000 shares) and common stock
      (920,100 shares) since inception. Such amounts would be $0.31 net income per
      share of common stock Class B (based on $1,868,959 interest on Trust Fund since
      the Offering) and $(2.89) net loss per share of common stock (based on net
      loss
      since inception of $2,658,427 excluding interest on Trust Fund) for the
      5,980,000 and 920,100 shares, respectively (this calculation excludes the per
      share loss related to 1,000,000 shares of common stock issued April 25, 2008
      discussed in Note 1 "History" above).




**Fair
      Value of Financial Instruments and Derivatives** - The
      fair values of the Company’s assets and liabilities that qualify as financial
      instruments under SFAS No. 107 approximate their carrying amounts presented
      in
      the balance sheet at April 30, 2008. As of April 30, 2008, the Company had
      no
      derivatives under SFAS No. 107.





**Use
      of Estimates** - The
      preparation of financial statements in accordance with accounting principles
      generally accepted in the United States of America requires management to make
      estimates and assumptions that affect certain 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 revenue and expenses during
      the reporting period. Actual results could differ from those estimates.





**Income
      Taxes** -
      Deferred income tax assets and liabilities are computed for differences between
      the financial statement and tax bases of assets and liabilities that will result
      in future taxable or deductible amounts and are based on enacted tax laws and
      rates applicable to the periods in which the differences are expected to affect
      taxable income. Valuation allowances are established when necessary to reduce
      deferred income tax assets to the amount expected to be realized.




**New
      Accounting Pronouncements –**  In
      July
      2006, the Financial Accounting Standards Board (“FASB”) issued Interpretation
      No. 48 (“FIN 48”), “Accounting for Uncertainty in Income Taxes, an
      Interpretation of FASB Statement No. 109.” FIN 48 clarifies the accounting for
      uncertainty in income taxes recognized in a company’s financial statements and
      prescribes a recognition threshold and measurement attribute for the financial
      statement recognition and measurement of a tax position taken or expected to
      be
      taken in an income tax return. FIN 48 also provides guidance in derecognition,
      classification, interest and penalties, accounting in interim periods,
      disclosures and transition. FIN 48 is effective for fiscal years beginning
      after
      December 15, 2007. The adoption of FIN 48 is not expected to have a significant
      effect on the Company’s balance sheets or statements of operations.




9





**SouthPeak
      Interactive Corporation**


****


**Notes
      to Unaudited Condensed Consolidated Financial Statements**




**NOTE
      3 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)**




In
      September 2006, the FASB issued FASB Statement No. 157, Fair Value Measurements
      (“SFAS No. 157”), which defines fair value, establishes a framework for
      measuring fair value under GAAP, and expands disclosures about fair value
      measurements. SFAS No. 157 applies to other accounting pronouncements that
      require or permit fair value measurements. The new guidance is effective for
      financial statements issued for fiscal years beginning after November 15, 2007,
      and for interim periods within those fiscal years. The Company will evaluate
      the
      potential impact, if any, of the adoption of SFAS No. 157 on its financial
      position, results of operations and cash flows.





In
      February 2007, the FASB issued SFAS No. 159, “The Fair Value Option
      for Financial Assets and Financial Liabilities — including an amendment of FASB
      Statement No. 115” (“SFAS No. 159”). SFAS No. 159 permits
      entities to elect to measure many financial instruments and certain other items
      at fair value. Upon adoption of SFAS No. 159, an entity may elect the fair
      value option for eligible items that exist at the adoption date. Subsequent
      to
      the initial adoption, the election of the fair value option should only be
      made
      at initial recognition of the asset or liability or upon a remeasurement event
      that gives rise to new-basis accounting. SFAS No. 159 does not affect any
      existing accounting literature that requires certain assets and liabilities
      to
      be carried at fair value nor does it eliminate disclosure requirements included
      in other accounting standards. SFAS No. 159 is effective for fiscal years
      beginning after November 15, 2007 and may be adopted earlier but only if
      the adoption is in the first quarter of the fiscal year. The Company is
      considering whether to adopt SFAS No. 159.




In
      December 2007, the FASB issued SFAS 141 (revised 2007), *Business
      Combinations* (“SFAS
      141(R)”). SFAS 141(R) retains the fundamental requirements of the original
      pronouncement requiring that the purchase method be used for all business
      combinations, but also provides revised guidance for recognizing and measuring
      identifiable assets and goodwill acquired and liabilities assumed arising from
      contingencies, the capitalization of in-process research and development at
      fair
      value, and the expensing of acquisition-related costs as incurred. SFAS 141(R)
      is effective for fiscal years beginning after December 15, 2008. In the event
      that the Company completes acquisitions subsequent to its adoption of SFAS
      141(R), the application of its provisions will likely have a material impact
      on
      the Company’s results of operations, although the Company is not currently able
      to estimate that impact.




In
      December 2007, the FASB issued SFAS 160, *Noncontrolling
      Interests in Consolidated Financial Statements – an amendment of ARB No. 51*(“SFAS
      No. 160”)*.* SFAS
      160
      requires that ownership interests in subsidiaries held by parties other than
      the
      parent, and the amount of consolidated net income, be clearly identified,
      labeled and presented in the consolidated financial statements. It also requires
      once a subsidiary is deconsolidated, any retained noncontrolling equity
      investment in the former subsidiary be initially measured at fair value.
      Sufficient disclosures are required to clearly identify and distinguish between
      the interests of the parent and the interests of the noncontrolling owners.
      It
      is effective for fiscal years beginning after December 15, 2008, and requires
      retroactive adoption of the presentation and disclosure requirements for
      existing minority interests. All other requirements are applied prospectively.
      The Company does not expect the adoption of SFAS 160 to have a material impact
      on its financial condition or results of operations.




Management
      does not believe that any other recently issued, but not yet effective,
      accounting standards if currently adopted would have a material effect on the
      Company’s consolidated financial statements.




**NOTE
      4 - TAXES**





***Income
      Taxes***





No
      provisions for federal income taxes has been made because the Company’s interest
      income is earned from investments in Commonwealth of Virginia and Commonwealth
      of Maryland securities which are exempt from federal and Virginia state
      taxation.




***Other***


The
        Company is incorporated in Delaware and accordingly is subject to franchise
        taxes. Amounts of $0, $18,000, $9,000, $27,000 and $64,556 for Delaware
        franchise taxes are included as part of general and administrative expenses
        in
        the accompanying statements of operations for the three and nine months ended
        April 30, 2008 and 2007 and for the period from inception (August 10, 2005)
        to
        April 30, 2008, respectively.


10




**SouthPeak
      Interactive Corporation**


****


**Notes
      to Unaudited Condensed Consolidated Financial Statements**




**NOTE
      5** - **COMMITMENTS**




*Administrative
      Services*





Commencing
      on April 18, 2006, the effective date of the Offering, the Company was obligated
      to pay an affiliate of the Company’s chief executive officer, $7,500 per month
      for office, secretarial and administrative services. Amounts of $21,000,
      $66,000, $22,500, $67,500, for such services for the three and nine months
      ended
      April 30, 2008 and 2007, respectively, and $181,725 for the period from
      inception (August 10, 2005) to April 30, 2008 are included in general and
      administrative expenses on the accompanying statements of operations. This
      arrangement was terminated in April 2008.





*Financial
      Advisory Services*




At
      the
      time of the Offering, HCFP/Brenner Securities LLC (“HCFP”), had been engaged by
      the Company to act as the Company’s non-exclusive investment banker in
      connection with a proposed Business Combination. For assisting the Company
      in
      structuring and negotiating the terms of a Business Combination, the Company
      agreed to pay HCFP a cash transaction fee of $900,000 upon consummation of
      the
      combination. In lieu of the $900,000 fee otherwise payable to HCFP, the Company
      has agreed to pay HCFP, for financial advisory services rendered to it in
      connection with the Business Combination, $2.5 million and 250,000 Class Z
      Warrants of SP Holdings with such payments contingent upon the closing of the
      merger and Business Combination.





*Solicitation
      Services*





The
      Company has engaged HCFP on a non-exclusive basis, to act as its agent for
      the
      solicitation of the exercise of the Company’s Class W Warrants and Class Z
      Warrants. In consideration for solicitation services, the Company agreed to
      pay
      HCFP a commission equal to 5% of the exercise price for each Class W Warrant
      and
      Class Z Warrant exercised after April 18, 2007 if the exercise is solicited
      by
      HCFP. No services have been provided as of April 30, 2008.





**NOTE
      6 – CAPITAL STOCK**




*Preferred
      Stock*





The
      Company is authorized to issue up to 5,000 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.





*Common
      Stock and Class B Common Stock*





The
      Company is authorized to issue 24,000,000 shares of common stock and 7,000,000
      shares of Class B common stock. As of April 30, 2008, there are 1,920,100
      (including the 1,000,000 shares issued to the principal of SouthPeak LLC, Note
      1) shares of the Company’s common stock issued and outstanding and 0 shares of
      the Company’s Class B stock issued and outstanding.





**NOTE
      7 - WARRANTS AND OPTION TO PURCHASE COMMON STOCK**




In
      August, 2005, the Company sold and issued Class W Warrants to purchase 1,537,500
      shares of the Company’s common stock, and Class Z Warrants to purchase 1,537,500
      shares of the Company’s common stock to its initial securityholders, for an
      aggregate purchase price of $153,750, or $0.05 per warrant. The Class W Warrants
      and Class Z Warrants held by the initial securityholders are also subject to
      a
      registration rights agreement. The Class W Warrants and Class Z Warrants
      outstanding prior to the Offering may be exercised with cash on or prior to
      their respective expiration dates. Although the Company’s initial
      securityholders may make a written demand that the Company file a registration
      statement, the Company is only required to use its best efforts to cause the
      registration statement to be declared effective and, once effective, only to
      use
      its best efforts to maintain its effectiveness. Accordingly, because the
      Company’s obligation is merely to use its best efforts in connection with the
      registration rights agreement and upon exercise of the warrants, the Company
      can
      satisfy its obligation by delivering unregistered shares of common stock.




