UNITED
STATES SECURITIES AND EXCHANGE COMMISSION


WASHINGTON,
D. C.  20549




FORM
10-Q





xQuarterly report under
Section 13 or 15(d) of the Securities Exchange Act of 1934


For the
quarterly period ended March 31,
2009 or





 ̈
Transition report under Section 13 or 15(d) of the Securities Exchange Act of
1934


For the
transition period from ______ to ______




000-52919


(Commission file
No.)





CAMDEN
LEARNING CORPORATION


(Exact
name of registrant as specified in its charter)





DELAWARE
            83-0479936(State
      or other jurisdiction of incorporation
      or  organization)
            (I.R.S.
      employer identification no.)





500
East Pratt Street


Suite
1200


Baltimore,
MD 21202


(Address
of principal executive offices)





(410)
878-6800


(Issuer's
telephone number, including area code)





Check
whether the registrant (1) has filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 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 xNo ̈.





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





Large
Accelerated filer  ̈       Accelerated
filer  ̈      Non-Accelerated
filer  ̈      Smaller
reporting company 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  ̈




Indicate
by check mark whether the registrant has submitted electronically and posted on
its corporate Website, if any, every Interactive Date File required to be
submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this
chapter) during the preceding 12 months (or for such shorter period that the
registrant was required to submit and post such
files).    Yes  o        No  o


As
of May 8, 2009 there were 8,188,800 shares of the Company’s common stock
outstanding.





TABLE
OF CONTENTS




PART I – FINANCIAL INFORMATIONItem 1.
                Financial
      Statements
                3CondensedBalance
      Sheets as of March 31, 2009 (unaudited) and December 31,
    2008
                F-1Condensed
      Statements of Operations for the three months ended March 31, 2009
      (unaudited) and March 31, 2008 (unaudited) and for the period from April
      10, 2007 (inception) to March 31, 2009 (unaudited)
                F-2Condensed
      Statements of Stockholder’s Equity (unaudited) for the period from April
      10, 2007 (inception) to March 31, 2009
                F-3Condensed
      Statements of Cash Flows for the three months ended March 31, 2009
      (unaudited) and March 31, 2008 (unaudited) and for the period from April
      10, 2007 (inception) to March 31, 2009 (unaudited)
                F-4Notes
      to Condensed Financial Statements (unaudited)
                F-5Item 2.
                Management’s
      Discussion and Analysis of Financial Condition and Results of
      Operations
                3Item 3.
                Quantitative
      and Qualitative Disclosures About Market Risk
                7Item 4.
                Controls
      and Procedures
                7PART II – OTHER INFORMATIONItem 1.
                Legal
      Proceedings
                8Item 2.
                Unregistered
      Sales of Equity Securities and Use of Proceeds
                8Item 3.
                Defaults
      upon Senior Securities
                8Item 4.
                Submission
      of Matters to a Vote of Security Holders
                8Item 5.
                Other
      Information
                8Item 6.
                Exhibits
                8SIGNATURES
                9


2




Item
1. Financial Statements




Reference
is made to our financial statements and accompanying notes beginning on Page F-1
of this report.




Item
2. Management’s Discussion and Analysis of Financial Condition or Plan of
Operation




FORWARD-LOOKING
STATEMENTS




The
following discussion should be read in conjunction with our financial statements
and the notes hereto included elsewhere in this Form 10-Q.




This Form
10-Q contains forward-looking statements regarding the plans and objectives of
management for future operations.  This information may involve known
and unknown risks, uncertainties and other factors which may cause our actual
results, performance or achievements to be materially different from future
results, performance or achievements expressed or implied by any forward-looking
statements.  Forward-looking statements, which involve assumptions and
describe our future plans, strategies and expectations, are generally
identifiable by use of words “may,” “will,” “should,” “expect,” “anticipate,”
“estimate,” “believe,” “intend,” or “project” or the negative of these words or
other variations on these words or comparable terminology.  These
forward-looking statements are based on assumptions that may be incorrect, and
we cannot assure you that these projections included in these forward-looking
statements will come to pass. Our actual results could differ materially from
those expressed or implied by the forward-looking statements as a result of
various factors.




We have
based the forward-looking statements included in this quarterly report on Form
10-Q on information available to us on the date of this quarterly report on Form
10-Q, and we assume no obligation to update any such forward-looking
statements.  Although we undertake no obligation to revise or update
any forward-looking statements, whether as a result of new information, future
events or otherwise, you are advised to consult any additional disclosures that
we may make directly to you or through reports that we in the future may file
with the SEC, including annual reports on Form 10-K, quarterly reports on Form
10-Q and current reports on Form 8-K.





MANAGEMENT’S
DISCUSSION AND ANALYSIS OF


FINANCIAL
CONDITION AND RESULTS OF OPERATIONS





The
following Management’s Discussion and Analysis of Financial Condition and
Results of Operations should be read in conjunction with our financial
statements and the related notes thereto which are included in this quarterly
report on Form 10-Q and the Company’s audited financial statements and notes
thereto included in our Form 10-K for our fiscal year ended December 31,
2008.




OVERVIEW




We were
formed on April 10, 2007 for the purpose of acquiring, through a merger, capital
stock exchange, asset acquisition or other similar business combination, an
operating business in the education industry. Our initial business combination
must be with a target business whose fair market value is at least equal to 80%
of our net assets at the time of such acquisition. We intend to use cash derived
from the proceeds of our initial public offering and concurrent private
placement, our capital stock, debt or a combination of cash, capital stock and
debt, to effect such business combination.




3




Since our
initial public offering, we have been actively searching for a suitable business
combination candidate. We currently have not entered into any definitive
agreement with any potential target businesses. We have met with service
professionals and other intermediaries to discuss our company, the background of
our management and our combination preferences. In the course of these
discussions, we have also spent time explaining the capital structure of the
initial public offering, the combination approval process and the timeline
within which we must consummate a business combination, or return the proceeds
of the initial public offering held in the trust account to
investors.  Consistent with the disclosures in our prospectus, we have
focused our search on companies in the education industry, which include but are
not limited to early child care (pre-school programs and/or day care facilities
for pre-school aged children), K-12 (kindergarten through twelfth grade),
post-secondary (a formal instructional program for students who have completed
the requirements for a high school diploma or its equivalent, including programs
whose purpose is academic, vocational and continuing professional education),
and corporate training.  We cannot assure investors we will find a
suitable business combination within the allotted time.




