**UNITED
      STATES**


**SECURITIES
      AND EXCHANGE COMMISSION**


**WASHINGTON,
      D.C. 20549**




**FORM
      10-Q**




ý
            **Quarterly
                Report Pursuant to Section 13 or 15(d) of the Securities Exchange
                Act of
                1934****for
                the quarterly period ended September 30,
                2006.**




or


**Transition
                Report Pursuant to Section 13 or 15(d) of the Securities Exchange
                Act of
                1934 f****or
                the transition period from ___ to
                ____.**




**Commission
      File Number: 000-51854**




**Phoenix
      India Acquisition Corp.**


(Exact
      name of registrant as specified in its charter)




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




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


(Address
      of Principal Executive Offices including Zip Code)





**(212)
      734-4600**


(Registrant’s
      Telephone Number, Including Area Code)




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




Indicate
      by check mark whether the registrant is a large accelerated filer, an
      accelerated filer, or a non-accelerated filer. See definition of “accelerated
      filer and large accelerated filer” in Rule 12b-2 of the Exchange. (Check one):




Large
      Accelerated Filer ð   Accelerated
      Filer ð   Non-Accelerated
      Filer ý




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




There
      were 8,966,796  shares
      of
      the Registrant’s common stock issued and outstanding as of November 14, 2006.














**Phoenix
      India Acquisition Corp. Index to Form 10-Q**




**Part
                I.**
            **Financial
                Information**Item
                1. Financial Statements (unaudited)Balance
                SheetsStatements
                of OperationsStatement
                of Stockholders’ EquityStatements
                of Cash FlowsNotes
                to Financial StatementsItem
                2. Management’s Discussion and Analysis of Financial Condition and Results
                of OperationsItem
                3. Quantitative and Qualitative Disclosures about Market RiskItem
                4. Controls and Procedures**Part
                II.**
            **Other
                Information**Item
                1. Legal ProceedingsItem
                1A. Risk FactorsItem
                2. Unregistered Sales of Equity Securities and Use of
                ProceedsItem
                3. Defaults Upon Senior SecuritiesItem
                4. Submission of Matters to a Vote of Security HoldersItem
                5. Other InformationItem
                6. ExhibitsSIGNATURES






2




**PART
      I - FINANCIAL INFORMATION**




**Item
      1 - Financial Statements.**




**PHOENIX
                  INDIA ACQUISITION CORP.**(a
                  corporation in the development stage)**BALANCE
                  SHEETS**
  **September
                  30, 2006**
              
              **December
                  31, 2005****Assets**
              
              (Unaudited)
              
              (Audited)Current
                  assets:Cash
              
              $
              923,004
              
              $
              1,234Cash
                  held in trust account
              
              
              54,913,371Accrued
                  interest receivable
              
              
              279,000
              
              
              —Prepaid
                  expenses
              
              
              31,000Other
                  assets, deferred offering costs
              
              
              
              
              
              310,641Total
                  assets
              
              $
              56,146,375
              
              $
              311,875**Liabilities
                  and Stockholders' Equity**Current
                  and total liabilities:Accounts
                  payable and accrued expenses
              
              $
              237,200
              
              $
              89,875Income
                  taxes payable
              
              
              84,598
              
              
              —Notes
                  payable, stockholders
              
              
              360,000
              
              
              200,000Deferred
                  underwriting fees
              
              
              2,265,500
              
              
              —**Total
                  current and total liabilities**
              
              
              2,947,298
              
              
              289,875Common
                  stock subject to redemption, 1,415,2219 shares at redemption value
                  of
                  $7.65
              
              
              10,826,505
              
              
              —Stockholders'
                  Equity:Preferred
                  stock, $0.0001 par value, authorized 1,000,000 shares; none
                  issued
              
              
              
              
              
              —Common
                  stock, $0.0001 par value, authorized 89,000,000 shares, issued
                  and
                  outstanding 8,966,796 shares
              
              
              897
              
              
              157Paid-in
                  capital in excess of par
              
              
              41,903,917
              
              
              24,843Earnings
                  accumulated during the development stage
              
              
              467,758
              
              
              (3,000
              )Total
                  stockholders' equity
              
              
              42,372,572
              
              
              22,000**Total
                  liabilities and stockholders' equity**
              
              $
              56,146,375
              
              $
              311,875
  *See
          accompanying notes to financial statements*







3


**PHOENIX
                  INDIA ACQUISITION CORP.**(a
                  corporation in the development stage)**STATEMENT
                  OF OPERATIONS**(UNAUDITED)
  **For
                  the period**
              
              
              
              **For
                  the Period****from
                  July 13, 2005**
              
              
              
              **from
                  July 13, 2005****Three
                    months ended**
                  **September
                    30,**
                  **2006**
              
              **(Inception)**
                  **to
                    September 30,**
                  **2005**
              
              **Nine
                    Months ended**
                  **September
                    30,**
                  **2006**
              
              **(Inception)**
                  **to
                    September 30,**
                  **2006**Revenues:Interest
                  income
              
              $
              615,528
              
              $
              —
              
              $
              1,256,553
              
              $
              1,256,553Total
                  revenues
              
              
              615,528
              
              
              —
              
              
              1,256,553
              
              
              1,256,553Expenses:General
                  and administrateive expenses
              
              
              273,171
              
              
              —
              
              
              503,800
              
              
              506,800Total
                  expenses
              
              
              273,171
              
              
              —
              
              
              503,800
              
              
              506,800Income
                  before provision for income taxes
              
              
              342,357
              
              
              —
              
              
              752,753
              
              
              749,753Provision
                  for income taxes
              
              
              (130,096
              )
              
              —
              
              
              (281,995
              )
              
              (281,995
              )Net
                  income
              
              $
              212,261
              
              $
              —
              
              $
              470,758
              
              $
              467,758Weighted
                  average shares outstanding:Basic
              
              
              8,966,796
              
              
              1,562,500
              
              
              6,419,048
              
              
              4,555,362Diluted
              
              
              11,740,198
              
              
              1,562,500
              
              
              9,192,450
              
              
              7,328,764Net
                  income per share, basic
              
              $
              0.02
              
              $
              —
              
              $
              0.07
              
              $
              0.10Net
                  income per share, diluted
              
              $
              0.02
              
              $
              —
              
              $
              0.05
              
              $
              0.06


*See
          accompanying notes to financial statements*


4




**PHOENIX
                  INDIA ACQUISITION CORP.**(a
                  corporation in the development stage)**STATEMENT
                  OF STOCKHOLDERS' EQUITY****For
                  the period from July 13, 2005 (inception) to September 30,
                  2006**(UNAUDITED)
  Common
                  Stock
              
