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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549





FORM 10-Q







|x | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|- | ---------------------------------------------------------------------------------------

FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2008.



| ̈ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|- | ----------------------------------------------------------------------------------------

COMMISSION FILE NUMBER: 1-32983





MARATHON ACQUISITION CORP.

(Exact name of registrant as specified in its charter)







|                                                               |  |                                     
|-------------------------------------------------------------- |  | ------------------------------------
|Delaware                                                       |  | 20-4813290                          
|(State or other jurisdiction of incorporation or organization) |  | (I.R.S. Employer Identification No.)

500 PARK AVENUE, 5THFLOOR

NEW YORK, NEW YORK 10022

(Address of principal executive office)

(212) 993-1670

(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 Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter
period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  x    No   ̈.

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 accelerated filer, large accelerated filer and smaller reporting company in Rule
12b-2 of the Exchange Act. (Check one):



|                                              |  |   |  |                           |  |  
|--------------------------------------------- |  | - |  | ------------------------- |  | -
|Large accelerated filer                       |  |  ̈ |  | Accelerated filer         |  | x
|                                              |  |   | 
|Non-accelerated filer                         |  |  ̈ |  | Smaller reporting company |  |  ̈
|(Do not check if a smaller reporting company) |  |   |  |                          

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 the number of shares outstanding of each of the issuers classes of common stock, as of the latest practicable date.

The number of
shares of the issuers Common Stock, $0.0001 par value, outstanding as of August 11, 2008 was 49,410,850.









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TABLE OF CONTENTS



|                               |  |                                                                                                                                                                                                |  |     
|------------------------------ |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ----
|                               |  |                                                                                                                                                                                                |  | Page
|PART I  FINANCIAL INFORMATION |  |                                                                                                                                                                                               
|                               |  |                                                                                                                                                                                               
|Item 1.                        |  | Financial Statements                                                                                                                                                                           |  | 1   
|                               |  |                                                                                                                                                                                               
|                               |  | Consolidated Balance Sheets as of June 30, 2008 (unaudited) and December 31, 2007                                                                                                              |  | F-1 
|                               |  |                                                                                                                                                                                               
|                               |  | Consolidated Statements of Operations (unaudited) for the three and six months ended June 30, 2008 and June 30, 2007 and for the period from April 27, 2006 (inception) through
 June 30, 2008 |  | F-2 
|                               |  |                                                                                                                                                                                               
|                               |  | Consolidated Statement of Stockholders Equity (unaudited) for the period from April 27, 2006 (inception) through June 30, 2008                                                                |  | F-3 
|                               |  |                                                                                                                                                                                               
|                               |  | Consolidated Statements of Cash Flows (unaudited) for the six months ended June 30, 2008 and June 30, 2007 and for the period from April 27, 2006 (inception) through June 30,
 2008           |  | F-4 
|                               |  |                                                                                                                                                                                               
|                               |  | Notes to Consolidated Financial Statements (unaudited)                                                                                                                                         |  | F-5 
|                               |  |                                                                                                                                                                                               
|Item 2.                        |  | Managements Discussion and Analysis of Financial Condition and Results of Operation                                                                                                           |  | 1   
|                               |  |                                                                                                                                                                                               
|Item 3.                        |  | Quantitative and Qualitative Disclosures about Market Risk                                                                                                                                     |  | 6   
|                               |  |                                                                                                                                                                                               
|Item 4.                        |  | Controls and Procedures                                                                                                                                                                        |  | 6   
|                               | 
|PART II  OTHER INFORMATION    |  |                                                                                                                                                                                               
|                               |  |                                                                                                                                                                                               
|Item 1.                        |  | Legal Proceedings                                                                                                                                                                              |  | 6   
|                               |  |                                                                                                                                                                                               
|Item 1A.                       |  | Risk Factors                                                                                                                                                                                   |  | 6   
|                               |  |                                                                                                                                                                                               
|Item 2.                        |  | Unregistered Sales of Equity Securities and Use of Proceeds                                                                                                                                    |  | 6   
|                               |  |                                                                                                                                                                                               
|Item 3.                        |  | Defaults upon Senior Securities                                                                                                                                                                |  | 7   
|                               |  |                                                                                                                                                                                               
|Item 4.                        |  | Submission of Matters to a Vote of Security Holders                                                                                                                                            |  | 7   
|                               |  |                                                                                                                                                                                               
|Item 5.                        |  | Other Information                                                                                                                                                                              |  | 7   
|                               |  |                                                                                                                                                                                               
|Item 6.                        |  | Exhibits                                                                                                                                                                                       |  | 7   
|                               | 
|SIGNATURES                     |  | 9                                                                                                                                                                                             



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PART I  FINANCIAL INFORMATION



|Item 1. | Financial Statements
|------- | --------------------

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



|Item 2. | Managements Discussion and Analysis of Financial Condition and Results of Operations.
|------- | --------------------------------------------------------------------------------------

FORWARD-LOOKING STATEMENTS

The following discussion should be read in
conjunction with our combined consolidated financial statements and the notes thereto 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 the 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 US Securities and Exchange Commission (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

Overview

The following Managements Discussion and Analysis of Financial Condition and Results of Operations should be
read in conjunction with our consolidated financial statements and the related notes and schedules thereto.

We were formed on
April 27, 2006 as a blank check company for the purpose of acquiring, through a merger, stock exchange, asset acquisition, reorganization or similar business combination, one or more operating businesses. We intend to use cash derived from the
net proceeds of our initial public offering, and the exercise by the underwriters of their over-allotment option, together with any additional financing arrangements that we undertake, to effect a business combination.

On August 30, 2006, we consummated a private placement of warrants to Marathon Investors, LLC, an entity owned and controlled by our chief executive
officer for an aggregate purchase price of $5.5 million. On August 30, 2006, we consummated our initial public offering of 37,500,000 units, each consisting of one share of common stock and one warrant exercisable for an additional share of
common stock, and received proceeds of approximately $279,000,000, net of underwriting discounts and commissions of approximately $21,000,000 (including approximately $6,000,000 of deferred underwriting discounts and commissions placed in the trust
account pending completion of a business combination). In addition, on September 22, 2006 the underwriters for our initial public offering exercised their over-allotment option, which closed on September 27, 2006, generating proceeds of
approximately $18,867,000, net of underwriting discounts and commissions of approximately $1,420,000 (including approximately $400,000 of deferred underwriting discounts and commissions placed in the trust account pending completion of a business
combination). We incurred additional offering expenses of approximately $1,039,000, which have been charged to additional paid-in capital.

As of June 30, 2008, approximately $316.7 million was held in trust (plus accrued interest of approximately $0.5 million). We have incurred, and expect to continue to incur, substantial costs related to our proposed merger with GSL
Holdings, Inc. (GSL Holdings) and Global Ship Lease, Inc. (Global Ship Lease). As of June 30, 2008, we had only approximately $0.8 million of unrestricted cash available for completing our merger with GSL Holdings and
Global Ship Lease for payment of approximately $4.3 million of accrued expenses and for general corporate purposes. As a result, we cannot assure you that the cash we have available will be sufficient to cover our expenses. Deferred acquisition
costs associated with the proposed merger were approximately $3.6 million as of June 30, 2008.



|                                                                                                                           |  |   |             |  
|-------------------------------------------------------------------------------------------------------------------------- |  | - | ----------- | -
|Net proceeds from our initial public offering and private placement of warrants to Marathon Investors, LLC placed in trust |  | $ | 302,416,724 |  
|Deferred underwriters discounts and commissions                                                                           |  |   | 6,405,736   |  
|Total interest received to date for investments held in trust account                                                      |  |   | 22,976,376  |  
|Less total interest disbursed to us for working capital through June 30, 2008                                              |  |   | (3,900,000  | )
|Less total taxes paid through June 30, 2008                                                                                |  |   | (11,157,690 | )
|                                                                                                                           |  |   |             |  
|Total funds held in trust account at June 30, 2008                                                                         |  | $ | 316,741,146 |  
|                                                                                                                           |  |   |             |  
|Interest receivable attributable to the trust                                                                              |  | $ | 486,618     |  
|                                                                                                                           |  |   |             |  



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The initial target business or business with which we combine must have a collective fair market value
equal to at least 80% of the balance in the trust account (excluding deferred underwriters discounts and commissions). However, 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.

We may
issue additional capital stock or debt securities to finance a business combination. The issuance of additional capital stock, including upon conversion of any convertible debt securities we may issue, or the incurrence of debt, could have material
consequences on our business and financial condition. The issuance of additional shares of our capital stock (including upon conversion of convertible debt securities):



| |  |  | may significantly reduce the equity interest of our stockholders;
| | - |  | -----------------------------------------------------------------



| |  |  | will likely cause a change in control if a substantial number of our shares of common stock or voting preferred stock are issued, which may affect, among other
things, our ability to use our net operating loss carry forwards, if any, and may 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 common stock.
| | - |  | -------------------------------------------------------------------

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



| |  |  | default and foreclosure on our assets if our operating revenues after a business combination are insufficient to pay our debt obligations;
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | acceleration of our obligations to repay the indebtedness even if we make all principal and interest payments when due if we breach the covenants contained in any
debt securities, such as covenants that require the satisfaction or maintenance of certain financial ratios or reserves, without a waiver or renegotiation of such covenants;
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | an obligation to immediately repay all principal and accrued interest, if any, upon demand to the extent any debt securities are payable on demand; and
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | our inability to obtain additional financing, if necessary, to the extent any debt securities contain covenants restricting our ability to obtain additional
financing while such security is outstanding, or to the extent our existing leverage discourages other potential investors.
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Through June 30, 2008, we have incurred significant costs conducting our due diligence activities and merger negotiations and have neither engaged in any operations nor generated any revenues, other than interest income earned on the
proceeds of our private placement and initial public offering. Interest income was $1.5 million and $3.9 million for the three months ended June 30, 2008 and 2007, respectively, and $3.5 million and $7.8 million for the six months ended
June 30, 2008 and 2007, respectively. For the six months ended June 30, 2008, approximately $3.0 million was received and $0.5 million was accrued interest.

For the three and six months ended June 30, 2008, we paid or incurred an aggregate of approximately $0.4 million and $2.3 million (excluding income taxes) in expense, respectively, and recorded approximately
$3.6 million in deferred acquisition costs as of June 30, 2008 for the following purposes:



| |  |  | premiums associated with our directors and officers liability insurance;
| | - |  | ------------------------------------------------------------------------



| |  |  | expenses for due diligence and investigation of prospective target businesses;
| | - |  | ------------------------------------------------------------------------------



| |  |  | professional fees and other expenses related to our proposed merger with GSL Holdings and Global Ship Lease;
| | - |  | ------------------------------------------------------------------------------------------------------------



| |  |  | legal and accounting fees relating to our SEC reporting obligations and general corporate matters; and
| | - |  | ------------------------------------------------------------------------------------------------------



| |  |  | miscellaneous expenses.
| | - |  | -----------------------

This
represents an increase in expenses from the three months and six months ended June 30, 2007 of approximately $0.1 million and $1.7 million, respectively, reflecting additional legal and accounting fees and due diligence expenses associated with
our negotiation and entry into a definitive merger agreement relating to a proposed business combination with GSL Holdings, Inc., as described below.