We are
currently in the process of evaluating and identifying targets for an initial
transaction. We are not presently engaged in, and will not engage in, any
substantive commercial business until we consummate our initial business
combination. We intend to utilize cash derived from the proceeds of our initial
public offering, the private placement, our capital stock, debt or a combination
of cash, capital stock and debt, in effecting our initial business combination.
We are authorized to issue 20,000,000 shares of common stock and may need to
authorize additional shares in conjunction with a business combination. The
issuance of additional shares of our capital stock:




•           may
significantly reduce the equity interest of our current
stockholders;




•           may
subordinate the rights of holders of common stock if preferred stock is issued
with rights senior to those afforded to our common stock;




•           will
likely cause a change in control if a substantial number of our shares of common
stock or preferred 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 one or more of our present officers
and directors; and




•           may
adversely affect prevailing market prices for our securities.




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




•           default
and foreclosure on our assets, if our operating revenues after an initial
transaction 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
anticipate we would only consummate such a financing simultaneously with the
consummation of a business combination, although nothing would preclude us from
raising more capital in anticipation of a possible business
combination.




4




CHANGES
IN FINANCIAL CONDITION




Liquidity
and Capital Resources





On May
16, 2007, we entered into an agreement with certain of our initial stockholders
for the sale of 2,800,000 warrants in a private placement. Each warrant entitles
the holder to purchase from us one share of our common stock on a cashless
basis. On November 24, 2007, the warrants were sold at a price of $1.00 per
warrant, generating net proceeds of $2,800,000.





On
December 5, 2007, we consummated our initial public offering of 6,250,000
units.  Each unit consists of one share of common stock and one
warrant. On December 19, 2007, we consummated the closing of 376,300 additional
units subject to the underwriters’ over allotment option.  Each
warrant entitles the holder to purchase from us one share of our common stock at
an exercise price of $5.50.





The net
proceeds we received from the private placement and the sale of our units and
warrants were $53,182,836 (not including deferred underwriting discounts and
commissions of $1,590,312).   Of this amount, $52,389,984 was
placed in a trust account at JP Morgan Chase Bank, N.A. maintained by
Continental Stock Transfer & Trust Company, as trustee.  The
remaining funds are being held outside of the trust. The funds held outside of
trust (together with $600,000 of interest we may earn on funds in the trust
account which we are entitled to withdraw in order to cover our operating
expenses and the costs associated with our plan of dissolution and liquidation
if we do not consummate a business combination) will be used to cover our
operating expenses and to cover the expenses incurred in connection with seeking
and consummating a business combination.




For the three
                  
                  
                  For the three
                  
                  
                  April 10, 2007months ended
                  
                  
                  months ended
                  
                  
                  (inception) throughMarch 31, 2009
                  
                  
                  March 31, 2008
                  
                  
                  March 31, 2009Investments
      held in trust – beginning of period
                  
                  $
                  53,034,322
                  
                  
                  $
                  52,543,772
                  
                  
                  $
                  -Contribution
      to trust (which includes the deferred underwriting discount and commission
      of $1,590,312 )
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  52,389,984Interest
      income received
                  
                  
                  21,284
                  
                  
                  
                  470,321
                  
                  
                  
                  1,275,622Withdrawals
      to pay taxes
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  (610,000
                  )Total
      investments held in trust
                  
                  $
                  53,055,606
                  
                  
                  $
                  53,014,093
                  
                  
                  $
                  53,055,606





At March
31, 2009, $600,000 remains available for working capital purposes from the
restricted funds held in the Trust Account.





We will
use substantially all of the net proceeds of the initial public 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 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 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 November 29, 2009, assuming a business combination
is not consummated during that time.  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.




5





The
$1,590,312 of the funds attributable to the deferred underwriting discount and
commissions in connection with the offering and private placement will be
released to the underwriters less $0.24 per share for any public stockholders
exercising their redemption rights, upon completion of a business combination as
such term is defined in our prospectus filed on Form 424B4 on November 30, 2007
with the Securities and Exchange Commission.





We may
need to raise additional funds in order to meet the expenditures required to
consummate a business combination before November 29, 2009.  Although
we believe the net proceeds of the offering and the private placement will be
sufficient to allow us to consummate a business combination, in as much as we
have not yet identified any prospective target business, we cannot ascertain the
capital requirements for any particular transaction. If the net proceeds of the
offering and the private placement prove to be insufficient, either because of
the size of the business combination or the depletion of the available net
proceeds 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 you such
financing would be available on acceptable terms, if at all.





Commencing
on November 29, 2007, we began incurring a fee of $7,500 per month for certain
administrative services from Camden Partners Holdings, LLC.  In
addition, in 2007, Camden Learning, LLC advanced to us an aggregate of $200,000
for payment of offering expenses on our behalf. These advances were repaid on
December 5, 2007 from the proceeds of the initial public offering that were
allocated to pay offering expenses.





We may
use all or substantially all of the proceeds held in trust, other than the
deferred portion of the underwriter’s fee, to acquire one or more target
businesses. We may not use all of the proceeds held in the trust account in
connection with a business combination, either because the consideration for the
business combination is less than the proceeds in trust or because we finance a
portion of the consideration with capital stock or debt securities that we can
issue. In that event, the proceeds held in the trust account as well as any
other net proceeds not expended, will be used to finance the operations of the
target business or businesses. The operating business that we acquire in such
business combination must have a fair market value equal to at least 80% of the
balance in the trust account (excluding deferred underwriter’s fee of
$1,590,312) at the time of such acquisition. If we consummate multiple business
combinations that collectively have a fair market value of 80% of our net
assets, then we would require that such transactions are consummated
simultaneously.





If we are
unable to find a suitable target business by November 29, 2009, we will be
forced to liquidate. If we are forced to liquidate, the per share liquidation
amount may be less than the initial per unit offering price because of the
underwriting commissions and expenses related to our initial public offering and
because of the value of the warrants in the per unit offering price.
Additionally, if third parties make claims against us, the initial public
offering proceeds held in the trust account could be subject to those claims,
resulting in a further reduction to the per share liquidation price. Under
Delaware law, our stockholders who have received distributions from us may be
held liable for claims by third parties to the extent such claims have not been
paid by us. Furthermore, our warrants will expire worthless if we liquidate
before the completion of a business combination.





