**UNITED
      STATES**


**SECURITIES
      A** **ND
      EXCHANGE COMMISSION**


**WASHINGTON,
      D.C. 20549**




**FORM
      10-Q**




**x**
            **Quarterly
                Report Pursuant to Section 13 or 15(d) of the Securities Exchange
                Act of
                1934**




**for
      the quarterly period ended** **March
      31, 2008** **.**




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
            (I.R.S.
                EmployerIncorporation
                or Organization)
            Identification
                No.)




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


(Address
      of Principal Executive Offices including Zip Code)




**(212)
      734-4600**


(Registrant’s
      Telephone Number, Including Area Code)




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




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




Large
      Accelerated Filer ~  Accelerated
      Filer ~  Non-Accelerated
      Filer _




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




There
      were  8,966,796
      shares of the Registrant’s common stock issued and outstanding as of March 31,
      2008.











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




**Part
                I.**
            
            **Financial
                Information (put in page numbers)**
            
            3Item
                1. Financial Statements (unaudited)Balance
                Sheets
            
            3Statements
                of Operations
            
            4Statement
                of Stockholders’ Equity
            
            5Statements
                of Cash Flows
            
            6Notes
                to Financial Statements
            
            7Item
                2. Management’s Discussion and Analysis of Financial Condition and Results
                of Operations
            
            12Item
                3. Quantitative and Qualitative Disclosures about Market
                Risk
            
            13Item
                4. Controls and Procedures
            
            13**Part
                II.**
            
            **Other
                Information**
            
            13Item
                1. Legal Proceedings
            
            13Item
                1A. Risk Factors
            
            13Item
                2. Unregistered Sales of Equity Securities and Use of
                Proceeds
            
            27Item
                3. Defaults Upon Senior Securities
            
            27Item
                4. Submission of Matters to a Vote of Security Holders
            
            27Item
                5. Other Information
            
            27Item
                6. Exhibits
            
            28SIGNATURES
            
            29










**PART
      I - FINANCIAL INFORMATION**




**Item
      1 - Financial Statements**


**PHOENIX
        INDIA ACQUISITION CORP.** (a
          corporation in the development stage)
 **BALANCE
        SHEETS**
  **March
                  31, 2008**
              
              **December
                  31, 2007****ASSETS**
              
              (Unaudited)
              
              (Audited)Current
                  assets:Cash
              
              $
              31,481
              
              $
              227,322Cash
                  held in trust account
              
              
              58,214,833
              
              
              57,715,997Accrued
                  interest receivable
              
              
              112,444
              
              
              116,279Prepaid
                  expenses
              
              
              -
              
              
              13,750**Total
                  assets**
              
              $
              58,358,758
              
              $
              58,073,348**Liabilities
                  and Stockholders' Equity**Current
                  and total liabilities:Accounts
                  payable and accrued expenses
              
              $
              734,272
              
              $
              433,080Income
                  taxes payable
              
              
              671,408
              
              
              671,408Notes
                  payable, stockholders
              
              
              21,321Deferred
                  underwriting fees
              
              
              2,265,500
              
              
              2,265,500**Total
                  current and total liabilities**
              
              
              3,692,502
              
              
              3,369,988Common
                  stock subject to redemption, 1,415,221 shares at redemption value
                  of
                  $8.03
              
              
              11,403,213
              
              
              11,403,213Stockholders'
                  Equity:Preferred
                  stock, $0.0001 par value, authorized 1,000,000 shares; none
                  issued
              
              
              -
              
              
              -Common
                  stock, $0.0001 par value, authorized 89,000,000 shares, issued
                  and
                  outstanding 8,966,796 shares
              
              
              897
              
              
              897Paid-in
                  capital in excess of par
              
              
              41,327,209
              
              
              41,327,209Earnings
                  accumulated during the development stage
              
              
              1,934,938
              
              
              1,972,041Total
                  stockholders' equity
              
              
              43,263,044
              
              
              43,300,147**Total
                  liabilities and stockholders' equity**
              
              $
              58,358,758
              
              $
              58,073,348


*See
        accompanying notes to financial statements*


3


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


**STATEMENT
      OF OPERATIONS**





**For
                the period****from
                July 13, 2005****Three
                months ended March
                31,**
            
            **(inception)
                to****2008**
            
            **2007**
            
            **March
                31, 2008**Revenues:Interest
                income
            
            $
            495,001
            
            $
            729,152
            
            $
            5,460,926Total
                revenues
            
            
            495,001
            
            
            729,152
            
            
            5,460,926Expenses:General
                and administrateive expenses
            
            
            532,104
            
            
            120,372
            
            
            2,015,680Income
                before provision for income taxes
            
            
            (37,103
            )
            
            608,780
            
            
            3,395,246Provision
                for income taxes
            
            
            -
            
            
            213,073
            
            
            1,460,308Net
                income
            
            $
            (37,103
            )
            $
            395,707
            
            $
            1,934,938Weighted
                average shares outstanding:Basic
            
            
            8,966,796
            
            
            8,966,796
            
            
            6,994,782Diluted
            
            
            8,966,796
            
            
            11,740,198
            
            
            10,044,090Net
                income (loss) per share, basic
            
            $
            (0.00
            )
            $
            0.04
            
            $
            0.28Net
                income (loss) per share, diluted
            
            $
            (0.00
            )
            $
            0.03
            
            $
            0.19


*See
      accompanying notes to financial statements*




4




**PHOENIX
        INDIA ACQUISITION CORP.** (a
          corporation in the development stage)
 **STATEMENTS
        OF STOCKHOLDERS' EQUITY**
 **For
        the period from July 13, 2005 (inception) to March 31, 2008** (UNAUDITED)
  EarningsCommon
                  Stock
              
              Paid-in
              
              AcccumulatedPar
                  Value
              
              Capital
                  in
              
              During
                  the
              
              Total$0.0001
              
              Excess
                  of
              
              Development
              
              Stockholders'Shares
              
              Amount
              
              Par
              
              Stage
              
              EquityStock
                  issuance
              
              
              1,562,500
              
              $
              157
              
              $
              24,843
              
              $
              -
              
              $
              25,000Net
                  loss
              
              
              
              
              
              
              
              
              
              
              
              (3,000.00
              )
              
              (3,000.00
              )**Balance**,
                  at December 31, 2005
              
              
              1,562,500
              
              
              157
              
              
              24,843
              
              
              (3,000.00
              )
              
              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
              )Adjustment
                  in value of shares subject to possible conversion
              
              
              
              
              
              
              
              
              (576,708
              )
              
              
              
              
              (576,708.00
              )**Net
                  income**
              
              
              -
              
              
              -
              
              
              -
              
              
              1,975,041
              
              
              1,975,041**Balance**,
                  at December 31, 2007
              
              
              8,966,796
              
              
              897
              
              
              41,327,209
              
              
              1,972,041
              
              
              43,300,147**Net
                  income**
              
              
              