11




**SouthPeak
      Interactive Corporation**


****


**Notes
      to Unaudited Condensed Consolidated Financial Statements**




Each
      Class W Warrant issued in the Offering and to the initial securityholders is
      exercisable for one share of common stock. Except as set forth below, the Class
      W Warrants entitle the holder to purchase shares at $5.00, subject to adjustment
      in the event of stock dividends and splits, reclassifications, combinations
      and
      similar events, for a period commencing on the later of: (a) completion of
      the
      Business Combination and (b) April 18, 2007, and ending April 17, 2011. As
      of
      April 30, 2008, there were 7,517,500 Class W Warrants outstanding.




Each
      Class Z Warrant issued in the Offering and to the initial securityholders is
      exercisable for one share of common stock. Except as set forth below, the Class
      Z Warrants entitle the holder to purchase shares at $5.00, subject to adjustment
      in the event of stock dividends and splits, reclassifications, combinations
      and
      similar events, for a period commencing on the later of: (a) completion of
      the
      Business Combination and (b) April 18, 2007 and ending April 17, 2013. As of
      April 30, 2008, there were 6,137,500 Class Z Warrants outstanding.




The
      Class
      W Warrants and Class Z Warrants outstanding prior to the Offering, all of which
      are held by the Company’s initial securityholders or their affiliates, shall not
      be redeemable by the Company as long as such warrants continue to be held by
      such securityholders or their affiliates. Except as set forth in the preceding
      sentence, the Company may redeem the Class W Warrants and/or Class Z Warrants
      with the prior consent of HCFP, the representative of the underwriters in the
      Offering, in whole or in part, at a price of $.05 per warrant at any time after
      the warrants become exercisable, upon a minimum of 30 days’ prior written notice
      of redemption, and if, and only if, the last sale price of the Company’s common
      stock equals or exceeds $7.50 per share and $8.75 per share, for a Class W
      Warrant and Class Z Warrant, respectively, for any 20 trading days within a
      30
      trading day period ending three business days before the Company sent the notice
      of redemption. In addition, the Company may not redeem the Class W Warrants
      and/or the Class Z Warrants unless the shares of common stock underlying such
      warrants are covered by an effective registration statement.




The
      Class
      W Warrants and Class Z Warrants issued may be exercised with cash on or prior
      to
      their respective expiration dates. However, the Class W Warrants and Class
      Z
      Warrants issued will not be exercisable unless at the time of exercise the
      Company has a current prospectus relating to the Company’s common stock issuable
      upon exercise of the warrants and the common stock has been registered,
      qualified or deemed to be exempt under the applicable securities laws.
      Accordingly if the warrants are not able to be exercised such warrants may
      expire worthless. The Company has no obligation to net cash settle the exercise
      of the warrants.




The
      holders of Class W Warrants and Class Z Warrants do not have the rights or
      privileges of holders of the Company’s common stock or any voting rights until
      such holders exercise their respective warrants and receive shares of the
      Company’s common stock. As the proceeds from the exercise of the Class W
      Warrants and Class Z Warrants will not be received until after the completion
      of
      a Business Combination, the expected proceeds from exercise will not have any
      effect on the Company’s financial condition or results of operations prior to a
      Business Combination.




***Underwriter
      Purchase Option***




In
      connection with the Offering, the Company issued to certain of the underwriters
      an option, the UPO, for an aggregate of $100 to purchase up to 20,000 Series
      A
      Units at an exercise price of $14.025 per unit and/or up to 130,000 Series
      B
      Units at an exercise price of $16.665 per unit on the later of (a) completion
      of
      a Business Combination and (b) April 18, 2007 and ending April 17, 2011. The
      fair value of the UPO, inclusive of the receipt of the $100 cash payment, was
      accounted for as an expense of the Offering resulting in a charge directly
      to
      stockholders’ equity with a corresponding credit to additional paid-in-capital.
      The UPO may be exercised for cash or on a “cashless” basis, at the holder’s
      option, such that the holder may use the appreciated value of the UPO (the
      difference between the exercise prices of the UPO and the underlying warrants
      and the market price of the units and underlying securities) to exercise the
      UPO
      without the payment of any cash. Each of the Series A Units and Series B Units
      included in the UPO are identical to the Series A Units and Series B Units
      sold
      in the Offering, except that the exercise price of the Class W Warrants
      underlying the Series B Units and the Class Z Warrants underlying the Series
      A
      Units will be $5.50 per share and the Class Z Warrants underlying the Series
      A
      Units shall only be exercisable until the fifth anniversary of the Offering.
      The
      Company has no obligation to net cash settle the exercise of the UPO or the
      warrants underlying the UPO. The holder of the UPO will not be entitled to
      exercise the UPO or the warrants underlying the UPO unless a registration
      statement covering the securities underlying the UPO is effective or an
      exemption from registration is available. If the holder is unable to exercise
      the UPO or underlying warrants, the UPO or warrants, as applicable, will expire
      worthless.




12




**SouthPeak
      Interactive Corporation**


****


**Notes
      to Unaudited Condensed Consolidated Financial Statements**




**NOTE
      8 – SUBSEQUENT EVENT**




On
      May
      12, 2008, the Company amended its articles of incorporation by increasing the
      number of common stock authorized, par value $0.0001 per share, to 90,000,000
      shares of common stock, par value $0.0001 per share and 20,000,000 shares of
      preferred stock, par value $0.0001 per share.




On
      May 12, 2008, the Company entered into a purchase
      agreement (the “Preferred
      Stock Purchase Agreement”)
      with certain investors  (collectively, the “Investors”),
      pursuant to which the Company may sell to Investors up to 15,000,000 shares
      of
      its Series A Convertible Preferred Stock, par value $0.0001 (the “Series
      A
      Preferred”),
      at a
      purchase price of $1.00 per share. As of June 11, 2008, the Company had sold
      an
      aggregate of 12,984,833 shares of Series A Preferred for aggregate consideration
      of $12,984,833, including the conversion of $2,093,333 in principal and
      interest.




13




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





The
      following discussion should be read in conjunction with our financial statements
      and footnotes thereto contained in this report.





**General**





We
      were
      formed on August 10, 2005 to serve as a vehicle to effect a merger, capital
      stock exchange, asset acquisition or other similar business combination with
      an
      entity with an operating business in the security industry. We completed
      our initial public offering (“IPO”) on April 25, 2006. Our entire activity from
      inception through the consummation of our IPO on April 25, 2006 was to prepare
      for and complete our IPO. Since the consummation of our IPO on April 25, 2006,
      our activity has been limited to identifying targets for a business
      combination.





As
      of
      October 18, 2007 and October 19, 2007, the Company entered into two letters
      of
      intent with two different target companies to effect a business combination.
      As
      a result of entering into the letters of intent, the Company had until April
      25,
      2008 to complete a business combination with one of the target companies. One
      of
      the letters of intent expired on November 18, 2007. The letter of intent with
      the other target company was extended until January 15, 2008. On January 15,
      2008, the Company entered into a Amendment and Plan of Reorganization
      (“Reorganization Agreement”) with SouthPeak Interactive L.L.C. (“SouthPeak
      LLC”). As of April 30, 2008, the Company has incurred and expensed $1,703,770 of
      costs related to the transaction with SouthPeak LLC.





We
      are
      not presently engaged in, and will not engage in, any substantive commercial
      business until we consummate a business combination.




**Results
      of Operations**


Net
        loss
        for the three months ended April 30, 2008 was $(1,039,984), which consisted
        of
        interest income of the Trust Fund of $148,296, and interest on cash and cash
        equivalents of $761, offset by $74,314 of professional fees, transaction
        costs
        of $1,071,570 and $43,157 of general and administrative expenses consisting
        of
        $21,000 for a monthly administrative services agreement with an affiliate,
        $18,310 of D&O insurance, and $3,847 of other expenses.
  Net
        income for the three months ended April 30, 2007 was $139,963 which consisted
        of
        interest income of the Trust Fund of $240,590, and interest on cash and cash
        equivalents of $5,258, offset by $44,714 of professional fees, $61,171 of
        general and administrative expenses consisting of $22,500 for a monthly
        administrative services agreement with an affiliate, $15,000 of D&O
        insurance, $9,000 of Delaware franchise tax and $14,671 of other expenses.
  Net
        loss
        for the nine months ended April 30, 2008 was $(1,443,720) which consisted
        of
        interest income of the trust fund of $637,380, and interest on cash and cash
        equivalents of $11,681, offset by $240,685 of professional fees, transaction
        costs of $1,703,770 and $148,326 of general and administrative expenses
        consisting of $66,000 for a monthly administrative services agreement with
        an
        affiliate, $48,310 of D&O insurance, $18,000 of Delaware franchise tax and
        $16,016 of other expenses.
  Net
        income for the nine months ended April 30, 2007 was $388,923 which consisted
        of
        interest income of the trust fund of $724,018, and interest on cash and cash
        equivalents of $25,737, offset by $150,313 of professional fees and $210,519
        of
        general and administrative expenses consisting of $67,500 for a monthly
        administrative services agreement with an affiliate, $40,000 of D&O
        insurance, $27,000 of Delaware franchise tax and $76,019 of other expenses.
  Net
        loss
        for the period from inception (August 10, 2005) to April 30, 2008 was
        $(789,468), which consisted of interest income of the trust fund of $1,868,959,
        and interest on cash and cash equivalents of $53,810, offset by $559,054
        of
        professional fees, transaction costs of $1,703,770 and $449,413 general and
        administrative expenses consisting of $181,725 for a monthly administrative
        services agreement with an affiliate, $103,310 of D&O insurance, $64,556 of
        Delaware franchise tax and $99,822 of other expenses.




