**UNITED
        STATES**
 **SECURITIES
        AND EXCHANGE COMMISSION**
 **WASHINGTON,
        D.C. 20549**
  **FORM
        10-Q**
  ý **Quarterly
        Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of
        1934** **for
        the quarterly period ended March 31, 2006.**
  or
  o**Transition
        Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of
        1934** for
        the
        transition period from ___ to ____.
  **Commission
        File Number: 000-51854**
  **Phoenix
        India Acquisition Corp.**
 (Exact
        name of registrant as specified in its charter)
  **Delaware**
              
              **20-3195916**(State
                  or Other Jurisdiction of
                Incorporation
                  or Organization)
              
              (I.R.S.
                  Employer
                Identification
                  No.)
  **645
        Madison Avenue, 12th Floor, New York, New York, 10022**
 (Address
        of Principal Executive Offices including Zip Code)
 
 **(212)
        371-1302**
 (Registrant’s
        Telephone Number, Including Area Code)
  Indicate
        by check mark whether the Registrant (1) has filed all reports required to
        be
        filed by Section 13 or 15(d) of the Exchange Act during the preceding 12
        months
        (or for such shorter period that the registrant was required to file such
        reports), and (2) has been subject to such filing requirements for the past
        90
        days.   Yes x  No
o
  Indicate
        by check mark whether the registrant is a large accelerated filer, an
        accelerated filer, or a non-accelerated filer. See definition of “accelerated
        filer and large accelerated filer” in Rule 12b-2 of the Exchange. (Check one):
  Large
        Accelerated Filer o    Accelerated
        Filer o   Non-Accelerated
        Filer x
  Indicate
        by check mark whether the registrant is a shell company (as defined in Rule
        12b-2 of the Exchange Act). Yes x   No
o
  There
        were 8,966,796  shares
        of
        the Registrant’s common stock issued and outstanding as of May 10, 2006.
  
  
   **Phoenix
        India Acquisition Corp. Index to Form 10-Q**
  **Part
                  I.**
              **Financial
                  Information**Item
                  1. Financial Statements (unaudited)Balance
                  SheetsStatements
                  of OperationsStatements
                  of Stockholders’ EquityStatements
                  of Cash FlowsNotes
                  to Financial StatementsItem
                  2. Management’s Discussion and Analysis of Financial Condition and Results
                  of OperationsItem
                  3. Quantitative and Qualitative Disclosures about Market RiskItem
                  4. Controls and Procedures**Part
                  II.**
              **Other
                  Information**Item
                  1. Legal ProceedingsItem
                  1A. Risk FactorsItem
                  2. Unregistered Sales of Equity Securities and Use of
                  ProceedsItem
                  3. Defaults Upon Senior SecuritiesItem
                  4. Submission of Matters to a Vote of Security HoldersItem
                  5. Other InformationItem
                  6. ExhibitsSIGNATURES
  2
   **PART
        I - FINANCIAL INFORMATION**
  **Item
        1 - Financial Statements.**
  **PHOENIX
        INDIA ACQUISITION CORP.**
 (a
        corporation in the development stage)




**BALANCE
        SHEETS**


March
                31, 2006
            
            December
                31, 2005**ASSETS**
            
            
            (Unaudited)
            
            
            (Audited)**Current
                assets:**Cash
            
            $
            83,303
            
            $
            1,234Proceeds
                escrowed from private placement
            
            
            750,000
            
            
            -Other
                assets, deferred offering costs
            
            
            396,594
            
            
            310,641Total
                assets
            
            $
            1,229,897
            
            $
            311,875**LIABILITIES
                AND STOCKHOLDERS' EQUITY****Current
                and total liabilities:**Accounts
                payable and accrued expenses
            
            
            121,270
            
            
            89,875Notes
                payable, stockholders
            
            
            339,095
            
            
            200,000Total
                current and total liabilities
            
            $
            460,365
            
            $
            289,875**Stockholders'
                Equity:**Preferred
                stock, $0.0001 par value, authorized 1,000,000 shares; none
                issued
            
            $
            -
            
            $
            -Common
                stock, $0.0001 par value, authorized 89,000,000 shares, issued and
                outstanding 8,966,796 shares
            
            
            166
            
            
            157Paid-in
                capital in excess of par
            
            
            774,834
            
            
            24,843Deficit
                accumulated during the development stage
            
            
            (5,468
            )
            