We have incurred, and expect to continue to incur, substantial costs related to our proposed merger (See Entry Into Definitive Merger Agreement below). As of June 30, 2008, however, we had only approximately $0.8
million of unrestricted cash available for completing our merger with GSL Holdings, Inc., for payment of approximately $4.3 million of accrued expenses and for general corporate purposes. As a result, we cannot assure you that the cash we have
available will be sufficient to cover our expenses.

There is no assurance that the Companys plans to consummate a business
combination will be successful or successful within the target business acquisition period. These factors, among others, raise substantial doubt about the Companys ability to continue operations as a going concern. The accompanying financial
statements do not include any adjustments that may result from the outcome of this uncertainty.



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Entry Into Definitive Merger Agreement

On March 21, 2008, we entered into the Agreement and Plan of Merger (the Merger Agreement) with GSL Holdings, CMA CGM S.A.
(CMA) and Global Ship Lease, a wholly owned subsidiary of CMA CGM S.A., pursuant to which we will merge with and into GSL Holdings, our newly-formed, wholly-owned Marshall Islands subsidiary, and then Global Ship Lease will merge with
and into GSL Holdings, with GSL Holdings continuing as the surviving company domiciled in the Republic of the Marshall Islands and to be renamed Global Ship Lease, Inc. The Merger Agreement was amended on June 2,
2008, July 3, 2008 and July 23, 2008. On July 10, 2008, we filed with the Securities and Exchange Commission a definitive joint proxy statement/prospectus relating to the Merger Agreement. On July 28, 2008, we filed a
supplement to the definitive joint proxy statement/prospectus.

As a result of the Merger, each holder of a share of our common stock, par
value $0.0001 per share, issued and outstanding immediately prior to the effective time of the Merger will receive one Class A common share, par value $0.01 per share, of GSL Holdings, except that in lieu of 6,528,094 Class A common shares
of GSL Holdings to be received by Marathon Founders, LLC and other initial stockholders, they will receive an aggregate of 3,471,906 Class B common shares, par value $0.01 per share, of GSL Holdings and warrants to acquire an aggregate of 3,056,188
Class A common shares of GSL Holdings.

CMA will receive $18,570,135 in cash, 6,778,650 Class A common shares, 3,934,050 Class B
common shares, and 12,375,000 Class C common shares of GSL Holdings. CMA will also receive warrants to acquire 3,131,900 Class A common shares and 1,000 Series A preferred shares of GSL Holdings.

In addition, GSL Holdings intends to repurchase up to $48,000,000 in shares of our common stock or Class A common shares of GSL Holdings at or after
the closing to reduce the number of Class A common shares outstanding. In this regard, GSL Holdings may repurchase shares at the closing in privately negotiated transactions with a limited number of shareholders whom it believes would otherwise
elect to exercise conversion rights with respect to the their shares of common stock.

The rights of Series A preferred stock will rank
senior to the common shares and any class of equity securities issued by GSL Holdings which do not by their terms expressly provide that they are senior to the Series A preferred shares, with respect to dividend rights and rights upon liquidation,
dissolution, or winding up of GSL Holdings. The rights of holders of Class B common shares will be identical to those of holders of Class A common shares, except that the holders of Class B common shares will not be entitled to receive any
dividends with respect to the second and third quarters of 2008 and their dividend rights will be subordinated to those of holders of Class A common shares until at least July 2011. The rights of holders of Class C common shares will be
identical to those of holders of Class A common shares, except that holders of Class C common shares will not be entitled to receive dividends and the Class C common shares will convert into Class A common shares on a one-for-one basis on
January 1, 2009. Each outstanding warrant to acquire a share of Marathon common stock will become a warrant to receive one Class A common share of GSL Holdings. Each outstanding unit of Marathon will represent one Class A common share
of GSL Holdings and a warrant to acquire one Class A common share of GSL Holdings.

All Series A preferred shares will be mandatorily
redeemable by GSL Holdings on the third anniversary date of the Merger or, if earlier, upon a change in control, in each case, at a cash price of $48,000 per share plus all accrued and unpaid dividends to the redemption date. GSL Holdings will also
be required to redeem Series A preferred shares from time to time in part upon receipt of cash proceeds from the exercise of any warrants presently existing or hereinafter issued by Marathon or GSL Holdings and upon the occurrence of certain
significant transactions.

The warrants issued pursuant to the merger agreement will be exercisable upon issuance and will expire on the
fifth anniversary of the issuance date.

The Merger Agreement contains customary representations and warranties by each of the parties. The
representations and warranties do not survive the closing.

Marathon and Global Ship Lease have agreed to operate in the ordinary course
and to refrain from taking certain material prohibited actions without obtaining the other partys prior written consent (which shall not be unreasonably withheld) until the consummation of the Merger. Until the termination of the Merger
Agreement or the closing of the Merger, the parties have agreed not to encourage, solicit, initiate, engage or participate in negotiations regarding an alternate transaction. The parties have agreed to use commercially reasonable efforts to
consummate the transaction, including commercially reasonable efforts by Marathon to obtain the requisite stockholder approval and warrantholder consent. Marathon and Global Ship Lease will afford to each other reasonable access to their properties,
books, records, advisors, accountants, counsel and other representatives and to all information reasonably requested by each other, and Marathon will be permitted to conduct an inspection of Global Ship Leases vessels prior to the closing.

Marathon and Global Ship Lease have filed a joint proxy statement/prospectus with the U.S. Securities and Exchange Commission for the
purpose of (i) soliciting proxies from Marathons stockholders for the purpose of obtaining the requisite approval of the Merger Agreement and the transactions contemplated thereby at a meeting of Marathons stockholders to be called
and held for such purpose, (ii) soliciting consents from holders of Marathon warrants for obtaining the requisite approval of amendments to Marathons warrant agreement required for the transactions contemplated in the Merger Agreement and
(iii) registering the securities of GSL Holdings to be issued to Marathons security holders in connection with the Merger. A special stockholders meeting to vote on the Merger and the related proposals has been scheduled for
August 12, 2008. Marathon has received the requisite consent of a majority of the issued and outstanding warrants and executed the third supplement to its warrant agreement on August 6, 2008.

The obligations of Marathon and GSL Holdings, on the one hand, and CMA and Global Ship Lease, on the other hand, to consummate the transaction are
subject to the following closing conditions: (i) Marathon shall have obtained the approval of its stockholders and consent of its warrantholders with respect to the transaction, (ii) holders of less than 20% of Marathons common stock
shall have exercised their rights to convert their shares into a pro rata share of the aggregate amount then on deposit in the trust fund, (iii) the expiration of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of
1976, (iv) no statute, rule, regulation, decree, injunction or order of any governmental entity which prohibits the consummation of the transaction shall have been enacted, issued or entered, (v) accuracy of representations and warranties
of the other parties, (vi) performance and compliance by the other parties with their respective agreements and covenants, (vii) execution of related transaction agreements and (viii) Marathon and GSL Holdings shall have received tax
opinions from legal counsel. In addition, the obligation of Marathon and GSL Holdings to consummate the transaction is also subject to (x) an absence of a material adverse effect on Global Ship Lease and (y) Global Ship Leases credit
facility shall be in full force and effect as of the time of the Merger, and the obligation of CMA and Global Ship Lease to consummate the transaction is also subject to (a) an absence of a material adverse effect on Marathon or GSL Holdings
and (b) Marathon having made appropriate arrangements reasonably satisfactory to Global Ship Lease and CMA to have the trust fund (which shall contain no less than $240 million) disbursed to Marathon and CMA upon the closing.



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The Merger Agreement may be terminated at any time prior to the closing, as follows: (i) by mutual
written consent of Marathon and CMA, (ii) by Marathon or CMA if the transaction has not been consummated by August 31, 2008, (iii) by either Marathon, CMA or Global Ship Lease if a governmental entity has issued a final and
non-appealable order, decree, judgment or ruling or taken any other action permanently restraining, enjoining or otherwise prohibiting the closing of the transaction, (iv) by Marathon, on the one hand, or CMA and Global Ship Lease, on the other
hand, if either party materially breaches any of its representations, warranties, covenants or agreements such that the applicable closing condition would not be satisfied (subject to cure provisions), and (v) by either party, if
Marathons stockholders do not approve, and warrantholders do not consent to, the Merger (or if holders of 20% or more of Marathons common stock exercise conversion rights).

Pursuant to a second amended and restated asset purchase agreement (the Asset Purchase Agreement) to be entered into on the closing date of
the transaction, Global Ship Lease will purchase five additional vessels from CMA with expected delivery between December 2008 and July 2009 for an aggregate purchase price of $437 million, of which $99 million will be deemed to be prepaid by the
consideration paid to CMA in the Merger.

The foregoing summary of the Merger Agreement, as amended, and the Asset Purchase Agreement does
not purport to be complete and is subject to, and qualified in its entirety by, the full text of the Merger Agreement in our Current Report on Form 8-K filed on March 25, 2008, and the amendments to the Merger Agreement filed in our Current
Reports filed on June 3, 2008, July 8, 2008 and July 24, 2008, respectively, and the full text of the Asset Purchase Agreement included in our Current Report on Form 8-K filed on March 25, 2008, and which are all
incorporated herein by reference.

In connection with the proposed Merger, on March 24, 2008, Marathon entered into a second
supplemental agreement (the Second Supplemental Warrant Agreement) to the warrant agreement dated as of August 30, 2006 (the Warrant Agreement) by and between the Company and The Bank of New York, a New York trust
company (the successor thereto under the Warrant Agreement, Mellon Investor Services LLC, a New Jersey limited liability company), as Warrant Agent, to alter certain rights affecting the Sponsor Warrants (as such term is defined in the Warrant
Agreement), consistent with the terms of the Warrant Agreement and having received unanimous consent from all of the holders of the Sponsor Warrants, to provide that (i) the Sponsor Warrants must be exercised on a cashless basis and
(ii) the Sponsor Warrants would be subject to Marathons right of Redemption (as such term is defined in the Warrant Agreement), in each case, if and only if the Merger is consummated.

The foregoing summary of the Second Supplemental Warrant Agreement does not purport to be complete and is subject to, and qualified in its entirety by,
the full text of the Second Supplemental Warrant Agreement attached as Exhibit 4.3 to our Current Report on Form 8-K filed on March 25, 2008 and incorporated herein by reference.

In connection with the proposed Merger, on August 6, 2008, Marathon entered into a third supplemental agreement (the Third Supplemental
Warrant Agreement) to the Warrant Agreement to amend the Warrant Agreement (1) by amending the definition of business combination in the Warrant Agreement to include (A) the merger of Marathon with and into another entity
and (B) a merger of Marathon into or with a non-U.S. entity and the subsequent business combination with another entity and (2) by making a conforming change to the merger provision in the Warrant Agreement to include a merger of Marathon
into or with a non-U.S. entity.



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Recent Accounting Pronouncements

Fair Value MeasurementsIn September 2006, the Financial Accounting Standards Board (FASB) issued SFAS No. 157,Fair Value Measurement (SFAS 157). SFAS 157 defines fair
value, establishes a framework for measuring fair value and expands disclosures about fair value measurements. SFAS 157 applies under other accounting pronouncements that require or permit fair value measurements and is effective for fiscal years
beginning November 15, 2007. The Companys adoption of SFAS 157 did not have a material impact on the Companys financial statements.

The Fair Value Option for Financial Assets and Financial LiabilitiesIn February 2007, the FASB issued SFAS 159,The Fair Value Option for Financial Assets and Financial Liabilities (SFAS
159), which permits entities to choose to measure many financial instruments and certain other items at fair value. SFAS 159 is effective for the first quarter of 2008. The adoption of SFAS 159 did not have a material impact on the
Companys financial statements.