14




**Liquidity
      and Capital Resources**





Our
      net
      proceeds from the IPO, after deducting offering expenses of approximately
      $434,000 and underwriting discounts of approximately $2,047,000, was
      approximately $31,600,000 of which $30,199,000 was placed in a trust account
      and
      the remaining proceeds of approximately $1,430,000 became available to be used
      to provide for business, legal and accounting due diligence on prospective
      transactions and continuing general and administrative expenses. Except to
      the
      extent that our capital stock is used in whole or in part as consideration
      to
      effect a business combination, substantially all of the net proceeds of the
      IPO were to be used to acquire a target business, including identifying and
      evaluating prospective acquisition candidates, selecting the target business,
      and structuring, negotiating and consummating the business
      combination. In
      accordance with the Company’s organizational documents, as a result of the
      Company not consummating a business combination by April 25, 2008, the funds
      held in the trust account of approximately $32,000,000 were refunded to the
      Class B common stock holders at the end of April 2008. At
      April
      30, 2008, we had cash outside of the trust account of $43,470 cash held inside
      the trust account of $0, prepaid expenses of $2,077 and total liabilities of
      $150,904.




As
      a
      result of the acquisition of SouthPeak on May 12, 2008, and the sale of Series
      A
      Preferred Stock in May and June of 2008, the Company anticipates that there
      will
      be sufficient cash flow to finance the Company’s operations and
      growth .




**Item
      3. *Quantitative and Qualitative Disclosures About Market
      Risk***





Market
      risk is a broad term for the risk of economic loss due to adverse changes in
      the
      fair value of a financial instrument. These changes may be the result of various
      factors, including interest rates, foreign exchange rates, commodity prices
      and/or equity prices. $30,199,000 of the net offering proceeds was placed into
      a
      trust account at Lehman Brothers maintained by American Stock Transfer &
Trust Company, acting as trustee. The proceeds held in trust will only be
      invested in United States “government securities,” defined as any Treasury Bill
      issued within the meaning of Section 2(a)(16) of the Investment Company Act
      of
      1940 having a maturity of 180 days or less, or in money market funds meeting
      certain conditions under Rule 2a-7 promulgated under the Investment Company
      Act
      of 1940. The proceeds held in trust have been invested in Commonwealth of
      Virginia securities with maturities of up to 30 days. As of July 31, 2007,
      the
      effective annualized interest rate on our investment was 3.22%. As of April
      30,
      2008, $0 was held in the trust account. As of April 30, 2008, $43,470 of
      the proceeds not held in trust was being held in a business checking account
      with Provident Bank National Association or in an escrow account with our
      attorneys for the benefit of certain vendors who are performing services in
      connection with the proposed business combination transaction. Thus, we are
      subject to market risk primarily through the effect of changes in interest
      rates. The effect of other changes, such as foreign exchange rates, commodity
      prices and/or equity prices, does not pose significant market risk to
      us.




15




**Item
      4. *Controls and Procedures***





An
      evaluation of the effectiveness of our disclosure controls and procedures as
      of April 30, 2007 was made under the supervision and with the
      participation of our management, including our chief executive officer and
      our
      chief financial officer. Based on that evaluation, they concluded that our
      disclosure controls and procedures are effective as of the end of the period
      covered by this report to ensure that information required to be disclosed
      by us
      in reports that we file or submit under the Securities Exchange Act of 1934
      is
      recorded, processed, summarized and reported within the time periods specified
      in Securities and Exchange Commission rules and forms. During the most recently
      completed fiscal quarter, there has been no significant 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.





16




**PART
      II**





**OTHER
      INFORMATION**




**Item
        1.**  ***Legal
        Proceedings***
  The
        Company is not
        currently subject to any material legal proceedings.
 
 Item
        1A.*Risk
        Factors*
  Following
          the Company’s acquisition of SouthPeak LLC, the Company’s operations became
          those of SouthPeak LLC. ** As
          a
          result, the Company now operates in a rapidly changing environment that
          involves
          a number of risks, some of which are beyond its control. This discussion
          highlights some of the risks which may affect future operating results.
          These
          are the risks and uncertainties the Company’s management believes are most
          important for you to consider. Additional risks and uncertainties not presently
          known to the Company’s management, which the Company’s management currently
          deems immaterial or which are similar to those faced by other companies
          in the
          Company’s industry or business in general, may also impair the Company’s
          business operations. If any of the following risks or uncertainties actually
          occur, the Company’s business, financial condition and operating results would
          likely suffer.
  **Risks
          Related to the Company’s Business and Operations**
  ***Stiff
        competition within the video game publishing industry, in particular, can
        significantly reduce the Company’s share of the market, curtail potential
        revenue, and negatively impact its long-term
        viability.***
  The
        Company competes for licenses to properties and the sale of its titles with
        the
        large platform manufacturers such as Sony, Microsoft and Nintendo, each of
        which
        also develops and markets software for its own platforms. Each of these
        competitors can bundle their software with their hardware and create less
        demand
        for individual sales of the Company’s games. Additionally, these hardware
        systems manufacturers have better bargaining positions with respect to retail
        pricing, shelf space and retailer accommodations than do any of their licensees,
        including the Company, as well as the financial resources to withstand
        significant price competition and to implement extensive advertising campaigns.
        These platform providers may also give priority to their own games or to
        those
        of other publishers when manufacturing capacity is insufficient.
  Next
        generation consoles require larger development teams and budgets to bring
        games
        to market. Although the Company has been able to produce successful games
        for
        these next generation consoles with industry competitive budgets, the Company
        may be unable to continue to do so in the future.
  The
        Company competes, as well, with domestic game publishers such as Electronic
        Arts, Activision, THQ Inc., Take-Two and Midway Games; and international
        publishers, such as SEGA, Square Enix, UbiSoft, SCi Entertainment, Capcom,
        Konami and Namco-Bandai. Many of the Company’s competitors have blockbuster
        titles (with greater name recognition among consumers), a broader product
        line,
        or greater financial, marketing and other resources than it does. Accordingly,
        these competitors may be able to market their products more effectively or
        make
        larger offers or guarantees to independent developers in connection with
        the
        acquisition of commercially desirable properties.
 
 The
        Company’s video game distribution operations also exist in a highly competitive
        environment. Competition is based primarily on breadth, availability and
        marketability of titles; price; terms and conditions of sale; credit terms
        and
        availability; speed of delivery; and effectiveness of sales and marketing
        programs. The Company’s competitors include regional, national and international
        distributors, as well as hardware manufacturers and software publishers.
        The
        Company may lose market share or be forced in the future to reduce its prices
        in
        response to its competitors.
  ***The
        Company’s business model can limit its growth prospects and long-term
        viability.***
  The
        Company has historically focused on publishing innovative video games for
        underserved niches that are generally sold at prices typical for big budget
        games produced by the leading large game publishers. In doing so, it has
        relied
        on its management’s industry experience to identify game concepts that can be
        profitably produced, their ability to allocate the Company’s limited financial
        resources among games under development and their ability to leverage
        low-cost offshore video game developers. There can be no assurance, however,
        that the Company will be able to accurately assess the likelihood and volume
        of
        sales for future video games or to engage low-cost developers.
  17
 The
        traditional distribution model of distributing original titles through third
        parties, such as independent video game publishers, could be challenged by
        the
        emergence of direct-to-consumer electronic delivery. Microsoft, Sony and
        Nintendo each plan to provide a mechanism for game developers to publish
        games
        via electronic store fronts that enable direct downloading of game content,
        though only a limited number of games will be selected for these electronic
        store fronts at any given time. Similar distribution venues already exist
        for
        the personal computer platform as well. Whereas some games are likely to
        entail
        program file sizes not easily distributed digitally due to bandwidth and
        storage
        constraints, it is possible that game concepts pursued by the Company in
        the
        future may not always have these constraints, and therefore originators of
        such
        game concepts could potentially bypass the traditional distribution and
        publication path, and take a direct-to-consumer approach, or even choose
        to sign
        multi-product deals, be acquired by other publishers, or go direct to the
        Company’s clients. Additionally, although the Company has been able to gain
        access to the limited game slots available in electronic store fronts, there
        can
        be no assurance that the number of games at electronic store fronts will
        remain
        limited or that the Company will continue to be able to access limited available
        game slots. Such changes in industry distribution practices and the number
        of
        game slots made available at electronic store fronts could limit the Company’s
        prospects for growth and negatively affect its profitability.
  ***If
        the Company is unable to effectively compete with other independent publishing
        companies within an environment of intense and growing competition, the success
        of its operations and its earnings potential can be severely
        compromised.***
  The
        Company competes with a variety of independent publishers of proprietary
        video
        game software. Because platform licenses are non-exclusive, and many of the
        Company’s competitors also have licenses to develop and distribute video game
        software for these systems, new entrants could enter the market, including
        those
        with business models similar to the Company’s.
 