              Paid-in
              
              Earnings
                AcccumulatedPar
                  Value
              
              Capital
                  in
              
              During
                  the
              
              Total$0.0001
              
              Excess
                  of
              
              Development
              
              Stockholders'Shares
              
              Amount
              
              Par
              
              Stage
              
              EquityStock
                  issuance
              
              
              1,562,500
              
              $
              157
              
              $
              24,843
              
              $
              —
              
              $
              25,000Net
                  loss
              
              
              
              
              
              
              
              
              
              
              
              (3,000
              )
              
              (3,000
              )**Balance**,
                  at December 31, 2005
              
              
              1,562,500
              
              
              157
              
              
              24,843
              
              
              (3,000
              )
              
              22,000Stock
                  issuance on April 5, 2006 @$8.00
              
              
              6,156,250
              
              
              616
              
              
              49,249,384
              
              
              —
              
              
              49,250,000Stock
                  issuance on April 5, 2006 @$8.00
              
              
              923,437
              
              
              92
              
              
              7,387,404
              
              
              —
              
              
              7,387,496Stock
                  issuance on March 30, 2006 @$8.00
              
              
              93,750
              
              
              9
              
              
              749,991
              
              
              —
              
              
              750,000Proceeds
                  from exercise of options on April 5, 2006
              
              
              230,859
              
              
              23
              
              
              3,671
              
              
              —
              
              
              3,694Expenses
                  of offerings
              
              
              —
              
              
              —
              
              
              (4,684,871
              )
              
              —
              
              
              (4,684,871
              )Less:
                  Proceeds subject to possible redemption of 1,415,229 shares, 19.99%
                  of
                  public shares are subject to redemption $7.65 per share
              
              
              —
              
              
              —
              
              
              (10,826,505
              )
              
              —
              
              
              (10,826,505
              )**Net
                  income**
              
              
              —
              
              
              —
              
              
              —
              
              
              470,758
              
              
              470,758**Balance**,
                  at September 30, 2006
              
              
              8,966,796
              
              $
              897
              
              $
              41,903,917
              
              $
              467,758
              
              $
              42,372,572


*See
          accompanying notes to financial statements*




5


**PHOENIX
                  INDIA ACQUISITION CORP.**(a
                  corporation in the development stage)**STATEMENT
                  OF CASH FLOWS**(UNAUDITED)
  **For
                  Period**
              
              
              
              **For
                  Period****from
                  July 13,**
              
              
              
              **from
                  July 13,****Three
                  Months**
              
              **2005**
              
              **Nine
                  Months**
              
              **2005****Ended**
              
              **(Inception)
                  to**
              
              **Ended**
              
              **(Inception)
                  to****Sept
                  30,**
              
              **Sept
                  30,**
              
              **Sept
                  30,**
              
              **Sept
                  30,****2006**
              
              **2005**
              
              **2006**
              
              **2006****Cash
                  flows from operating activities**Net
                  income
              
              $
              212,261
              
              $
              —
              
              $
              470,758
              
              $
              467,758Adjustment
                  to reconcile net income to net cash
                provided
                  by operating activities:Increase
                  in accrued interest receivable
              
              
              
              
              
              —
              
              
              (279,000
              )
              
              (279,000
              )Increase
                  in prepaid expenses
              
              
              15,500
              
              
              —
              
              
              (31,000
              )
              
              (31,000
              )(Decrease)
                  increase in accounts payable and accrued expenses
              
              
              103,284
              
              
              —
              
              
              195,402
              
              
              195,402Income
                  taxes payable
              
              
              (21,803
              )
              
              —
              
              
              84,597
              
              
              84,597**Net
                  cash provided by operating activities**
              
              
              **309,242**
              
              
              —
              
              
              **440,757**
              
              
              **437,757**Cash
                  flows from investing activities:Payment
                  to trust account
              
              
              —
              
              
              —
              
              
              (54,913,371
              )
              
              (54,913,371
              )**Net
                  cash used in investing activities**
              
              
              —
              
              
              —
              
              
              **(54,913,371**
              **)**
              
              **(54,913,371**
              **)**Cash
                  flows from financing activities:Gross
                  proceeds from public offering
              
              
              —
              
              
              —
              
              
              56,637,496
              
              
              56,637,496Gross
                  proceeds from private offering
              
              
              —
              
              
              —
              
              
              750,000
              
              
              750,000Proceeds
                  from notes payable, stockholders
              
              
              (140,000
              )
              
              200,000
              
              
              160,000
              
              
              360,000Proceeds
                  from sale of common stock
              
              
              —
              
              
              25,000
              
              
              —
              
              
              25,000Proceeds
                  from exercise of management options
              
              
              —
              
              
              —
              
              
              3,697
              
              
              3,697Payment
                  of offering costs
              
              
              —
              
              
              —
              
              
              (2,156,809
              )
              
              (2,377,575
              )Payment
                  of deferred offering costs
              
              
              —
              
              
              (197,449
              )
              
              —
              
              
              —**Net
                  cash (used in) provided by financing
                  activities**
              
              
              **(140,000**
              **)**
              
              **27,551**
              
              
              **55,394,384**
              
              
              **55,398,618**Net
                  increase in cash
              
              
              169,242
              
              
              27,551
              
              
              921,770
              
              
              923,004Cash,
                  beginning of period
              
              
              753,762
              
              
              —
              
              
              1,234
              
              
              —Cash,
                  end of period
              
              $
              923,004
              
              $
              27,551
              
              $
              923,004
              
              $
              923,004Supplemental
                  non-cash financing transactionsAccrual
                  of costs of public offering
              
              $
              2,419,371
              
              $
              —
              
              $
              2,419,371
              
              $
              2,419,371Accrued
                  deferred offering costs
              
              
              (86,975
              )
              
              —
              
              
              (86,975
              )
              
              (86,975
              )
   *See
          accompanying notes to financial statements*


6




**NOTES
      TO UNAUDITED FINANCIAL STATEMENTS**


**September
      30, 2006**




**1.**
            **Basis
                of Presentation**




The
      financial statements for the three and nine months ended September 30, 2006
      and
      for the period July 13, 2005 (inception) to September 30, 2006 are unaudited.
      In
      the opinion of management, all adjustments (consisting only of normal recurring
      accruals) have been made that are necessary to present fairly the financial
      position of Phoenix India Acquisition Corp. (the “Company”) as of September 30,
      2006 and the results of its operations and its cash flows for the three and
      nine
      months ended September 30, 2006, the period from July 13, 2005 (inception)
      to
      September 30, 2005 and period from July 13, 2005 (inception) to September 30,
      2006 in conformity with generally accepted accounting principles. Operating
      results for the interim period are not necessarily indicative of the results
      to
      be expected for the full year.