            (3,000
            )Total
                stockholders' equity
            
            
            769,532
            
            
            22,000Total
                liabilities and stockholders' equity
            
            $
            1,229,897
            
            $
            311,875




*See
        accompanying notes to unaudited financial statements*





3





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


**STATEMENTS
        OF OPERATIONS**
 (UNAUDITED)
  **For
                  the period****from
                  July 13, 2005****Three
                  months ended**
              
              **(inception)****March
                  31, 2006**
              
              **to
                  March 31, 2006**Formation
                  and operating costs
              
              $
              2,468
              
              $
              5,468Net
                  Loss
              
              $
              2,468
              
              $
              5,468Weighted
                  average shares outstanding (basic and diluted)
              
              
              1,563,542
              
              
              1,656,250Net
                  loss per share (basic and diluted)
              
              
              0.00
              
              
              0.00




*See
        accompanying notes to unaudited 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,
      2006**


(UNAUDITED)





DeficitCommon
                  Stock
              
              Paid-in
              
              AcccumulatedPar
                  Value
              
              Capital
                  in
              
              During
                  the
              
              Total$0.0001
              
              Excess
                  of
              
              Development
              
              Stockholders'Shares
              
              Amount
              
              Par
              
              Stage
              
              EquityStock
                  issuance on July 14, 2005 @$.016
              
              
              1,562,500
              
              $
              157
              
              $
              24,843
              
              $
              -
              
              $
              25,000Net
                  Loss
              
              
              -
              
              
              -
              
              
              -
              
              
              (3,000
              )
              
              (3,000
              )**Balances**,
                  at December 31, 2005
              
              
              1,562,500
              
              
              157
              
              
              24,843
              
              
              (3,000
              )
              
              22,000Private
                  Placement on March 31, 2006 @$8.00
              
              
              93,750
              
              
              9
              
              
              749,991
              
              
              -
              
              $
              750,000**Net
                  loss**
              
              
              -
              
              
              -
              
              
              -
              
              
              (2,468
              )
              
              (2,468
              )**Balances**,
                  at March 31, 2006
              
              
              1,656,250
              
              $
              166
              
              $
              774,834
              
              $
              (5,468
              )
              $
              769,532




*See
        accompanying notes to unaudited financial statements*




5




**PHOENIX
        INDIA ACQUISITION CORP.**


(a
      corporation in the development stage)




**STATEMENTS
        OF CASH FLOW**


(UNAUDITED)





For
                periodfrom
                July 13,Three
                months
            
            2005ended
            
            (inception)
                toMarch
                31,
            
            March
                31,2006
            
            2006**Cash
                flows from operating activities**Net
                loss
            
            $
            (2,468
            )
            $
            (5,468
            )**Adjustment
                to reconcile net loss to net cash****provided
                by operating activities:**Increase
                in prepaid expenses
            
            
            -
            
            
            -(Decrease)
                increase in accounts payable and accrued expenses
            
            
            2,468
            
            
            5,468Net
                cash used in operating activities
            
            
            -
            
            
            -**Cash
                flows from investing activities:**Proceeds
                held in escrowed from private placement
            
            
            (750,000
            )
            
            -Net
                cash used in investing activities
            
            
            (750,000
            )
            
            -**Cash
                flows from financing activities:**Proceeds
                from notes payable, stockholders
            
            
            139,095
            
            
            339,095Proceeds
                from sale of common stock
            
            
            750,000
            
            
            25,000Payment
                of offering costs
            
            
            (57,026
            )
            
            (280,792
            )Net
                cash provided from financing activities
            
            
            832,069
            
            
            83,303**Net
                increase in cash**
            
            
            82,069
            
            
            83,303**Cash**,
                beginning of period
            
            
            1,234
            
            
            -**Cash**,
                end of period
            
            $
            83,303
            
            $
            83,303Supplemental
                non-cash financing transactionsAccrued
                deferred offering costs
            
            $
            28,926
            
            $
            115,802




*See
        accompanying 
        notes to unaudited financial statements*


6




**NOTES
      TO UNAUDITED FINANCIAL STATEMENTS**




**March
      31, 2006**




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




The
      financial statements for the three months ended March 31, 2006 are unaudited.
      In
      the opinion of management, all adjustments (consisting only of normal recurring
      accruals) have been made that are necessary to present fairly the financial
      position of Phoenix India Acquisition Corp. (the “Company”) as of March 31, 2006
      and the results of its operations and its cash flows for the three months ended
      March 31, 2006 and period from July 13, 2005 (inception) to March 31, 2006
      in
      conformity with generally accepted accounting principles. Operating results
      for
      the interim period are not necessarily indicative of the results to be expected
      for the full year.




