UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D C. 20549

FORM 10-Q

þ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934.

For the quarterly period ended September 30, 2008

or

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

For the transition period from       to      

Commission file number 001-33343

MEDIA & ENTERTAINMENT HOLDINGS, INC.

(Exact Name of Registrant as Specified in Its Charter)

Delaware	20-3178730
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
230 Park Avenue, Suite 1000, New York, New York	10169
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code: (212) 551-1498

(Former name, former address and former fiscal year, if changed since last report)

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 þ     No o

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

Large accelerated filer o  Accelerated filer þ  Non-accelerated filer o
(Do not check if a smaller reporting company) Smaller Reporting Company o 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes þ     No o

As of November 10, 2008, 15,120,000 shares of the issuer’s common stock, par value $.0001, were outstanding.

MEDIA & ENTERTAINMENT HOLDINGS, INC.
(a development stage enterprise)
TABLE OF CONTENTS

	Page
Part I — Financial Information
Item 1.- Financial Statements
Condensed Balance Sheets as of September 30, 2008 (Unaudited) and March 31, 2008		2
Condensed Statements of Income (Unaudited) for the three and six months ended September 30, 2008 and 2007, and for the period from July 8, 2005 (inception) through September 30, 2008		3
Condensed Statement of Changes in Stockholders’ Equity (Unaudited) for the period from July 8, 2005 (inception) through September 30, 2008		4-5
Condensed Statements of Cash Flows (Unaudited) for the six months ended September 30, 2008 and 2007, and for the period from July 8, 2005 (inception) through September 30, 2008		6-7
Notes to Condensed Financial Statements (Unaudited)		8-11
Item 2.— Management’s Discussion and Analysis of Financial Condition and Results of Operations		12-15
Item 3.— Quantitative and Qualitative Disclosures About Market Risk		15
Item 4T.— Controls and Procedures		16
Part II— Other Information
Item 1.— Legal Proceedings		16
Item 1A.— Risk Factors		17
Item 2.— Unregistered Sales of Equity Securities and Use of Proceeds		17
Item 3.— Defaults upon Senior Securities		17
Item 4.— Submission of Matters to a Vote of Security Holders		17
Item 5.— Other Information		17
Item 6.— Exhibits		17
Signatures		18
EX-31.1: CERTIFICATION
EX-31.2: CERTIFICATION
EX-32.1: CERTIFICATION

PART 1. FINANCIAL INFORMATION

ITEM 1: FINANCIAL STATEMENTS

MEDIA & ENTERTAINMENT HOLDINGS, INC.
(a development stage enterprise)

CONDENSED BALANCE SHEETS

	September 30,			March 31,
	2008			2008
	Unaudited
ASSETS
CURRENT ASSETS
Cash	$	819,236		$	1,107,519
Cash held in trust account, interest and dividend income available for working capital and taxes		5,899			1,103,685
Prepaid expenses		21,899			22,097
TOTAL CURRENT ASSETS		847,034			2,233,301
TRUST ACCOUNT, RESTRICTED
Cash held in trust account, restricted		97,599,056			97,300,150
Tax refunds due to trust account		486,609			300,100
		98,085,665			97,600,250
OTHER ASSETS
Deferred acquisition costs		10,000			—
TOTAL ASSETS	$	98,942,699		$	99,833,551
LIABILITIES AND STOCKHOLDERS’ EQUITY
CURRENT LIABILITIES
Accounts payable and accrued expenses	$	111,524		$	128,690
Income taxes payable		—			1,076,063
TOTAL CURRENT LIABILITIES		111,524			1,204,753
COMMON STOCK — subject to possible conversion, 2,483,999 shares at conversion value		19,617,263			19,520,042
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS’ EQUITY
Preferred stock, $.0001 par value; authorized 1,000,000 shares; none issued		—			—
Common stock, $.0001 par value, authorized 70,000,000 shares; 16,920,000 (less 2,483,999 subject to possible conversion) issued and outstanding		1,444			1,444
Additional paid-in capital		77,160,897			77,216,430
Income accumulated during the development stage		2,051,751			1,891,062
		79,214,092			79,108,936
Less: Shares of common stock held in treasury, 1,800,000 shares		(180	)		(180	)
TOTAL STOCKHOLDERS’ EQUITY		79,213,912			79,108,756
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	98,942,699		$	99,833,551

The accompanying notes are an integral part of these condensed financial statements.