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




*Nature
      of Operations*




The
      Company was incorporated in Delaware on July 13, 2005, as a blank check company
      whose objective is to acquire, through a merger, capital stock exchange, asset
      acquisition or other similar business combination, a currently unidentified
      business with primary operations in India.




Primarily
      all activity from April 5, 2006, the consummation date of the Company’s initial
      public offering (“Offering”) described below, through September 30, 2006 relates
      to the Company’s efforts in identifying an acquisition target in India. The
      Company has selected December 31 as its fiscal year-end. The registration
      statement for the Company’s initial public offering ("Offering") was declared
      effective March 31, 2006. The Company consummated the Offering on April 5,
      2006
      including the 923,437 units subject to the underwriters’ over-allotment option
      and the private placement sold to the existing officers and directors through
      an
      entity they own and received net proceeds of approximately $54,600,251 (Note
      3).
      The Company’s management has broad discretion with respect to the specific
      application of the net proceeds of the Offering, although substantially all
      of
      the net proceeds of the Offering are intended to be generally applied toward
      consummating a business combination with a company operating in India (a “target
      business”).




In
      evaluating a prospective target business, the Company will consider, among
      other
      factors, the financial condition and results of operation; growth potential;
      experience and skill of management; availability of additional personnel;
      capital requirements; competitive position; barriers to entry into other
      industries; stage of development of the products, processes or services; degree
      of current or potential market acceptance of the products, processes or
      services; proprietary features and degree of intellectual property or other
      protection of the products, processes or services; regulatory environment of
      the
      industry; and costs associated with effecting the business combination. These
      criteria are not intended to be exhaustive. Any evaluation relating to the
      merits of a particular business combination will be based, to the extent
      relevant, on the above factors, as well as other considerations deemed relevant
      by the Company in effecting a business combination consistent with its business
      objective.




There
      are
      no assurances the Company will be able to successfully effect a business
      combination. An amount of $54,913,371 or 97.0% of the gross proceeds of the
      Offering  and
      the
      private placement ($7.76 per unit) is being held in an interest-bearing trust
      account at JP Morgan Chase NY Bank maintained by American Stock Transfer &
Trust Company (“Trust Fund”) and invested in United States Treasury Bills with
      maturity dates of 180 days or less or in money market funds meeting certain
      conditions under Rule 2a-7 promulgated with the Investment Company Act of 1940,
      until the earlier of (i) the consummation of the Company’s first business
      combination or (ii) the liquidation of the Company. The placing of funds in
      the
      Trust Fund may not protect those funds from third party claims against the
      Company. Although the Company will seek to have all vendors, prospective target
      businesses or other entities it engages, execute agreements with the Company
      waiving any right, title, interest or claim of any kind in or to any monies
      held
      in the Trust Fund, there is no guarantee that they will execute such agreements.
      The remaining proceeds, not held in trust, may be used to pay for business,
      legal and accounting expenses, expenses which may be incurred related to the
      investigation and selection of a target business, and the negotiation of an
      agreement to acquire a target business, and for continuing general and
      administrative expenses.




7


The
      Company’s first business combination must be with a business or businesses with
      a fair market value of at least 80% of the Company’s net asset value at the time
      of acquisition. The Company, after signing a definitive agreement for the
      acquisition of a target business, will submit such transaction for stockholder
      approval. In the event that stockholders owning 20% or more of the outstanding
      stock excluding, for this purpose, those persons who were stockholders prior
      to
      the Offering, vote against the business combination or request their conversion
      right as described below, the business combination will not be consummated.
      All
      of the Company's stockholders prior to the Offering, including all of the
      officers and directors of the Company (“Initial Stockholders”), have agreed to
      vote their 1,887,109 (including 93,750 shares purchased in the private placement
      and 230,859 shares purchased by exercising their option in full) founding shares
      of common stock in accordance with the vote of the majority in interest of
      all
      other stockholders of the Company (“Public Stockholders”) with respect to any
      business combination. After consummation of the Company’s first business
      combination, all of these voting safeguards will no longer be
      applicable.




With
      respect to the first business combination, any Public Stockholder who voted
      against the business combination may demand that the Company redeem his or
      her
      shares. The per share redemption price will equal the amount in the Trust Fund
      as of the record date for determination of stockholders entitled to vote on
      the
      business combination divided by the number of shares of common stock held by
      Public Stockholders at the consummation of the Offering. Accordingly, Public
      Stockholders holding 19.99% of the aggregate number of shares owned by all
      Public Stockholders may seek redemption of their shares in the event of a
      business combination. Such Public Stockholders are entitled to receive their
      per
      share interest in the Trust Fund computed without regard to the shares held
      by
      Initial Stockholders. Accordingly, a portion of the net proceeds from the
      Offering (19.99% of the amount held in the Trust Fund), or $10,977,182 after
      proceeds from the underwriter over-allotment, has been classified as common
      stock subject to possible conversion and 19.99% of the related interest earned
      on cash held in the Trust Fund has been recorded as deferred revenue until
      the
      business combination is consummated.




The
      Company’s Amended and Restated Certificate of Incorporation provides for
      mandatory liquidation of the Company, without stockholder approval, in the
      event
      that the Company does not consummate a business combination within eighteen
      (18)
      months from the date of the consummation of the Offering, or twenty-four (24)
      months from the consummation of the Offering if certain extension criteria
      have
      been satisfied. In the event of liquidation, it is likely that the per share
      value of the residual assets remaining available for distribution (including
      Trust Fund assets) will be less than the initial public offering price per
      share
      in the Offering (assuming no value is attributed to the Warrants contained
      in
      the Units sold in the Offering discussed in Note 3).