              
              
              
              
              
              
              
              
              (37,103
              )
              
              (37,103
              )**Balance**,
                  at March 31, 2008
              
              
              8,966,796
              
              $
              897
              
              $
              41,327,209
              
              $
              1,934,938
              
              $
              43,263,044


*See
        accompanying notes to financial statements*


5


**PHOENIX
        INDIA ACQUISITION CORP.**
 **(a
        corporation in the development stage)**
  **STATEMENTS
        OF CASH FLOW**
 **(UNAUDITED)**
  **For
                  period****from
                  July 13,****2005****For
                  the Three Months Ended**
              
              **(inception)
                  to****March
                  31,**
              
              **March
                  31,****2008**
              
              **2007**
              
              **2008****Cash
                  flows from operating activities**Net
                  income (loss)
              
              $
              (37,103
              )
              $
              395,707
              
              $
              1,934,938Adjustment
                  to reconcile net loss to net cashprovided
                  by operating activities:Decrease
                  (increase) in accrued interest receivable
              
              
              3,835
              
              
              4,101
              
              
              (112,444
              )Increase
                  in prepaid expenses
              
              
              13,750
              
              
              20,500
              
              
              -(Decrease)
                  increase in accounts payable and accrued expenses
              
              
              301,192
              
              
              (111,660
              )
              
              695,473Income
                  taxes payable
              
              
              -
              
              
              (423,928
              )
              
              671,408**Net
                  cash provided by (used in) operating
                  activities**
              
              
              **281,674**
              
              
              **(115,280**
              **)**
              
              **3,189,375**Cash
                  flows from investing activities:Trust
                  account proceeds
              
              
              (498,836
              )
              
              (730,835
              )
              
              (58,214,833
              )**Net
                  cash used in investing activities**
              
              
              **(498,836**
              **)**
              
              **(730,835**
              **)**
              
              **(58,214,833**
              **)**Cash
                  flows from financing activities:Proceeds
                  from notes payable, stockholders
              
              
              21,321
              
              
              -
              
              
              221,321Repayment
                  of notes payable, stockholders
              
              
              -
              
              
              -
              
              
              (200,000
              )Gross
                  proceeds from public offering
              
              
              -
              
              
              -
              
              
              56,637,496Gross
                  proceeds from private offering
              
              
              -
              
              
              -
              
              
              750,000Proceeds
                  from exercise of management options
              
              
              -
              
              
              -
              
              
              (2,380,575
              )Payment
                  of offering costs
              
              
              -
              
              
              -
              
              
              3,697Proceeds
                  from sale of common stock
              
              
              -
              
              
              
              
              
              25,000Payment
                  of deferred offering costs
              
              
              -
              
              
              -**Net
                  cash provided from financing activities**
              
              
              **21,321**
              
              
              **-**
              
              
              **55,056,939**Net
                  increase in cash
              
              
              (195,841
              )
              
              (846,115
              )
              
              31,481Cash,
                  beginning of period
              
              
              227,322
              
              
              1,085,202
              
              
              -Cash,
                  end of period
              
              $
              31,481
              
              $
              239,087
              
              $
              31,481Cash
                  paid during the period for:Interest
              
              $
              -
              
              $
              -
              
              $
              -Income
                  taxes
              
              $
              -
              
              $
              272,029
              
              $
              788,900Supplemental
                  non-cash financing transactionsAccrual
                  of costs of public offering
              
              $
              -
              
              $
              -
              
              $
              2,419,371


*See
        accompanying notes to financial statements*




6




**NOTES
      TO UNAUDITED FINANCIAL STATEMENTS**


**March
      31, 2008**





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





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





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





***Introduction***





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





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





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





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





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





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





***Industry
      Overview***





The
      terrain and prevailing wind conditions make numerous locations in India ideal
      for wind energy generation. The South-West monsoon winds, which begin in April
      and weaken around September, provide a steady flow of wind starting in the
      Indian Ocean and gradually moving in a north-east direction. During the peak
      wind season (predominantly July), surface wind speeds exceeding 12 to 20 miles
      per hour are experienced over Western India, Southern Tamil Nadu, Saurashtra,
      the Kutch regions and coastal Bengal. Strong upper winds (500 feet or more
      above
      ground level) are found in the interior peninsula, Western Madhya Pradesh,
      Rajasthan and Saurashtra during the peak monsoon season. During the winter
      months, the large scale air flow reverses, and moves from the Himalayan belt
      towards the Indian Ocean, which is known as the North-East monsoon. Wind speeds
      over 6 miles per hour are experienced during this period in Orissa, Saurashtra,
      Kutch and Southern Tamil Nadu.




7





India's
      wind power potential is presently assessed at around 70,000 MW, and is expected
      to be scaled up even higher as WTG technology improves and more states are
      surveyed. However, despite the ideal conditions for wind energy in India, it
      has
      been a dormant industry until recently.





Government
      initiatives in the late 1980s first promoted the development of wind energy
      in
      India. The Government's wind power program included a comprehensive wind
      resource assessment program, research and development, implementation of
      demonstration projects to create awareness, development of infrastructure
      capability (such as development of the grid systems), capacity of support
      services such as installation, operation and maintenance of the wind turbines
      and policy formulation. Both Union and State Governments introduced policies
      that encouraged private investment in the wind energy sector. One of the most
      effective of these policies was that which allowed the entire cost of installing
      a wind energy power plant to be depreciated and written off in the year of
      installation. Further, SEBs, the State Government power grids, were required
      to
      purchase power generated by wind energy plants at competitive rates and pursuant
      to long-term PPAs. The wind energy generator, on the other hand, was not
      obligated to sell the power to the grid, and could sell the power to industry
      if
      better rates were available.





The
      promotion of wind energy through these, and other Government incentives, led
      to
      an increase in the development of wind energy generation in India. Over the
      last
      five to ten years, many new Wind Energy Assets were constructed by wind turbine
      manufacturers on a fixed cost turnkey basis, who then sold partial interests
      in
      the wind farms to private (and often non-energy sector) enterprises, who wished
      to avail themselves of the tax incentives offered. Companies generally purchased
      relatively small holdings of Wind Energy Assets within larger wind farms
      (generally assets aggregating to around 7 MW in capacity), and used the tax
      incentives to shelter their unrelated corporate income. While an average wind
      farm in India may range in size between 30 MW to 150 MW, it typically has
      multiple owners with individual ownership interests ranging in size from 0.25
      MW
      to 25 MW.