2

MEDIA & ENTERTAINMENT HOLDINGS, INC.
(a development stage enterprise)

CONDENSED STATEMENTS OF INCOME
(UNAUDITED)

													For the period
													from
													July 8, 2005
	For the three months			For the three months			For the six months			For the six months			(inception)
	ended			ended			ended			ended			through
	September 30, 2008			September 30, 2007			September 30, 2008			September 30, 2007			September 30, 2008
Revenue	$	—		$	—		$	—		$	—		$	—
Formation and operating costs		184,874			222,049			382,524			371,047			1,442,500
Loss from operations		(184,874	)		(222,049	)		(382,524	)		(371,047	)		(1,442,500	)
Interest and dividend income		301,138			993,755			621,554			2,157,718			4,670,779
Income before provision for income taxes		116,264			771,706			239,030			1,786,671			3,228,279
Provision for income taxes		38,839			380,339			78,341			854,748			1,176,528
Net income		77,425			391,367			160,689			931,923			2,051,751
Accretion of trust account income relating to common stock subject to possible conversion		(46,795	)		(104,835	)		(97,221	)		(104,835	)		(293,511	)
Net income attributable to other common stockholders	$	30,630		$	286,532		$	63,468		$	827,088		$	1,758,240
Weighted average shares outstanding – basic and diluted		12,636,001			12,636,001			12,636,001			12,636,001
Basic and diluted net income per share attributable to other common stockholders	$	.00		$	.02		$	.01		$	.07

The accompanying notes are an integral part of these condensed financial statements.

3

MEDIA & ENTERTAINMENT HOLDINGS, INC.
(a development stage enterprise)

CONDENSED STATEMENT OF CHANGES IN STOCKHOLDERS’ EQUITY
FROM JULY 8, 2005 (INCEPTION) THROUGH SEPTEMBER 30, 2008
(UNAUDITED)

									(Deficit)
									Income
									Accumulated
						Additional			During								Total
	Common Stock					Paid-in			Development			Treasury Stock					Stockholders’
	Shares		Amount			Capital			Stage			Shares		Amount			Equity
BALANCE — July 8, 2005 (Inception)		—	$	—		$	—		$	—			—	$	—		$	—
Issuance of stock to initial stockholders		4,500,000		450			24,550			—			—		—			25,000
Amortization of stock based compensation		—		—			32,062			—			—		—			32,062
Net loss from July 8, 2005 (inception) through March 31, 2006		—		—			—			(56,249	)		—		—			(56,249	)
BALANCE — March 31, 2006		4,500,000		450			56,612			(56,249	)		—		—			813
Treasury stock		—		—			180			—			1,800,000		(180	)		—
Amortization of stock based compensation		—		—			99,950			—			—		—			99,950
Sale of 10,800,000 units, net of underwriters’ discount and offering expenses of $4,979,553 (includes 2,159,999 shares subject to possible conversion)		10,800,000		1,080			81,369,367			—			—		—			81,370,447
Sale of 1,620,000 units net of underwriting discount and offering expenses of $583,200 (includes 324,000 shares subject to possible conversion)		1,620,000		162			12,376,638			—			—		—			12,376,800
Proceeds subject to possible conversion of 2,483,999 shares		—		(248	)		(19,323,504	)		—			—		—			(19,323,752	)
Proceeds from issuance of options		—		—			100			—			—		—			100
Proceeds from private sale of warrants		—		—			2,700,000			—			—		—			2,700,000
Net loss for the year ended March 31, 2007		—		—			—			(26,249	)		—		—			(26,249	)
BALANCE — March 31, 2007		16,920,000		1,444			77,279,343			(82,498	)		1,800,000		(180	)		77,198,109
Amortization of stock based compensation		—		—			83,377			—			—		—			83,377
Reduction of accrued offering expenses		—		—			50,000			—			—		—			50,000
Accretion of trust account income relating to common stock subject to possible conversion		—		—			(196,290	)		—			—		—			(196,290	)
Net income for the year ended March 31, 2008		—		—			—			1,973,560			—		—			1,973,560

The accompanying notes are an integral part of these condensed financial statements.