*Net
      Income (Loss) Per Common Share*




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




8


*Derivative
      Financial Instrument*




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




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




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




*Use
      of Estimates*




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




*Income
      Taxes*




Deferred
      income taxes are provided for the differences between the basis of assets and
      liabilities for financial reporting and income tax purposes. A valuation
      allowance is established, when necessary, to reduce deferred tax assets to
      the
      amount expected to be realized.




The
      effective tax rate differs from the statutory rate of 34% due to primarily
      all
      interest income being generated from tax-exempt securities.




*Recent
      Accounting Pronouncements*




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




**3.**
            **Per
                Share Information**




In
      accordance with SFAS No. 128, “Earnings Per Share”, basic earnings per common
      share (“Basic EPS”) is computed by dividing the net income by the
      weighted-average number of shares outstanding. Diluted earnings per common
      share
      (“Diluted EPS”) is computed by dividing the net income by the weighted-average
      number of common shares and dilutive common share equivalents and warrants
      then
      outstanding. SFAS No. 128 requires the presentation of both Basic EPS and
      Diluted EPS on the face of the Company’s Condensed Statements of
      Income . Common
      share equivalents totaling 860,074 were excluded from the computation with
      respect to the three and nine months ended September 30, 2006 and for the period
      since inception on July
      13, 2005 to September 30, 2006, as their impact would have been
      anti-dilutive.




9




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




**For
                  the period****from
                  July 13, 2005****Three
                  months ended**
              
              **Nine
                  months ended**
              
              **(inception)****September
                  30, 2006**
              
              **September
                  30, 2006**
              
              **September
                  30, 2006****Numerator:**Net
                  Income
              
              $
              212,261
              
              $
              470,758
              
              $
              467,758**Denominator:**Weighted-average
                  common shares outstanding
              
              
              8,966,796
              
              
              6,419,048
              
              
              4,555,362Dilutive
                  effect of warrants
              
              
              2,773,402
              
              
              2,773,402
              
              
              2,773,402Weighted-average
                  common shares outstanding, assuming dilution
              
              
              11,740,198
              
              
              9,192,450
              
              
              7,328,764**Net
                  Income Per Share:**Basic
              
              $
              0.02
              
              $
              0.07
              
              $
              0.10Diluted
              
              $
              0.02
              
              $
              0.05
              
              $
              0.06




**4.**
            **Initial
                Public Offering**




On
      April
      5, 2006, the Company sold 7,079,687 units -- including 923,437 units subject
      to
      the underwriters’ over-allotment option -- ("Units") in the Offering. On March
      31, 2006, an additional 93,750 Units were sold in a private placement to the
      existing officers and directors, through an entity they own. Each Unit consists
      of one share of the Company’s common stock, $.0001 par value and one Redeemable
      Common Stock Purchase Warrant (“Warrant”). Each Warrant entitles the holder to
      purchase from the Company one share of common stock at an exercise price of
      $5.00 commencing the later of the completion of a business combination with
      a
      target business or one (1) year from the effective date of the Offering and
      expiring five (5) years from the effective date of the Offering. The Warrants
      will be redeemable by the Company at a price of $.01 per Warrant, upon thirty
      (30) days notice after the Warrants become exercisable, only in the event that
      the last sales price of the common stock is at least $11.50 per share for any
      twenty (20) trading days within a thirty (30) trading-day period ending on
      the
      third day prior to date on which notice of redemption is given. The warrants began trading separately from the Company’s common stock on May 19,
      2006. In connect ion
      with
      the Offering, the Company paid the underwriter a discount of 7% of the gross
      proceeds of the Offering.




**5.**
            **Notes
                Payable, Stockholders**





The
      Company issued unsecured promissory notes to all of the Company’s Initial
      Stockholders, amounting to $500,000, who are also officers. The notes are
      interest bearing and will be paid from the interest income from the Trust Fund
      immediately upon fully funding the $1,250,000 working capital budget. During
      the quarter ended September 30, 2006, notes to the amount of $140,000 were
      redeemed.




**6.**
            **Unit
                Option**




In
      connection with the Offering, the Company issued to the representative of the
      underwriters for $100, an option to purchase up to a total of 430,037 units,
      exercisable at $8.80 per unit (“Purchase Option”). In lieu of payment of the
      exercise price in cash, the holder of the Purchase Option has the right (but
      not
      the obligation) to convert any exercisable portion of the Purchase Option into
      units using a cashless exercise based on the difference between current market
      value of the units and its exercise price. The Warrants issued in conjunction
      with these units are identical to those sold in the Offering, except that they
      have an exercise price of $5.50 (110% of the exercise price of the Warrants
      included in the Units sold in the Offering). This option commences on the later
      of the consummation of a business combination and one (1) year from the date
      of
      the prospectus and expiring five (5) years from the date of the prospectus.
      Additionally, the option may not be sold, transferred, assigned, pledged or
      hypothecated for a one-year period (including the foregoing 180-day period)
      following April 5, 2006. However, the option may be transferred to any
      underwriter and selected dealer participating in the Offering and their bona
      fide officers or partners. The purchase option grants to holders demand and
      “piggy back” rights for periods of five (5) and seven (7) years, respectively,
      from April 5, 2006 with respect to the registration under the Securities Act
      of
      the securities directly and indirectly issuable upon exercise of the option.
      The
      Company will bear all fees and expenses attendant to registering the securities,
      other than underwriting commissions, which will be paid for by the holders
      themselves. The exercise price and number of units issuable upon exercise of
      the
      option may be adjusted in certain circumstances, including in the event of
      a
      stock dividend, or our recapitalization, reorganization, merger or
      consolidation. However, the option will not be adjusted for issuances of common
      stock at a price below its exercise price.




10




**7.**
            **Related
                Party Transaction**




The
      Company presently occupies office space in a location, provided by one affiliate
      of the Initial Stockholders. Such affiliate has agreed that, until the Company
      consummates a business combination, they will make such office space, as well
      as
      certain office and secretarial services, available to the Company, as may be
      required by the Company from time to time. The Company has agreed to pay such
      affiliates an aggregate of $5,000 per month for such services commencing on
      the
      effective date of the Offering. Upon completion of a business combination or
      liquidation, the Company will no longer be required to pay these monthly
      fees.