RESULTS
OF OPERATIONS





For the
three months ended March 31, 2009, we had a net loss of $112,132 consisting of
interest income of $17,611 less costs attributable to general and administrative
expenses of $187,060 and net of a benefit for income taxes of
$57,317.  For the three months ended March 31, 2008, we had net income
of $195,711, consisting of interest income of $473,499 less costs attributable
to organization, formation and general and administrative expenses of $152,833
and net of a provision for income taxes of $124,955.  The decrease in
interest income for the period was a result of a significant decrease in the
interest rate caused by an increase in demand for government securities and
treasury bills. For the period from April 10, 2007 (inception) through March 31,
2009, we had net income of $211,200, consisting of interest income of $1,197,587
less costs attributable to organization, formation and general and
administrative expenses of $811,713 and net of a provision for income taxes of
$174,674.




6




Through
March 31, 2009, our efforts have been primarily activities relating to our
search for a target company with which to do a business combination. We have
neither engaged in any operations nor generated any revenues to date. We
currently have no operating business and have not entered into a definitive
agreement with any potential target businesses. Beginning December 5, 2007 (the
date of the consummation of our initial public offering) until our consummation
of a business combination, we expect interest earned on the offering proceeds
held in our trust account to be our primary source of income.




We
received net proceeds from the offering of $47,492,852, before deducting
deferred underwriting compensation of $1,500,000.  On December 19,
2007, the underwriters for the offering exercised a portion of their
over-allotment option, generating additional proceeds of $2,889,984, before
deducting deferred underwriting compensation of $90,312.




In
addition, we may need to raise additional funds through a private offering of
debt or equity securities if such funds are required to consummate an initial
transaction that is presented to us. Subject to compliance with applicable
securities laws, we would only consummate such a fund-raising simultaneously
with the consummation of an initial transaction.




We
currently pay Camden Partners Holdings, LLC an aggregate fee of $7,500 per month
which includes the cost of other general and administrative services provided to
us by Camden Partners Holdings, LLC.





Contractual
Obligations





We do not
have any long term debt, capital lease obligations, operating lease obligations,
purchase obligations or other long term liabilities.  We entered into
a Service Agreement with Camden Partners Holdings, LLCrequiring
us to pay $7,500 per month.  The agreement terminates on the earlier
of the completion of a business combination or upon our
dissolution.





The
Company has entered into an engagement agreement with Morgan Joseph & Co.
Inc. whereby Morgan Joseph & Co. Inc. will provide financial advisory and
investment banking services to the Company.




The
Company entered into an engagement agreement with a consultant on June 23,
2008.  The consultant will provide financial advisory services to the
Company in connection with a potential transaction with certain predetermined
entities.  The Company is obligated to pay the consultant 1.5% of the
Transaction Value (as defined in the engagement agreement), provided, however,
the aggregate Transaction Fee shall not be less than $1,000,000 in the event a
Business Combination is completed with any of the predetermined
entities.  The Company also agreed to reimburse the consultant for its
reasonable business expenses in connection with services
rendered.  The agreement is on a month-to-month basis.  Upon
termination, no party shall have any liability to the other except that the
consultant shall be entitled to its transaction fee if, within twelve (12)
months from the date of termination of the agreement, the Company consummates a
transaction with one of the predetermined entities.




Other
than contractual obligations incurred in the ordinary course of business, we do
not have any other long-term contractual obligations.




Item
3. Quantitative and Qualitative Disclosures About Market Risk.




Not
Applicable for Smaller Reporting Companies.




Item
4(T).  Controls and Procedures.





Disclosure
Controls and Procedures





As of the
end of the period covered by this report on Form 10-Q, our chief executive
officer and chief financial officer conducted an evaluation of our disclosure
controls and procedures (as defined in Rules 13a-15(e) of the Securities
Exchange Act of 1934 (the “Exchange Act”). Based upon this evaluation, our chief
executive officer and chief financial officer concluded that our disclosure
controls and procedures, which are designed to ensure that information
required to be disclosed by the issuer in the reports it files or submits under
the Securities Act of 1933, as amended, is recorded, processed, summarized and
reported within the time periods specified in the SEC’s rules and forms, are
effective and adequate.




7





Internal
Control over Financial Reporting





During
the period covered by this report, there have been no significant changes in our
internal control over financial reporting (as defined in Rule 13-15(f) of the
Securities Exchange Act) that have materially affected, or are reasonably likely
to materially affect, our internal control over financial
reporting.




PART
II – OTHER INFORMATION




Item
1. Legal Proceedings.




To the
knowledge of our management, there is no litigation currently pending or
contemplated against the Company or its property.




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




None.




Recent
Sales of Unregistered Securities





None.





Item
3. Defaults upon Senior Securities.





None.





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





None.





Item
5. Other Information.





None.





Item
6. Exhibits and Financial Statement Schedules.


Exhibit
      No.
              
              Description31.1
              
              Certifications
      Pursuant to Section 302 of the Sarbanes-Oxley Act of
  200231.2
              
              Certifications
      Pursuant to Section 302 of the Sarbanes-Oxley Act of
  200232.1
              
              Certifications
      Pursuant to Section 906 of the Sarbanes-Oxley Act of
  200232.2
              
              Certifications
      Pursuant to Section 906 of the Sarbanes-Oxley Act of
  2002








8


SIGNATURES




Pursuant
to the requirements of Section 13 or 15(d) of the Securities Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized on this 11th day of  May
2009.




CAMDEN
      LEARNING CORPORATION.By:
                /s/ David
      L. WarnockName:
      David L. Warnock
                  Title:
      Chief Executive Officer
                  (Principal
      Executive Officer)





By:
                /s/ Donald
      W. HughesName:
      Donald W. Hughes
                  Title:
      Chief Financial Officer
                  (Principal
      Financial Officer)


9


Camden
Learning Corporation


(a
corporation in the development stage)





Condensed
Balance Sheets





March 31, 2009
                              
                              
                              December 31, 2008(unaudited)AssetsCurrent
      assets:Cash
                              
                              $
                              67,382
                              
                              
                              $
                              190,665Prepaid
      expenses
                              
                              
                              24,278
                              
                              
                              
                              60,695Refundable
      income tax
                              
                              
                              150,513
                              
                              
                              
                              155,399Total
      current assets
                              
                              
                              242,173
                              
                              
                              
                              406,759Restricted
      funds held in trust
                              
                              
                              53,055,606
                              
                              
                              
                              53,034,322Deferred
      tax asset
                              
                              
                              284,813
                              
                              
                              