Business CombinationsIn December 2007, the FASB issued SFAS No. 141(R),Business
Combinations (SFAS 141(R)). SFAS 141(R) expands the definition of transactions and events that qualify as business combinations; requires that the acquired assets and liabilities, including contingencies, be recorded at the fair
value determined on the acquisition date and changes thereafter reflected in revenue, not goodwill; changes the recognition timing for restructuring costs; and requires acquisition costs to be expensed as incurred. Adoption of SFAS 141(R) is
required for combinations after December 15, 2008. Early adoption and retroactive application of SFAS 141(R) to fiscal years preceding the effective date are not permitted. We are currently evaluating the impact of SFAS 141(R) on the financial
statements.

Noncontrolling Interest in Consolidated Financial StatementsIn December 2007, the FASB issued SFAS No. 160,
Noncontrolling Interest in Consolidated Financial Statements (SFAS 160). SFAS 160 re-characterizes minority interests in consolidated subsidiaries as non-controlling interests and requires the classification of minority interests
as a component of equity. Under SFAS 160, a change in control will be measured at fair value, with any gain or loss recognized in earnings. The effective date for SFAS 160 is for annual periods beginning on or after December 15, 2008. Early
adoption and retroactive application of SFAS 160 to fiscal years preceding the effective date are not permitted. We are currently evaluating the impact of SFAS 160 on the financial statements.

In March 2008, the FASB issued SFAS No. 161 (SFAS 161),Disclosures about Derivative Instruments and Hedging Activitiesan
amendment of FASB Statement No. 133, Accounting for Derivative Instruments and Hedging Activities (SFAS No. 133). SFAS No. 161 requires companies to provide enhanced disclosures regarding derivative instruments and
hedging activities in order to better convey the purpose of derivative use in terms of risk management. Disclosures about (i) how and why an entity uses derivative instruments, (ii) how derivative instruments and related hedged items are
accounted for under SFAS No. 133 and its related interpretations, and (iii) how derivative instruments and related hedged items affect a companys financial position, financial performance, and cash flows, are required. This Statement
retains the same scope as SFAS No. 133 and is effective for fiscal years and interim periods beginning after November 15, 2008. The Company is currently evaluating the impact, if any, that the adoption of SFAS No. 161 will have on its
consolidated financial position and results of operations. However, the company considers any impact unlikely.

In May 2008, the FASB
issued SFAS No. 162, The Hierarchy of Generally Accepted Accounting Principles, (SFAS 162). SFAS 162 sets forth the sources of accounting principles and the framework, or hierarchy, for selecting principles to be used in
financial statement preparation. Prior to the issuance of SFAS 162, the GAAP hierarchy was defined in the American Institute of Certified Public Accountants Statement on Auditing Standards No. 69, The Meaning of Present Fairly in conformity
With Generally Accepted Accounting Principles. SFAS 162 will be effective following approval by the Securities and Exchange Commission (SEC). The FASB does not expect the issuance of SFAS 162 to result in a change in current
practice. The Company is currently evaluating the impact, if any, that SFAS No. 161 will have on its consolidated financial position and results of operations.

In December 2007, the FASB ratified EITF Issue No. 07-1,Accounting for Collaborative Arrangements Related to the Development and Commercialization of Intellectual Property (EITF 07-1). The
EITF concluded that a collaborative arrangement is one in which the participants are actively involved and are exposed to significant risks and rewards that depend on the ultimate commercial success of the endeavor. Revenues and costs incurred with
third parties in connection with collaborative arrangements would be presented gross or net based on the criteria in EITF Issue No. 99-19, Reporting Revenue Gross as a Principal versus Net as an Agent , and other accounting literature.
Payments to or from collaborators would be evaluated and presented based on the nature of the arrangement and its terms, the nature of the entitys business, and whether those payments are within the scope of other accounting literature. The
nature and purpose of collaborative arrangements are to be disclosed along with the accounting policies and the classification and amounts of significant financial statement amounts related to the arrangements. Activities in the arrangement
conducted in a separate legal entity should be accounted for under other accounting literature; however, required disclosure under EITF 07-1 applies to the entire collaborative agreement. This Issue is effective for fiscal years beginning after
December 15, 2008, and is to be applied retrospectively to all periods presented for all collaborative arrangements existing as of the effective date. The Company is currently evaluating the impact that this pronouncement may have on its
consolidated financial position and results of operations. However, the company considers any impact unlikely.

Critical Accounting Policies

The preparation of financial statements and related disclosures in conformity with generally accepted accounting principles in the
United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements, and income and expenses during
the periods reported. Actual results could materially differ from those estimates. We have identified the following as our critical accounting policies:

Cash and cash equivalents

We consider all highly liquid investments with maturities of three months or less to be
cash equivalents, when purchased.

Earnings per common share

Basic earnings per common share for all periods is computed by dividing the earnings applicable to common stockholders by the weighted average number of common shares outstanding for the period. Warrants issued in the
offering and sponsor warrants are contingently exercisable upon consummation of a business combination. Hence, these warrants are presented in the pro-forma diluted earnings per share. Diluted income per share reflects the potential dilution
assuming common shares were issued upon the exercise of outstanding in the money warrants and the proceeds thereof were used to purchase common shares at the average market price during the period.

Our statements of operations include a presentation of earnings per share for common stock subject to possible conversion in a manner similar to the
two-class method of earnings per share. Basic and diluted net income per share amount for the maximum number of shares subject to possible conversion is calculated by dividing the net interest income attributable to common shares subject to
conversion ($163,633 and $422,445 for the three months ended June 30, 2008 and 2007, respectively and $373,374 and $644,091 for the six months ended June 30, 2008 and 2007, respectively) by the weighted average number of shares subject to
possible conversion. Basic and diluted net income per share amount for the shares outstanding not subject to possible conversion is calculated by dividing the net income exclusive of the net interest income attributable to common shares subject to
conversion by the weighted average number of shares not subject to possible conversion.



5



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##### Table of Contents

|Item 3. | Quantitative and Qualitative Disclosures about Market Risk.
|------- | -----------------------------------------------------------

To date, our efforts have been limited to organizational activities, activities relating to our initial public offering, and the acquisition of a target business; we have neither engaged in any operations nor generated any revenues. As the
proceeds from our initial public offering held in trust have been invested in short term investments, our only market risk exposure relates to fluctuations in interest rates.

As of June 30, 2008, approximately $316.7 million (excluding approximately $6.4 million of deferred underwriting discounts and commissions) was held
in trust for the purposes of consummating a business combination. The proceeds held in trust (including approximately $6.4 million of deferred underwriting discounts and commissions) have been invested in a money market fund that invests principally
in short-term securities issued or guaranteed by the United States. The effective interest rate earned on our investment for the six months June 30, 2008 was approximately 2.17%. Assuming no other changes to our holdings as of June 30,
2008, a 1% increase in the underlying interest rate payable on our investment as of June 30, 2008 would result in an increase of approximately $791,853 in the interest earned on our investment for the following 90-day period, and a
corresponding increase in our net increase in stockholders equity resulting from operations, if any, for that period.

We have not
engaged in any hedging activities since our inception on April 27, 2006. We do not expect to engage in any hedging activities with respect to the market risk to which we are exposed.



|Item 4. | Controls and Procedures.
|------- | ------------------------

As of June 30, 2008,
we, including our chief executive officer, who also serves as our principal 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). Based upon
this evaluation, our chief executive officer concluded that our disclosure controls and procedures are effective in timely alerting management of any material information relating to us that is required to be disclosed by us in the reports we file
or submit under the Securities Exchange Act of 1934.

There have been no changes in our internal control over financial reporting (as
defined in Rule 13-15(f) of the Securities Exchange Act of 1934) that occurred during the quarter ended June 30, 2008 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.
|------- | ------------------

We are not currently subject to
any material legal proceedings, nor, to our knowledge, is any material legal proceeding threatened against us.



|Item 1A. | Risk Factors.
|-------- | -------------

We may incur expenses in excess
of available cash.

We have incurred, and expect to continue to incur, substantial costs related to our proposed merger with GSL
Holdings and Global Ship Lease. For the three and six months ended June 30, 2008, we paid or incurred an aggregate of approximately $0.4 million and $2.3 million in expenses, excluding income taxes, and recorded deferred acquisition costs of
$3.6 million as of June 30, 2008, which are attributable to expenses incurred in connection with our proposed merger with GSL Holdings and Global Ship Lease. As of June 30, 2008, however, we had only approximately $0.8 million of
unrestricted cash available for completing our merger with GSL Holdings and Global Ship Lease and for general corporate purposes as well as a liability of $4.3 million for accrued expenses. As a result, we cannot assure you that the cash we have
available will be sufficient to cover our expenses.

Ownership and further purchases by the initial stockholders and their respective
affiliates may influence the outcome of the stockholder vote and could result in the approval of the Merger Agreement.

Each of our initial stockholders has agreed to vote all of his or its initial shares in accordance with the majority of the votes cast with respect to the merger proposal relating to the
Merger Agreement by the holders of the shares issued in the initial public offering, and any shares acquired in or after the initial public offering in favor of the merger proposal. As of July 7, 2008, our initial stockholders, either directly or
beneficially, owned and were entitled to vote 11,375,000 shares or approximately 23.0% of Marathons outstanding common stock. With respect to the Merger, our initial stockholders have agreed to vote 9,375,000 of their respective shares of
common stock which were acquired by them prior to the initial public offering, or 19.0% of the outstanding common stock, in accordance with the majority of the shares of common stock voted by the public stockholders. Our initial stockholders and
directors and Marathon Investors, LLC have also agreed that they will vote any shares they purchase in the open market in or after the initial public offering in favor of the merger. As of July 7, 2008, 2,000,000 shares, or 4.0% of the outstanding
common stock, were subject to this voting arrangement. Furthermore, our officers and directors and their respective affiliates, at any time prior to the special meeting on August 12, 2008, during a period when they are not then aware of any material
nonpublic information regarding Marathon or its securities, may enter into a written plan to purchase Marathon securities pursuant to Rule 10b5-1 of the Securities Exchange Act of 1934, as amended (the Exchange Act), and may engage in
other permissible public market purchases, as well as private purchases, of securities. On June 4, 2008, Michael Gross, our Chief Executive Officer and chairman of our Board of Directors, entered into a stock purchase plan with Citigroup Global
Markets Inc., in accordance with the guidelines of Rule 10b5-1 and the provisions of Rule 10b-18 of the Exchange Act, under which he placed a limit order to purchase up to 2,000,000 shares of Marathon common stock at a price of $8 per share or
below. Under this plan, 2,000,000 shares were purchased at prices between $7.59 and $7.87 with an average price of $7.84 per share. If our initial stockholders or our officers and directors purchase securities from existing Marathon stockholders
that are likely to vote against the transaction, or that are likely to elect to convert their shares, the probability that the business combination will succeed increases, since the number of shares held by public stockholders will be reduced and
the number of shares held by insiders will be increased. Therefore the number of shares that will be voted in favor of the merger proposal increases and the number of shares that are converted may decrease.

Other than as set forth above, there have been no material changes from the risk factors set forth in our Annual Report on Form 10-K for the year
ended December 31, 2007, other than the additional risk factors set forth under the caption Risk Factors in our Definitive Proxy Statement filed under cover of Schedule 14A on July 10, 2008, which are specifically incorporated
by reference herein.