4

MEDIA & ENTERTAINMENT HOLDINGS, INC.
(a development stage enterprise)
CONDENSED STATEMENT OF CHANGES IN STOCKHOLDERS’ EQUITY
FROM JULY 8, 2005 (INCEPTION) THROUGH SEPTEMBER 30, 2008
(UNAUDITED)
CONTINUED

								(Deficit)
								Income
								Accumulated
					Additional			During							Total
	Common Stock				Paid-in			Development		Treasury Stock					Stockholders’
	Shares		Amount		Capital			Stage		Shares		Amount			Equity
BALANCE-March 31, 2008		16,920,000	$	1,444	$	77,216,430		$	1,891,062		1,800,000	$	(180	)	$	79,108,756
Amortization of stock based compensation		—		—		41,688			—		—		—			41,688
Accretion of trust account income relating to common stock subject to possible conversion		—		—		(97,221	)		—		—		—			(97,221	)
Net income for the six months ended September 30, 2008		—		—		—			160,689		—		—			160,689
BALANCE-September 30, 2008 (UNAUDITED)		16,920,000	$	1,444	$	77,160,897		$	2,051,751		1,800,000	$	(180	)	$	79,213,912

The accompanying notes are an integral part of these condensed financial statements.

5

MEDIA & ENTERTAINMENT HOLDINGS, INC.
(a development stage enterprise)

CONDENSED STATEMENTS OF CASH FLOWS
(UNAUDITED)

							For the period
							from
							July 8, 2005
	For the six months			For the six months			(inception)
	ended			ended			through
	September 30, 2008			September 30, 2007			September 30, 2008
CASH FLOWS FROM OPERATING ACTIVITIES
Net income	$	160,689		$	931,923		$	2,051,751
Adjustments to reconcile net income to net cash (used in) provided by operating activities:
Stock based compensation		41,688			41,688			257,077
Changes in operating assets and liabilities:
Prepaid expenses		198			(46,977	)		(21,899	)
Accounts payable and accrued expenses		(17,166	)		(5,296	)		26,970
Prepaid taxes		(186,509	)		—			(486,608	)
Income taxes payable		(1,076,063	)		844,024			—
NET CASH (USED IN) PROVIDED BY OPERATING ACTIVITIES		(1,077,163	)		1,765,362			1,827,291
CASH FLOWS FROM INVESTING ACTIVITIES
Cash held in trust account, restricted		(298,906	)		(524,176	)		(97,599,056	)
Cash held in trust account, interest and dividend income available for working capital and taxes		1,097,786			183,799			(5,899	)
Deferred acquisition costs		(10,000	)		—			(10,000	)
NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES		788,880			(340,377	)		(97,614,955	)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from notes payable — stockholders		—			—			300,000
Proceeds from private sale of warrants		—			—			2,700,000
Repayment of notes payable — stockholders		—			—			(300,000	)
Proceeds from sale of option		—			—			100
Proceeds from issuance of stock to initial stockholders		—			—			25,000
Gross proceeds from initial public offering		—			—			86,400,000
Payment of offering expenses from initial public offering		—			—			(4,895,000	)
Gross proceeds from over-allotment		—			—			12,960,000
Payment of offering expenses from over-allotment		—			—			(583,200	)
NET CASH PROVIDED BY FINANCING ACTIVITIES		—			—			96,606,900
NET (DECREASE) INCREASE IN CASH		(288,283	)		1,424,985			819,236
CASH — Beginning of period		1,107,519			13,693			—
CASH — End of period	$	819,236		$	1,438,678		$	819,236

The accompanying notes are an integral part of these condensed financial statements.

6

MEDIA & ENTERTAINMENT HOLDINGS, INC.
(a development stage enterprise)
CONDENSED STATEMENTS OF CASH FLOWS (CONTINUED)
(UNAUDITED)

						For the period
						from
						July 8, 2005
	For the six months		For the six months			(inception)
	ended		ended			through
	September 30, 2008		September 30, 2007			September 30, 2008
SUPPLEMENTAL DISCLOSURES OF NON-CASH TRANSACTIONS:
Transfer of shares from directors to Hearst Corporation for purchase commitment:
Deferred offering expenses	$	—	$	—		$	2,264,987
Additional paid-in-capital		—		—			(2,264,987	)
	$	—	$	—		$	—
Accrual of offering expenses:
Offering expenses	$	—	$	25,000		$	84,553
Accrued expenses		—		(25,000	)		(84,553	)
	$	—	$	—		$	—
Cash paid for income taxes:	$	1,341,000	$	—		$	1,663,135

The accompanying notes are an integral part of these condensed financial statements.