                              222,610Total
      assets
                              
                              $
                              53,582,592
                              
                              
                              $
                              53,663,691Liabilities
      and Stockholders’ EquityCurrent
      liabilities:Accounts
      payable and accrued expenses
                              
                              $
                              86,302
                              
                              
                              $
                              59,290Deferred
      interest
                              
                              
                              61,072
                              
                              
                              
                              57,051Total
      current liabilities
                              
                              
                              147,374
                              
                              
                              
                              116,341Deferred
      underwriting compensation
                              
                              
                              1,590,312
                              
                              
                              
                              1,590,312Total
      liabilities
                              
                              
                              1,737,686
                              
                              
                              
                              1,706,653CommitmentsCommon
      stock, subject to possible redemption 1,987,889 shares
                              
                              
                              15,744,081
                              
                              
                              
                              15,744,081Stockholders’
      equityPreferred
      Stock, $.0001 par value, 1,000,000 shares authorized; none issued or
      outstanding
                              
                              
                              —
                              
                              
                              
                              —Common
      Stock, $.0001 par value, 20,000,000 shares authorized; 8,188,800 shares
      issued and outstanding (less 1,987,889 shares subject to possible
      redemption)
                              
                              
                              620
                              
                              
                              
                              620Additional
      paid-in capital
                              
                              
                              35,889,005
                              
                              
                              
                              35,889,005Retained
      earnings accumulated during the development stage
                              
                              
                              211,200
                              
                              
                              
                              323,332Total
      stockholders’ equity
                              
                              
                              36,100,825
                              
                              
                              
                              36,212,957Total
      liabilities and stockholders’ equity
                              
                              $
                              53,582,592
                              
                              
                              $
                              53,663,691





See notes
to condensed financial statements.


F-1




Camden
Learning Corporation


(a
corporation in the development stage)





Unaudited
Condensed Statements of Operations


For
the three months ended March 31, 2009 and March 31, 2008 and for the period
from


April
10, 2007 (inception) through March 31, 2009





For the three
                        months ended
                        March 31, 2009
                      
                      
                      For the three
                        months ended
                        March 31, 2008
                      
                      
                      April 10, 2007
                        (inception) through
                        March 31, 2009Operating
      expenses:Operating
      and formation expenses
                      
                      $
                      187,060
                      
                      
                      $
                      152,833
                      
                      
                      $
                      811,713Loss
      from operations
                      
                      
                      (187,060
                      )
                      
                      
                      (152,833
                      )
                      
                      
                      (811,713
                      )Other
      income/(expense):Interest
      income/(expense), net
                      
                      
                      17,611
                      
                      
                      
                      473,499
                      
                      
                      
                      1,197,587Income/(loss)
      before provision for taxes
                      
                      
                      (169,449
                      )
                      
                      
                      320,666
                      
                      
                      
                      385,874Benefit/(Provision)
      for income taxes
                      
                      
                      57,317
                      
                      
                      
                      (124,955
                      )
                      
                      
                      (174,674
                      )Net
      income/(loss)
                      
                      $
                      ( 112,132
                      )
                      
                      $
                      195,711
                      
                      
                      $
                      211,200Net
      income /(loss) per shareBasic
      and Diluted
                      
                      $
                      (0.01
                      )
                      
                      $
                      0.02Weighted
      average shares outstandingBasic
      and Diluted
                      
                      
                      8,188,800
                      
                      
                      
                      8,188,800





See notes
to condensed financial statements.


F-2


Camden
Learning Corporation


(a
corporation in the development stage)





Condensed
Statements of Stockholders’ Equity


For
the cumulative period from April 10, 2007 (inception) to March 31,
2009





Common
      Stock
              
              
              Additional
                Paid-In
              
              
              Retained
                  Earnings
                  Accumulated
                  During the
                  Development
              
              
              Total
                Stockholders’Shares
              
              
              Amount
              
              
              Capital
              
              
              Stage
              
              
              EquityCommon
      shares issued to initial stockholders on April 10, 2007 atapproximately
      $.02 per share
              
              
              1,562,500
              
              
              $
              156
              
              
              $
              24,844
              
              
              $
              —
              
              
              $
              25,000Sale
      of 2,800,000 private placement warrants on November 29, 2007 at$1.00
      per warrant
              
              
              —
              
              
              
              —
              
              
              
              2,800,000
              
              
              
              —
              
              
              
              2,800,000Sale
      of 6,626,300 units, net of    underwriters’ discount
      and offering expenses of $507,248 (including 1,987,889 shares subject to
      possible redemption) and sale of underwriter’s
                over-allotment
      option
              
              
              6,626,300
              
              
              
              663
              
              
              
              48,791,861
              
              
              
              —
              
              
              
              48,792,524Net
      proceeds subject to possible redemption of 1,987,889
shares
              
              
              
              
              
              
              (199
              )
              
              
              (15,743,882
              )
              
              
              
              
              
              
              (15,744,081
              )Discount
      on note payable to affiliate
              
              
              —
              
              
              
              —
              
              
              
              17,569
              
              
              
              —
              
              
              
              17,569Net
      income
              
              
              —
              
              
              
              —
              
              
              
              —
              
              
              
              44,190
              
              
              
              44,190Balance
      at December 31, 2007
              
              
              8,188,800
              
              
              $
              620
              
              
              $
              35,890,392
              
              
              $
              44,190
              
              
              $
              35,935,202Offering
      expenses
              
              
              
              
              
              
              
              
              
              
              (1,387
              )
              
              
              
              
              
              
              (1,387
              )Net
      income
              
              
              —
              
              
              
              —
              
              
              
              —
              
              
              
              279,142
              
              
              
              279,142Balance
      at December 31, 2008
              
              
              8,188,800
              
              
              $
              620
              
              
              $
              35,889,005
              
              
              $
              323,332
              
              
              $
              36,212,957Unaudited:Net
      loss
              
              
              —
              
              
              
              —
              
              
              
              —
              
              
              
              (112,132
              )
              
              
              (112,132
              )Balance
      at March 31, 2009
              
              
              8,188,800
              
              
              $
              620
              
              
              $
              35,889,005
              
              
              $
              211,200
              
              
              $
              36,100,825





See notes
to condensed financial statements.