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

Recent Sales of Unregistered Securities

We did not engage in any unregistered sales of equity securities during the six
months ended June 30, 2008.



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Use of Proceeds from Registered Offering

On May 11, 2006 in connection with our formation and initial capitalization, we consummated a private placement of an aggregate of 9,375,000 shares
of our common stock to Marathon Founders, LLC, an entity owned and controlled by Michael Gross, our chairman, chief executive officer and secretary, and two of our then current directors for an aggregate purchase price of $25,000.

On August 30, 2006, we consummated a private placement of an aggregate of 5,500,000 warrants to Marathon Investors, LLC, an entity owned and
controlled by our chief executive officer for an aggregate purchase price of $5.5 million.

On August 30, 2006, we consummated our
initial public offering of 37,500,000 units, each consisting of one share of common stock and one warrant exercisable for an additional share of common stock, and received proceeds of approximately $279,000,000, net of underwriting discounts and
commission of approximately $21,000,000 (including approximately $6,000,000 of deferred underwriting discounts and commissions placed in the trust account pending completion of a business combination).

On August 30, 2006, we used $225,000 of our general working capital to repay the note payable to our chief executive officer. The note was repaid in
full, without interest, and cancelled.

On September 14, 2006, we used $285,000 of our general working capital to pay premiums
associated with our directors and officers liability insurance.

On September 27, 2006, the underwriters for our initial public
offering exercised their over-allotment option and, on September 27, 2006, purchased 2,535,850 additional units. The proceeds from the exercise of the over-allotment option was approximately $18,867,000, after deducting underwriting discounts
and commissions of approximately $1,420,000 (including approximately $400,000 of deferred underwriting discounts and commissions placed in the trust account pending completion of a business combination).

We incurred additional offering expenses of approximately $1,039,000, which have been charged to additional paid-in capital.

As of June 30, 2008, we have paid or incurred an aggregate of approximately $18.5 million in expenses, which have been or will be paid out of the
proceeds of our initial public offering not held in trust and our withdrawal of interest earned on the funds held in the trust account, for the following purposes:



| |  |  | payment of estimated taxes incurred as a result of interest income earned on funds currently held in the trust account;
| | - |  | -----------------------------------------------------------------------------------------------------------------------



| |  |  | expenses for due diligence and investigation of prospective target businesses;
| | - |  | ------------------------------------------------------------------------------



| |  |  | legal and accounting fees relating to our SEC reporting obligations and general corporate matters; and
| | - |  | ------------------------------------------------------------------------------------------------------



| |  |  | professional fees and other expenses related to our proposed merger with GSL Holdings and Global Ship Lease
| | - |  | -----------------------------------------------------------------------------------------------------------



| |  |  | and other miscellaneous expenses.
| | - |  | ---------------------------------

As of June 30, 2008, after giving effect to our initial public offering and our operations subsequent thereto, including our withdrawal of approximately $15.0 million of the interest earned on the funds held in the trust account
through June 30, 2008, which includes approximately $11.1 million withdrawn for the payment of estimated taxes thereon and $3.9 million withdrawn for working capital purposes, approximately $316.7 million was held in trust. We have incurred,
and expect to continue to incur, substantial costs related to our proposed merger (See Entry Into Definitive Merger Agreement above). A substantial portion of this amount is attributable to expenses incurred in connection with our proposed merger
with GSL Holdings and Global Ship Lease. As of June 30, 2008, however, we had only approximately $0.8 million of unrestricted cash available for completing our merger with GSL Holdings and Global Ship Lease for payment of approximately $4.3
million of accrued expenses and for general corporate purposes. As a result, we cannot assure you that the cash we have available will be sufficient to cover our expenses.



|Item 3. | Defaults upon Senior Securities.
|------- | --------------------------------

Not applicable



|Item 4. | Submission of Matters to a Vote of Security Holders.
|------- | ----------------------------------------------------

No matters were submitted to a vote of stockholders during the quarter ended June 30, 2008.



|Item 5. | Other Information.
|------- | ------------------

Not applicable



|Item 6. | Exhibits.
|------- | ---------



|    |  |                                                                                                                       
|--- |  | ----------------------------------------------------------------------------------------------------------------------
|2.1 |  | Agreement and Plan of Merger among the Registrant, GSL Holdings, Inc., CMA CGM S.A. and Global Ship Lease, Inc. ******
|    | 
|2.2 |  | Amendment to Agreement and Plan of Merger*******                                                                      
|    | 
|2.3 |  | Second Amendment to Agreement and Plan of Merger********                                                              
|    | 
|2.4 |  | Third Amendment to Agreement and Plan of Merger*********                                                              
|    | 
|3.1 |  | Amended and Restated Certificate of Incorporation *                                                                   
|    | 
|3.2 |  | By-laws **                                                                                                            
|    | 
|4.1 |  | Specimen Unit Certificate **                                                                                          



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|     |  |                                                                                                                                                                                    
|---- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|4.2  |  | Specimen Common Stock Certificate **                                                                                                                                               
|     | 
|4.3  |  | Specimen Warrant Certificate **                                                                                                                                                    
|     | 
|4.4  |  | Form of Warrant Agreement between the Warrant Agent and the Registrant ***                                                                                                         
|     | 
|4.5  |  | First Supplemental Warrant Agreement between the Warrant Agent and the Registrant ******                                                                                           
|     | 
|4.6  |  | Second Supplemental Warrant Agreement between the Warrant Agent and the Registrant ******                                                                                          
|     | 
|4.7  |  | Third Supplemental Warrant Agreement between the Warrant Agent and the Registrant**********                                                                                        
|     | 
|10.1 |  | Form of Letter Agreement between the Registrant and each of Marathon Founders, LLC, Marathon Investors, LLC, and all of the directors and executive officers of the Registrant
****
|     | 
|10.2 |  | Promissory Note, dated May 11, 2006, issued to Michael S. Gross*****                                                                                                               
|     | 
|10.3 |  | Letter Agreement between the Registrant and Marathon Management, LLC **                                                                                                            
|     | 
|10.4 |  | Form of Registration Rights Agreement among the Registrant, Marathon Investors, LLC, Marathon Founders, LLC and certain directors of the Registrant ****                           
|     | 
|10.5 |  | Founders Unit Agreement among the Registrant and Marathon Founders, LLC and certain directors of the Registrant *****                                                             
|     | 
|10.6 |  | Form of Indemnity Agreement between the Registrant and each of its directors and executive officers **                                                                             
|     | 
|10.7 |  | Form of Investment Management Trust Account Agreement by and between the Registrant and The Bank of New York ****                                                                  
|     | 
|10.8 |  | Founder Warrant Purchase Agreement between the Registrant and Marathon Investors, LLC *****                                                                                        
|     | 
|10.9 |  | First Supplemental Founder Warrant Purchase Agreement between the Registrant and Marathon Investors, LLC ******                                                                    
|     | 
|31.1 |  | Certification of Chief Executive Officer and Principal Financial Officer pursuant to Rule 13a-14 of the Securities Exchange Act of 1934, as amended                                
|     | 
|32.1 |  | Certification of Chief Executive Officer and Principal Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002                                                 



|           |  |                                                                                                                                                                       
|---------- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------
|*          |  | Previously filed in connection with Marathon Acquisition Corp.s registration statement on Form S-1 (File No. 333-134078) filed on May 12, 2006.                      
|**         |  | Previously filed in connection with amendment no. 2 to Marathon Acquisition Corp.s registration statement on Form S-1 (File No. 333-134078) filed on August 1,
2006. 
|***        |  | Previously filed in connection with amendment no. 5 to Marathon Acquisition Corp.s registration statement on Form S-1 (File No. 333-134078) filed on August 23,
2006.
|****       |  | Previously filed in connection with amendment no. 3 to Marathon Acquisition Corp.s registration statement on Form S-1 (File No. 333-134078) filed on August 8,
2006. 
|*****      |  | Previously filed in connection with amendment no. 1 to Marathon Acquisition Corp.s registration statement on Form S-1 (File No. 333-134078) filed on June 29,
2006.  
|******     |  | Previously filed in connection with the Current Report on Form 8-K (File No. 1-32983) filed on March 25, 2008.                                                        
|*******    |  | Previously filed in connection with the Current Report on Form 8-K (File No. 1-32983) filed on June 3, 2008.                                                          
|********   |  | Previously filed in connection with the Current Report on Form 8-K (File No. 1-32983) filed on July 8, 2008.                                                          
|*********  |  | Previously filed in connection with the Current Report on Form 8-K (File No. 1-32983) filed on July 24, 2008.                                                         
|********** |  | Previously filed in connection with the Current Report on Form 8-K (File No. 1-32983) filed on August 7, 2008.                                                        



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SIGNATURES

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



|                      |  |                            |  |                                                      
|--------------------- |  | -------------------------- |  | -----------------------------------------------------
|Date: August 11, 2008 |  | MARATHON ACQUISITION CORP.
|                      |  |                           
|                      |  | By:                        |  | /s/ Michael S. Gross                                 
|                      |  |                            |  | Michael S. Gross                                     
|                      |  |                            |  | Chief Executive Officer (Principal Financial Officer)



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MARATHON ACQUISITION CORP.

(a development stage company)

CONSOLIDATED BALANCE SHEETS



|                                                                                                                                                                             |  |               |             |                   |   |            
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ------------- | ----------- | ----------------- | - | -----------
|                                                                                                                                                                             |  | June 30, 2008 |             | December 31, 2007
|                                                                                                                                                                             |  | (unaudited)   |             |                  
|ASSETS                                                                                                                                                                       |  |               |             |                   |   |            
|Current assets:                                                                                                                                                              |  |               |             |                   |   |            
|Cash and cash equivalents                                                                                                                                                    |  | $             | 798,013     |                   | $ | 2,671,034  
|Prepaid expenses                                                                                                                                                             |  |               |            |                   |   | 39,935     
|Prepaid income taxes                                                                                                                                                         |  |               | 363,815     |                   |   | 458,139    
|Interest receivable attributable to trust                                                                                                                                    |  |               | 486,618     |                   |   | 999,199    
|                                                                                                                                                                             |  |               |             |                   |   |            
|Total current assets                                                                                                                                                         |  |               | 1,648,446   |                   |   | 4,168,307  
|                                                                                                                                                                             |  |               |             |                   |   |            
|Investments held in trust account                                                                                                                                            |  |               | 316,741,146 |                   |   | 314,130,809
|Deferred acquisition costs                                                                                                                                                   |  |               | 3,614,087   |                   |   |           
|                                                                                                                                                                             |  |               |             |                   |   |            
|Total assets                                                                                                                                                                 |  | $             | 322,003,679 |                   | $ | 318,299,116
|                                                                                                                                                                             |  |               |             |                   |   |            
|LIABILITIES AND STOCKHOLDERS EQUITY                                                                                                                                         |  |               |             |                   |   |            
|Current liabilities:                                                                                                                                                         |  |               |             |                   |   |            
|Accrued expenses                                                                                                                                                             |  | $             | 4,346,281   |                   | $ | 162,559    
|Income tax payable                                                                                                                                                           |  |               |            |                   |   | 47,886     
|Deferred underwriting discounts and commissions                                                                                                                              |  |               | 6,405,736   |                   |   | 6,405,736  
|                                                                                                                                                                             |  |               |             |                   |   |            
|Total current liabilities                                                                                                                                                    |  |               | 10,752,017  |                   |   | 6,616,181  
|                                                                                                                                                                             |  |               |             |                   |   |            
|Common stock subject to possible conversion (8,003,166 shares at $7.72 per share)                                                                                            |  |               | 61,795,116  |                   |   | 61,795,116 
|Interest attributable to common stock subject to possible conversion (net of income taxes of $1,464,954 and $1,156,989 at June 30, 2008
and December 31, 2007, respectively) |  |               | 1,776,095   |                   |   | 1,402,720  
|Stockholders equity:                                                                                                                                                        |  |               |             |                   |   |            
|Preferred stock, $0.0001 par value, 1,000,000 shares authorized; none issued or outstanding                                                                                  |  |               |            |                   |   |           
|Common stock, $0.0001 par value, 249,000,000 shares authorized; 49,410,850 shares issued and outstanding (including 8,003,166 shares subject
to possible conversion)         |  |               | 4,942       |                   |   | 4,942      
|Additional paid-in capital                                                                                                                                                   |  |               | 240,553,066 |                   |   | 240,553,066
|Retained earnings accumulated during development stage                                                                                                                       |  |               | 7,122,443   |                   |   | 7,927,091  
|                                                                                                                                                                             |  |               |             |                   |   |            
|Total stockholders equity                                                                                                                                                   |  |               | 247,680,451 |                   |   | 248,485,099
|                                                                                                                                                                             |  |               |             |                   |   |            
|Total liabilities and stockholders equity                                                                                                                                   |  | $             | 322,003,679 |                   | $ | 318,299,116
|                                                                                                                                                                             |  |               |             |                   |   |            

See accompanying notes to financial statements.