The
      Government's promotion of wind energy also prompted the development of a support
      industry to the wind energy industry. Indian companies began manufacturing
      wind
      turbines for the local market, which historically had been manufactured in
      Europe. A number of these Indian companies were collaborations with foreign
      manufacturers, manufacturing wind turbines through joint ventures or under
      licensing arrangements. However, in recent years there has been a growth in
      the
      number of local manufacturers of wind turbines and components, such as Suzlon
      Energy Limited, which is fast emerging as a major multinational company in
      the
      field of wind energy. India now exports wind energy parts to the United States,
      Australia, China, South Korea and Japan, and the Indian wind turbine and
      component manufacturing industry is expected to become a net exporter by 2012.
      Most wind turbine manufacturers also construct and commission wind farms,
      delivering complete turnkey projects to customers.





In
      addition to the manufacture of wind turbines, a burgeoning service industry
      has
      developed for the planning, development, installation and operation and
      maintenance of Wind Energy Assets in India, and for the supply of spare parts,
      tools and lubricants.


Given
      the
      nature of its development in India, the wind energy industry is fragmented,
      and
      there are currently about 800 privately owned Wind Energy Assets in India,
      mostly owned by passive owners, for whom power generation is not a part of
      their
      core business. Small scale owners generally own a number of Wind Energy Assets
      within a larger wind farm that has been developed in a suitable location. Each
      wind farm has one or more PPAs for the sale of the generated electricity to
      the
      relevant SEB, or directly to third party purchasers through a PPA, and an
      associated transmission or wheeling and/or banking agreement with the relevant
      transmission company.





If
      power
      is not used by a captive, i.e., for internal consumption or through long-term
      PPAs, it is sold to third party users either on a long-term or short-term basis
      (spot) through the power grid owned or operated by a power distribution company.
      This grid may be local, regional, national, or a combination thereof. Depending
      on the maturity of the power industry, power producers may sell the power to
      end
      users and use the grid as a "wheeling" mechanism. "Wheeling" is the service
      provided by the grid whereby it picks up power from a power producer at one
      point on the grid, and delivers that power to a customer at another point on
      the
      grid that could be hundreds or thousands of miles away.





"Banking"
      is another mechanism of ensuring continuity of revenue from wind farms. As wind
      energy produces power with a degree of volatility - the power produced varies
      by
      hour, day, week and month (though not much by year) - and most consumers require
      a steady supply of power, the grid may provide a "banking service." This is
      a
      balancing mechanism whereby the grid picks up power from producers with output
      volatility, and supplies power to consumers on a steady basis. In some Indian
      states the banking arrangements last for one year, which means that a power
      producer can supply a given number of generation units in any year to the grid,
      and these units can be sold to consumers over the course of the
      year.




8





Even
      though wind energy is a low maintenance operation, in most instances the owners
      of Wind Energy Assets in India have outsourced the responsibility of the
      operation and maintenance of the Wind Energy Assets to third party contractors.
      In addition, the typical operation is generally too small to benefit from the
      sale of carbon credits attributable to the Wind Energy Assets. In many cases,
      having derived the "tax holiday" at the outset, many owners appear to have
      been
      content to keep their investment as a passive investment. It is anticipated
      that
      some would prefer to sell their assets and exit the industry, if a buyer were
      available. The Company's strategy is to provide an exit option for many of
      these
      passive Wind Energy Asset owners, and subsequently aggregate these small
      holdings to take advantage of ongoing tax incentives, access to capital markets
      that are not readily available to small power plants, and carbon credits through
      the expansion of existing assets. As far as the Company is aware, to date there
      have been almost no re-sales of existing Wind Energy Assets in
      India.





The
      Company intends to focus its wind energy development efforts predominantly
      in
      the states of Tamil Nadu, Maharashtra, Karnataka, Rajasthan, Gujarat and Andhra
      Pradesh. The wind conditions in these states are suitable for wind energy
      generation, the states are highly industrialized, and as such, have
      significantly higher per capita demand for power. Further, the State Governments
      in these states have implemented policies that support the development of wind
      energy generation.




Cash
      and
      cash equivalents




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




Net
      Income (Loss) Per Common Share




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




Derivative
      Financial Instrument




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




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




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




Use
      of
      Estimates





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





*Income
      Taxes*





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




9





The
      effective tax rate differs from the statutory rate of 35.5% 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.
      Income Taxes**





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





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





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




4.Notes
      Payable, Stockholders




The
      Company issued unsecured promissory notes to management of the Company totaling
      $21,321 on March 30, 2008. The Notes bear interest
      at the rate of 4% per annum.




5. **Related Party Transaction**




The
      Company has agreed to pay Phoenix Capital Partners LLC, a company of which
      an
      executive officer is the sole member, an administrative
      fee of $5,000 per month for office space and general and administrative services
      from the effective date of the Public Offering through
      the acquisition date of a target business. Total payments totaled $15,000 for
      the quarter ended March 31, 2008.





6. **Preferred Stock**




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




7. **Per Share Information**




In
      accordance with SFAS No. 128, “Earnings Per Share”, basic earnings per common
      share (“Basic EPS”) is computed by dividing the net income
      by
      the weighted-average number of shares outstanding. Diluted earnings per common
      share (“Diluted EPS”) are computed by dividing the
      net
      income by the weighted-average number of common shares and dilutive common
      share
      equivalents and warrants then outstanding. SFAS
      No.
      128 requires the presentation of both Basic EPS and Diluted EPS on the face
      of
      the Company’s Condensed Statements of Income. Common
      share equivalents totaling 860,074 were excluded from the computation with
      respect to the three months ended March 31, 2008 and for the period since
      inception on July 13, 2005 to March 31, 2008, as their impact would have been
      anti-dilutive.


10


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




**PHOENIX
      INDIA ACQUISITION CORP.**


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




**For
                the period****from
                April 13, 2005****Three
                Months Ended March 31,**
            
            **to****2008**
            
            **2007**
            
            **March
                31, 2008****Numerator:**Net
                Income (loss)
            
            $
            (37,103
            )
            $
            395,707
            
            $
            1,934,938**Denominator:**Weighted-average
                common shares outstanding
            
            
            8,966,796
            
            
            8,966,796
            
            
            6,994,782Dilutive
                effect of warrants
            
            
            -
            
            
            2,773,402
            
            
            3,049,308Weighted-average
                common shares outstanding, assuming dilution
            
            
            8,966,796
            
            
            11,740,198
            
            
            10,044,090**Net
                Income Per Share:**Basic
            
            $
            (0.00
            )
            $
            0.04
            
            $
            0.28Diluted
            
            
            (0.00
            )
            $
            0.03
            
            $
            0.19




8. **Subsequent Events**




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





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.
      We can pursue an acquisition of a target for cash, our capital stock, debt
      or a
      combination of cash, capital stock and debt, in effecting a business combination.




**Results
      of Operations** **for the Three Months Ending March 31, 2008**




For
      the
      quarter ended March 31, 2008, we had a net loss of $37,103, primarily as a
      result of interest income received on funds held
      in
      trust offset in part by consulting and professional fees and other operating
      expenses.