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




*Nature
      of Operations*




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




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




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




There
      are
      no assurances the Company will be able to successfully effect a business
      combination. An amount of $54,913,370 or 97.0% of the gross proceeds of the
      Offering and the private placement ($7.76 per unit) is being held in an
      interest-bearing trust account at JP Morgan Chase NY Bank maintained by American
      Stock Transfer & Trust Company (“Trust Fund”) and invested in United States
      Treasury Bills with maturity dates of 180 days or less or in money market funds
      meeting certain conditions under Rule 2a-7 promulgated with the Investment
      Company Act of 1940, until the earlier of (i) the consummation of the Company’s
      first business combination or (ii) the liquidation of the Company. The placing
      of funds in the Trust Fund may not protect those funds from third party claims
      against the Company. Although the Company will seek to have all vendors,
      prospective target businesses or other entities it engages, execute agreements
      with the Company waiving any right, title, interest or claim of any kind in
      or
      to any monies held in the Trust Fund, there is no guarantee that they will
      execute such agreements. The remaining proceeds, not held in trust, may be
      used
      to pay for business, legal and accounting expenses, expenses which may be
      incurred related to the investigation and selection of a target business, and
      the negotiation of an agreement to acquire a target business, and for continuing
      general and administrative expenses.





7




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




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




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




*Net
      Loss Per Common Share*




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


8


*Derivative
      Financial Instrument*




As
      described in Note 5, the Company has granted a Purchase Option to a
      representative of its underwriters. Based on Emerging Issues Task Force 00-19,
      Accounting for Derivative Financial Instruments Indexed to, and Potentially
      Settle in, a Company’s Own Stock, the sale of the Purchase Option was reported
      in permanent equity and accordingly, there is no impact on the Company's
      financial position and results of operations, except for the $100 in proceeds
      from 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 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 currently available to
      management. Although an expected life of five years was used in the calculation,
      if the Company does not consummate a business combination within the prescribed
      time period and the Company liquidates, the Company believes the option will
      become worthless.




*Use
      of Estimates*




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




*Income
      Taxes*




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




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




*Recent
      Accounting Pronouncements*




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




**3.**
            **Initial
                Public Offering**




On
      April
      5, 2006, the Company sold 7,079,687 units -- including 923,437 units subject
      to
      the underwriters’ over-allotment option -- ("Units") in the Offering. On March
      31, 2006, an additional 93,750 Units were sold in a private placement to the
      existing officers and directors, through an entity they own. Each Unit consists
      of one share of the Company’s common stock, $.0001 par value and one Redeemable
      Common Stock Purchase Warrant (“Warrant”). Each Warrant entitles the holder to
      purchase from the Company one share of common stock at an exercise price of
      $5.00 commencing the later of the completion of a business combination with
      a
      target business or one (1) year from the effective date of the Offering and
      expiring five (5) years from the effective date of the Offering. The Warrants
      will be redeemable by the Company at a price of $.01 per Warrant, upon thirty
      (30) days notice after the Warrants become exercisable, only in the event that
      the last sales price of the common stock is at least $11.50 per share for any
      twenty (20) trading days within a thirty (30) trading-day period ending on
      the
      third day prior to the date on which notice of redemption is given. The warrants
      will begin trading separately from the Company’s common stock within the first
      twenty (20) trading days following the earlier to occur of the expiration of
      the
      underwriters’ over-allotment option or its exercise in full, unless the
      Underwriter determines an earlier date is acceptable, provided we have filed
      with the Securities and Exchange Commission a Current Report on Form 8-K, which
      includes an audited balance sheet reflecting the Company’s receipt of the
      proceeds of the Offering, including any proceeds the Company receives from
      the
      exercise of the over-allotment option, if such option is exercised prior to
      the
      filing of the Form 8-K. In connection with the Offering, the Company paid the
      underwriter a discount of 7% of the gross proceeds of the Offering.





9




**4.**
            **Notes
                Payable, Stockholders**




The
      Company issued unsecured promissory notes to all of the Company’s Initial
      Stockholders, amounting to $339,095, who are also officers. The notes are
      interest bearing and will be paid from the interest income from the Trust Fund
      immediately upon fully funding the $1,250,000 working capital
      budget.




**5.**
            **Unit
                Option**




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




**6.**
            **Related
                Party Transaction**




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




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





10




**7.**
              **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.




**8.**
            **Common
                Stock**




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




**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.




11


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




**Overview**




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




**Results
      of Operations for the Quarter Ending March 31, 2006**




During
      the quarter ended March 31, 2006, we had not yet completed our initial public
      offering and only incurred additional formation and operating costs, of which
      approximately $57,000 were paid in cash and approximately $28,000 represented
      an
      increase in our accounts payable and accrued expenses.