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##### Table of Contents

MARATHON ACQUISITION CORP.

(a development stage company)

CONSOLIDATED STATEMENTS OF OPERATIONS

(unaudited)



|                                                                                                                                                           |  |                                |            |   |                                |   |            |                              |  |   |                              |   |  |                                                           |            |   |  |   |             |  
|---------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ------------------------------ | ---------- | - | ------------------------------ | - | ---------- | ---------------------------- |  | - | ---------------------------- | - |  | --------------------------------------------------------- | ---------- | - |  | - | ----------- | -
|                                                                                                                                                           |  | Three MonthsendedJune 30, 2008 |            |   | Three MonthsendedJune 30, 2007 |   |            | Six MonthsendedJune 30, 2008 |  |   | Six MonthsendedJune 30, 2007 |   |  | Period fromApril 27, 2006(inception) throughJune 30, 2008 |           
|Formation and general and administrative costs                                                                                                             |  | $                              | 428,401    |   |                                | $ | 286,948    |                              |  | $ | 2,291,185                    |   |  | $                                                         | 573,224    |   |  | $ | 3,899,089   |  
|                                                                                                                                                           |  |                                |            |   |                                |   |            |                              |  |   |                              |   |  |                                                           |            |   |  |   |             |  
|Net loss from operations                                                                                                                                   |  |                                | (428,401   | ) |                                |   | (286,948   | )                            |  |   | (2,291,185                   | ) |  |                                                           | (573,224   | ) |  |   | (3,899,089  | )
|Other income  interest                                                                                                                                    |  |                                | 1,501,563  |   |                                |   | 3,913,426  |                              |  |   | 3,454,976                    |   |  |                                                           | 7,825,334  |   |  |   | 23,584,244  |  
|                                                                                                                                                           |  |                                |            |   |                                |   |            |                              |  |   |                              |   |  |                                                           |            |   |  |   |             |  
|Income before provision for taxes                                                                                                                          |  |                                | 1,073,162  |   |                                |   | 3,626,478  |                              |  |   | 1,163,791                    |   |  |                                                           | 7,252,110  |   |  |   | 19,685,155  |  
|Provision for income taxes                                                                                                                                 |  |                                | (704,105   | ) |                                |   | (2,074,000 | )                            |  |   | (1,595,065                   | ) |  |                                                           | (3,713,000 | ) |  |   | (10,786,617 | )
|                                                                                                                                                           |  |                                |            |   |                                |   |            |                              |  |   |                              |   |  |                                                           |            |   |  |   |             |  
|Net income (loss)                                                                                                                                          |  |                                | 369,057    |   |                                |   | 1,552,478  |                              |  |   | (431,274                     | ) |  |                                                           | 3,539,110  |   |  |   | 8,898,538   |  
|Less: Interest attributable to common stock subject to possible conversion (net of income taxes of $134,967, $348,440, $307,965, $531,258,
and $1,464,954) |  |                                | (163,633   | ) |                                |   | (422,445   | )                            |  |   | (373,374                     | ) |  |                                                           | (644,091   | ) |  |   | (1,776,095  | )
|                                                                                                                                                           |  |                                |            |   |                                |   |            |                              |  |   |                              |   |  |                                                           |            |   |  |   |             |  
|Net income (loss) attributable to common stock not subject to possible conversion                                                                          |  | $                              | 205,424    |   |                                | $ | 1,130,033  |                              |  | $ | (804,648                     | ) |  | $                                                         | 2,895,019  |   |  | $ | 7,122,443   |  
|                                                                                                                                                           |  |                                |            |   |                                |   |            |                              |  |   |                              |   |  |                                                           |            |   |  |   |             |  
|Maximum number of shares subject to possible conversion:                                                                                                   |  |                                |            |   |                                |   |            |                              |  |   |                              |   |  |                                                           |            |   |  |   |             |  
|Weighted average shares outstanding subject to possible conversion                                                                                         |  |                                | 8,003,166  |   |                                |   | 8,003,166  |                              |  |   | 8,003,166                    |   |  |                                                           | 8,003,166  |   |  |   |             |  
|Income per share amount (basic and diluted)                                                                                                                |  | $                              | 0.02       |   |                                | $ | 0.05       |                              |  | $ | 0.05                         |   |  | $                                                         | 0.08       |   |  |   |             |  
|Weighted average shares outstanding not subject to possible conversion (basic and diluted)                                                                 |  |                                | 41,407,684 |   |                                |   | 41,407,684 |                              |  |   | 41,407,684                   |   |  |                                                           | 41,407,684 |   |  |   |             |  
|Net income (loss) per share attributable to common stock not subject to possible conversion (basic and diluted)                                            |  | $                              | 0.00       |   |                                | $ | 0.03       |                              |  | $ | (0.02                        | ) |  | $                                                         | 0.07       |   |  |   |             |  
|Proforma diluted weighted average shares not subject to possible conversion                                                                                |  |                                | 51,799,797 |   |                                |   | 51,373,062 |                              |  |   | 41,407,684                   |   |  |                                                           | 51,036,852 |   |  |   |             |  
|Proforma diluted income (loss) per share attributable to shares not subject to possible conversion                                                         |  | $                              | 0.00       |   |                                | $ | 0.02       |                              |  | $ | (0.02                        | ) |  | $                                                         | 0.06       |   |  |   |             |  

See accompanying notes to financial statements.



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##### Table of Contents

MARATHON ACQUISITION CORP.

(a development stage company)

CONSOLIDATED STATEMENTS OF STOCKHOLDERS EQUITY

For the period from April 27, 2006 (inception) through
June 30, 2008



|                                                                                                                                                            |  |              |  |        |       |                           |          |             |                                   |  |   |                     |   |  |   |             |  
|----------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ------------ |  | ------ | ----- | ------------------------- | -------- | ----------- | --------------------------------- |  | - | ------------------- | - |  | - | ----------- | -
|                                                                                                                                                            |  | Common Stock |  |        |       |                           | Earnings |             |                                   |  |  
|                                                                                                                                                            |  | Shares       |  | Amount |       | AdditionalPaid-In Capital |          |             | Accumulatedin theDevelopmentStage |  |   | StockholdersEquity |  
|Issuance of common stock to initial stockholders                                                                                                            |  | 9,375,000    |  | $      | 938   |                           | $        | 24,062      |                                   |  | $ |                    |   |  | $ | 25,000      |  
|Sale of 40,035,850 units, net of underwriters discounts and commissions and offering expenses (including 8,003,1666 shares subject to
possible conversion) |  | 40,035,850   |  |        | 4,004 |                           |          | 296,824,120 |                                   |  |   |                    |   |  |   | 296,828,124 |  
|Sale of private placement warrants                                                                                                                          |  |             |  |        |      |                           |          | 5,500,000   |                                   |  |   |                    |   |  |   | 5,500,000   |  
|Net proceeds subject to possible conversion of 8,003,166 shares                                                                                             |  |             |  |        |      |                           |          | (61,795,116 | )                                 |  |   |                    |   |  |   | (61,795,116 | )
|Net Income                                                                                                                                                  |  |             |  |        |      |                           |          |            |                                   |  |   | 2,647,015           |   |  |   | 2,647,015   |  
|                                                                                                                                                            |  |              |  |        |       |                           |          |             |                                   |  |   |                     |   |  |   |             |  
|Balance at December 31, 2006                                                                                                                                |  | 49,410,850   |  | $      | 4,942 |                           | $        | 240,553,066 |                                   |  | $ | 2,647,015           |   |  | $ | 243,205,023 |  
|                                                                                                                                                            |  |              |  |        |       |                           |          |             |                                   |  |   |                     |   |  |   |             |  
|Accretion of trust account relating to common stock subject to possible conversion                                                                          |  |             |  |        |      |                           |          |            |                                   |  |   | (1,402,721          | ) |  |   | (1,402,721  | )
|Net income                                                                                                                                                  |  |             |  |        |      |                           |          |            |                                   |  |   | 6,682,797           |   |  |   | 6,682,797   |  
|                                                                                                                                                            |  |              |  |        |       |                           |          |             |                                   |  |   |                     |   |  |   |             |  
|Balance at December 31, 2007                                                                                                                                |  | 49,410,850   |  | $      | 4,942 |                           | $        | 240,553,066 |                                   |  | $ | 7,927,091           |   |  | $ | 248,485,099 |  
|                                                                                                                                                            |  |              |  |        |       |                           |          |             |                                   |  |   |                     |   |  |   |             |  
|Accretion of trust account relating to common stock subject to possible conversion                                                                          |  |             |  |        |      |                           |          |            |                                   |  |   | (373,374            | ) |  |   | (373,374    | )
|Net loss                                                                                                                                                    |  |             |  |        |      |                           |          |            |                                   |  |   | (431,274            | ) |  |   | (431,274    | )
|                                                                                                                                                            |  |              |  |        |       |                           |          |             |                                   |  |   |                     |   |  |   |             |  
|Balance at June 30, 2008 (unaudited)                                                                                                                        |  | 49,410,850   |  | $      | 4,942 |                           | $        | 240,553,066 |                                   |  | $ | 7,122,443           |   |  | $ | 247,680,451 |  
|                                                                                                                                                            |  |              |  |        |       |                           |          |             |                                   |  |   |                     |   |  |   |             |  

See accompanying notes to financial statements.



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##### Table of Contents

MARATHON ACQUISITION CORP.