The
      Initial Stockholders, who are holders of 1,887,109 (including 93,750 shares
      purchased in the private placement and 230,859 shares purchased by exercising
      their option in full) issued and outstanding shares of common stock, are
      entitled to registration rights pursuant to an agreement signed on the effective
      date of the Offering. The holders of the majority of these shares are entitled
      to request the Company, on up to two (2) occasions, to register these shares.
      The holders of the majority of these shares can elect to exercise these
      registration rights at any time after the date on which these shares of common
      stock are released from escrow. In addition, these stockholders have certain
      "piggy-back" registration rights on registration statements filed subsequent
      to
      the date on which these shares of common stock are released from escrow. The
      Company will bear the expenses incurred in connection with the filing of any
      such registration statements.




**8.**
            **Preferred
                Stock**




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




**9.**
            **Common
                Stock**




On
      January 11, 2006, the Company’s Board of Directors authorized a one-for-two
      reverse split of its common shares. All references in the accompanying financial
      statements to the number of shares of stock have been retroactively restated
      to
      reflect these transactions.




11




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




**Forward
      Looking Statements**




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




**Critical
      Accounting Policies**




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




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




**Overview**




We
      were
      organized as a Delaware corporation on July 13, 2005, to serve as a vehicle
      to
      acquire, through a merger, capital stock exchange, asset acquisition or other
      similar business combination, an operating business in India. Our initial
      business combination must be with a target business or businesses whose fair
      market value is at least equal to 80% of net assets at the time of such
      acquisition. We intend to utilize cash derived from the proceeds of the
      Offering, our capital stock, debt or a combination of cash, capital stock and
      debt, in effecting a business combination.




**Results
      of Operations for the Three and Nine Months Ending September 30,
      2006**




We
      had a
      net income of $212,261 for the three month period ended September 30, 2006,
      primarily as a result of interest income received on funds held in trust (less
      interest income deferred as a result of the possible share subject to possible
      future redemption) offset in part by consulting and professional fees and other
      operating expenses. For the nine months ended September 30, 2006, we had a
      net
      income of $470,758, primarily as a result of interest income received on funds
      held in trust (less interest income deferred as a result of the possible share
      subject to possible future redemption) offset in part by consulting and
      professional fees and other operating expenses.




12


**Liquidity
      and Capital Resources**




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




Our
      net
      proceeds from the sale of our units, including amounts from exercise of the
      underwriters’ over-allotment option and the private placement, after deducting
      certain offering expenses of approximately $722,713, (including the proceeds
      from the underwriters’ over-allotment), and underwriting discounts of
      approximately $1,699,124, were approximately $55,350,251. Of this amount, as
      of
      September 30, 2006, $54,913,370 is being held in trust. The remaining proceeds
      are available to be used by us to provide for business, legal and accounting
      due
      diligence on prospective acquisitions and continuing general and administrative
      expenses. We will use substantially all of the net proceeds of the Offering
      to
      acquire a target business, including identifying and evaluating prospective
      acquisition candidates, selecting the target business, and structuring,
      negotiating and consummating the business combination. To the extent that our
      capital stock is used in whole or in part as consideration to effect a business
      combination, the proceeds held in the trust fund as well as the remainder of
      $1,250,000 funded from interest income earned on the trust fund not expended
      will be used to finance the operations of the target business. We believe we
      will have sufficient available funds outside of the trust fund to operate
      through April 5, 2008, assuming that a business combination is not consummated
      during that time. From April 5, 2006 through April 5, 2008, we anticipate
      approximately $150,000 of expenses for legal, accounting and other expenses
      attendant to the due diligence investigations, structuring and negotiation
      of a
      business combination, an aggregate of $120,000 for the administrative fees
      payable to Phoenix Capital Partners LLC (a total of $5,000 per month for two
      years), $250,000 for expenses for the due diligence and investigation of target
      businesses, $90,000 of expenses for legal and accounting fees relating to our
      SEC reporting obligations and $550,000 for general working capital that will
      be
      used for miscellaneous expenses and reserves. We do not believe we will need
      to
      raise additional funds in order to meet the expenditures required for operating
      our business. However, we may need to raise additional funds through a private
      or public offering of debt or equity securities if such funds are required
      to
      consummate a business combination that is presented to us. We would only
      consummate such a financing simultaneously with the consummation of a business
      combination.




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




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




**Off-Balance
      Sheet Arrangements**




We
      do not
      have any off-balance sheet arrangements.




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




Market
      risk is the sensitivity of income to changes in interest rates, foreign
      exchanges, commodity prices, equity prices, and other market-driven rates or
      prices. We are not presently engaged in and, if a suitable business target
      is
      not identified by us prior to the prescribed liquidation date of the trust
      fund,
      we may not engage in, any substantive commercial business. Accordingly, we
      are
      not and, until such time as we consummate a business combination, we will not
      be, exposed to risks associated with foreign exchange rates, commodity prices,
      equity prices or other market-driven rates or prices. The net proceeds of our
      initial public offering held in the trust fund have been invested only in money
      market funds meeting certain conditions under Rule 2a-7 promulgated under the
      Investment Company Act of 1940 or United States treasury bills. Given our
      limited risk in our exposure to these money market funds and treasury bills,
      we
      do not view the interest rate risk to be significant.




13


**Item
      4. Controls and Procedures.**




Our
      management carried out an evaluation, with the participation of our president
      and chief strategy officer (our principal executive officer, principal financial
      and accounting officer) of the effectiveness of our disclosure controls and
      procedures as of September 30, 2006. Based upon that evaluation, our president
      and chief strategy officer 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 accumulated and communicated to
      management (including such officers) as appropriate to allow timely decisions
      regarding required disclosures and recorded, processed, summarized, and reported
      within the time periods specified in the rules and forms of the Securities
      and
      Exchange Commission. There has been no significant change in our internal
      control over financial reporting in connection with the evaluation required
      by
      Rule 13a-15(d) under the Exchange Act that occurred during the quarter ended
      September 30, 2006, that has materially affected, or is reasonably likely to
      materially affect, our internal control over financial reporting.