For
      the
      quarter ended March 31, 2008 the trust account earned interest of
      $495,001.




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
      $55,350,000. Of this amount, as of March 31, 2008,
      $58,214,833, is being held in trust. The remaining proceeds were 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 anticipated 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 will need to raise additional funds through a private or public
      offering of debt or equity securities if such funds are required to consummate
      the transaction.





12




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




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




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





**Off-Balance
      Sheet Arrangements.**




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




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




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





**Item
      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 March 31, 2008. 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 March 31, 2008, that has materially affected, or is
      reasonably likely to materially affect, our internal control over financial
      reporting.




**PART
      II - OTHER INFORMATION**




**Item
      1. Legal Proceedings.**




None




**Item
      1A. Risk Factors.**





**Risks
      associated with our business**





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




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




13





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





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





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





Our
      certificate of incorporation authorizes the issuance of up to 89,000,000 shares
      of common stock, par value $.0001 per share, and 1,000,000 shares of blank
      check
      preferred stock, par value $.0001 per share. As of March 31, 2008, there
      were 80,033,234 authorized but unissued shares of our common stock available
      for
      issuance (after appropriate reservation for the issuance of shares upon full
      exercise of our outstanding warrants) and all of the 1,000,000 shares of blank
      check preferred stock available for issuance. We will issue a substantial number
      of additional shares of our common stock or blank check preferred stock, or
      a
      combination of common and blank check preferred stock, to complete a business
      combination. The issuance of additional shares of our common stock or any number
      of shares of our blank check preferred stock:




·
            Will
                significantly reduce the equity interest of current stockholders;





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





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





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





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





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





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





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





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





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





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





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





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





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





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




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




14





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





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





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





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





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





If
      we
      have insufficient funds to complete the proposed transaction through our private
      placement efforts, we will be required to seek additional financing. We cannot
      assure our stockholders that such financing would be available on acceptable
      terms, if at all. To the extent that additional financing proves to be
      unavailable when needed to consummate the proposed transaction, we would be
      compelled to restructure the transaction or abandon it altogether and seek
      an
      alternative target business candidate. In addition, we may not have a sufficient
      amount of working capital available to finding an alternate suitable business
      combination without securing additional financing. If we were unable to secure
      additional financing, we would most likely fail to consummate a business
      combination. In addition, if we consummate an alternate business combination,
      we
      may require additional financing to fund the operations or growth of the target
      business. The failure to secure additional financing could limit the development
      or growth of the target business. None of our officers, directors or
      stockholders is required to provide any financing to us in connection with
      or
      after a business combination.





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





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




15





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





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





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





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




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




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





**Risks
      associated in India**





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




16







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





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





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





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





***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.




17





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.





**Risks
      Related to Our Business and Operations Following the
      Transaction**




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




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




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




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




18




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




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




***Our
      liquidity or ability to raise capital may be limited***




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




***The
      Target has no operating history in power generation***




To
      date,
      the Target does not own any power generation assets, and has not earned any
      revenue, though it has entered into binding Purchase Agreements to acquire
      Wind
      Energy Assets representing an aggregate of 412 MW of generation capacity and
      has
      offered or has entered into memoranda of understanding to acquire an additional
      1,461 MW of new constructs. It may be difficult, therefore, to evaluate the
      Target's current or future prospects. Companies in their initial stages of
      development present substantial business and financial risks and may suffer
      significant losses.




***The
      Target does not have legal title to any existing wind or other renewable energy
      assets***




The
      Target has entered into binding Purchase Agreements to purchase Wind Energy
      Assets with a total aggregate generation capacity of 412 MW, but as at the
      date
      of this Memorandum, does not have legal title to any of these assets. In order
      to acquire valid legal title to the aforesaid Wind Energy Assets, consent is
      required to be obtained from the lenders in whose favour the land and/or other
      Wind Energy Assets are charged, and the owners/lessors of the leasehold land
      where the Wind Energy Assets are located, if necessary. Furthermore, the consent
      of the respective contract counterparties is required to be obtained for the
      assignment of the PPAs, O&M contracts and other ancillary agreements
      relating to the Wind Energy Assets. If such consents are not forthcoming, the
      Target will be unable to complete the Purchase Agreements for the Wind Energy
      Assets, which will have an adverse effect on the business, financial condition
      and results of operations of the Target.




***The
      Target may not be able to acquire subsequent wind or other renewable energy
      assets, or construct new wind energy assets***




While
      the
      Target has identified a number of potential acquisition targets, the Target
      can
      give no assurance that the Target will be able to conclude transactions on
      acceptable terms in respect of desirable acquisition targets so as to reach
      the
      Target's intended initial goal of acquiring over 1,000 MW of existing generation
      capacity within 12 to 18 months of financial close of this transaction, or
      its
      long-term generation capacity target of up to 3,000 MW of renewable energy
      assets in the first five years of the Target's operations. The terms of the
      Purchase Agreements are such that the acquisition is subject to the satisfactory
      completion of due diligence, the transfer of necessary licences and the
      obtaining of any necessary third party consents. If the outcome of due diligence
      is unfavorable, the necessary licences are not transferred and/or consents
      are
      not obtained, or simply if the Target does not have sufficient funds, it will
      not be able to acquire the assets. Further, the Target expects to construct
      approximately 1,000 MW of generation capacity through new developments of Wind
      Energy Assets within two years of the financial close of this transaction.
      However, as of the date of this Memorandum, the Target has not yet entered
      into
      any binding turnkey construction contracts for the development of new assets.
      Therefore, failure by the Target to acquire existing assets, or to construct
      new
      developments of assets, would have a material adverse effect on our business,
      financial condition and results of operations.




***The
      Target is relying on funding from this Transaction, and future equity and debt
      financing, to acquire the assets for the Target's
      business***




The
      acquisition of Wind Energy Assets and other renewable energy assets is subject
      to the Target obtaining sufficient funding. The Target is a pre-revenue
      enterprise, and, accordingly, is reliant on the success of this business
      combination to acquire funding to build the asset base required for the Target
      to operate its business. If this Transaction does not raise sufficient funding,
      the Target will be unable to acquire all, or any of the assets outlined in
      the
      PPM. The Target cannot give any assurances that this transaction will deliver
      the necessary funding to enable the Target to acquire or develop renewable
      energy assets, and this would have a significant negative impact on the
      operations of the Target, its financial condition and results, and its ability
      to meet its objectives.




19




The
      Target is seeking debt capital to finance future acquisitions. However, the
      debt
      and equity funding made available may not suffice to fully finance 1,000 MW
      of
      Wind Energy Assets in the coming two years, nor to acquire up to 3,000 MW of
      renewable energy assets by 2012. Should future funding be insufficient, the
      Target will be unable to continue acquiring or developing assets for the
      Target's business. The Target cannot give any assurances that future equity
      and/or debt funding will be available to the necessary extent, if at all, to
      enable the Target to continue acquiring or developing additional renewable
      energy assets, and this would have a significant negative impact on the
      operations of the Target, its financial condition and results, and its ability
      to meet its objectives.