7

MEDIA & ENTERTAINMENT HOLDINGS, INC.
(a development stage enterprise)

NOTES TO CONDENSED FINANCIAL STATEMENTS (UNAUDITED)

NOTE 1 Interim Financial Information, Organization, Business Operations, Significant Accounting Policies and Going Concern Consideration

These unaudited condensed financial statements as of September 30, 2008, for the three and six months ended September 30, 2008 and 2007, and for the period from July 8, 2005 (inception) through September 30, 2008 have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and with the instructions to Form 10-Q. Accordingly, they do not include all of the information and footnotes required by accounting principles generally accepted in the United States of America for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring adjustments) considered necessary for a fair presentation have been included. Operating results for the interim periods presented are not necessarily indicative of the results to be expected for any other interim period or for the full year.

These unaudited condensed financial statements should be read in conjunction with the audited financial statements and notes thereto for the fiscal year ended March 31, 2008 included in Media & Entertainment Holdings, Inc.’s (the “Company”) Form 10-K for the fiscal year ended March 31, 2008, filed on June 16, 2008. The accounting policies used in preparing these unaudited condensed financial statements are consistent with those described in the March 31, 2008 financial statements.

The Company was incorporated in the State of Delaware on July 8, 2005 as a blank check company whose objective is to acquire an operating business in the entertainment, media and communications industries. The Company has selected March 31 as its fiscal year-end.

All activity for the period from July 8, 2005 (inception) through March 14, 2007 relates to the Company’s formation, the initial public offering (“the Offering”) and the exercise of the underwriter’s over–allotment options described below. Since March 15, 2007, the Company has been searching for a target business to acquire.

Concentrations of Credit Risk:

Statement of Financial Accounting Standards (“SFAS”) No. 105, “Disclosure of Information about Financial Instruments with Off-Balance Sheet Risk and Financial Instruments with Concentration of Credit Risk”, requires disclosure of significant concentrations of credit risk regardless of the degree of risk.  At September 30, 2008, financial instruments that potentially expose the Company to credit risk consist of cash and cash equivalents held in trust.  The Company maintains its cash balances in two different financial institutions.  At September 30, 2008, the Federal Deposit Insurance Corporation insured balances in bank accounts up to $100,000 ($250,000 effective October 3, 2008) and the Securities Investor Protection Corporation insured balances up to $500,000 in brokerage accounts.  At September 30, 2008, the uninsured balances in the bank brokerage accounts amounted to $97,904,651. Management believes the risk of loss to be minimal since it invests in or through major financial institutions.

8

MEDIA & ENTERTAINMENT HOLDINGS, INC.
(a development stage enterprise)
NOTES TO CONDENSED FINANCIAL STATEMENTS (UNAUDITED)

NOTE 1 – Interim Financial Information, Organization, Business Operations, Significant Accounting Policies and Going Concern Consideration (Continued)

Income (Loss) Per Share:

The Company follows the provisions of SFAS No. 128, “Earnings Per Share”. In accordance with SFAS No. 128, earnings per common share amounts (“Basic EPS”) is computed by dividing earnings by the weighted average number of common shares outstanding for the period. Common shares subject to possible conversion of 2,483,999 have been excluded from the calculation of basic earnings per share since such shares, if redeemed, only participate in their pro rata shares of the trust earnings. Earnings per common share amounts, assuming dilution (“Diluted EPS”), gives effect to dilutive options, warrants, and other potential common stock outstanding during the period. SFAS No. 128 requires the presentation of both Basic EPS and Diluted EPS on the face of the statements of operations. The effect of the 16,500,000 outstanding options and warrants issued in connection with the Offering and the private placement for the six months ended September 30, 2008 and 2007 described in Note 2 has not been considered in the diluted earnings per share calculation since the conversion of the outstanding options and warrants are contingent upon the occurrence of future events, and therefore, is not includable in the calculation of diluted earnings per share in accordance with SFAS No. 128.