 Many
        of
        the Company’s competitors have certain advantages over it, including:
  ·
              Substantially
                  greater financial, technical, marketing and other resources, including
                  brand or corporate name
                  recognition;
  ·
              Larger
                  client bases;
  ·
              Longer
                  operating histories;
  ·
              More
                  established relationships in the industry;
                  and
  ·
              Larger
                  geographic coverage.
  The
        Company’s competitors may be able to use these advantages to:
  ·
              Develop
                  or adapt to new or emerging technologies and changes in consumer
                  preferences more quickly;
  ·
              Take
                  advantage of acquisitions and other opportunities more
                  readily;
  ·
              Enter
                  into and increase funding for strategic relationships to rapidly
                  grow
                  their reach and offerings;
  ·
              Devote
                  greater resources to the marketing and sale of their services;
                  and
  ·
              Adopt
                  more aggressive pricing and incentive policies, which could drive
                  down
                  margins.
  18
 ***If
        the Company is unable to anticipate and adapt to rapidly changing technology,
        its results of operations and competitive position could be adversely
        affected.***
  The
        Company derives most of its revenue from the sale of video game software
        developed for use on popular consoles. The success of its business is affected
        in large part by the market appeal of its published games and by the
        availability of an adequate supply of the hardware systems on which they
        run.
        The Company’s ability to accurately predict which new video game platforms will
        be successful in the marketplace, as well as its ability to develop commercially
        successful products for these new systems, will determine whether or not
        the
        Company will be competitive in the future.
  The
        Company typically makes product development decisions and commits significant
        resources and time (18 to 24 months) in advance to remain competitive. If
        the
        Company chooses not to publish games for a new hardware system that is
        ultimately popular, its competitive position and profitability may be adversely
        affected. Yet, even if the Company seeks to adapt to any new game platforms,
        the
        Company faces the risk of not being able to generate any significant earnings
        or
        recoup its investment as quickly as anticipated if the new system does not
        gain
        widespread market appeal, is not available in adequate quantities to meet
        consumer demand, or has a shorter life cycle than anticipated. Alternatively,
        a
        platform for which the Company has not devoted significant resources could
        be
        more successful than it had initially anticipated, causing it to miss a vital
        earnings opportunity.
 
 ***If
        the Company is unable to enter into attractive publishing arrangements with
        developers of highly innovative and commercially appealing games, its
        competitiveness and prospects for growth could be severely
        impacted.***
  The
        Company’s success depends on its ability to timely identify and publish highly
        marketable titles. The Company relies on third-party software developers
        or
        development studios for the development of most of its titles. Because
        interactive game developers are highly in demand, the relatively limited
        resources of the Company vis-à-vis its competitors puts it at a competitive
        disadvantage when bidding to offer attractive compensation packages, advance
        royalties or ample pre-development financing to desirable developers, and
        potentially reduces its chances of winning the right to publish highly
        innovative games. Such a situation could severely impact its competitiveness
        and
        prospects for growth.
  ***If
        the Company fails to satisfy its obligations under agreements with third-party
        developers and licensors, its operating results could be materially adversely
        affected.***
  Software
        developers who have developed video games for the Company in the past may
        not be
        available to develop video game software for it in the future. Due to the
        limited number of third-party software developers and the limited control
        that
        the Company exercises over them, these developers may not manage to complete
        video games for it on time and within product quality expectations, if at
        all.
        The Company has entered into agreements with third parties to acquire the
        rights
        to publish and distribute proprietary video game software. These agreements
        typically require the Company to make advance payments, pay royalties and
        satisfy other conditions. The Company’s advance payments may not be sufficient
        to permit developers to develop new software successfully, which could result
        in
        material delays and significantly increase the Company’s costs to bring
        particular products to market. Future sales of its titles may not be sufficient
        to recover advances to software developers and licensors, and it may not
        have
        adequate financial and other resources to satisfy the Company’s contractual
        commitments to such developers. If the Company fails to satisfy its obligations
        under agreements with third-party developers, the agreements may be terminated
        or modified in ways that are burdensome and materially adversely affect its
        operating results and long-term viability.
  ***If
        the Company is unable to sell any of the works it has committed to fund,
        its
        operating margins could be adversely affected.***
  The
        Company typically enters into contracts with suppliers that are matched with
        commitments to fund original work development under specific terms. As
        of December 31, 2007, the Company had entered into contracts with nine
        independent software developers pursuant to which it is subject to minimum
        funding commitments and the Company may enter into additional contracts with
        similar commitments in the future. To date, the Company has sufficiently
        met its
        commitments with each of those suppliers, but the Company can make no
        assurances that in the future its earnings and/or liquidity will meet or
        exceed its commitments with each vendor. If the Company is unable to sell
        any of
        the works it has committed to fund, its operating margins could be adversely
        affected.
 
 19
 ***If
        the Company is unable to secure approval from hardware manufacturers to publish
        new titles for their respective platforms, its business could suffer
        significantly or, alternatively, if the Company fails to satisfy its obligations
        under agreements with first-party platform manufacturers such as Microsoft,
        Sony, and Nintendo, its operating results could be materially adversely
        affected.***
  The
        Company is dependent on non-exclusive licenses from platform manufacturers
        (Microsoft, Nintendo and Sony) for the right to publish titles for their
        platforms. The Company’s existing platform licenses require that it obtain
        approval for the publication of new games on a title-by-title basis. As a
        result, the number of titles the Company is able to publish for these platforms,
        and its sales from titles for these platforms, may be limited. A manufacturer
        may elect not to renew or extend the Company’s license agreement at the end of
        its term, or adversely modify it, for whatever reason. Consequently, the
        Company
        may be unable to publish new games for the applicable platforms or the Company
        may be required to do so on less attractive terms. This will not only prevent
        the Company from publishing additional titles for a manufacturer but also
        negatively impact its operating results and prospects for
        growth.
  In
        addition, the Company’s contracts with the console manufacturers often grant the
        latter approval rights over new software products, and control over the
        development of the Company’s games. These rights and privileges of hardware
        manufacturers could adversely affect its results of operations or financial
        condition by:
  ·
              Causing
                  the termination of a new project for which the Company has expended
                  significant resources;
  ·
              Impeding
                  the development and shipment of newly published titles to customers;
                  and
  ·
              Increasing
                  development lead times and costs which could be avoided if the
                  Company is
                  able to manufacture new game software
                  independently.
  Microsoft
        released its next-generation hardware platform, the Xbox 360, into the North
        American marketplace in November 2005, and each of Sony and Nintendo
        introduced their respective next-generation platforms PlayStation 3 and the
        Wii
        into the marketplace during November 2006. While the Company has licenses
        for Microsoft Xbox 360, Nintendo Wii, DS and Gameboy Advance, and for Sony
        PlayStation 3, Playstation 2, and Playstation Portable, it may be unable
        to
        obtain licenses for future hardware platforms.
 
 ***If
        the Company’s inventory of next-generation video games is not fully sold and it
        has paid upfront significant license fees and manufacturing costs, its
        operating results and net worth may be materially adversely
        affected.***
  When
        publishing for game consoles, game publishers take on the burden of a great
        deal
        of inventory risk. All significant console manufacturers since Nintendo with
        its
        NES (1985) have monopolized the manufacture of every game made for their
        console, and have required all publishers to pay a license fee for every
        game so
        manufactured. This license fee is generally due at the time of manufacturing
        the
        game and is based upon the number of games being manufactured, unlike license
        fee payments in most other industries, in which license fees are paid following
        actual sales of the product. So, if a game publisher orders one million copies
        of its game, but half of them do not sell, the publisher has already paid
        the
        full console manufacturer license fee on one million copies of the game,
        and has
        to absorb that cost. Furthermore, non-moving inventory of games tend to decline
        substantially in value over time or to become obsolete. If this situation
        happens to the Company, and price concessions are not available to it on
        unsold
        products, it could incur significant losses, which could materially adversely
        affect its profitability and net worth.
  ***The
        Company is dependent upon a limited number of customers and the loss of any
        of
        its key customers could materially adversely affect its
        business.***
  The
        Company is dependent on a small number of large customers for a significant
        portion of its sales, and the loss of one or more of these clients, or a
        significant decrease in total revenues from any of these clients, could
        seriously hurt its business. Historically, a substantial portion of the
        Company’s revenue has come from a limited number of clients. For example,
        the Company had three customers, GameStop, Wal-Mart and Pinnacle that accounted
        for 19%, 14% and 11%, respectively, of consolidated gross revenues for the
        six
        months ended December 31, 2007 and 24%, 10%, and 8%, respectively, of
        consolidated gross accounts receivable at December 31, 2007.
  Approximately
        95% of the Company’s sales are made through purchase orders subject to
        agreements with its customers, including GameStop, Wal-Mart and Pinnacle,
        through which the customer may reduce the titles they purchase from the Company,
        renegotiate the terms on which they purchase its games, or terminate their
        relationship with the Company at any time. Certain of the
        Company’s customers may decline to carry products containing mature
        content. A substantial reduction in orders, including as a result of a product
        being rated “AO” (age 18 and over); difficulty in collecting receivables in
        full, or within a reasonable time period, or within reserve levels; or
        termination of its relationship with the customer as a result of a number
        of
        factors (including their level of satisfaction with the support services
        they
        receive from the Company, demand for or pricing of competing titles, and
        their
        ability to continue their operations); could adversely affect the Company’s
        operating results and business viability.
  20
 ***The
        Company is dependent on the success of a few titles, and unless it is able
        to
        gain and maintain market acceptance for newly published titles in the future,
        its growth and earnings prospects could be severely
        compromised.***
  A
        limited
        number of titles may produce a disproportionately large amount of the Company’s
        sales. Due to this dependence on a limited number of games, the failure of
        one
        or more of these products to achieve anticipated results may significantly
        harm
        the Company’s business and financial results.
 