Moreover,
      competitors of the Target with greater resources, immediate access to funding
      and/or an established presence in the market could acquire desirable Wind Energy
      Assets before the Target obtains financing and can conclude binding purchase
      agreements for the assets with the owners of existing assets, or turnkey
      construction contracts with wind farm developers for the development of new
      assets.




***The
      financial success of the Target will be dependent on the ability of the Target
      to acquire assets at attractive prices***




The
      Target's business plan assumes that the Target will be able to acquire existing
      Wind Energy Assets at a specified multiple of the asset's historic EBITDA.
      The
      Target's financial position will be affected if the Target is required to pay
      a
      higher than anticipated price for existing Wind Energy Assets it
      purchases.




***The
      Target is undertaking and may expand into businesses in which it has no prior
      experience***




The
      Target lacks experienced staff to operate, maintain and manage the Wind Energy
      Assets, and is reliant on contractors to undertake the key operations of the
      business. The Target relies on third parties to carry out its day-to-day
      activities.




As
      a new
      company, the Target has no prior experience in the acquisition, operation or
      development of Wind Energy Assets or other renewable energy assets. While the
      management is comprised of experienced business people, only the Target's CTO
      has direct prior experience in the wind energy sector. Two members of the
      Advisory Board, Mr. Thyagarajan and Dr. Sankar, also have extensive experience
      in the Indian energy industry.




***The
      acquisition of assets will affect the Target's cash flows and results of
      operations***




The
      Target plans to regularly acquire Wind Energy Assets to build its business,
      to
      develop new Wind Energy Assets and to acquire, develop or invest in other
      renewable energy assets in the future. Future acquisitions and developments
      could mean that at times, the Target's cash flow is negative, and may further
      result in the incurrence of additional indebtedness and liabilities which could
      have a material adverse effect on the business, financial condition and results
      of operations of the Target.




***The
      Wind Energy Assets being acquired initially are not newly
      constructed***




The
      Target proposes initially to purchase existing operating Wind Energy Assets,
      a
      number of which have already been operating for approximately five years or
      longer. While the Target will procure that physical and technical inspections
      of
      each of the Wind Energy Assets is undertaken prior to purchase as part of the
      due diligence review, such an inspection will not provide the Target with an
      absolute assurance that the future maintenance costs have been fully factored
      into the decision to purchase the Wind Energy Asset and the price to be paid
      for
      such asset.




Further,
      notwithstanding thorough due diligence, a second-hand Wind Energy Asset may
      have
      conditions or defects that the Target is not aware of when it buys it, and
      which
      may require the Target to incur costly repairs. These repairs are likely to
      require the temporary decommissioning of the Wind Energy Asset, resulting in
      reduction in revenue, increased maintenance expenditure and a potential breach
      of a supply obligation under a PPA with the offtaker. In buying previously
      owned
      Wind Energy Assets, the Target may not be able to avail itself of manufacturers'
      or installation contractors' warranties or guarantees in relation to the
      turbines or other component parts due to warranty periods having expired, or
      the
      warranties not being assignable. These consequences will affect the business,
      financial condition and results of operations of the Target.




20




***The
      construction of new electricity generation facilities brings certain
      risks***




Power
      sector projects carry project-specific, as well as general, risks. The risks
      specific to the construction of new energy projects which will generally fall
      outside the control of the Target include:




·
            political,
                regulatory, fiscal, monetary, legal actions and policies that may
                adversely affect the viability or the economics of a
                project;




·
            changes
                in government and regulatory policies relating to the power
                sector;




·
            delays
                or failures by contractors and suppliers in the construction and
                operation
                of projects;




·
            adverse
                changes in demand for, or the price of, power generated by
                projects;




·
            the
                willingness and ability of consumers to pay for the power produced
                by
                projects; and




·
            increased
                project costs due to environmental challenges and changes in environmental
                regulations.




While
      the
      Target proposes to engage developers, in the capacity of engineering,
      procurement and construction (" EPC ")
      contractors, to carry out new developments on a fixed price turnkey basis (e.g.
      the delivery of a complete operating energy facility) (if and when such fixed
      price turnkey contracts are available) and thereby to allocate many of the
      new
      development risks to the developer, not all of these risks can be allocated
      to
      third parties (particularly at an acceptable price). Accordingly, delays in
      completion of a project, the resultant increase in funding costs, and delays
      in
      the commencement of cash flows may increase the capital needed to complete
      construction, which may in turn have an impact on the Target's financial
      condition and results of operations.




Further,
      the experience and reputation, and human and technical resources, together
      with
      the financial standing of the developers, are key factors in determining the
      likelihood of the timely completion of the new development for the agreed price.
      Ensuring that the developers have satisfactory financial resources to support
      liquidated damages and performance obligations under a turnkey construction
      contract is also important, as the failure of a developer will have an adverse
      impact on a new project. It should be anticipated in such a robust market as
      renewable energy represents today in India and in the foreseeable future that
      demand for the services of reputable contractors will be great and the
      negotiating position of the Target will be consequently affected.




***The
      construction of new electricity generation facilities is subject to
      regulation***




India
      has
      existing legislation (and may introduce further legislation) governing the
      manufacture, installation, operation and decommissioning of Wind Energy Assets.
      A wind farm developer (or its contractor(s)) must comply with procedures
      relating to the acquisition of land to be used for wind farms and relevant
      planning regulations, and obtain approvals for the commencement of the wind
      energy project, including clearances from environmental regulators. If
      legislation and regulations relating to the Target's activities are made more
      stringent, such as increasing the requirements for obtaining approvals or
      meeting government standards, this could result in changes to the infrastructure
      necessary for the Target's wind energy projects and the technical requirements
      for the Wind Energy Assets, thereby increasing the costs related to the
      development of wind farms *vis
à
      vis* other
      energy sources. These factors would have a material adverse effect on the
      business, financial condition and results of operations of the
      Target.




***The
      construction of new electricity generation facilities is subject to the
      acquisition of suitable land, equipment, permits and availability of
      contractors***




The
      success of the Target's plans to develop new electricity generation facilities
      is subject to the availability of appropriate sites, equipment, spare parts
      and
      contractors. Wind Energy Assets need to be installed in locations with suitable
      wind patterns, and competition for desirable wind energy sites is increasing
      as
      the demand for renewable energy increases. Further, licences or permits may
      need
      to be obtained. (See "Risk Factors - The construction of new electricity
      generation facilities is subject to regulation"). The availability of suitably
      experienced contractors to undertake the construction of the new Wind Energy
      Assets could also be limited as the number of projects under construction
      increases.