**PART
      II - OTHER INFORMATION**




**Item
      1. Legal Proceedings.**




None




**Item
      1A. Risk Factors.**




**Risks
      associated with our business**




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




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




***If
      we are forced to liquidate before a business combination, our public
      stockholders will receive less than $8.00 per share upon distribution of the
      trust account and our warrants will expire worthless.***




If
      we are
      unable to complete a business combination and are forced to liquidate our assets
      (which will include the full amount in the trust account, including $2,265,500)
      held for the benefit of Rodman & Renshaw, LLC and any interest earned
      thereon (net of taxes payable)), the per-share liquidation price will be less
      than approximately $7.77 per share, plus interest, if any (net of taxes payable
      and up to $1,250,000 of interest earned on the trust account that may be
      released to us to fund our working capital and repay management loans) because
      of the expenses of our initial public offering, our general and administrative
      expenses and the anticipated costs of seeking a business combination.
      Furthermore, there will be no distribution with respect to our outstanding
      warrants and, accordingly, the warrants will expire worthless if we liquidate
      before the completion of a business combination.




14


***Our
      stockholders will not be entitled to protections normally afforded to investors
      of blank check companies.***




Since
      the
      net proceeds of the initial public offering are intended to be used to complete
      a business combination with one or more target businesses that have not been
      identified, we may be deemed to be a “blank check” company under the United
      States securities laws. However, since we had net tangible assets in excess
      of
      $5,000,000 upon the successful consummation of the initial public offering
      and
      filed a Current Report on Form 8-K with the Securities and Exchange Commission
      upon consummation of the initial public offering, including an audited balance
      sheet demonstrating this fact, we are exempt from rules promulgated by the
      Securities and Exchange Commission to protect investors of blank check
      companies, such as Rule 419. Accordingly, investors were not be afforded the
      benefits or protections of those rules. Because we believe we are not subject
      to
      Rule 419, our units will be immediately tradable, and we have a longer period
      of
      time to complete a business combination in certain circumstances.




***If
      third parties bring claims against us, the proceeds held in trust could be
      reduced and the per-share liquidation price received by stockholders may be
      less
      than $7.77 per share and the per share redemption price for redeeming
      stockholders could be less than $7.65.***




Our
      placing of funds in trust may not protect those funds from third party claims
      against us. Although we will seek to have vendors, prospective target businesses
      or other entities we hire or do business with execute agreements with us waiving
      any right, title, interest or claim of any kind in or to any monies held in
      the
      trust account for the benefit of our public stockholders, there is no guarantee
      that they will execute such agreements or, even if they execute such agreements,
      that they would be prevented from bringing claims against the trust account.
      If
      any third party refused to execute an agreement waiving such claims to the
      monies held in the trust account, we would perform an analysis of the
      alternatives available to us and evaluate if such engagement would be in the
      best interest of our stockholders. Examples of possible instances where we
      may
      engage a third party that has refused to execute a waiver include the engagement
      of a third party consultant whose particular expertise or skills are believed
      by
      management to be significantly superior to those of other consultants that
      would
      agree to execute a waiver or in cases where management is unable to find a
      provider of required services willing to provide the waiver. In addition, there
      is no guarantee that such entities will agree to waive any claims they may
      have
      in the future as a result of, or arising out of, any negotiations, contracts
      or
      agreements with us and will not seek recourse against the trust account for
      any
      reason. Accordingly, the proceeds held in trust could be subject to claims
      which
      could take priority over the claims of our public stockholders and the per-share
      liquidation price could be less than approximately $7.77, plus interest (net
      of
      taxes payable and up to $1,250,000 of interest earned on the trust account
      that
      may be released to us to fund our working capital and repay management loans),
      due to claims of such creditors. If we are unable to complete a business
      combination and are forced to liquidate, our officers and directors, severally,
      in accordance with their respective beneficial ownership interests in us, will
      be personally liable to ensure that the proceeds in the trust account are not
      reduced by the claims of various vendors (which does not include, for example,
      third party creditors) for services rendered or contracted for or products
      sold
      to us, but only to the extent necessary to ensure that such loss, liability,
      claim, damage or expense does not reduce the amount in the trust account.
      However, we cannot assure our stockholders that they will be able to satisfy
      those obligations. Further, they will not be personally liable to pay debts
      and
      obligations to prospective target businesses, if a business combination is
      not
      consummated with such prospective target businesses, or for claims from any
      entity other than vendors. Accordingly, the proceeds held in trust could be
      subject to claims which could take priority over the claims of our public
      stockholders and the per-share liquidation price could be less than
      approximately $7.77, plus interest (net of taxes payable and up to $1,250,000
      of
      interest earned on the trust account that may be released to us to fund our
      working capital and repay management loans), due to claims of such creditors.
      In
      addition, such third party claims could result in the per share redemption
      price
      received by stockholders who vote against a business combination and elect
      to
      redeem their shares for cash being less than approximately $7.65 per-share,
      plus
      interest (net of taxes payable and interest previously released to
      us).




15


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




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




***We
      will be dependent upon interest earned on the trust account to fund our search
      for a target company and consummation of a business
      combination.***




As
      of the
      date of this report, we have approximately $923,004 available to us outside
      the
      trust account to fund our working capital requirements. We will be dependent
      upon sufficient interest being earned on the proceeds held in the trust account
      to provide us with the additional working capital we will need to search for
      a
      target company and consummate a business combination. While we are entitled
      to
      the interest earned on the trust account (net of taxes payable), up to a maximum
      of $1,250,000 (of which we have received approximately $977,553 as of September
      30, 2006), for such purpose and to repay working capital loans from management
      (of which we repaid approximately $140,000 as of September 30, 2006), if
      interest rates were to decline substantially, we may not have sufficient funds
      available to complete a business combination. In such event, we would need
      to
      borrow funds from our insiders or others or be forced to liquidate.