 ***If
        the Company’s contracted game developers fail to deliver their finished titles
        on time, or at all, the Company stands to incur significant losses that could
        severely adversely affect its financial performance.***
  The
        Company relies upon its third-party software developers to deliver titles
        within
        anticipated release schedules and cost projections.
  While
        timetables for the development and delivery of game software are set in advance,
        video game production schedules are difficult to predict and can be subject
        to
        delays. Schedule slippage is very common due to the uncertain schedules of
        software development. Most publishers have suffered a “false launch”, in which
        the development staff assures the Company that game development will be
        completed by a certain date, and a marketing launch is planned around that
        date,
        including advertising commitments, and then after all the advertising is
        paid
        for, the development staff announces that the game will “slip”, and will
        actually be ready several months later than originally intended. When the
        game
        finally appears, the effects among consumers of the marketing launch -
        excitement and “buzz” over the release of, and intent of customers to purchase,
        the game - have dissipated, and lackluster interest leads to weak sales.
        These
        problems are compounded if the game is supposed to ship for the Christmas
        selling season, but actually slips into the subsequent year.
  The
        development cycle for new titles can range from twelve to twenty-four months
        and
        can be expected to increase in connection with the development of
        next-generation software. After development of a game, it may take between
        nine
        to twelve additional months to develop the product for other hardware platforms.
        As the Company has no direct control over the business, finances and operating
        practices of external game developers, a delay or failure by these developers
        to
        make shipments or to complete the work performed - whether due to operational
        issues, financial difficulties, or faulty business decisions - may result
        in
        delays in, or cancellations of, product releases that may threaten the Company’s
        ability to obtain sufficient amounts of its product to sell to its customers
        when they demand them. In addition, customers may, under certain contracts,
        have
        the ability to terminate agreements to purchase game publications in view
        of
        issues concerning work quality and originality, or prolonged delay or
        significant revisions to published games. Terminations by clients of their
        purchase commitments can significantly dampen the Company’s revenue and cause
        its business to suffer tremendous losses.
  Because
        many leading independent video game developers are small companies that are
        dependent on a few key individuals for the completion of a project, this
        also
        exposes the Company to the risk that these developers will lose a key employee,
        go out of business before completing a project, or simply cease work on a
        project for which the Company’s has hired them, and this occurrence could also
        be highly detrimental to the Company’s ability to compete and to generate
        additional revenue.
  ***If
        delays or disruptions occur in the delivery to the Company’s customers of newly
        published titles following their commercial release, the Company’s operating
        results could be materially adversely affected.***
  Certain
        of the Company’s licensing and marketing agreements contain provisions that
        would impose penalties in the event that the Company fails to meet agreed
        upon
        video game release dates. The life cycle of a game generally involves a
        relatively high level of sales during the first few months after introduction,
        followed by a rapid decline in sales. New products may not achieve significant
        market acceptance or generate sufficient sales to permit the Company to recover
        development, manufacturing and marketing costs associated with these products.
        Because revenues associated with an initial product launch generally constitute
        a high percentage of the total revenue associated with the life of a product,
        delays in product releases or disruptions following the commercial release
        of
        one or more new titles could adversely affect the sales of such products
        and
        cause the Company’s operating results to materially suffer and differ from
        expectations.
 
 21
 ***If
        the Company incurs substantial costs for market testing and sales activities
        after its new games are published, and fails to anticipate market demand
        or
        secure customer contracts, its profitability and liquidity could be materially
        adversely affected.***
  The
        Company typically undertakes market testing and sales activities before each
        of
        its titles is eventually approved for deployment by a given customer. In
        addition, once a customer contract is signed, there is a period in which
        revisions to game features are made, which can contribute to further delays
        in
        the realization of revenue. If the Company incurs significant expenses
        associated with market testing, product revisions, and sales and marketing
        and
        is not successful in anticipating market demand for its games or in securing
        contracts from its targeted customers, it may generate insufficient revenue
        to
        fully cover its costs, including its investment in game development, and
        its
        profitability and liquidity could be severely affected.
  ***If
        the Company incurs unanticipated levels of returns of its titles from customers,
        or price concessions granted to them, its operating results could
        significantly suffer.***
  The
        Company is exposed to the risk that customers will return its products, or
        seek
        to secure price concessions for any bulk orders. The company’s distribution
        arrangements with its customers generally do not give them the right to return
        titles to the Company or to cancel firm orders. However, when demand for
        its
        offerings falls below expectations, the Company can sometimes accept product
        returns for stock balancing and negotiate accommodations to customers in
        order
        to maintain healthy relationships with them as well as continued access
        to their sales channels. These accommodations include negotiation of price
        discounts and credits against future orders, referred to as price concessions.
        The estimated reserve for returns and price concessions is based on the Company
        management’s evaluation of expected sales, potential markdown allowances based
        on historical experience, market acceptance of products produced, retailer
        inventory levels, budgeted customer allowances and the nature of the title
        and
        existing commitments to customers.
  While
        the
        Company believes that it can reliably estimate future returns and price
        concessions, it cannot predict with certainty whether existing reserves will
        be
        sufficient to offset any accommodations the Company will actually provide,
        nor
        can it predict the amount or nature of accommodations that it will provide
        in
        the future. Furthermore, the continued granting of substantial price protection
        and other allowances may require it to raise additional funds for its operating
        requirements, but there is no assurance that such funds will be available
        to it
        on acceptable terms, if at all. In addition, the license fees the Company
        pays
        Sony, Microsoft and Nintendo are non-refundable and cannot be recovered when
        titles are returned. Ultimately, if the Company’s return rates and price
        concessions for published titles materially exceed its reserves, its operating
        results may be adversely affected.
 
 ***If
        the Company’s published titles suffer from grave defects, market acceptance of
        the Company’s product may be adversely affected, its results of operations
        adversely affected, and its reputation seriously harmed*** ***.***
  The
        Company’s published video games can contain major defects, which could delay
        market acceptance of its products; cause customers to either terminate
        relationships with, or initiate product liability suits against the Company,
        or
        both; or divert the company’s engineering resources, and consequently adversely
        impact its results of operations and its reputation.
  ***If
        the Company's licensed intellectual property is not adequately protected
        from
        unauthorized use or access by others, the Company's competitiveness could
        be
        significantly undermined and its viability adversely
        affected.***
  The
        Company has obtained licenses for video game software developed by third
        parties
        in connection with the Company's publishing business, and it regards these
        licenses, including for the trademarks, copyrights, patents and trade secrets
        to
        such video game software, as proprietary intellectual property. The
        underlying trademarks, copyrights, trade secrets and patents often are
        separately protected by the third party developers of the software by
        enforcement of intellectual property laws. To protect the Company's proprietary
        licenses from unauthorized use and infringement, the Company maintains
        employee or third-party nondisclosure and confidentiality agreements,
        contractual restrictions on copying and distribution, as well as "shrink-wrap"
        or "click-wrap" license agreements or limitations-on-use of software
        included with its products.
  However,
        the Company's licenses are vulnerable to misappropriation and infringement,
        which could undermine its competitiveness and materially adversely affect
        its
        business. It is difficult to effectively police unauthorized use of its licenses
        and the Company cannot be certain that existing intellectual property laws
        will provide adequate protection for its products. Despite the Company's
        efforts
        to protect its proprietary rights, unauthorized parties may try to copy its
        games, or to reverse engineer the licensed software. Well-organized piracy
        operations that have proliferated in recent years also have the ability to
        download pirated copies of its published software over the Internet. In
        addition, the laws of some foreign countries where the Company's products
        are or
        may be distributed may not protect its proprietary rights to as great an
        extent
        as US law, or are poorly enforced. If the Company is unable to protect its
        software against piracy, or prevent the misappropriation and infringement
        of its
        licenses in any form, its competitiveness and viability could be severely
        adversely affected.
  22
 ***If
        the Company infringes on the proprietary rights of others, unknowingly or
        not,
        it could sustain major damages to its business.***
  Although
        the Company believes its software and technologies and the software and
        technologies of third-party developers and publishers with whom it has
        contractual relations do not and will not infringe or violate proprietary
        rights
        of others, it is possible that infringement of proprietary rights of others
        has
        occurred or may occur.
 