The
      Target can give no assurance that it will be able to develop new Wind Energy
      Assets on time, that such assets will generate the anticipated quantity of
      electricity, or that the assets can be constructed at an economic and acceptable
      price, or at all.




***The
      construction and operation of wind energy projects may face opposition from
      local communities and other parties***




Wind
      farms can create noise and are considered by some to be aesthetically
      unappealing. Certain environmental organizations have expressed opposition
      to
      wind turbines on the allegation that wind farms cause the killing of birds
      and
      have other adverse effects on flora and fauna. In India, some communities have
      claimed that the local climate has been adversely affected by the operation
      of
      nearby Wind Energy Assets. The introduction or enhancement of legislation
      restricting the construction of Wind Energy Assets to take into account some
      of
      these concerns could cause significant constraints on the growth of the wind
      energy industry in India. This would have an adverse effect on the business,
      financial condition and results of operations of the Target.




21




***There
      are credit risks arising from the Power Purchase
      Agreements***




The
      Target intends to acquire Wind Energy Assets that have already contracted for
      the sale of generated power under an existing PPA, either with the local SEB
      distribution company, or a private third party purchaser. The Target intends
      to
      acquire assets that have long-term offtake agreements with such customers.
      However, as the Target's revenue is directly attributable to the PPAs, a credit
      risk may arise should the PPAs expire or be terminated for any
      reason.




The
      terms
      of the PPAs may be detrimental to the Target. In such cases, the Target would
      need to enter into a new PPA with the offtaker, which may not be on equally
      favorable terms. Also, if the Target is assigned a PPA through the acquisition
      of a Wind Energy Asset, but defaults in its obligations to supply the offtaker
      under that agreement, the offtaker may have a reason to terminate that PPA
      for
      cause. Alternatively, a PPA may simply expire in the near future and not be
      subject to renewal rights. The expiry or termination of a PPA will affect the
      cash flow of the Target, and a PPA would need to be renegotiated, or a new
      offtaker secured, to preserve the Target's revenue from the Wind Energy Asset.
      Moreover, if the power offtaker under any PPA defaults, the Target is likely
      to
      be an unsecured creditor, and may suffer serious financial consequences as
      a
      result, particularly if the defaulting party is insolvent, or if there are
      protracted proceedings in bankruptcy tribunals.




The
      laws
      in some states require the State Electricity Boards (" SEB ")
      to
      purchase a specified percentage of electricity from renewable sources. Some
      states also provide price support for renewable energy projects. To the extent
      laws such as these supporting renewable energy projects are amended or revoked,
      the Target's security of offtaker, or ability to take advantage of price
      support, may be affected. Further, the vast obligations of the SEBs to purchase
      electricity from all generators of renewable power within the state may exceed
      available funds, and the Target may fail to realize the benefits of the price
      support due to the inability of the SEB to honor its obligations.




***The
      Target faces various forms of competition***




A
      competitor with available funds and/or an established presence in the market
      will buy the Wind Energy Assets targeted by the Target, or replicate the
      Target's business plan before the Target obtains sufficient funding to acquire
      the targeted Wind Energy Assets. Such a competitor's access to immediate
      funding, and its consequent ability to effectuate prompt purchases of Wind
      Energy Assets, could prevent the implementation of the Target's business plan
      by
      removing targeted assets from the market - or driving up the market price for
      these assets. Such competitors might also appear attractive to sellers of assets
      should they have an established history of purchasing, developing and operating
      Wind Energy Assets in India.




The
      development of new Wind Energy Assets requires the identification, acquisition
      and permitting of land that has a viable wind resource. As the demand for and
      desirability of wind energy grows, competition for wind resources may increase,
      thus limiting the Target's development opportunities.




Competition
      from other sources of electricity generation may also impact on the Target's
      business. The demand for Wind Energy Assets is dependent to a certain degree
      on
      the cost of wind-generated electricity compared to electricity generated from
      other sources of energy. The cost of electricity produced by Wind Energy Assets
      is dependent on the cost of establishment of the Wind Energy Assets themselves,
      financing costs, maintenance costs and wind conditions at the designated site.
      The cost and limited supplies of oil, coal and other fossil fuels are key
      factors in determining the desirability of wind energy, as from an economic
      perspective, cheaper and large supplies of fossil fuels favour non-wind energy
      generation, while more expensive and limited supplies of fossil fuels favour
      wind energy. In addition to energy produced from other renewable energy sources,
      the main competition to wind energy is oil, coal, gas and nuclear-fuelled power
      generation. The cost-competitiveness of energy from renewable energy sources,
      particularly from wind energy, has been enhanced by the current near record-high
      prices for crude oil and petroleum products, and also from the tax incentives
      offered to developers of wind energy in India. Accordingly, the profitability
      of
      the Target depends to a certain degree on the continuation of high oil and
      petroleum prices, and of incentives for wind energy in India, in particular
      the
      tax benefits and statutory incentives currently enjoyed by wind farm
      developers.




An
      increase in cost competitiveness or enhancements in technology for other sources
      of power generation, the discovery of new and significant oil, gas and coal
      deposits, or a decline in the global prices of oil, gas and coal and other
      petroleum products, the removal of tax incentives, or increases of incentives
      for next generation wind technologies, or other renewable energy technologies,
      such as wave power or solar power technologies, could result in lower demand
      for
      wind energy, which would have a material adverse effect on the business,
      financial condition and results of operations of the Target.




22




Should
      any of the various competitive threats noted above materialize to any extent,
      they may have the effect of hindering the Target's growth such that it is unable
      to achieve its stated objective of operating up to 3,000 MW of renewable energy
      assets within the first five years of the Target's operations, or may result
      in
      the Target taking longer to achieve its objectives in respect of generation
      capacity.




***The
      Target is reliant on certain key relationships***




The
      Target will ultimately be reliant on relationships with other entities including
      electricity offtakers, transmission/distribution companies, O&M contractors
      and other service providers, developers and turbine and component parts
      manufacturers. The relationships with some of these counterparties (such as
      offtakers and transmission companies) are to a large extent outside the control
      and discretion of the Target. Moreover, there can be no guarantee that the
      Target will be able to continue to attract and retain experienced and reputable
      contractors, or maintain favorable relationships with developers and other
      parties, and any adverse disruptions to these key relationships could result
      in
      a severe negative impact on the business, financial condition and results of
      operations of the Target.




***The
      Target is reliant on key individuals***




The
      Target currently relies on a small number of key individuals, in particular
      the
      senior management of the Target, its Board of Directors and the Advisory Board
      members. Mr. Kailas, the Chairman and CEO and Mr. Kochhar, the Managing Director
      have executed an employment contract with the Target providing for a minimum
      three-year term and a non-competition restraint, which contract permits the
      relevant person to work for the any member of the The Target Group, including
      the Target. However, there can be no assurance that the management, the
      non-executive directors, and the Advisory Board members will remain with the
      Target, and the Target's business may be negatively affected by the departure
      of
      these key individuals.