***Because
      there are numerous companies with business plans similar to ours seeking to
      effectuate business combinations, it may be more difficult for us to do
      so.***




Since
      August 2003, based upon publicly available information, as of October 31, 2006,
      approximately 71 similarly structured blank check companies have completed
      initial public offerings, and numerous others have filed registration statements
      for initial public offerings. Of these companies, only nine companies have
      consummated a business combination, while 28 other companies have announced
      they
      have entered into a definitive agreement for a business combination, but have
      not consummated such business combination. While, like us, some of those
      companies have specific industries in which they must complete a business
      combination, a number of them may consummate a business combination in any
      industry they choose. Moreover, we know of at least two companies which have
      filed a registration statement and seek to consummate a business combination
      in
      India. We may, therefore, be subject to competition from these and other
      companies seeking to consummate a business plan similar to ours, which, as
      a
      result, would increase demand for privately-held companies to combine with
      companies structured similarly to ours. Further, the fact that only a few of
      such companies have completed a business combination or entered into a
      definitive agreement for a business combination, may be an indication that
      there
      are only a limited number of attractive target businesses available to such
      entities, or that many privately held or publicly held, target businesses may
      not be inclined to enter into business combinations with publicly held blank
      check companies like us. We cannot assure our stockholders that we will be
      able
      to successfully compete for an attractive business combination. Additionally,
      because of this competition, we cannot assure our stockholders that we will
      be
      able to effectuate a business combination within the required time periods.
      If
      we are unable to find a suitable target business within such time periods,
      we
      will be forced to liquidate.




16


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




Our
      certificate of incorporation authorizes the issuance of up to 89,000,000 shares
      of common stock, par value $.0001 per share, and 1,000,000 shares of blank
      check
      preferred stock, par value $.0001 per share. As of April 5, 2006, there were
      72,513,126 authorized but unissued shares of our common stock available for
      issuance (after appropriate reservation for the issuance of shares upon full
      exercise of our outstanding warrants) and all of the 1,000,000 shares of blank
      check preferred stock available for issuance. We may issue a substantial number
      of additional shares of our common stock or blank check preferred stock, or
      a
      combination of common and blank check preferred stock, to complete a business
      combination. The issuance of additional shares of our common stock or any number
      of shares of our blank check preferred stock:




•
            May
                significantly reduce the equity interest of current
                stockholders;




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




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




•
            May
                reduce the prevailing market prices for our common stock warrants
                and
                units.




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




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




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




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




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




17


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




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




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




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




18


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




Although
      none of our officers, directors or affiliates have previously been associated
      with any “blank check” companies, our officers and directors may in the future
      become affiliated with entities, including other “blank check” companies,
      engaged in business activities similar to those intended to be conducted by
      us.
      Additionally, our officers and directors may become aware of business
      opportunities which may be appropriate for presentation to us as well as the
      other entities with which they are or may be affiliated. Further, certain of
      our
      officers and directors are currently involved in merchant banking/private equity
      businesses. Due to these existing affiliations, they may have fiduciary
      obligations to present potential business opportunities to those entities prior
      to presenting them to us which could cause additional conflicts of interest.
      Accordingly, they may have conflicts of interest in determining to which entity
      a particular business opportunity should be presented.




***All
      of our officers and directors own shares of our common stock which will not
      participate in liquidation distributions and, therefore, they may have a
      conflict of interest in determining whether or not a particular target business
      is appropriate for a business combination.***




All
      of
      our officers and directors and their respective affiliates own shares of our
      common stock that were issued in connection with our formation (including shares
      underlying their anti-dilution options) as to which they have waived their
      right
      to receive distributions upon our liquidation or failure to complete a business
      combination. Additionally, our executive officers and directors have purchased,
      through an entity they own, an aggregate of 93,750 units in a private placement
      that occurred immediately prior to our initial public offering and have waived
      their liquidation rights with respect to the shares included in such units.
      The
      shares and warrants owned by our officers and directors and their affiliates
      will be worthless if we do not consummate a business combination. The personal
      and financial interests of our officers and directors may influence their
      motivation in identifying and selecting a target business and completing a
      business combination in a timely manner. Consequently, our directors’ and
      officers’ discretion in identifying and selecting a suitable target business may
      result in a conflict of interest when determining whether the terms, conditions
      and timing of a particular business combination are appropriate and in our
      public stockholders’ best interest.




***Our
      officers and directors own shares that are subject to early release from escrow
      if a business combination involves a change of control, and, therefore, they
      may
      have a conflict of interest in determining how to structure a business
      combination.***




The
      shares of common stock owned by our existing stockholders prior to our initial
      public offering have been placed into an escrow account and will only be
      released one year after we complete a business combination unless the business
      combination results in a change of control. In such event, the shares will
      be
      released from escrow immediately upon the completion of the transaction.
      Consequently, our officers and directors may have a conflict of interest in
      determining how to structure, in terms of cash and/or equity, a business
      combination. A change of control for this purpose means a consolidation or
      merger where our stockholders immediately prior to such transaction hold less
      than 50% of the voting stock of the surviving entity.




19




***Our
      officers and directors will not receive reimbursement for any out-of-pocket
      expenses incurred by them to the extent that such expenses exceed the available
      funds outside the trust account, unless the business combination is consummated
      and, therefore, they may have a conflict of interest in determining whether
      or
      not a particular target business is appropriate for a business combination
      and
      in the public stockholders’ best interest.***




Our
      officers and directors will not receive reimbursement for any out-of-pocket
      expenses incurred by them to the extent that such expenses exceed the available
      funds held outside the trust account and the portion of the interest earned
      on
      the trust account released to us (which, because interest rates are unknown,
      may
      be insufficient to fund all of our working capital requirements) unless the
      business combination is consummated. The personal and financial interests of
      our
      officers and directors could influence their motivation in selecting a target
      business and, thus, there may be a conflict of interest when determining whether
      or not a particular business combination is in the stockholders’ best
      interest.




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




Although
      we believe that the net proceeds of our initial public offering will be
      sufficient to allow us to consummate a business combination, as we have not
      yet
      identified any prospective target business, we cannot ascertain the capital
      requirements for any particular transaction. If we have insufficient funds,
      either because of the size of the business combination or the depletion of
      the
      available net proceeds (including interest earned on the trust account released
      to us) in search of a target business, or because we become obligated to redeem
      for cash a significant number of shares from dissenting stockholders, we will
      be
      required to seek additional financing. We cannot assure our stockholders that
      such financing would be available on acceptable terms, if at all. To the extent
      that additional financing proves to be unavailable when needed to consummate
      a
      particular business combination, we would be compelled to restructure the
      transaction or abandon that particular business combination and seek an
      alternative target business candidate. In addition, it is possible that we
      could
      use a portion of the funds not held in the trust account to make a deposit,
      down
      payment or fund a “no-shop, standstill” provision with respect to a particular
      proposed business combination, although we do not have any current intention
      to
      do so. In the event that we were ultimately required to forfeit such funds
      (whether as a result of our breach of the agreement relating to such payment
      or
      otherwise), we may not have a sufficient amount of working capital available
      outside of the trust account to conduct due diligence and pay other expenses
      related to finding a suitable business combination without securing additional
      financing. If we were unable to secure additional financing, we would most
      likely fail to consummate a business combination in the allotted time and would
      be forced to liquidate. In addition, if we consummate a business combination,
      we
      may require additional financing to fund the operations or growth of the target
      business. The failure to secure additional financing could limit the development
      or growth of the target business. None of our officers, directors or
      stockholders is required to provide any financing to us in connection with
      or
      after a business combination.