 Any
        claims of infringement, with or without merit, could be time consuming, costly
        and difficult to defend. Parties making claims of infringement may be able
        to
        obtain injunctive or other equitable relief that could require the Company
        to
        discontinue the distribution of its interactive entertainment software, prevent
        it from obtaining a license or redesigning its games, block it from publishing
        new materials, and compel it to pay substantial damages. In the event of
        a
        successful claim of infringement, the Company may need to obtain one or more
        licenses from third parties, which may not be available at a reasonable cost,
        if
        at all; divert attention and resources away from its daily business; impede
        or
        prevent delivery of its published titles; and require it to pay significant
        royalties, licensing fees and damages. The defense of any lawsuit could result
        in time-consuming and expensive litigation, regardless of the merits of such
        claims, and could also result in damages, license fees, royalty payments
        and
        restrictions on the Company’s ability to provide its services, any of which
        could harm its business.
  ***The
        Company is subject to the risks and uncertainties associated with international
        trade, which could adversely affect its business.***
  As
        the
        Company expands its international operations, the Company is exposed to other
        risks, including: different market dynamics and consumer preferences; unexpected
        changes in international political, regulatory and economic developments;
        increased credit risks, tariffs and duties; difficulties in coordinating
        foreign
        transactions and operations; shipping delays; and possible impediments to
        the
        collection of foreign accounts receivable. Moreover, all of the Company’s
        international sales are made in local currencies, which could fluctuate against
        the dollar. While the Company may use forward exchange contracts to a limited
        extent to seek to mitigate foreign currency risk, its results of operations
        could be adversely affected by unfavorable foreign currency fluctuations.
        These
        or other factors could have an adverse effect on its business.
  ***If
        the Company is unable to effectively manage and fund its expansion initiatives,
        it could incur huge charges, which in turn could undermine its growth
        plans.***
  The
        Company has begun to expand its publishing operations, enlarge its work force,
        and increase its investments in proprietary games created by third-party
        developers. To manage this growth successfully, the Company must constantly
        hire, train and manage an increasing number of management, technical, marketing,
        and other personnel. Furthermore, the Company will require significant cash
        resources to fuel its expansion activities, and may have to seek debt or
        equity
        financing to fund related costs. There is no guarantee, however, that the
        Company could obtain the additional financing required on acceptable terms.
        The
        issuance of new equity securities of the Company, moreover, would result
        in
        dilution to the interests of its stockholders. Unless the Company is able
        to
        effectively manage its growth activities, its business may be materially
        adversely affected.
  ***The
        Company may not be able to adequately adjust its cost structure in a timely
        fashion in response to a sudden decrease in demand.***
  A
        significant portion of the Company’s sales and marketing and general and
        administrative expenses are comprised of personnel and facilities. In the
        event of a significant decline in revenues, it may not be able to exit
        facilities, reduce personnel, or make other changes to its cost structure
        without disruption to its operations or without significant termination and
        exit
        costs. Management may not be able to implement such actions in a timely manner,
        if at all, to offset an immediate shortfall in revenues and profit. Moreover,
        reducing costs may impair the Company’s ability to produce and develop software
        titles at sufficient levels in the future. The Company is subject to the
        risk
        that its inventory values may decline and protective terms under supplier
        arrangements may not adequately cover the decline in values.
 
 23
 ***Failure
        to collect its accounts receivable on a timely basis will negatively impact
        the
        Company’s cash flow.***
  The
        Company’s sales are typically made on credit. The Company does not hold any
        collateral to secure payment from its customers. As a result, the Company
        is
        subject to credit risks, particularly in the event that a significant amount
        of
        its receivables represent sales to a limited number of retailers or are
        concentrated in foreign markets. Although the Company continually assesses
        the
        creditworthiness of its customers, which are principally large, national
        retailers, if it is unable to collect its accounts receivable as they become
        due, the Company’s financial condition and cash flow could be adversely
        affected. From time to time the Company may purchase from financial institutions
        insurance on its receivables (with certain limits) to help protect it from
        loss
        in the event of a customer’s bankruptcy or insolvency.
  ***The
        Company’s quarterly operating results may fluctuate significantly due
        to various factors related to its operations, which could cause its
        stock price to decline and could result in substantial losses to
        investors.***
  The
        Company's quarterly operating results have varied widely in the past and
        are
        likely to vary in the future, due to numerous factors, several of which are
        not
        under its control. These factors include the timing of the Company's release
        of
        new titles, customer demand for the Company's titles, and fluctuations in
        receivables collections and quarterly working capital needs. Other factors
        that
        cause fluctuations in the Company's sales and operating results
        include:
  ·
              The
                  timing of release of its competitor’s
                  products;
  ·
              The
                  popularity of both new titles and titles released in prior
                  periods;
  ·
              The
                  profit margins for titles it sells;
  ·
              Competition
                  in the industry for retail shelf
                  space;
  ·
              Changing
                  consumer demand for titles for different platforms; and
  ·
              The
                  timing of the introduction of new platforms and the accuracy of
                  retailers’
                  forecasts of consumer demand.
  The
        uncertainties associated with video game development, including varying
        manufacturing lead times, production delays and the approval process for
        products by hardware manufacturers and other licensors also make it difficult
        to
        predict the quarter in which the Company's products will ship and therefore
        may
        cause it to fail to meet financial expectations. In future quarters, operating
        results may fall below the expectations of securities analysts and investors
        and
        the price of its stock could decline significantly.
  The
        video
        game publishing industry is highly seasonal, with the Christmas selling season
        accounting for a substantial portion of the industry's yearly sales of video
        and
        computer games, leading to a concentrated glut of high-quality competition
        every
        year in every game category during this seasonal period. Although the Company
        historically has not been materially impacted by the industry seasonality,
        primarily because it has produced a limited volume of video games that have
        been
        absorbed by the market even in low volume periods of the year, the Company
        may
        be impacted by the industry seasonality in the future as the Company increases
        the volume of its video game production. The Company's failure or inability
        to
        introduce products on a timely basis to meet seasonal fluctuations in demand
        could adversely affect its business and operating results in the
        future.
  The
        Company believes that quarter-to-quarter comparisons of its operating results
        will not be a good indication of its future performance. The Company may
        not be
        able to maintain consistent profitability on a quarterly or annual basis.
        It is
        likely that in some future quarter, its operating results may be below the
        expectations of public market analysts and investors and as a result of the
        above-mentioned factors, and other factors described throughout this "Risk
        Factors" section, the price of  the Company’s common stock may fall or
        significantly fluctuate, and possibly bring about significant reductions
        to
        stockholder value.
  24
 ***The
        Company’s business activities may require additional financing that might not be
        able to be obtained on acceptable terms, if at all, which could have a material
        adverse effect on its financial condition, liquidity and its ability to operate
        going forward.***
  Although
        there can be no assurance, the Company’s management believes that based on the
        Company’s current operating plans, it will have sufficient capital resources to
        finance its operational requirements through the next 12 months. If unforeseen
        events occur that would require additional funding, the Company may need
        to
        raise additional capital or incur debt to fund its operations. The Company’s
        management would expect to seek such capital through sales of additional
        equity
        or debt securities and/or loans from financial institutions, but there can
        be no
        assurance that funds will be available on acceptable terms, if at all, and
        any
        sales of additional securities will be dilutive to investors.
  Failure
        to obtain financing or obtaining financing on unfavorable terms could result
        in
        a decrease in the Company’s stock price and could have a material adverse effect
        on future operating prospects, or require a significant reduction in
        operations.
  ***If
        the Company is unable to generate the cash that it needs to pursue its business
        plan, it may have to raise additional capital on terms unfavorable to its
        stockholders.***
  The
        operation or expansion of the Company’s business may require substantial
        additional financial, operational and managerial resources. If the Company
        is
        required to obtain additional funding in the future, it may have to sell
        assets,
        seek debt financing or obtain additional equity capital. Additional capital
        may
        not be available to it on favorable terms, or at all. If the Company is unable
        to obtain additional capital when needed, this could slow the Company’s growth,
        negatively affect its ability to compete in its industry and adversely affect
        its financial condition.
 
 ***If
        the Company fails to retain the services of senior management, its business
        and
        prospects could be materially adversely
        affected.***
  The
        Company’s continued success will depend to a significant extent upon the
        performance and contributions of its senior management and upon the Company’s
        ability to attract, motivate and retain highly qualified employees. The Company
        is dependent upon key senior management to effectively manage the Company’s
        business in a highly competitive environment. If one or more of the Company’s
        key officers joins a competitor or forms a competing company, it may
        experience material interruptions in product development, delays in bringing
        products to market, difficulties in its relationships with licensors, suppliers
        and customers, and lose additional personnel, which could significantly harm
        its
        business, financial condition and operating results. Additionally, failure
        to
        continue to attract and retain qualified management personnel could adversely
        affect the Company’s business and prospects.
  The
        Company does not have “key person” life insurance policies covering any
        of its employees, nor is it certain if any such policies will be obtained
        or maintained in the future. In particular, the Company will depend in large
        part on the abilities of Mr. Terry Phillips and Ms. Melanie Mroz, who are
        the
        Chairman, and President and Chief Executive Officer, respectively, of the
        Company, to effectively execute future strategies.
  ***If
        the Company fails to hire and retain qualified personnel, in an industry
        where
        competition for qualified personnel is intense, its business could be seriously
        harmed.***
  The
        Company’s business, operating results and financial condition could be
        materially and adversely affected if the Company loses the services of key
        technical, sales or marketing employees, or if the Company failed to attract
        additional highly qualified employees. The Company’s employees are responsible
        for ensuring the timely publication, distribution and continued improvement
        of
        proprietary video games that the Company’s clients demand, for promptly
        addressing client requirements through technical and operational support
        services, and for identifying and developing opportunities to provide additional
        products and/or services to existing clients. The loss of the services of
        these
        employees, the inability to attract or retain qualified personnel in the
        future,
        or delays in hiring qualified personnel could limit the Company’s ability to
        generate revenues and to successfully operate the Company’s
        business.
  Competition
        for employees can be intense and the process of locating key personnel with
        the
        right combination of skills is often lengthy. The Company relies to a
        substantial extent on the expertise, skills and knowledge of management,
        marketing, sales, technical and technology personnel to formulate and implement
        its business plan, as well as to identify, support, publish and market quality
        titles. Although the Company has granted incentives to some employees, it
        may
        not be able to continue to retain these personnel at current compensation
        levels, or at all. The compensation arrangements with such employees could
        result in increased expenses and have a negative impact on its operating
        results. In addition, if one or more of these individuals leave the Company,
        it
        may experience material delays in bringing products to market, which could
        have
        a material adverse effect on its business and prospects.
 