***The
      Target relies on third parties to carry out its day-to-day
      activities***




Currently,
      the Target has no employees (other than its executive officers, the CFO and
      the
      CTO) and will continue to rely on services provided by third parties, such
      as
      wind farm developers and O&M contractors, to carry out its day-to-day
      activities. The Target is and will remain dependent on these services, and
      should any such third party fail to carry out its services, it could have a
      material adverse impact on the operations of the Target.




***The
      Target's projects are subject to risks associated with the engagement of third
      party contractors***




The
      construction, development, maintenance and operation of all newly-developed
      Wind
      Energy Assets as well as the continued maintenance and operations of existing
      operating Wind Energy Assets will be performed by third party contractors.
      The
      Target will not have direct control over the day-to-day activities of such
      contractors and will be reliant on such contractors performing these services
      in
      accordance with the relevant contracts. If the Target fails to enter into such
      contracts, or if the contractors fail to perform their obligations in a manner
      consistent with their contracts, the Target's projects may not be achieved,
      and
      the Target may not be able to recover all or any losses it incurs under a legal
      action brought in respect of a breach by any such third party contractor of
      its
      respective obligations. If a contractor engaged to work on behalf of the Target
      becomes insolvent, it may prove impossible to recover compensation for defective
      work or materials, and the Target may incur losses as a result of funding the
      repair of defective work or paying damages to persons who have suffered loss
      as
      a result of such defective work.




***There
      may be security provisions and negative covenants in loan agreements entered
      into by the Target that affect the operations of the
      Target***




The
      Target, or one of its subsidiaries may enter into debt financing (including
      both
      bond issues and bank financings), the terms of which are likely to contain
      provisions offering collateral for the prior satisfaction of the indebtedness
      owed to those lenders, in addition to the usual and customary restrictive
      covenants requiring the Target (as the case may be) to seek the prior consent
      of
      the lenders before undertaking specified activities. Any such restrictive
      covenants are likely to curtail the ability of the Target to freely carry on
      its
      business in the normal course and thus would affect the business, financial
      condition and results of operations of the Target.




***The
      Target will be required to renew and maintain statutory and regulatory permits
      and approvals to operate its business***




Certain
      statutory and regulatory permits and approvals will be required to operate
      the
      Target's renewable energy business in India. There can be no assurance that
      the
      relevant authorities in India will issue such permits or approvals in the
      time-frame anticipated, or at all. Failure to obtain and maintain required
      permits or approvals may result in the interruption of the Target's operations,
      which would have a material adverse effect on the business, financial condition
      and results of operations of the Target.




23




***Governmental
      regulation may adversely affect the Target's
      profitability***




There
      may
      be changes in government regulations or policies in India or Mauritius, in
      particular in relation to taxation, which could have a material adverse effect
      on the Target's activities.




***Technological
      developments in the wind energy industry may render the existing Wind Energy
      Assets less effective***




Technology
      is important in the non-conventional energy sector and a failure to keep abreast
      of technological advancements may result in the Target's competitors gaining
      a
      competitive advantage over the Target in terms of cost, efficiency and volume
      of
      wind energy generated. The Target intends to use respected and experienced
      O&M contractors to ensure that the Target's Wind Energy Assets are operated
      and maintained in compliance with international best practice.




***The
      Target's cash flow in any year could be negative***




As
      the
      Target is not yet operating any Wind Energy Assets, and may not acquire wind
      energy or other renewable energy assets as quickly as anticipated, the Target's
      initial cash flow could be negative. Likewise, as the Target intends to grow
      aggressively through acquisitions and developments of new Wind Energy Assets
      and
      other renewable energy projects, the cash flow of the Target could be negative
      as a result of the costs incurred in such acquisitions and developments,
      relative to the Target's income from the sale of power in addition to the risk
      of unforeseen liabilities and reductions in revenue (for example, due to higher
      than expected operating costs and maintenance costs.




**Risks
      Related to the Industry**




***The
      generation output of the Wind Energy Assets will be affected by wind
      conditions***




The
      viability of wind energy projects is dependent on wind patterns, which may
      not
      be constant and can vary seasonally. A sustained drop in wind conditions, though
      highly improbable, or the occurrence of natural disasters resulting from
      exceptional climatic conditions, could cause a reduction in the volume of
      electricity generated by the Target's Wind Energy Assets.




The
      efficiency of any power generating operation is measured in terms of the plant
      load factor (" PLF ").
      The
      PLF is a critical success factor of a Wind Energy Asset, and is calculated
      on
      the basis of the rated capacity (in kW) of a single wind mill and the number
      of
      hours the wind mill is generating power in a year. Adverse wind conditions
      will
      affect the PLF of the Wind Energy Assets, resulting in a loss of revenue or
      a
      potential breach of a contractual supply obligation under a PPA. Wind power
      is
      generally considered as a variable base load source of electricity, which means
      that power generated from any given wind farm will vary greatly over time.
      A
      reduction in the actual generation output of the Target's Wind Energy Assets
      will affect the business, financial condition and results of operations of
      the
      Target.




***Energy
      generation assets are subject to operational risks such as equipment failure,
      non-performance to specification, accidents and turbine
      damage***




Equipment
      failure and non-performance to specification, grid unavailability, planned
      and
      unplanned outages, accidents and turbine damage will affect the PLF of the
      affected assets, resulting in a loss of generation, additional maintenance
      and
      spare part replacement costs, and a potential breach of a contractual supply
      obligation under a PPA, which will in turn harm the financial condition and
      operations of the Target.




Some
      of
      these risks may be able to be allocated to the O&M contractors (in respect
      of existing assets), or the manufacturers/developers (in respect of newly built
      assets), and over the longer term can be minimized or mitigated through proper
      monitoring and inspections, and routine maintenance and repairs. Risks such
      as
      extreme weather events and natural disasters, while beyond the control of the
      Target, would be expected to be covered under insurance policies which the
      Target intends to obtain and maintain in respect of its assets, subject to
      the
      continued availability of such insurance at commercially reasonable premiums.
      Other extraneous risks, such as unavailability of the grid, are outside the
      control of the Target and will be uninsurable.




24




***The
      Target is able to utilize significant government incentives offered to the
      renewable energy sector in India, but if such incentives are withdrawn, the
      Target's financial outlook will be affected***




In
      recent
      years, the Union Government has enacted legislation and established policies
      that support the expansion of renewable energy sources such as wind energy,
      and
      such support has been a significant contributing factor in the growth of the
      wind energy industry in India. Support for investments in wind energy has been
      provided through fiscal incentive schemes and public grants to the owners of
      Wind Energy Assets, for example price support though preferential tariffs on
      power generated by Wind Energy Assets, and tax incentives promoting investments
      in and development of wind energy. Various State Governments have also provided
      wind energy generators with wheeling (transmission) facilities **** and
      have
      also allowed wind energy generators to bank power with the grid, due to wind
      being an intermittent **** source
      of
      power (for a further description of wheeling and banking, see "Business of
      the
      Target"). In addition, some State Governments also prescribe that utilities
      must
      obtain a specified minimum percentage of their electricity from renewable energy
      sources.