F-3




Camden
Learning Corporation


(a
corporation in the development stage)





Unaudited
Condensed Statements of Cash Flows


For the three months ended March 31,
2009 and March 31, 2008, and for the period from


April
10, 2007 (inception) through March 31, 2009





Three months ended
                  March 31, 2009
                
                
                Three Months ended
                  March 31, 2008
                
                
                April 10, 2007
                  (inception) through
                  March 31, 2009Cash
      flows from operating activities:Net
      income (loss)
                
                $
                (112,132
                )
                
                $
                195,711
                
                
                $
                211,200Adjustments
      to reconcile net income (loss) to net cash provided by (used
      in)  operating activities Accretion of interest on note
      payable
                
                
                —
                
                
                
                —
                
                
                
                17,569Deferred
      income taxes
                
                
                (62,203
                )
                
                
                (60,772
                )
                
                
                (284,813
                )Changes
      in assets and liabilities(Increase)/decrease
      in prepaid expenses
                
                
                36,417
                
                
                
                (177,446
                )
                
                
                (24,278
                )(Increase)/decrease
      in refundable income tax
                
                
                4,886
                
                
                
                —
                
                
                
                (150,513
                )Increase
      in accounts payable and accrued expenses
                
                
                27,012
                
                
                
                8,551
                
                
                
                86,302Increase
      in deferred interest
                
                
                4,021
                
                
                
                —
                
                
                
                61,072Increase
      in income tax payable
                
                
                —
                
                
                
                135,727
                
                
                
                —Net
      cash (used in)/provided by operating activities
                
                
                (101,999
                )
                
                
                101,771
                
                
                
                (83,461
                )Cash
      flows from investing activities:Proceeds
      from sale of units placed in trust
                
                
                —
                
                
                
                —
                
                
                
                (49,589,984
                )Proceeds
      from sale of warrants placed in trust
                
                
                —
                
                
                
                —
                
                
                
                (2,800,000
                )Interest
      income earned on funds held in trust
                
                
                (21,284
                )
                
                
                (470,321
                )
                
                
                (1,275,622
                )Withdrawals
      for payments of income tax expense
                
                
                —
                
                
                
                —
                
                
                
                610,000Net
      cash used in investing activities
                
                
                (21,284
                )
                
                
                (470,321
                )
                
                
                (53,055,606
                )Cash
      flows from financing activities:Proceeds
      from sale of stock to initial stockholders
                
                
                —
                
                
                
                —
                
                
                
                25,000Proceeds
      from note payable to affiliate
                
                
                —
                
                
                
                —
                
                
                
                200,000Advance
      from affiliates
                
                
                —
                
                
                
                —
                
                
                
                37,500Repayment
      to affiliates
                
                
                —
                
                
                
                —
                
                
                
                (37,500
                )Gross
      proceeds from initial public offering
                
                
                —
                
                
                
                —
                
                
                
                53,010,500Proceeds
      from issuance of warrants
                
                
                —
                
                
                
                —
                
                
                
                2,800,000Payment
      of offering costs
                
                
                —
                
                
                
                (57,565
                )
                
                
                (2,629,051
                )Repayment
      of note payable to affiliate
                
                
                —
                
                
                
                —
                
                
                
                (200,000
                )Net
      cash (used in)/provided by financing activities
                
                
                —
                
                
                
                (57,565
                )
                
                
                53,206,449Net
      increase/(decrease) in cash
                
                
                (123,283
                )
                
                
                (426,115
                )
                
                
                67,382Cash
      at beginning of period
                
                
                190,665
                
                
                
                858,347
                
                
                
                —Cash
      at end of period
                
                $
                67,382
                
                
                $
                432,232
                
                
                $
                67,382Supplemental
      Disclosures:Non-cash
      financing activities:Deferred
      underwriting compensation
                
                $
                —
                
                
                $
                —
                
                
                $
                1,590,312Cash
      flow information:Cash
      paid during the period for income taxes
                
                $
                —
                
                
                $
                50,000
                
                
                $
                610,000Cash
      paid for interest
                
                $
                —
                
                
                $
                —
                
                
                $
                5,987





See notes
to condensed financial statements.


F-4


Camden
Learning Corporation


(a
corporation in the development stage)





Notes
to Condensed Financial Statements (unaudited)





Note
1 – Organization and Nature of Business Operations





Camden
Learning Corporation (the “Company”) is a blank check company incorporated in
the state of Delaware on April 10, 2007 for the purpose of effecting a merger,
capital stock exchange, stock purchase, asset acquisition or other similar
business combination with one or more operating businesses in the education
industry.  In April 2007, the Company issued 1,562,500 shares of
common stock to the Initial Stockholders for an aggregate amount of
$25,000.  The Company is 20.4% owned by Camden Learning, LLC, whose
members are Camden Partners Strategic Fund III, LP and Camden Partners Strategic
Fund III-A, LP (see Note 5).





At March
31, 2009, the Company had not commenced any operations.  All activity
through March 31, 2009 relates to the Company’s formation, initial public
offering (the “Offering”) and efforts to identify prospective target businesses
described below and in Note 4.  The Company has selected December 31
as its fiscal year end.





The
financial statements give retroactive effect to a common stock split in the form
of a stock dividend of 0.3888888 shares of common stock for each outstanding
share of common stock declared and paid as of November 20, 2007.





The
registration statement for the Offering was declared effective November 29,
2007.  The Company consummated the Offering on December 5, 2007 and
received proceeds of $45,991,365, net of underwriting discounts and commissions
of $3,500,000 (including $1,500,000 of deferred underwriting discounts and
commissions placed in the trust account pending completion of a business
combination).  In addition, on December 19, 2007 the underwriters for
the Offering exercised a portion of their over-allotment option, generating
proceeds of $2,799,672, net of underwriting discounts and commissions of
$210,728 (including $90,312 of deferred underwriting discounts and commissions
placed in the trust account pending completion of a business
combination).  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 applied toward effecting a merger, capital stock exchange, stock purchase,
asset acquisition or other similar business combination with one or more
operating businesses in the education industry.  As used herein, a
“Business Combination” shall mean the merger, capital stock exchange, asset
acquisition or other similar business combination with one or more operating
businesses in the education industry having, collectively, a fair market value
of at least 80.0% of the amount in the Company’s trust account, less the
deferred underwriting discount and commissions and taxes payable at the time of
such transaction.





The trust
account is maintained by Continental Stock Transfer & Trust Company, as
Trustee. On September 25, 2008, the Company determined, in light of the current
market uncertainties, to authorize the transfer of funds being held in a trust
account from the Morgan Stanley Institutional Liquidity Fund – Government
Portfolio to the Morgan Stanley Institutional Liquidity Fund – Treasury
Portfolio.  The portfolio invests in U.S. treasuries and short
duration repurchase agreements collateralized by the U.S.
treasuries.