(a development stage company)

CONSOLIDATED STATEMENTS OF CASH FLOWS

(unaudited)



|                                                                           |  |                              |            |   |                              |   |            |                                                           |  |   |              |  
|-------------------------------------------------------------------------- |  | ---------------------------- | ---------- | - | ---------------------------- | - | ---------- | --------------------------------------------------------- |  | - | ------------ | -
|                                                                           |  | Six MonthsendedJune 30, 2008 |            |   | Six MonthsendedJune 30, 2007 |   |            | Period fromApril 27, 2006(inception) throughJune 30, 2008 | 
|Cash flows from operating activities                                       |  |                              |            |   |                              |   |            |                                                           |  |   |              |  
|Net (loss) income                                                          |  | $                            | (431,274   | ) |                              | $ | 3,539,110  |                                                           |  | $ | 8,898,540    |  
|Adjustments to reconcile net loss to net cash used in operating activities |  |                              |            |   |                              |   |            |                                                           |  |   |              |  
|Deferred income taxes                                                      |  |                              |           |   |                              |   | 193,440    |                                                           |  |   |             |  
|Changes in:                                                                |  |                              |            |   |                              |   |            |                                                           |  |   |              |  
|Prepaid expenses                                                           |  |                              | 39,936     |   |                              |   | (81,762    | )                                                         |  |   | (36,805      | )
|Interest receivable                                                        |  |                              | 512,581    |   |                              |   | 73,774     |                                                           |  |   | (486,620     | )
|Accrued expenses                                                           |  |                              | 569,633    |   |                              |   | (37,015    | )                                                         |  |   | 732,191      |  
|Income tax payable                                                         |  |                              | 46,440     |   |                              |   | 19,303     |                                                           |  |   | (327,007     | )
|                                                                           |  |                              |            |   |                              |   |            |                                                           |  |   |              |  
|Net cash provided by operating activities                                  |  |                              | 737,316    |   |                              |   | 3,706,850  |                                                           |  |   | 8,780,299    |  
|Cash flows from investing activities                                       |  |                              |            |   |                              |   |            |                                                           |  |   |              |  
|Investments held in trust account                                          |  |                              | (2,610,337 | ) |                              |   | (2,045,519 | )                                                         |  |   | (316,741,146 | )
|                                                                           |  |                              |            |   |                              |   |            |                                                           |  |   |              |  
|Net cash used by investing activities                                      |  |                              | (2,610,337 | ) |                              |   | (2,045,519 | )                                                         |  |   | (316,741,146 | )
|                                                                           |  |                              |            |   |                              |   |            |                                                           |  |   |              |  
|Cash flows from financing activities                                       |  |                              |            |   |                              |   |            |                                                           |  |   |              |  
|Proceeds from note to stockholder                                          |  |                              |            |   |                              |   |            |                                                           |  |   | 225,000      |  
|Repayment of note to stockholder                                           |  |                              |            |   |                              |   |            |                                                           |  |   | (225,000     | )
|Proceeds from public offering, net                                         |  |                              |            |   |                              |   |            |                                                           |  |   | 303,233,860  |  
|Proceeds from issuance of warrants                                         |  |                              |            |   |                              |   |            |                                                           |  |   | 5,500,000    |  
|Proceeds from issuance of securities to initial stockholders               |  |                              |            |   |                              |   |            |                                                           |  |   | 25,000       |  
|                                                                           |  |                              |            |   |                              |   |            |                                                           |  |   |              |  
|Net cash provided by financing activities                                  |  |                              |           |   |                              |   |           |                                                           |  |   | 308,758,860  |  
|                                                                           |  |                              |            |   |                              |   |            |                                                           |  |   |              |  
|Net (decrease) increase in cash                                            |  |                              | (1,873,021 | ) |                              |   | 1,661,331  |                                                           |  |   | 798,013      |  
|Cash  beginning of period                                                 |  |                              | 2,671,034  |   |                              |   | 1,370,943  |                                                           |  |   |             |  
|                                                                           |  |                              |            |   |                              |   |            |                                                           |  |   |              |  
|Cash  end of period                                                       |  | $                            | 798,013    |   |                              | $ | 3,032,274  |                                                           |  | $ | 798,013      |  
|                                                                           |  |                              |            |   |                              |   |            |                                                           |  |   |              |  
|Non-cash financing activities                                              |  |                              |            |   |                              |   |            |                                                           |  |   |              |  
|Deferred underwriting discounts and commissions                            |  | $                            |           |   |                              | $ |           |                                                           |  | $ | 6,405,736    |  
|Non-cash investing activities                                              |  |                              |            |   |                              |   |            |                                                           |  |   |              |  
|Accrued deferred acquisition costs                                         |  | $                            | 3,614,087  |   |                              |   |           |                                                           |  | $ | 3,614,087    |  
|Cash paid for income taxes                                                 |  | $                            | 1,538,000  |   |                              | $ | 3,726,804  |                                                           |  | $ | 11,157,690   |  

See accompanying notes to financial statements.



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##### Table of Contents

MARATHON ACQUISITION CORP.

(a development stage company)

NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2008

(unaudited)

Note 1  Organization and Nature of Business Operations

Marathon Acquisition Corp. (the Company) was incorporated in Delaware on April 27, 2006 as a blank check company whose objective is to
acquire, through a merger, stock exchange, asset acquisition, reorganization or similar business combination, one or more currently unidentified operating business or businesses. The Company is considered to be in the development stage and is
subject to the risks associated with activities of development stage companies. All activity through June 30, 2008 relates to the companys formation, initial public offering (the Offering) and efforts to identify prospective
target businesses described below and in Note 3. At June 30, 2008, the Company had not commenced any operations.

The registration
statement for the Offering was declared effective August 24, 2006. The Company consummated the Offering on August 30, 2006 and received proceeds of approximately $279,000,000, net of underwriting discounts and commissions of approximately
$21,000,000 (including approximately $6,000,000 of deferred underwriting discounts and commissions placed in the trust account pending completion of a business combination). In addition, on September 22, 2006 the underwriters for the Offering
exercised their over-allotment option (the Over-Allotment Option Exercise), which closed on September 27, 2006, generating proceeds of approximately $18,867,000, net of underwriting discounts and commissions of approximately
$1,420,000 (including approximately $400,000 of deferred underwriting discounts and commissions placed in the trust account pending completion of a business combination). The Company incurred additional offering expenses of approximately $1,039,000,
which have been charged to additional paid-in capital. The Companys management has broad discretion with respect to the specific application of the net proceeds of the Offering and the Over-Allotment Option Exercise, although substantially all
of the net proceeds of the Offering and the Over-Allotment Option Exercise are intended to be generally applied toward consummating a business combination with an operating company or companies. As used herein, a Target Business shall
mean one or more businesses that at the time of the Companys initial business combination has a fair market value of at least 80% of the balance in the trust account (excluding deferred underwriting discounts and commissions of approximately
$6.4 million) described below and a Business Combination shall mean the acquisition by the Company of such Target Business. Furthermore, there is no assurance that the Company will be able to successfully effect a Business Combination.

Upon the closing of the Offering and the Over-Allotment Option Exercise by the underwriters, approximately $308.8 million was placed in a
trust account invested until the earlier of (i) the consummation of the Companys initial Business Combination or (ii) the liquidation of the Company. The amount placed in the trust account consisted of the proceeds of this offering
and the concurrent private placement of warrants as well as approximately $6.4 million of deferred underwriting discounts and commissions that will be released to the underwriters on completion of a Business Combination. The remaining proceeds
outside of the trust account as well as the interest income of up to $3.9 million earned on the trust account balance that may be released to the Company (as described below) may be used to pay for business, legal and accounting due diligence
on prospective acquisitions and continuing general and administrative expenses; provided, however, that after such release there remains in the trust account a sufficient amount of interest income previously earned on the trust account balance to
pay any income taxes on such $3.9 million of interest income.

The Company will seek stockholder approval before it will effect any
Business Combination, even if the Business Combination would not ordinarily require stockholder approval under applicable state law. In connection with the stockholder vote required to approve any Business Combination, the Companys Initial
Stockholders have agreed to vote the shares of common stock owned by them immediately before 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 a Business Combination only if a majority of the shares of common stock voted by the Public Stockholders are voted in favor of
the Business Combination and Public Stockholders owning less than 20% of the shares sold in the Offering exercise their conversion rights. The Initial Stockholders and Marathon Investors, LLC, an entity controlled by the Companys chairman and
chief executive officer, have agreed that if they acquire shares of common stock in or following the Offering, they will vote all such acquired shares in favor of any Business Combination submitted for stockholder approval. 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 closing of the Offering, the Company may combine with another Target Business meeting
the fair market value criterion described above.



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##### Table of Contents

If a Business Combination is approved and completed, Public Stockholders voting against a Business
Combination will be entitled to convert their stock into a pro rata share of the total amount on deposit in the trust account, before payment of deferred underwriting discounts and commissions and including any interest earned on their pro rata
portion of the trust account, net of income taxes payable thereon, and net of any interest income of up to $3.9 million on the balance of the trust account previously released to the Company to fund its working capital requirements (subject to
the tax holdback). Public Stockholders who exercise their conversion rights will continue to have the right to exercise any Warrants they may hold. It is important to note that voting against a Business Combination alone will not result in
conversion of a stockholders shares into apro rata share of the trust account, which only occurs when the stockholder exercises the conversion rights described above.

The Company accreted interest, net of taxes, to the common stock subject to possible conversion for the three months ended June 30, 2008 and
June 30, 2007 of approximately $163,633 and $422,445, respectively. The Company accreted interest, net of taxes, to the common stock subject to possible conversion for the six months ended June 30, 2008 and June 30, 2007 of
approximately $373,374 and $644,091, respectively. The company accreted $1,776,095 of interest, net of taxes, for the period from April 26, 2006 (inception) through June 30, 2008.

In the event that the Company does not effect a Business Combination within 24 months after consummation of the Offering, the Company will dissolve and
promptly distribute only to its Public Stockholders the amount in the trust account, including accrued interest, less any income taxes payable on interest income and any interest income of up to $3.9 million on the balance of the trust account
previously released to the Company to fund its working capital requirements, including the costs of the Companys dissolution and liquidation (subject to the tax holdback), plus any remaining net assets. In the event of liquidation, 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 price per share in the Offering (assuming no value is attributed to the Warrants contained in the
Units in the Offering discussed in Note 3).

The accompanying unaudited condensed consolidated financial statements have been prepared in
accordance with the generally accepted accounting principles in the United States of America (GAAP) for interim financial information and pursuant to the rules and regulations of the SEC. Accordingly, they do not include all of the
information and footnotes required by GAAP for complete financial statements. In the opinion of management, such statements include all adjustments (consisting only of normal recurring items) which are considered necessary for a fair presentation of
the financial position of the Company and the results of its operations and cash flows for the periods presented. The results of its operations for the six month period ended June 30, 2008 are not necessarily indicative of the operating results
for the full year. It is suggested that these financial statements be read in conjunction with the financial statements and related disclosures for the year ended December 31, 2007 included on Form 10-K filed with the SEC on March 17,
2008.

Going concern consideration  As indicated in the accompanying financial statements, at June 30, 2008 the Company had
unrestricted cash of $798,013 and $4,346,281 in accrued expenses. These costs mainly relate to the pursuit of its acquisition plans and specifically the proposed merger with GSL Holdings and Global Ship Lease, Inc. (Global Ship Lease).
In addition, there is no assurance that the Company will successfully complete a Business Combination with GSL Holdings, Inc. and Global Ship Lease by August 30, 2008. As a result, the Company cannot assure that the cash available will be
sufficient to cover expenses. These factors, among others, raise substantial doubt about the Companys ability to continue operations as a going concern. The accompanying financial statements do not include any adjustments that may result from
the outcome of this uncertainty.