**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, on March 31, 2006, we completed a private placement of 93,750 units
      sold to the existing officers and directors through an entity they own. Each
      unit consists of one share of common stock and one redeemable common stock
      purchase warrant. Each warrant entitles the holder to purchase from us one
      share
      of our common stock at an exercise price of $5.00.




Our
      net
      proceeds from the sale of our units, including amounts from exercise of the
      underwriters’ over-allotment option, and the private placement, after
      deducting certain offering expenses of approximately $722,713 (including the
      proceeds from the underwriters’ over-allotment), and underwriting discounts of
      approximately $1,699,124, were approximately $55,350,251. Of this amount,
      $54,913,370 is being held in trust and the remaining $436,880 is being held
      outside of the trust. The remaining proceeds are available to be used by us
      to
      provide for business, legal and accounting due diligence on prospective
      acquisitions and continuing general and administrative expenses. We will use
      substantially all of the net proceeds of the Offering to acquire a target
      business, including identifying and evaluating prospective acquisition
      candidates, selecting the target business, and structuring, negotiating and
      consummating the business combination. To the extent that our capital stock
      is
      used in whole or in part as consideration to effect a business combination,
      the
      proceeds held in the trust fund plus an incremental $1,250,000 to be funded
      from
      interest income earned on the trust fund as well as any other net proceeds
      not
      expended will be used to finance the operations of the target business. We
      believe we will have sufficient available funds outside of the trust fund to
      operate through April 5, 2008, assuming that a business combination is not
      consummated during that time. From April 5, 2006 through April 5, 2008, we
      anticipate approximately $50,000 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), $50,000 for expenses for the due diligence and
      investigation of target businesses, $70,000 of expenses for legal and accounting
      fees relating to our SEC reporting obligations and $190,000 for general working
      capital that will be used for miscellaneous expenses and reserves. We do not
      believe we will need to raise additional funds in order to meet the expenditures
      required for operating our business. However, we may need to raise additional
      funds through a private or public offering of debt or equity securities if
      such
      funds are required to consummate a business combination that is presented to
      us.
      We would only consummate such a financing simultaneously with the consummation
      of a business combination.




12


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




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




**Off-Balance
      Sheet Arrangements**




We
      do not
      have any off-balance sheet arrangements.




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




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




**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, 2006. Based upon that evaluation, our president
      and
      chief strategy officer concluded that our disclosure controls and procedures
      are
      effective as of the end of the period covered by this report to ensure that
      information required to be disclosed by us in reports that we file or submit
      under the Securities Exchange Act of 1934 is 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, 2006, that has materially affected, or is reasonably
      likely to materially affect, our internal control over financial
      reporting.




13


**PART
      II - OTHER INFORMATION**




**Item
      1. Legal Proceedings.**




There
      are
      no legal proceedings pending against us.




**Item
      1A. Risk Factors.**




**Risks
      associated with our business**




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




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




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




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




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




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




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





14




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




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




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





15




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




As
      of the
      date of this report, we have approximately $600,000 available to us outside
      the
      trust account to fund our working capital requirements. We will be dependent
      upon sufficient interest being earned on the proceeds held in the trust account
      to provide us with the additional working capital we will need to search for
      a
      target company and consummate a business combination. While we are entitled
      to
      the interest earned on the trust account (net of taxes payable), up to a maximum
      of $1,250,000, for such purpose and to repay working capital loans from
      management, if interest rates were to decline substantially, we may not have
      sufficient funds available to complete a business combination. In such event,
      we
      would need to borrow funds from our insiders or others, or be forced to
      liquidate.




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




Since
      August 2003, based upon publicly available information, approximately 40
      similarly structured blank check companies have completed initial public
      offerings, and numerous others have filed registration statements for initial
      public offerings. Of these companies, only four companies have consummated
      a
      business combination, while seven other companies have announced they have
      entered into a definitive agreement for a business combination, but have not
      consummated such business combination. While, like us, some of those companies
      have specific industries in which they must complete a business combination,
      a
      number of them may consummate a business combination in any industry they
      choose. Moreover, we know of at least two companies which have filed a
      registration statement and seek to consummate a business combination in India.
      We may, therefore, be subject to competition from these and other companies
      seeking to consummate a business plan similar to ours, which, as a result,
      would
      increase demand for privately-held companies to combine with companies
      structured similarly to ours. Further, the fact that only a few of such
      companies have completed a business combination or entered into a definitive
      agreement for a business combination, may be an indication that there are only
      a
      limited number of attractive target businesses available to such entities,
      or
      that many privately held or publicly held target businesses may not be inclined
      to enter into business combinations with publicly held blank check companies
      like us. We cannot assure our stockholders that we will be able to successfully
      compete for an attractive business combination. Additionally, because of this
      competition, we cannot assure our stockholders that we will be able to
      effectuate a business combination within the required time periods. If we are
      unable to find a suitable target business within such time periods, we will
      be
      forced to liquidate.