 25
 ***Growth
        of the Company’s business will result in increased demands on the Company’s
        management and limited human capital resources, which the Company may not
        be
        able to meet.***
  Any
        future growth in the combined business of the Company, whether organic or
        through acquisitions, will result in increased responsibility for the Company’s
        management and increased demands on the Company’s personnel. As the Company’s
        business grows, it will be required to retain qualified personnel who can
        expand
        their customer base and ensure continued development and delivery of highly
        innovative and technologically advanced games. The Company must continue
        to
        enhance and expand its management, technical, selling and marketing capabilities
        to accommodate this growth. To manage future growth, the Company will need
        to:
  ·
              Retain
                  and hire competent senior management and marketing personnel to
                  manage
                  publishing and marketing
                  activities;
  ·
              Maintain
                  and expand their base of operating, financial and administrative
                  personnel; and
  ·
              Continue
                  to train, motivate, and retain existing employees and attract and
                  integrate new employees.
  If
        the
        Company is unable to manage future expansion, its ability to provide and
        maintain superior services to its vendors and customers can be compromised,
        which could in turn damage its reputation and substantially harm the
        business.
  ***Potential
        increased regulation of video game content and distribution can stifle growth
        and profitability and seriously hurt the Company’s
        business.***
  Video
        game entertainment has come under increased scrutiny from politicians and
        consumer advocacy groups many of which are calling for increased
        regulation/oversight of the content of video game products. Such potential
        regulation could raise costs or limit the market for video games, in general,
        and for the Company’s products in particular.
  Consumer
        advocacy groups have opposed sales of video game software containing graphic
        violence or sexually explicit material or other objectionable content by
        pressing for legislation in these areas, including legislation prohibiting
        the
        sale of certain “M” rated video games to minors, and by engaging in public
        demonstrations and media campaigns, and various governmental bodies have
        proposed regulation aimed at the Company’s industry to prohibit the sale to
        minors of software containing such material. Additionally, retailers may
        decline
        to sell video games containing graphic violence or sexually explicit material
        that they deem inappropriate for their businesses. Some of the Company’s titles
        have received an “M” rating (age 17 and over). If retailers decline to sell the
        Company’s “M” rated products or if the Company’s products are rated “AO” (age 18
        and over), the Company might be required to significantly change or discontinue
        particular titles.
  Currently
        in the United States, the video game publishing industry is rated by the
        Entertainment Software Rating Board or ESRB, a self-regulated volunteer video
        game rating organization. The ESRB, through its ratings system, requires
        game
        publishers to provide consumers with information relating to video game content,
        including graphic violence, profanity or sexually explicit material contained
        in
        software titles. There are similar ratings agencies in the UK, Germany,
        Australia and other geographic territories.
 
 ***Failure
        to obtain a target rating for certain of the Company’s products, as well as game
        re-rating, could negatively impact its sales.***
  The
        ESRB
        system uses a rating symbol that suggests the appropriate player age group,
        and
        content descriptor information, such as graphic violence, profanity, or sexually
        explicit material. The ESRB rating is printed on each game package and retailers
        may use the rating to restrict sales to the recommended age groups. Retail
        customers take the ESRB rating into consideration when deciding which games
        they
        will purchase. If the ESRB or a manufacturer determines that any of the
        Company’s video games should have a rating directed to an older or more mature
        consumer, the Company may be less successful in marketing and selling said
        games.
  The
        Company claims compliance with rating system requirements and the proper
        display of the designated rating symbols and content descriptors. In some
        instances, however, the Company may have to modify certain games in order
        to
        market them under the expected rating, which could delay or disrupt the release
        of these games. In the United States, the Company expects its software titles
        to
        receive ESRB ratings of “E” (age 6 and older), “E10+” (age 10 and older), “T”
(age 13 and over) or “M” (age 17 and over). In addition to these ratings, the
        ESRB may also rate a game as “AO” (age 18 and over). A few of the Company’s
        published titles have been rated “M” by the ESRB. If the Company is unable to
        obtain “M” ratings as a result of changes in the ESRB’s ratings standards or for
        other reasons, including the adoption of legislation in this area, the Company’s
        business and prospects could be negatively affected. In the event any of
        the
        Company’s games are re-rated by the ESRB, it may be required to record a reserve
        for anticipated product returns and inventory obsolescence which could expose
        it
        to additional litigation, administrative fines and penalties and other potential
        liabilities, and could adversely affect its operating results.
  26
 ***New
        legislation, content policies adopted by retailers, and litigation could
        inhibit
        sales of the Company’s products.***
  Legislation
        has been introduced at the local, state and federal levels for the establishment
        of a government-mandated rating and governing system in the United States
        and in
        foreign countries for the video game software publishing industry. Various
        foreign countries already allow government censorship of video games. The
        Company believes that if its industry were to become subject to a government
        rating system, its ability to successfully market and sell its products could
        be
        adversely affected.
  In
        the
        United States, proposals have been made by numerous state legislators to
        regulate the sale of video games containing violent or sexually explicit
        material by prohibiting the sale of such products to under 17 or 18 audiences
        and proposing penalties for non-compliance, and certain states have recently
        sought to adopt laws regulating “M” or “AO” rated products or products otherwise
        depicting violent or sexually explicit materials. While such legislation
        has
        been successfully enjoined by industry and retail groups, the adoption into
        law
        of such legislation in federal and/or in state jurisdictions in which the
        Company does significant business could severely limit the retail market
        for its
“M” rated titles.
 
 Furthermore,
        a United States Senate bill, referred to as The Family Entertainment Protection
        Act, proposes to adopt a common rating system for video game software,
        television and music containing violence or sexually explicit material and
        to prohibit the sale of “M” rated, “AO” rated and “Rating Pending” products to
        under-17 audiences. The Federal Trade Commission has issued reports with
        respect
        to the marketing of such material to minors. If the bill is adopted into
        law, it
        may limit the potential market for the Company’s “M” rated products, and
        adversely affect its operating results.
  Certain
        countries have also established similar rating systems as prerequisites for
        sales of video game software in such countries. In some instances, the Company
        may be required to modify certain of its games to comply with the requirements
        of these rating systems, which could delay the release of said games in these
        countries. Other countries, such as Germany, have adopted laws regulating
        content both in packaged games and those transmitted over the Internet that
        are
        stricter than current United States laws.
  Moreover,
        retailers may decline to sell video game software containing graphic violence
        or
        sexually explicit material. Some trade organizations also require video game
        publishers to provide consumers with information relating to graphic violence,
        profanity, or sexually explicit material contained in software titles, and
        they
        impose penalties for non-compliance.
  Additionally,
        although lawsuits seeking damages for injuries allegedly suffered by third
        parties as a result of video games have been unsuccessful in the courts,
        claims
        of this kind can be asserted against the Company.
  ***The
        Chairman of the Company is subject to an SEC cease and desist
        order.***
  Mr.
        Terry
        Phillips, the Chairman of the Company agreed, in May 2007, to a settlement
        with
        the SEC in a proceeding arising from certain actions in 2000 and 2001. Without
        admitting or denying the allegations, Mr. Phillips agreed to consent to the
        entry of an order to cease and desist from committing or causing any violations
        of Section 10(b) of the Exchange Act and Exchange Act Rules 10b-5 and 13b2-1
        and
        from causing any violations of Sections 13(a) and 13(b)(2)(A) of the Exchange
        Act and Exchange Act Rules 12b-2, 13a-1 and 13a-13.
  This
        proceeding arose from the involvement in 2000 and 2001 of Mr. Phillips, Capitol
        Distributing, L.L.C, and another private company in which Mr. Phillips was
        a principal, in certain actions of Take-Two Interactive Software, Inc., where
        Mr. Phillips was accused of taking receipt of merchandise from Take-Two
        Interactive Software, Inc. and later returning the merchandise to Take-Two
        without making an effort to sell the merchandise. In his agreement to cease
        and
        desist, Mr. Phillips paid a civil penalty of $50,000.
  Should
        Mr. Phillips be found to have violated the terms of the SEC’s order in the
        future, he may be subject to further enforcement action, including legal
        action
        imposing injunctive relief and assessing fines or penalties, which could
        have a
        material impact on the Company’s reputation and business.
  27
 **Risks
        Relating to the Company’s Securities**
  ***Fulfilling
        the obligations incident to being a public company after completing the
        Acquisition will be expensive and time consuming.***
  Each
        of
        the Company, as a former blank-check company, and SouthPeak, as a private
        company, has maintained relatively small finance and accounting staffs. Neither
        the Company nor SouthPeak currently has an internal audit group. Although
        the
        Company has maintained disclosure controls and procedures and internal control
        over financial reporting as required under the federal securities laws with
        respect to its very limited activities, the Company has not been required
        to
        maintain and establish such disclosure controls and procedures and internal
        control as will be required with respect to businesses such as SouthPeak
        with
        substantial operations. Under the Sarbanes-Oxley Act of 2002 and the related
        rules and regulations of the SEC, the Company will need to implement additional
        corporate governance practices and adhere to a variety of reporting requirements
        and complex accounting rules. Compliance with these obligations will require
        significant management time, place significant additional demands on the
        Company’s finance and accounting staff and on the Company’s financial,
        accounting and information systems, and increase its insurance, legal and
        financial compliance costs. The Company may also need to hire additional
        accounting and financial staff with appropriate public company experience
        and
        technical accounting knowledge.
  ***Section 404
        of the Sarbanes-Oxley Act of 2002 will require the Company to document and
        test
        its internal controls over financial reporting for fiscal 2008 and beyond.
        Any
        delays or difficulty in satisfying these requirements could adversely affect
        its
        future results of operations and its stock price.***
  Section 404
        of the Sarbanes-Oxley Act of 2002 will require the Company to document and
        test
        the effectiveness of its internal controls over financial reporting in
        accordance with an established internal control framework and to report on
        its
        conclusion as to the effectiveness of its internal controls. It may cost
        the
        Company more than it expects to comply with these control- and procedure-related
        requirements.
  The
        Company may discover in the future areas of its internal controls that need
        improvement, including with respect to other businesses that it may acquire
        in
        the future. The Company cannot be certain that any remedial measures it takes
        will ensure that it implements and maintains adequate internal controls over
        its
        financial processes and reporting in the future. Any failure to implement
        required new or improved controls, or difficulties encountered in their
        implementation could harm operating results or cause it to fail to meet its
        reporting obligations. If the Company is unable to conclude that it has
        effective internal controls over financial reporting, or if its independent
        auditors are unable to provide it with an unqualified report regarding the
        effectiveness of its internal controls over financial reporting as of June
        30,
        2009 and in future periods as required by Section 404, investors could lose
        confidence in the reliability of its financial statements, which could result
        in
        a decrease in the value of the Company’s common stock. Failure to comply with
        Section 404 could potentially subject the Company to sanctions or
        investigations by the SEC or other regulatory authorities.
 