Note 2  The Proposed Merger

On March 21, 2008, the Company entered into the Agreement and Plan of Merger (the Merger Agreement) with GSL Holdings, CMA CGM S.A., a French corporation (CMA) and Global Ship Lease
pursuant to which the Company will merge with and into GSL Holdings, its newly-formed, wholly owned Marshall Islands subsidiary and then Global Ship Lease will merge with and into GSL Holdings, with GSL Holdings continuing as the surviving
corporation and to be renamed Global Ship Lease, Inc. The Merger Agreement was amended on June 2, 2008, July 3, 2008 and July 23, 2008. On July 10, 2008, the Company filed with the Securities and Exchange Commission a
definitive joint proxy statement/prospectus relating to the Merger Agreement. On July 28, 2008, the Company filed a supplement to the definitive joint proxy statement/prospectus.

As result of the Merger, each holder of a share of Company common stock, par value $0.0001 per share, issued and outstanding immediately prior to the
effective time of the Merger will receive one Class A common share, par value $0.01 per share, of GSL Holdings, except that in lieu of 6,528,094 Class A common shares of GSL Holdings to be received by Marathon Founders, LLC and other
initial stockholders, they will receive an aggregate of 3,471,906 Class B common shares, par value $0.01 per share, of GSL Holdings and warrants to acquire an aggregate of 3,056,188 Class A common shares of GSL Holdings.

CMA will receive $18,570,135 in cash, 6,778,650 Class A common shares, 3,934,050 Class B common shares, and 12,375,000 Class C common shares of GSL
Holdings. CMA will also receive warrants to acquire 3,131,900 Class A common shares and 1,000 Series A preferred shares of GSL Holdings.

In addition, GSL Holdings intends to repurchase up to $48,000,000 in shares of common stock of the Company or Class A common shares of GSL Holdings at or after the closing to reduce the
number of Class A common shares outstanding. In this regard, Holdings may repurchase shares at the closing in privately negotiated transactions with a limited number of shareholders whom it believes would otherwise elect to exercise conversion
rights with respect the their shares of Company common stock.

The rights of Series A preferred stock will rank senior to the common shares
and any class of equity securities issued by GSL Holdings which do not by their terms expressly provide that they are senior to the Series A preferred shares, with respect to dividend rights and rights upon liquidation, dissolution, or winding up of
GSL Holdings. The rights of holders of Class B common shares will be identical to those of holders of Class A common shares, except that the holders of Class B common shares will not be entitled to receive any dividends with respect to the
second and third quarters of 2008 and their dividend rights will be subordinated to those of holders of Class A common shares until at least July 2011. The rights of holders of Class C common shares will be identical to those of holders of
Class A common shares, except that holders of Class C common shares will not be entitled to receive dividends and the Class C common shares will convert into Class A common shares on a one-for-one basis on January 1, 2009. Each
outstanding warrant to acquire a share of Company common stock will become a warrant to receive one Class A common share of GSL Holdings. Each outstanding unit of Marathon will represent one Class A common share of GSL Holdings and a
warrant to acquire one Class A common share of GSL Holdings.

All Series A preferred shares will be mandatorily redeemable by GSL
Holdings on the third anniversary date of the merger or, if earlier, upon a change in control, in each case, at a cash price of $48,000 per share plus all accrued and unpaid dividends to the redemption date. GSL Holdings will also be required to
redeem Series A preferred shares from time to time in part upon receipt of cash proceeds from the exercise of any warrants presently existing or hereinafter issued by the Company or GSL Holdings and upon the occurrence of certain significant
transactions.

The warrants issued pursuant to the merger agreement will be exercisable upon issuance and will expire on the fifth
anniversary of the issuance date.

The Merger Agreement contains customary representations and warranties by each of the parties. The
representations and warranties do not survive the closing.



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Note 3  Summary of Significant Accounting Policies

[a] Cash and cash equivalents:

The Company considers
all highly liquid investments with maturities of three months or less to be cash equivalents, when purchased. The trust assets are invested in one or more money market funds.

[b] Earnings per common share:



|(i) | Basic earnings per common share for all periods is computed by dividing the earnings applicable to common stockholders by the weighted average number of common shares outstanding
for the period. Warrants issued by the Company in the offering and sponsor warrants are contingently exercisable upon consummation of a business combination. Hence, these are presented in the proforma diluted earnings per share. Proforma diluted
income per share reflects the potential dilution assuming common shares were issued upon the exercise of outstanding in the money warrants and the proceeds thereof were used to purchase common shares at the average market price during the period.
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|(ii) | The Companys consolidated statements of operations include a presentation of earnings per share for common stock subject to possible conversion in a manner similar to the
two-class method of earnings per share. Basic and diluted net income per share amount for the maximum number of shares subject to possible conversion is calculated by dividing the net interest income attributable to common shares subject to
conversion ($163,633 and $422,445 for the three months ended June 30, 2008 and 2007, respectively and $373,374 and $644,091 for the six months ended June 30, 2008 and 2007, respectively) by the weighted average number of shares subject to
possible conversion. Basic, diluted and proforma diluted earnings per share amount for the shares outstanding not subject to possible conversion is calculated by dividing the net income exclusive of the net interest income attributable to common
shares subject to conversion by the weighted average number of shares not subject to possible conversion.
|---- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

At June 30,
2008 and 2007, the Company had outstanding warrants to purchase 45,535,850 shares of common stock.

The weighted average number of shares
used in the basic and proforma diluted earnings per share for shares outstanding not subject to possible conversion are as follows:



|                                                                                                 |  |                                        |  |                                        |  |                                      |  |                                     
|------------------------------------------------------------------------------------------------ |  | -------------------------------------- |  | -------------------------------------- |  | ------------------------------------ |  | ------------------------------------
|                                                                                                 |  | For the threemonths endedJune 30, 2008 |  | For the threemonths endedJune 30, 2007 |  | For the sixmonths endedJune 30, 2008 |  | For the sixmonths endedJune 30, 2007
|Weighted Average number of shares outstanding as used in computation of basic earnings per share |  | 41,407,684                             |  | 41,407,684                             |  | 41,407,684                           |  | 41,407,684                          
|Proforma Effect of diluted securities - warrants                                                 |  | 10,392,113                             |  | 9,965,378                              |  |                                     |  | 9,629,168                           
|                                                                                                 |  |                                        |  |                                        |  |                                      |  |                                     
|Shares used in computation of diluted earnings per shares                                        |  | 51,799,797                             |  | 51,373,062                             |  | 41,407,684                           |  | 51,036,852                          
|                                                                                                 |  |                                        |  |                                        |  |                                      |  |                                     

For the six months ended June 30, 2008, 45,535,850 shares attributable to the exercise of
outstanding warrants were excluded from the calculation of proforma diluted earnings per share for shares not subject to possible conversion because the effect was anti-dilutive.

[c] 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 revenues and expenses during the reporting period. Actual results could differ from those estimates.

[d] Fair Value Measurements 

The fair values of the Companys financial instruments reflect the estimates of
amounts that would be received from selling an asset in an orderly transaction between market participants at the measurement date. The fair value estimates presented in this report are based on information available to the Company as of
June 30, 2008 and December 31, 2007.

In accordance with Statement of Financial Accounting Standards No. 157,Fair Value
Measurements (SFAS 157), the Company applies a fair value hierarchy based on three levels of inputs, of which the first two are considered observable and the last unobservable, that may be used to measure fair value. The three levels
are the following:



| |  |  | Level 1  Quoted prices in active markets for identical assets or liabilities.
| | - |  | ------------------------------------------------------------------------------



| |  |  | Level 2  Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities, quoted prices
in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Level 3  Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------

The fair value of cash and investments held in the trust account were estimated using Level 1 inputs and the carrying
value approximates the fair value because of their nature and respective duration.



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[e] Income taxes:

Deferred income taxes are provided for the differences between the bases 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 Company will record any penalties and interest associated with any tax adjustments due to audits as an operating expense.

[f] Recent accounting developments:

Business CombinationsIn December 2007, the FASB
issued SFAS No. 141(R),Business Combinations (SFAS 141(R)). SFAS 141(R) expands the definition of transactions and events that qualify as business combinations; requires that the acquired assets and liabilities, including
contingencies, be recorded at the fair value determined on the acquisition date and changes thereafter reflected in revenue, not goodwill; changes the recognition timing for restructuring costs; and requires acquisition costs to be expensed as
incurred. Adoption of SFAS 141(R) is required for combinations after December 15, 2008. Early adoption and retroactive application of SFAS 141(R) to fiscal years preceding the effective date are not permitted. The Company is currently
evaluating the impact of SFAS 141(R) on the financial statements.

Noncontrolling Interest in Consolidated Financial
StatementsIn December 2007, the FASB issued SFAS No. 160, Noncontrolling Interest in Consolidated Financial Statements (SFAS 160). SFAS 160 re-characterizes minority interests in consolidated subsidiaries as
non-controlling interests and requires the classification of minority interests as a component of equity.

Under SFAS 160, a change in
control will be measured at fair value, with any gain or loss recognized in earnings. The effective date for SFAS 160 is for annual periods beginning on or after December 15, 2008. Early adoption and retroactive application of SFAS 160 to
fiscal years preceding the effective date are not permitted. The Company is currently evaluating the impact of SFAS 160 on the financial statements. In March 2008, the FASB issued SFAS No. 161 (SFAS 161),Disclosures about
Derivative Instruments and Hedging Activitiesan amendment of FASB Statement No. 133, Accounting for Derivative Instruments and Hedging Activities (SFAS No. 133). SFAS No. 161 requires companies to provide
enhanced disclosures regarding derivative instruments and hedging activities in order to better convey the purpose of derivative use in terms of risk management. Disclosures about (i) how and why an entity uses derivative instruments,
(ii) how derivative instruments and related hedged items are accounted for under SFAS No. 133 and its related interpretations, and (iii) how derivative instruments and hedged items affect a companys financial position, financial
performance, and cash flows, are required. This Statement retains the same scope as SFAS No. 133 and is effective for fiscal years and interim periods beginning after November 15, 2008. The Company is currently evaluating the impact, if
any, that the adoption of SFAS No. 161 will have on its consolidated financial position and results of operations. However, the company considers any impact unlikely.

In December 2007, the FASB ratified EITF Issue No. 07-1,Accounting for Collaborative Arrangements Related to the Development and
Commercialization of Intellectual Property (EITF 07-1). The EITF concluded that a collaborative arrangement is one in which the participants are actively involved and are exposed to significant risks and rewards that depend on the
ultimate commercial success of the endeavor. Revenues and costs incurred with third parties in connection with collaborative arrangements would be presented gross or net based on the criteria in EITF Issue No. 99-19,Reporting Revenue Gross
as a Principal versus Net as an Agent , and other accounting literature. Payments to or from collaborators would be evaluated and presented based on the nature of the arrangement and its terms, the nature of the entitys business, and
whether those payments are within the scope of other accounting literature. The nature and purpose of collaborative arrangements are to be disclosed along with the accounting policies and the classification and amounts of significant financial
statement amounts related to the arrangements. Activities in the arrangement conducted in a separate legal entity should be accounted for under other accounting literature; however, required disclosure under EITF 07-1 applies to the entire
collaborative agreement. This Issue is effective for fiscal years beginning after December 15, 2008, and is to be applied retrospectively to all periods presented for all collaborative arrangements existing as of the effective date. The Company
is currently evaluating the impact that this pronouncement may have on its consolidated financial position and results of operations. However, the company considers any impact unlikely.