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




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





16





•
            May
                significantly reduce the equity interest of current
                stockholders;•
            Will
                likely cause a change in control if a substantial number of our shares
                of
                common stock are issued, which may affect, among other things, our
                ability
                to use our net operating loss carry forwards, if any, and most likely
                also
                result in the resignation or removal of our present officers and
                directors;•
            May
                reduce or limit the voting power or other rights of holders of our
                common
                stock if we issue preferred stock with dividend, liquidation, compensation
                or other rights superior to the common stock; and•
            May
                reduce the prevailing market prices for our common stock warrants
                and
                units.




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




•
            Default
                and foreclosure on our assets if our operating cash flow after a
                business
                combination were insufficient to pay our debt
                obligations;•
            Acceleration
                of our obligations to repay the indebtedness even if we have made
                all
                principal and interest payments when due if the debt security contained
                covenants that required the maintenance of certain financial ratios
                or
                reserves and any such covenant were breached without a waiver or
                renegotiation of that covenant;•
            Our
                immediate payment of all principal and accrued interest, if any,
                if the
                debt security was payable on demand; and•
            Our
                inability to obtain additional financing, if necessary, if the debt
                security contained covenants restricting our ability to obtain additional
                financing while such security was
                outstanding.




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





17




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




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




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





18




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




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




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




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




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




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





19




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




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




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




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




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




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





20




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




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




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




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




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




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




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





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***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.





22




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




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




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




•
            Levying
                fines;•
            Revoking
                our business and other licenses; and•
            Requiring
                that we restructure our ownership or
                operations.




***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.***





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




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




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




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




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




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




On
      April
      5, 2006, we consummated our initial public offering of 6,156,250 units and,
      on
      March 31, 2006, we sold 93,750 units in a private placement to our existing
      officers and directors, through an entity they own. On April 5, 2006, we
      consummated the closing of 923,437 additional units that were subject to the
      underwriters’ over-allotment option. 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. The units were sold at an offering price of $8.00 per unit,
      generating total gross proceeds of $57,387,496. Rodman & Renshaw, LLC acted
      as lead underwriter. The securities sold in the offering were registered under
      the Securities Act of 1933, as amended, on a registration statement on Form
      S-1
      (No. 333-128008). The Securities and Exchange Commission declared the
      registration statement effective on April 5, 2006.




We
      incurred a total of $3,964,625 in underwriting discounts and commissions. Rodman
      & Renshaw, LLC, the representative of the underwriters in the Offering
      deposited 4.0% of the gross proceeds attributable to the underwriters’ discount
      ($0.32 per unit or $2,265,499) into the trust fund that will be paid to the
      underwriters only upon the consummation of a business combination (and then
      only
      with respect to the units as to which the components shares have not been
      redeemed). We paid a total of $1,699,125 in underwriting discounts and
      commissions and approximately $722,713 has been paid for costs and expenses
      related to the Offering.





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After
      deducting the underwriting discounts and commissions and the offering expenses,
      the total net proceeds to us from the offering were
      approximately $55,350,251
      (including the private placement), of which $54,913,370 (or
      $7.76 per
      unit sold in the offering) was deposited into a trust fund and the remaining
      proceeds are available to be used to provide for business, legal and accounting
      due diligence on prospective business combinations and continuing general and
      administrative expenses.




For
      additional information on our use of proceeds from our public offering, please
      see Item 2 of Part I in this report.




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




Not
      applicable.




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




Not
      applicable.




**Item
      5. Other Information.**




Not
      applicable.




**Item
      6. Exhibits.**







(b)
            Exhibits





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




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




25




**SIGNATURES**




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





PHOENIX
                INDIA ACQUISITION CORP.Date:
              May 12, 2006
            By:
            /s/
              Ramesh
              AkellaRamesh AkellaPresident,
                Chief Strategy Officer and Director
              (Principal
                Executive Officer and Principal Financial
                Officer)





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