One
      of
      the most significant of the incentives is the Section 80-IA benefits under
      the
      Income Tax Act, 1961 (" ITA ")
      which
      provide for a tax holiday for infrastructure projects in certain circumstances
      (as summarized in the section entitled "Taxation" in this Memorandum). By
      acquiring assets which were constructed taking advantage of these tax benefits,
      the Target, as transferee, expects to be entitled to obtain the benefit of
      these
      tax advantages. Further, the Target expects to take advantage of such tax
      incentives in respect of any new developments of renewable energy assets it
      undertakes. The Target's professional tax advisers have advised the Target
      that
      it will be entitled to the benefit of these tax advantages. However, there
      can
      be no assurances that the Target will in practice be able to gain such benefit
      in whole or in part.




Any
      decrease in or elimination of direct or indirect government support schemes
      will
      have a negative impact on the Target's plans to develop new Wind Energy Assets
      or other renewable energy assets. There can be no assurance that any government
      support in India will continue at the same level, or at all. If direct and
      indirect government support for renewable energy in India is terminated or
      reduced, this would make producing electricity from renewable resources less
      competitive, and the Target's financial performance would be affected. Further
      adverse effects could result, in relation specifically to the tax benefits
      the
      Target expects to be able to enjoy, if a claim for deductions under Section
      80-IA of the ITA is disputed or disallowed by the Indian taxation
      authority.




***The
      market price of electricity can be subject to
      volatility***




To
      the
      extent the Target sells electricity on the spot market as a merchant IPP, it
      will be subject to fluctuations in the price of electricity on the spot market.
      While historically the market price of electricity has risen steadily over
      recent years, the market price may be exposed to some volatility depending
      on
      factors such as supply and demand, and transmission grid
      constraints.




***The
      electricity sector is reliant on transmission and there are numerous
      transmission risks***




Except
      where there is direct or embedded generation, wind energy and other renewable
      energy assets must be connected to the grid to supply the electricity to end
      users. If the grid fails, or experiences "downtime," the wind energy or other
      renewable energy asset, as the case may be, will not be able to deliver the
      generated electricity. This may affect the PLF of the asset indirectly, and
      consequently result in a loss of revenue for the Target, or a potential breach
      of a contractual supply obligation under a PPA.




As
      a
      generator of electricity, a wind farm (or other renewable energy facility)
      is
      required to meet certain technical specifications in order to be connected
      to
      the grid. If a particular facility does not comply with these specifications,
      or
      ceases to comply with them, it will not be permitted to connect to the grid.
      It
      can also incur liabilities and penalties for the non-technically compliant
      transmission of electricity. It may further be at risk of having its connection
      to the grid terminated unless it rectifies its non-compliance. The Target's
      operations and financial condition will be affected by any damages or penalties
      payable for any breach under a PPA and liabilities or penalties that the Target
      may incur for non-compliant transmission or through disconnection from the
      transmission network.




***The
      electricity industry generally is highly regulated and any change in the
      regulatory environment will affect the Target's business and
      operations***




The
      electricity industry in India in general is highly regulated by both the Union
      and State Governments. In addition, the nature of the Target's intended business
      and operations will mean that the Target will be subject to extensive
      environmental, health and safety and other legislation and regulations. In
      particular, environmental regulations are likely to evolve in a manner that
      will
      require stricter compliance and enforcement measures being implemented,
      increases in penalties for non-compliance, more stringent assessments of
      proposed projects and a heightened degree of responsibility for companies and
      their directors and employees. Compliance with the regulatory requirements
      in
      the industry could increase the Target's costs of operations and affect the
      Target's financial condition and results of operations.




The
      extent of regulation of the electricity industry means that changes in either
      the Union Government or any State Governments or their policies could result
      in
      significant changes to the current regulatory regime. New legislation or
      regulations may be adopted in the future that may materially adversely affect
      the Target's operations. New legislation or regulations, or different or more
      stringent interpretation or enforcement of existing laws and regulations, may
      also require the Target to change its operations significantly or incur
      increased costs which could have an adverse effect on the results of operations
      and financial condition of the Target.




25




***Illegal
      diversion of electricity from the grid***




It
      is
      possible for persons to directly connect their power supply to the grid and
      take
      electricity without such supply being metered and paid for. The diversion of
      power in this way has historically been widespread in India, and it is estimated
      that one third of all power supplied in India is taken in this way, costing
      India's utilities close to U.S.$5 billion a year. While government investigators
      employed by the SEBs have increased their monitoring of and enforcement against
      electricity theft, and the problem is diminishing, it still remains for the
      SEBs, who may be customers of the Target under long-term PPAs. The SEB's loss
      of
      revenue due to illegally diverted power may affect its ability to pay the Target
      under the PPAs. This creates a credit risk for the Target, which will affect
      the
      Target's business, financial condition, and results of operations.




***Historic
      problems with credit control and of recovering accounts
      receivable***




Large
      power producers in India have historically had, and continue to face,
      difficulties in collecting accounts receivable from offtakers under PPAs,
      regardless of whether the offtaker is a SEB or independent third party
      purchaser. To the extent that offtakers default in paying amounts due to the
      Target for delivered energy, or the Target is unable to enforce payment
      obligations of offtakers, the Target's financial position will be
      damaged.




**Risks
      Related to India**




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




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




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




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




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




South
      Asia has from time to time experienced instances of civil unrest, terrorism
      and
      hostilities among neighbouring countries, notably involving India and Pakistan.
      The governments of India and Pakistan have recently been engaged in conciliatory
      efforts. However, any deterioration in relations between India and its
      neighbours, and military activity or terrorist attacks in the future could
      influence the Indian economy by disrupting communications and making travel
      more
      difficult and such political tensions could create a perception that investments
      in Indian companies involve higher degrees of risk. Further, in December 2004,
      certain parts of India were severely affected by a tsunami triggered by an
      earthquake in the Indian Ocean, causing widespread physical and economic
      devastation.




26




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




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




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




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




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




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




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




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




***Accounting,
      disclosure and regulatory standards***




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






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




Not
      applicable.




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




Not
      applicable.




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




Not
      applicable.




**Item
      5. Other Information.**




Not
      applicable.




27




**Item
      6. Exhibits.**




(b)
      Exhibits




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




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




28


**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:
              May 20, 2008
            By:
            /s/
              Ramesh AkellaRamesh
                Akella
              President,
                Chief Strategy Officer and Director
              (Principal
                Executive Officer and Principal Financial
                Officer)


29