[g] Consolidation Policy:

The consolidated financial statements include the accounts of Marathon
Acquisition Corporation and its subsidiary GSL Holdings, Inc., a wholly-owned Marshall Islands company. All significant intercompany accounts and transactions have been eliminated in consolidation. As of June 30, 2008, GSL Holdings, Inc. has no
operations.

Note 4  Deferred Acquisition Costs

As of June 30, 2008, the Company has accumulated approximately $3,614,087 in deferred costs related to the proposed merger with Global Ship Lease (Note 2). These costs will be capitalized contingent upon the
completion of the Business Combination following the required approval by the Companys stockholders and the fulfillment of certain other conditions. If the acquisition is not completed or if the proposed merger is considered either a
re-capitalization or reverse merger for accounting purposes, these costs will be recorded as an expense. Deferred acquisition costs consist of approximately $3,100,000 for legal services and the remainder for other related transaction expenses.

Note 5  Initial Public Offering

On August 30, 2006, the Company sold to the public 37,500,000 units (Units) at a price of $8.00 per unit. Each Unit consists of one share of the Companys common stock, $0.0001 par value, and one Redeemable Common
Stock Purchase Warrant (Warrant). Each Warrant will entitle the holder to purchase from the Company one share of common stock at an exercise price of $6.00 commencing the later of the completion of a Business Combination with a Target
Business or November 24, 2007 and expiring August 24, 2010, unless earlier redeemed. The Warrants will be redeemable at a price of $0.01 per Warrant upon 30 days notice after the Warrants become exercisable, only in the event that the last
sale 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 such 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 and unredeemed.



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On September 27, 2006 the Company sold an additional 2,535,850 Units pursuant to the Over-Allotment
Option Exercise.

As of June 30, 2008, after giving effect to the Companys withdrawals of funds for tax purposes and for working
capital requirements subsequent to completion of its initial public offering, $316,741,146 was held in trust. As of June 30, 2008, however, we had only approximately $0.8 million of unrestricted cash available for completing our merger with GSL
Holdings and Global Ship Lease for payment of approximately $4.3 million of accrued expenses and for general corporate purposes. As a result, we cannot assure you that the cash we have available will be sufficient to cover our expenses.

Note 6  Note Payable to Affiliate and Related Party Transactions

The Company issued an aggregate of $225,000 in an unsecured promissory note to the Companys chairman, chief executive officer and secretary on May 10, 2006. The note was non-interest bearing and was payable
on the earlier of December 31, 2006 or the consummation of the Offering by the Company. The note was fully repaid on August 30, 2006 and no further amounts are due.

The Company has agreed to pay up to $7,500 a month in total for office space and general and administrative services to an affiliate of the
Companys chairman, chief executive officer and secretary. Services will commence on the completion of the Offering and will terminate upon the earlier of (i) the consummation of a Business Combination, or (ii) the liquidation of the
Company. The Company had incurred approximately $22,500 and $45,000 for both the three and six months ended June 30, 2008 and 2007, and $165,000 for the period from April 27, 2006 through June 30, 2008, in accordance with this
agreement.

On August 30, 2006, Marathon Investors, LLC, an entity owned and controlled by the Companys chairman, chief
executive officer and secretary, purchased an aggregate of 5,500,000 sponsor warrants at a price of $1.00 per warrant from the Company. Marathon Investors, LLC has agreed that it will not sell or transfer these warrants until completion of a
Business Combination, except in certain limited circumstances.

The Initial Stockholders and Marathon Investors, LLC will be entitled to
make up to two demands that the Company register the 9,375,000 shares and the 5,500,000 shares of common stock underlying the sponsor warrants, pursuant to an agreement signed in connection with the Offering. The Initial Stockholders and Marathon
Investors, LLC may elect to exercise these registration rights at any time (i) after the expiration of the transfer restrictions relating to the shares of common stock and (ii) after the sponsor warrants have become exercisable by their
times, in the case of such warrants and the underlying common stock. In addition, the Initial Stockholders and Marathon Investors, LLC have certain piggy back registration rights on registration statements filed subsequent to the date on
which these shares of common stock are no longer subject to such transfer restrictions or the sponsor warrants become exercisable. The Company will bear the expenses incurred in connection with the filing of any such registration statements.

Each of the Companys initial stockholders has agreed to vote all of his or its initial shares in accordance with the majority of the
votes cast with respect to the merger proposal relating to the Merger Agreement by the holders of the shares issued in the initial public offering, and any shares acquired in or after the initial public offering in favor of the merger proposal. As
of July 7, 2008, the Companys initial stockholders, either directly or beneficially, owned and were entitled to vote 11,375,000 shares or approximately 23.0% of the Companys outstanding common stock. With respect to the Merger, the
Companys initial stockholders have agreed to vote 9,375,000 of their respective shares of common stock which were acquired by them prior to the initial public offering, or 19.0% of the outstanding common stock, in accordance with the majority
of the shares of common stock voted by the public stockholders. The Companys initial stockholders and directors and Marathon Investors, LLC have also agreed that they will vote any shares they purchase in the open market in or after the
initial public offering in favor of the merger. As of July 7, 2008, 2,000,000 shares, or 4.0% of the outstanding common stock, were subject to this voting arrangement. Furthermore, the Companys officers and directors and their respective
affiliates, at any time prior to the special meeting on August 12, 2008, during a period when they are not then aware of any material nonpublic information regarding the Company or its securities, may enter into a written plan to purchase the
Companys securities pursuant to Rule 10b5-1 of the Securities Exchange Act of 1934, as amended (the Exchange Act), and may engage in other permissible public market purchases, as well as private purchases, of securities. On June 4,
2008, Michael Gross, our Chief Executive Officer and chairman of our Board of Directors, entered into a stock purchase plan with Citigroup Global Markets Inc., in accordance with the guidelines of Rule 10b5-1 and the provisions of Rule 10b-18 of the
Exchange Act, under which he placed a limit order to purchase up to 2,000,000 shares of the Companys common stock at a price of $8 per share or below. Under this plan, 2,000,000 shares were purchased at prices between $7.59 and $7.87 with an
average price of $7.84 per share. If the Companys initial stockholders or its officers and directors purchase securities from existing stockholders that are likely to vote against the transaction, or that are likely to elect to convert their
shares, the probability that the business combination will succeed increases, since the number of shares held by public stockholders will be reduced and the number of shares held by insiders will be increased. Therefore the number of shares that
will be voted in favor of the merger proposal increases and the number of shares that are converted may decrease.

Note 7  Units

On May 11, 2006, the Initial Stockholders purchased 9,375,000 of the Companys securities for an aggregate
purchase at a price of $25,000. Each security consisted of one share of the Companys common stock and one warrant to purchase one share of the Companys common stock. On July 31, 2006, the Initial Stockholders irrevocably agreed to
relinquish all of their right, title and interest in and to the warrants contained in such securities. As a result, the Company has cancelled these warrants.

Note 8  Preferred Stock

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



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Note 9  Income Taxes

The Companys provision for income taxes consisted of the following:



|                           |  |                                |         |                                |   |                              |  |                              |           |                                                           |   |           |  |   |           
|-------------------------- |  | ------------------------------ | ------- | ------------------------------ | - | ---------------------------- |  | ---------------------------- | --------- | --------------------------------------------------------- | - | --------- |  | - | ----------
|                           |  | Three MonthsendedJune 30, 2008 |         | Three MonthsendedJune 30, 2007 |   | Six MonthsendedJune 30, 2008 |  | Six MonthsendedJune 30, 2007 |           | Period fromApril 27, 2006(inception) throughJune 30, 2008
|Current                    |  |                                |         |                                |   |                              |  |                              |           |                                                           |   |           |  |   |           
|Federal                    |  | $                              | 340,813 |                                | $ | 1,151,000                    |  | $                            | 1,019,557 |                                                           | $ | 2,321,000 |  | $ | 7,032,443 
|State                      |  |                                | 363,292 |                                |   | 599,000                      |  |                              | 575,508   |                                                           |   | 1,199,000 |  |   | 3,754,174 
|                           |  |                                |         |                                |   |                              |  |                              |           |                                                           |   |           |  |   |           
|Total current              |  |                                | 704,105 |                                |   | 1,750,000                    |  |                              | 1,595,065 |                                                           |   | 3,520,000 |  |   | 10,786,617
|Deferred                   |  |                                |        |                                |   | 324,000                      |  |                              |          |                                                           |   | 193,000   |  |   |          
|                           |  |                                |         |                                |   |                              |  |                              |           |                                                           |   |           |  |   |           
|Provision for income taxes |  | $                              | 704,105 |                                | $ | 2,074,000                    |  | $                            | 1,595,065 |                                                           | $ | 3,713,000 |  | $ | 10,786,617

The difference between the actual income tax expense and that computed by applying the U.S.
federal income tax rate of 35% to pretax income from operations is summarized below:



|                                                    |  |                                |   |  |                                |   |  |                              |   |  |                              |  
|--------------------------------------------------- |  | ------------------------------ | - |  | ------------------------------ | - |  | ---------------------------- | - |  | ---------------------------- | -
|                                                    |  | Three MonthsendedJune 30, 2008 |   |  | Three MonthsendedJune 30, 2007 |   |  | Six MonthsendedJune 30, 2008 |   |  | Six MonthsendedJune 30, 2007 |  
|Computed expected tax expense                       |  | 35.0                           | % |  | 35.0                           | % |  | 35.0                         | % |  | 35.0                         | %
|State and local income taxes net of federal benefit |  | 10.2                           | % |  | 13.2                           | % |  | 10.2                         | % |  | 9.9                          | %
|Change in valuation allowance                       |  | 20.5                           | % |  | 8.9                            | % |  | 91.9                         | % |  | 6.3                          | %
|                                                    |  |                                |   |  |                                |   |  |                              |   |  |                              |  
|Effective tax rate                                  |  | 65.7                           | % |  | 57.1                           | % |  | 137.1                        | % |  | 51.2                         | %

The Company is considered in the development stage for income tax reporting purposes. Federal
income tax regulations require that the Company defer certain expenses for tax purposes. Therefore, the Company has recorded for the three months ended June 30, 2008 a deferred income tax asset of $1,206,857. The Company believes that it is
more likely than not that it will not be able to realize this deferred tax asset in the future and, therefore, it has provided a valuation allowance against this deferred tax asset as of June 30, 2008. As a result, the Companys statement
of operations for the six months ended June 30, 2008 reflects a provision for income taxes of $1,595,065 against income before provision for income taxes of $1,163,791. The Companys 2007 and 2006 Federal and State tax returns have not
been audited, and remain subject to examination.

Note 10  Subsequent Events

On August 11, 2008, the Company completed privately negotiated arrangements to purchase, subject to and contemporaneously with the closing of the
merger with Global Ship Lease, Inc., up to approximately 5 million additional shares of common stock for a purchase price of approximately $39.7 million. Additional financing for the share repurchases will be provided through (i) the purchase
by Michael Gross of up to 1.1 million shares of common stock for a total purchase price of approximately $8.7 million, (ii) the purchase by CMA CGM of up to 1.1 million shares of common stock for a total purchase price of approximately $8.7
million, and (iii) the use of approximately $22.3 million of corporate cash. In addition, corporate cash will be increased by up to $7.1 million through the issuance of up to 0.9 million shares in lieu of cash as partial payment towards
advisory and deferred underwriting fees.



F-10