 ***Because
        the Company does not currently intend to pay dividends on its common stock,
        stockholders will benefit from an investment in its common stock only if
        it
        appreciates in value.***
  The
        Company does not currently anticipate paying any dividends on shares of its
        common stock. Any determination to pay dividends in the future will be made
        by
        the Company’s board of directors and will depend upon results of operations,
        financial condition, contractual restrictions, restrictions imposed by
        applicable law and other factors the Company’s board of directors deems
        relevant. Accordingly, realization of a gain on stockholders’ investments will
        depend on the appreciation of the price of the Company’s common stock. There is
        no guarantee that the Company’s common stock will appreciate in value or even
        maintain the price at which stockholders purchased their
        shares.
  ***The
        market price for the Company’s common stock may be highly volatile as a result
        of, among other things, factors affecting the
        industry.***
  The
        market price of the Company’s common stock may be highly volatile. Factors such
        as operating results, announcements by it or its competitors and various
        factors
        affecting the video game software publishing industry may have a significant
        impact on the market price of its common stock.
  28
 ***The
        Company seeks to manage its business with a view to achieving long-term results,
        and this could have a negative effect on short-term
        trading.***
  The
        Company’s focus is on creation of stockholder value over time, and it
        intends to make decisions that will be consistent with this long-term view.
        As a
        result, some of its decisions, such as whether to make or discontinue operating
        investments, manage its balance sheet and capital structure, or pursue or
        discontinue strategic initiatives, may be in conflict with the objectives
        of
        short-term traders. Further, this could adversely affect its quarterly or
        other
        short-term results of operations.
  ***The
        warrants of the Company may have an adverse effect on the market price of
        its
        common stock.***
  The
        Company has outstanding warrants to purchase 13,655,000 shares of common
        stock. Certain of the Company’s current affiliates hold warrants to purchase
        910,320 shares of common stock at $5.00 per share. There will also be
        an option to purchase 200,000 Class Z warrants and 260,000 Class W warrants
        issued to the representative of the underwriters in the Company’s initial public
        offering. The sale, or even the possibility of sale, of the shares underlying
        the warrants and options could have an adverse effect on the market price
        for
        the Company’s securities or on its ability to obtain future public financing. If
        and to the extent these warrants are exercised, the common
        stockholders may experience dilution to their holdings.
  ***The
        registration for resale by the holders of Series A Preferred may have an
        adverse
        effect on the market price of the Company’s common
        stock.***
  The
        Company  has agreed to file a registration statement to register for
        resale certain securities held by the holders of shares of Series A Preferred.
        If all of these shares and warrants are registered for resale, there will
        be an
        additional 12,984,833 shares of common stock eligible for trading in the
        public
        market. The presence of this additional number of shares of common stock
        eligible for trading in the public market may have an adverse effect on the
        market price of the Company’s common stock.
  ***Holders
        of Series A Preferred have liquidation rights senior to the holders of the
        Company’s common stock.***
  The
        Company’s board of directors has the authority to designate and issue preferred
        stock that may have dividend, liquidation and other rights that are senior
        to
        those of the Company’s common stock. In connection with the Acquisition, the
        board designated 15,000,000 shares of Series A Preferred, 12,984,833 shares
        of which have been issued at a price of $1.00 per share. Holders of shares
        of
        the Company’s Series A Preferred are entitled to a liquidation preference
        before amounts are distributed on shares of the Company’s common stock equal to
        the original issue price of these shares. This right will reduce the remaining
        amount of the Company’s assets, if any, available to distribute to holders of
        the Company’s common stock.


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





On
      April
      25, 2006, the Company consummated its initial public offering of 460,000
      Series A units, with each Series A unit consisting of two shares of our common
      stock and ten Class Z warrants, each to purchase one share of its common
      stock at an exercise price of $5.00 per share, and 2,990,000 Series B units,
      with each Series B unit consisting of two shares of our Class B common stock
      and
      two Class W warrants, each to purchase one share of common stock. These units
      include units that were subject to the over-allotment option. The Series A
      Units
      were sold at an offering price of $8.50 per Series A Unit and the Series B
      Units
      were sold at an offering price of $10.10 per Series B Unit, generating total
      gross proceeds of $34,109,000. HCFP/Brenner Securities LLC acted as
      representative of the underwriters for the initial public offering. The
      securities sold in the offering were registered under the Securities Act of
      1933
      on a registration statement on Form S-1 (No. 333-128350). The Securities and
      Exchange Commission declared the registration statement effective on April
      18,
      2006.




29




The
      Company paid a total of $2,046,540 in underwriting discounts and
      commissions, and approximately $485,000 has been paid for costs and expenses
      related to the offering.





After
      deducting the underwriting discounts and commissions and the offering expenses,
      the total net proceeds to the Company from the offering were
      approximately $31,600,000, of which $30,199,000 was deposited into the trust
      account and the remaining proceeds are available to be used to provide for
      business, legal and accounting due diligence on prospective business
      combinations and continuing general and administrative expenses.





For
      a
      description of the use of the proceeds generated in our initial public offering,
      see Part I, Item 2 of this Form 10-Q.





**Item
      6. *Exhibits.***


**Exhibit****Number**
                
                **Exhibit**3
                .1
                
                Amended
                    and Restated Certificate of Incorporation.(1)3
                .2
                
                Amended
                    and Restated Bylaws.(1)4
                .1*
                
                Specimen
                  Common
                  Stock Certificate.4
                .2*
                
                Specimen
                  Class W
                  Warrant Certificate.4
                .3*
                
                Specimen
                  Class Z Warrant Certificate.31
                .1*
                
                Certification
                    of the President and Chief Executive Officer pursuant to
                    Rule 13a-14(a) and Rule 15d-14(a), promulgated under the
                    Securities Exchange Act of 1934, as amended.31
                .2*
                
                Certification
                    of Chief Financial Officer and Treasurer pursuant to Rule 13a-14(a)
                    and Rule 15d-14(a), promulgated under the Securities Act of 1934, as
                    amended.32
                .1*
                
                Certification
                    of President and Chief Executive Officer and Chief Financial
                    Officer and
                    Treasurer pursuant to 18 U.S.C. Section 1350, as adopted
                    pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
 *
                
                Filed
                    herewith(1)
                
                Incorporated
                    by reference to an exhibit to the Current Report on Form 8-K
                    of the
                    Registrant filed with the Securities and Exchange Commission
                    on May 15,
                    2008.
  
 30




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.




SOUTHPEAK
                INTERACTIVE CORPORATIONBy:
            /s/ Melanie
                MrozMelanie
                Mroz
              President
                and Chief Executive
              Officer
              (Principal
                Executive Officer)




By:
            /s/ Andrea
                Gail JonesAndrea
                Gail Jones
              Chief
                Financial Officer
              (Principal
                Financial and Accounting Officer)




Date: June
        16, 2008
 31
  **INDEX
          TO EXHIBITS**
 **Exhibit****Number**
                      
                      **Exhibit**3
                      .1
                      
                      Amended
                          and Restated Certificate of Incorporation.(1)3
                      .2
                      
                      Amended
                          and Restated Bylaws.(1)4
                      .1*
                      
                      Specimen
                        Common
                        Stock Certificate.4
                      .2*
                      
                      Specimen
                        Class W
                        Warrant Certificate.4
                      .3*
                      
                      Specimen
                        Class Z Warrant Certificate.31
                      .1*
                      
                      Certification
                          of the President and Chief Executive Officer pursuant to
                          Rule 13a-14(a) and Rule 15d-14(a), promulgated under the
                          Securities Exchange Act of 1934, as amended.31
                      .2*
                      
                      Certification
                          of Chief Financial Officer and Treasurer pursuant to Rule 13a-14(a)
                          and Rule 15d-14(a), promulgated under the Securities Act of 1934,
                          as
                          amended.32
                      .1*
                      
                      Certification
                          of President and Chief Executive Officer and Chief Financial
                          Officer and
                          Treasurer pursuant to 18 U.S.C. Section 1350, as adopted
                          pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
 *
                      
                      Filed
                          herewith(1)
                      
                      Incorporated
                          by reference to an exhibit to the Current Report on Form
                          8-K of the
                          Registrant filed with the Securities and Exchange Commission
                          on May 15,
                          2008.


32