**Risks
      associated with the outsourcing industry in India**




***There
      is intense competition in the market for outsourcing
      services.***




Certain
      factors may affect the competitive landscape in the outsourcing industry,
      including divestitures and acquisitions that result in consolidation within
      the
      industry. These changes may result in larger competitors with significantly
      more
      resources. In addition, some competitors may add or announce plans to add
      cost-competitive offshore capabilities to their outsourcing service offerings.
      These competitors may be able to offer their services using the offshore and
      onsite model more efficiently than the acquired business. A number of these
      competitors may also have significantly more experience with international
      operations and significantly greater financial, technical and marketing
      resources, generate greater revenues, have more extensive existing client
      relationships and technology partners and have greater brand recognition than
      the acquired business. Consequently, following a business combination, we may
      be
      unable to compete successfully against these competitors.




20


***An
      acquired businesses’ revenues could be significantly affected if the laws of the
      government in which it operates, restrict companies from outsourcing work to
      foreign companies.***




In
      the
      United States, despite some economic recovery, unemployment levels have not
      declined significantly from the pre-economic recovery levels. There has been
      concern among the legislators about the impact of outsourcing on unemployment
      levels in the United States. For example, legislation has been proposed to
      prohibit federal and state governments from outsourcing IT and IT enabled
      services to foreign companies. Legislators have also proposed to introduce
      economic deterrents for U.S. companies outsourcing work to foreign companies.
      If
      such proposed laws come into effect, we could be prevented from performing
      certain outsourcing services.




***Wage
      pressures in India may prevent an acquired company from sustaining a competitive
      advantage and may reduce its profit margins.***




Wage
      costs in India have historically been significantly lower than wage costs in
      the
      United States and Europe for comparably skilled professionals, which we expect
      will be one of the competitive strengths of a company we acquire. However,
      if,
      following a business combination, wages for skilled professionals increase
      in
      India, we may not be able to sustain this competitive advantage, which could
      negatively affect profit margins. In addition, we may need to increase the
      levels of an acquired company’s employee compensation to remain competitive with
      other employers, or seek to recruit in other low labor cost areas to keep its
      wage costs low. Compensation increases may result in decreased
      profitability.




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




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




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




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




21


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




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




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




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




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




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




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




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




22


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




•
            Levying
                fines;


•
            Revoking
                our business and other licenses;
                and


•
            Requiring
                that we restructure our ownership or
                operations.




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




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




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




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




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




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




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




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




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




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





23


***If
      we liquidate, the procedures we must follow under Delaware law are
      time-consuming and may result in residual liability for our
      stockholders***




If
      we do
      not consummate a business combination by the later of August 5, 2007, or April
      5, 2008 in the event that a letter of intent, an agreement in principle or
      a
      definitive agreement to complete a business combination was executed but not
      consummated by August 5, 2007, then, pursuant to Article SIXTH of our
      certificate of incorporation, and in accordance with Section 281(b) of the
      Delaware General Corporation Law, we will adopt a plan of dissolution, and
      as
      soon as reasonably possible after dissolution, make liquidating distributions
      to
      our stockholders.




Under
      the
      Delaware General Corporation Law, stockholders may be held liable for claims
      by
      third parties against a corporation to the extent of distributions received
      by
      them in a dissolution. To mitigate against this possibility, we have received
      executed agreements from our vendors waiving any right, title, interest or
      claim
      of any kind in or to any monies held in the trust account. As a result of this,
      the claims that could be made against us are significantly limited and the
      likelihood that any claim would result in any liability extending to the trust
      account is minimal. If we wind up our affairs in compliance with either Section
      280 or 281(b) of the Delaware General Corporation Law following a dissolution,
      pursuant to Section 282 of the Delaware General Corporation Law, the potential
      liability of our stockholders will be limited to the lesser of the stockholder’s
      pro-rata share of any claim or the amount distributed to the stockholder. As
      we
      do not anticipate seeking dissolution under the complex procedures of Section
      280, we expect that, in accordance with Section 281(b), we will be required
      to
      seek stockholder approval of a plan of dissolution to provide for our payment,
      based on facts known to us at such time, of existing and pending claims,
      and claims that may be potentially brought against us within the subsequent
      10 years. We
      estimate the costs associated with the implementation and completion of such
      a
      plan of dissolution and liquidation, to be approximately $50,000 to $75,000,
      whic h
      would
      be funded by any funds not held in our trust account and funds released to
      Stone
      to fund working capital.




The
      procedures required for us to liquidate under the DGCL, or a vote to reject
      any
      plan of dissolution and distribution by our stockholders, may result in
      substantial delays in the liquidation of our trust account to our public
      stockholders as part of our plan of dissolution and distribution.




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




Not
      applicable.




**Item
      3. Defaults Upon Senior Securities.**




Not
      applicable.




24


**Item
      4. Submission of Matters to a Vote of Security Holders.**




Not
      applicable.




**Item
      5. Other Information.**




Not
      applicable.




**Item
      6. Exhibits.**







(b)
            Exhibits





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




32
            Certification
                of the Principal Executive Officer and Principal Financial Officer
                pursuant to18
                U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley
                Act of 2002.







25




**SIGNATURES**




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




PHOENIX
              INDIA
              ACQUISITION CORP.Date: November
              14, 2006
            By:
            /s/ Ramesh
              AkellaRamesh
                Akella
              President,
                Chief Strategy Officer and Director(Principal
              Executive Officer and Principal Financial
              Officer)




26