F-5





Upon the
closing of the Offering, the Over-Allotment Option Exercise by the underwriters
and the private placement of warrants (see Note 4), $52,389,984 was placed in a
trust account invested until the earlier of (i) the consummation of the
Company’s initial Business Combination or (ii) the dissolution of the
Company.  The proceeds in the trust account include the deferred
underwriting discount of $1,590,312 that will be released to the underwriters if
the initial Business Combination is completed (subject to a $0.24 per share
reduction for public stockholders who exercise their redemption
rights).  Interest (after taxes) earned on assets held in the trust
account will remain in the trust.  However, up to $600,000 of the
interest earned on the trust account, and amounts required for payment of taxes
on interest earned, may be released to the Company to cover a portion of the
Company’s operating expenses and expenses incurred in connection with the
Company’s dissolution and liquidation, if a Business Combination is not
consummated.  Through March 31, 2009, $610,000 has been withdrawn from
the trust account for payment of income taxes.





The
Company will seek stockholders’ approval before it will affect the initial
Business Combination.  In connection with the stockholder vote
required to approve the initial Business Combination, the Company’s holders of
common stock prior to the Offering including all of the Company’s officers and
directors, have agreed to vote the shares of common stock owned by them prior to
the Offering in accordance with the majority of the shares of common stock voted
by the Public Stockholders.  “Public Stockholders” is defined as the
holders of common stock sold as part of the units in the Offering or in the
aftermarket.  The Company will proceed with the initial Business
Combination only if a majority of the shares of common stock voted by the Public
Stockholders are voted in favor of such Business Combination and Public
Stockholders owning less than 30% of the shares sold in the Offering exercise
their right to convert their shares into a pro rata share of the aggregate
amount then on deposit in the trust account.  If a majority of the
shares of common stock voted by the Public Stockholders are not voted in favor
of a proposed initial Business Combination but 24 months has not yet passed
since the date of the prospectus, the Company may combine with another Target
Business meeting the fair market value criterion described above.





Public
Stockholders voting against a Business Combination will be entitled to redeem
their stock for a pro rata share of the total amount on deposit in the trust
account including the $0.24 per share deferred underwriter’s compensation, and
including any interest earned net of income taxes on their portion of the trust
account, net of up to $600,000 of the interest earned on the trust account which
may be released to the Company to cover a portion of the Company’s operating
expenses.  Public Stockholders who convert their stock into their
share of the trust account will continue to have the right to exercise any
Warrants they may hold.





If
holders of more than 20% of the shares sold in the Offering vote against a
proposed Business Combination and seek to exercise their redemption rights and
the Business Combination is consummated, the Company’s initial stockholders have
agreed to forfeit, on a pro rata basis, a number of the initial 1,562,500 shares
of the Company’s common stock purchased, up to a maximum of 112,997 shares, so
that the initial stockholders will collectively own no more than 23.81% (without
regard to any purchase of units in the Offering, any open market purchases or
private purchases of units directly from the Company) of the Company’s
outstanding common stock immediately prior to the consummation of the Business
Combination.


F-6





The
Company’s amended and restated certificate of incorporation filed with the State
of Delaware includes a requirement that the initial Business Combination be
presented to Public Stockholders for approval; a prohibition against completing
a Business Combination if 30% or more of the Company’s Public Stockholders
exercise their redemption rights in lieu of approving a Business Combination; a
provision giving Public Stockholders who vote against a Business Combination the
right to redeem their shares for a pro rata portion of the trust account in lieu
of participating in a proposed Business Combination; and a requirement that if
the Company does not consummate a Business Combination within 24 months from the
date of the prospectus for the Offering, the Company will dissolve and
liquidate, including liquidation of the trust account for the benefit of the
Public Stockholders.  The amended and restated certificate of
incorporation includes a limitation on the Company’s corporate existence of
November 29, 2009, if the Company does not consummate a Business
Combination.  This factor raises substantial doubt about the Company’s
ability to continue as a going concern.  The financial statements do
not include any adjustment that may result from the outcome of this
uncertainty.





The
Company will dissolve and promptly distribute only to its Public Stockholders
the amount in the trust account, less any income taxes payable on interest
income, plus any remaining net assets if the Company does not affect a Business
Combination within 24 months after consummation of the Offering.





In the
event of dissolution, it is likely that the per share value of the residual
assets remaining available for distribution (including trust account assets)
will be less than the initial public offering price per share in the Offering
(assuming no value is attributed to the Warrants contained in the units sold in
the Offering discussed in Note 4).





The
Company’s initial stockholders placed the shares they owned before the Offering
into an escrow account, and with limited exceptions, these shares will not be
transferable and will not be released from escrow until one year after
consummation of a Business Combination.  If the Company is forced to
dissolve or liquidate, these shares will be cancelled.  Additionally,
the insider warrants (see Note 5) have been placed into the escrow account, and
subject to limited exceptions, will not be transferable and will not be released
from escrow until the 90th day
following the completion of a Business Combination.





Note
2 – Interim Financial Information





The
Company’s unaudited condensed interim financial statements as of March 31, 2009
and for the three months ended March 31, 2009 and 2008, and for the period from
April 10, 2007 (date of inception) through March 31, 2009, have been prepared by
the Company in accordance with accounting principles generally accepted in the
United States of America for interim financial information and with the
instructions to Form 10-Q.  Accordingly, they do not include all of
the information and footnotes required by accounting principles generally
accepted in the United States of America for complete financial
statements.  In the opinion of management, all adjustments (consisting
of normal recurring accruals) considered necessary for a fair presentation have
been included.  The operating results for the interim period presented
are not necessarily indicative of the results to be expected for any other
interim period or for the full year.





These
unaudited condensed interim financial statements should be read in conjunction
with the audited financial statements and notes thereto for the period ended
December 31, 2008 included in the Company’s Annual Report on Form 10-K filed
with the U.S. Securities and Exchange Commission (“SEC”) on March 27, 2009. The
December 31, 2008 balance sheet and the changes in stockholders’ equity for the
periods ended December 31, 2007 and 2008 have been derived from those audited
financial statements.  The accounting policies used in preparing these
unaudited financial statements are consistent with those described in the
December 31, 2008 audited financial statements.


F-7





Note
3 – Summary of Significant Accounting Policies





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 and disclosure of contingent


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.





Recent
accounting pronouncements




In
December 2007, the FASB released SFAS No. 141(R), Business Combinations (revised
2007) (“SFAS 141(R)”), which changes many well-established business combination
accounting practices and significantly affects how acquisition transactions are
reflected in the financial statements.  Additionally, SFAS 141(R) will
affect how companies negotiate and structure transactions, model financial
projections of acquisitions and communicate to stakeholders.  SFAS 141(R)
must be applied prospectively to business combinations for which the acquisition
date is on or after the beginning of the first annual reporting period beginning
on or after December 15, 2008.  The adoption of this statement did not have
a material impact on the condensed financial statements.




In
December 2007, the FASB released SFAS No. 160, Noncontrolling Interests in
Consolidated Financial Statements an amendment of ARB No. 51 (“SFAS 160”), which
establishes accounting and reporting standards for the noncontrolling interests
in a subsidiary and for the deconsolidation of a subsidiary.  SFAS 160
requires consolidated net income to be reported at amounts that include the
amounts attributable to both the parent and the noncontrolling interests and
requires disclosure, on the face of the consolidated statement of income, of the
amounts of consolidated net income attributable to the parent and to the
noncontrolling interest.  Previously, net income attributable to the
noncontrolling interest was reported as an expense or other deduction in
arriving at consolidated net income.  SFAS 160 is effective for financial
statements issued for fiscal years beginning after December 15, 2008.  The
adoption of this statement did not have a material impact on the condensed
financial statements.




In June
2008, the FASB ratified EITF Issue No. 07-5, “Determining Whether an Instrument
(or Embedded Feature) is Indexed to an Entity’s Own Stock” (“EITF
07-5”).  EITF 07-5 provides guidance on how to determine if certain
instruments or embedded features are considered indexed to our own stock,
including instruments similar to our convertible notes and warrants to purchase
our stock.  EITF 07-5 requires companies to use a two-step approach to
evaluate an instrument’s contingent exercise provisions and settlement
provisions in determining whether the instrument is considered to be indexed to
its own stock and exempt from the application of SFAS No. 133, “Accounting for
Derivative Instruments and Hedging Activities”.  Although EITF 07-5 is
effective for fiscal years beginning after December 15, 2008, any outstanding
instrument at the date of adoption will require a retrospective application of
the accounting through a cumulative effect adjustment to retained earnings upon
adoption.  The adoption of EITF 07-5 did not have a significant impact
on the Company’s financial statements.




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


F-8




Reclassifications




Certain
reclassifications have been made to the prior year’s financial statements to
conform to the current year’s presentation.





Note
4 – Initial Public Offering




On
December 5, 2007, the Company sold to the public 6,250,000 units (“Units”) at a
price of $8.00 per unit.  Each Unit consists of one share of the
Company’s common stock, $.0001 par value,
and one warrant.  On December 19, 2007 the Company sold an additional
376,300 Units pursuant to the over-allotment option exercise.  Each
warrant will entitle the holder to purchase from the Company one share of common
stock at an exercise price of $5.50 commencing the later of the completion of a
Business Combination with a Target Business or one year from the date of the
prospectus for the Offering and expiring four years from the date of the
prospectus, unless earlier redeemed.  The warrants will be redeemable
at the Company’s option, at a price of $0.01 per warrant upon 30 days’ written
notice after the warrants become exercisable, only in the event that the last
price of the common stock is at least $11.50 per share for any 20 trading days
within a 30 trading day period ending on the third business day prior to the
date on which notice of redemption is given.





In
accordance with the Warrant Agreement related to the warrants (the “Warrant
Agreement”), the Company is only required to use its best efforts to effect the
registration of the shares of common stock underlying the
Warrants.  The Company will not be obligated to deliver securities,
and there are no contractual penalties for failure to deliver securities, if a
registration statement is not effective at the time of exercise.





Additionally,
in the event that a registration statement is not effective at the time of
exercise, the holder of a warrant shall not be entitled to exercise such warrant
and in no event (whether in the case of a registration statement not being
effective or otherwise) will the Company be required to net cash settle the
warrant exercise.  Consequently, the warrants may expire
unexercised.





The
Company sold to the underwriters, for $100, an option to purchase up to a total
of 625,000 units exercisable on a cashless basis at $9.60 per unit commencing
one year from the date of the prospectus and expiring five years from the date
of the prospectus.  The units issuable upon exercise of this option
are identical to those that were sold in the Offering, except that the warrants
in these units have an exercise price of $6.71.  The sale of the
option was accounted for as a cost attributable to the
Offering.  Accordingly, there was no net impact on the Company’s
financial position or results of operations, except for the recording of the
$100 proceeds from the sale.  The Company has estimated, based upon a
Black-Scholes model, that the fair value of the option on the date of sale would
be approximately $2,430,000, using an expected life of five years, volatility of
59.4%, and a risk-free interest rate of 3.08%.  However, because the
units do not have a trading history, the volatility assumption is based on
information currently available to the Company.  The Company believes
the volatility estimate calculated is a reasonable benchmark to use in
estimating the expected volatility of the units.  The volatility
calculation is based on the most recent trading day average volatility of
publicly traded companies providing educational services with market
capitalizations less than $500 million.  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 automatically
dissolves and subsequently liquidates the trust account, the option will become
worthless.


F-9





Note
5 – Related Party Transactions





The
Company has agreed to pay up to $7,500 a month in total for certain general and
administrative services, including but not limited to receptionist, secretarial
and general office


services
to Camden Partners Holdings, LLC.  Services commenced on November 29,
2007 and


will
terminate upon the earlier of (i) the completion of the Company’s Business
Combination or (ii) the Company’s dissolution.





The
Company has allocated a percentage of the part-time accounting staff’s salaries
from Camden Partners Holdings, LLC. The allocation percentage is based upon the
amount of the staff’s time spent on the Company.





On
November 29, 2007, Camden Learning, LLC purchased warrants to acquire 2,800,000
shares of Common Stock from the Company at a price of $1.00 per warrant for a
total of $2,800,000 in a private placement prior to the completion of the
Offering. The terms of these warrants are identical to the terms of the warrants
issued in the Offering, except that these insider warrants will not be subject
to redemption and may be exercised on a cashless basis, in each case if held by
the initial holder thereof or its permitted assigns, and may not be sold,
assigned or transferred prior to the 90th day
following consummation of a Business Combination.  The holder of these
insider warrants will not have any right to any liquidation distributions with
respect to shares underlying these warrants if the Company fails to consummate a
Business Combination, in which event these warrants will expire
worthless.





Camden
Learning, LLC has agreed to indemnify the Company for claims of creditors that
have not executed a valid and binding waiver of their rights to seek payments of
amounts due to them out of the trust account.





The
Company’s principal stockholder has entered into an agreement with the
underwriter pursuant to which it will place limit orders to purchase up to an
additional $4,000,000 of the Company’s common stock in the open market
commencing the later of (i) ten business days after the Company files its
current report on Form 8-K announcing its execution of a definitive agreement
for a Business Combination and (ii) 60 calendar days after the end of the
restricted period in connection with the Offering, as defined under the
Securities Exchange Act of 1934, and ending on the business day preceding the
record date of the stockholders’ meeting at which a Business Combination is to
be approved.  In the event the Company’s principal stockholder
does


not
purchase $4,000,000 of the Company’s common stock in the open market, the
stockholder


has
agreed to purchase from the Company in a private placement a number of units
identical to the units to be sold in the Offering at a purchase price of $8.00
per unit until it has spent, together with the aforementioned open market
purchases, an aggregate of $4,000,000 for purchase of the Company’s common
stock.


F-10





Note
6 – Restricted Funds Held in Trust:





For
      the three
                
                
                For
      the three
                
                
                April
      10, 2007months
      ended
                
                
                months
      ended
                
                
                (inception)
      throughMarch 31, 2009
                
                
                March 31, 2008
                
                
                March 31, 2009Investments
      held in trust – beginning of period
                
                $
                53,034,322
                
                
                $
                52,543,772
                
                
                $
                -Contribution
      to trust (which includes the deferredunderwriting
      discount and commission of $1,590,312 )
                
                
                -
                
                
                
                -
                
                
                
                52,389,984Interest
      income received
                
                
                21,284
                
                
                
                470,321
                
                
                
                1,275,622Withdrawals
      to pay taxes
                
                
                -
                
                
                
                -
                
                
                
                (610,000
                )Total
      investments held in trust
                
                $
                53,055,606
                
                
                $
                53,014,093
                
                
                $
                53,055,606





Note
7 – Common Stock Subject to Possible Redemption





The
Company will not proceed with a Business Combination if Public Stockholders
owning 30% or more of the shares sold in the Offering vote against the Business
Combination and exercise their redemption rights.  Accordingly, the
Company may affect a Business Combination only if stockholders owning one share
less than 30% of the shares sold in this Offering exercise their redemption
rights.  If this occurred, the Company would be required to redeem for
cash up to one share less than 30% of the 6,626,300 shares of common stock sold
in the Offering, or 1,987,889 shares of common stock, at a per-share redemption
price of $7.92 (plus their pro-rata portion of the interest earned on the trust
account, net of (i) taxes payable on interest earned and (ii) up to $600,000 of
interest income released to the Company to fund its working capital), which
includes $0.24 per share of deferred underwriting discount and commissions which
the underwriters have agreed to forfeit to pay redeeming stockholders. Total
interest earned through March 31, 2009, net of taxes of $471,980 and working
capital of $600,000, totaled $203,642. The dissenting stockholder’s pro-rata
share of this amount is reflected on the balance sheet as deferred
interest.





Note
8 – Commitments




The
Company entered into an engagement agreement with a consultant on June 23,
2008.  The consultant will provide financial advisory services to the
Company in connection with a potential transaction with certain predetermined
entities.  The Company is obligated to pay the consultant 1.5% of the
Transaction Value (as defined in the engagement agreement), provided, however,
the aggregate Transaction Fee shall not be less than $1,000,000 in the event a
Business Combination is completed with any of the predetermined
entities.  The Company also agreed to reimburse the consultant for its
reasonable business expenses in connection with services
rendered.  The agreement is on a month-to-month basis.  Upon
termination, no party shall have any liability to the other except that the
consultant shall be entitled to its transaction fee if, within twelve (12)
months from the date of termination of the agreement, the Company consummates a
transaction with one of the predetermined entities.


F-11





Note
9 – Common Stock





The
Company has 10,676,300 shares reserved for issuance for the exercise of the
underwriter’s purchase option units and the private placement warrants, as well
as the warrants sold in the initial public offering.





Note
10 – 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.





Note
11 – Fair Value of Financial Instruments





Effective
January 1, 2008 the Company adopted Statement No. 157, Fair Value
Measurements.  Statement No. 157 applies to all assets and
liabilities that are being measured and reported on a fair value
basis.  Statement No. 157 requires new disclosure that establishes a
framework for measuring fair value in GAAP, and expands disclosure about fair
value measurements.  This statement enables the reader of the
financial statements to assess the inputs used to develop those measurements by
establishing a hierarchy for ranking the quality and reliability of the
information used to determine fair values.  The statement requires
that assets and liabilities carried at fair value will be classified and
disclosed in one of the following three categories:




Level
      1:
            Quoted
      market prices in active markets for identical assets or
      liabilities.




Level
      2:
            Observable
      market based inputs or unobservable inputs that are corroborated by market
      data.




Level
      3:
            Unobservable
      inputs that are not corroborated by market
data.





In
determining the appropriate levels, the Company performs a detailed analysis of
the assets and liabilities that are subject to Statement No. 157.  At
each reporting period, all assets and liabilities for which the fair value
measurement is based on significant unobservable inputs are classified as Level
3.





The table
below presents the balances of assets and liabilities measured at fair value on
a recurring basis by level within the hierarchy.




March
      31, 2008Total
                  
                  
                  Level
      1
                  
                  
                  Level
      2
                  
                  
                  Level
      3Funds
      Held in Trust
                  
                  $
                  53,055,606
                  
                  
                  $
                  53,055,606
                  
                  
                  $
                  —
                  
                  
                  $
                  —Total
      assets
                  
                  $
                  53,055,606
                  
                  
                  $
                  53,055,606
                  
                  
                  $
                  —
                  
                  
                  $
                  —


F-12





The
Company’s restricted funds held in trust are invested in an institutional
liquidity fund invested in U.S. treasuries and repurchase agreements
collateralized by U.S. treasuries that are considered to be highly liquid and
easily tradable.  These securities are valued using inputs observable
in active markets for identical securities and therefore are classified as Level
1 within the fair value hierarchy.


F-13