Recently Issued Accounting Pronouncements:

In April 2008, the Financial Accounting Standard (“FASB”) issued Financial Standard Pronouncement (“FSP”) Financial Accounting Standard (“FAS”) No. 142-3, which amends the factors that must be considered in developing renewal or extension assumptions used to determine the useful life over which to amortize the cost of a recognized intangible asset under FAS No. 142, “Goodwill and Other Intangible Assets.” The FSP requires an entity to consider its own assumptions about renewal or extension of the term of the arrangement, consistent with its expected use of the asset, and is an attempt to improve consistency between the useful life of a recognized intangible asset under FAS No. 142 and the period of expected cash flows used to measure the fair value of the asset under FAS No. 141, “Business Combinations.” The FSP is effective for fiscal years beginning after December 15, 2008, and the guidance for determining the useful life of a recognized intangible asset must be applied prospectively to intangible assets acquired after the effective date. The FSP is not expected to have a significant impact on the Company’s financial condition and results of operations.

In June 2008, the FASB issued FSP Emerging Issues Task Force (EITF) No. 03-6-1, “Determining Whether Instruments Granted in Share-Based Payment Transactions Are Participating Securities.” Under the FSP, unvested share-based payment awards that contain rights to receive nonforfeitable dividends (whether paid or unpaid) are participating securities, and should be included in the two-class method of computing EPS. The FSP is effective for fiscal years beginning after December 15, 2008, and interim periods within those years, and is not expected to have a significant impact on the Company’s financial condition and results of operations.

9

MEDIA & ENTERTAINMENT HOLDINGS, INC.
(a development stage enterprise)
NOTES TO CONDENSED FINANCIAL STATEMENTS (UNAUDITED)

NOTE 1 – Interim Financial Information, Organization, Business Operations, Significant Accounting Policies and Going Concern Consideration (Continued)

Recently Issued Accounting Pronouncements (Continued):

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

Going Concern and Management’s Plan and Intentions:

As of September 30, 2008, the Company had working capital of $735,510. The Company’s only source of income to enable it to continue to fund its search for an acquisition candidate is the interest and dividend it earns on its cash held in an interest bearing trust account (the “Trust Account”). These funds may not be sufficient to maintain the Company until its initial business combination (“Business Combination”) is consummated. In addition, there can be no assurance that the Company will enter into a Business Combination prior to March 14, 2009. Pursuant to its Certificate of Incorporation, if the Company is unable to file a proxy statement relating to a Business Combination by January 14, 2009 or consummate a Business Combination by March 14, 2009, the Company would have to liquidate pursuant to a dissolution plan and return the funds held in the Trust Account to the holders of shares issued in the Offering as previously described. These factors raise substantial doubt about the Company’s ability to continue as a going concern. The unaudited condensed interim financial statements do not include any adjustments that might result from the outcome of these uncertainties.

On July 8, 2008, the Company executed a letter of intent for a Business Combination with a potential target.

NOTE 2 – Commitments and Contingencies

The Company entered into an agreement with the underwriters of the Offering (the “Underwriting Agreement”). The Underwriting Agreement required the Company to pay 4.5% of the gross proceeds of the Offering as an underwriting discount plus an additional 2.5% of the gross proceeds only upon consummation of a Business Combination. The Company paid an underwriting discount of 4.5% of the gross proceeds ($3,888,000) in connection with the consummation of the Offering and has placed 2.5% of the gross proceeds ($2,160,000) in the Trust Account. The underwriters have waived their right to receive payment of the 2.5% of the gross proceeds upon the Company’s liquidation if it is unable to complete a Business Combination.

On March 4, 2008, the Company entered into a one year agreement for financial advisory services in connection with acquisition of a target. If the Company consummates a transaction during the term the fee will be equal to .5% of the consideration paid in connection with the acquisition.

10

MEDIA & ENTERTAINMENT HOLDINGS, INC.
(a development stage enterprise)
NOTES TO CONDENSED FINANCIAL STATEMENTS (UNAUDITED)

NOTE 3 – Subsequent Events

On October 2, 2008, the Company executed a second letter of intent for a Business Combination with a potential target.

The Company has until January 14, 2009 (22 months from the date of the Offering) to file a proxy statement relating to the Business Combination and until March 14, 2009 (24 months from the date of the Offering) to consummate a Business Combination.

11

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

The following discussion should be read in conjunction with our condensed financial statements and footnotes thereto contained in this report.

Forward Looking Statements

All statements other than statements of historical fact included in this Form 10-Q including, without limitation, statements under “Management’s Discussion and Analysis of Financial Condition and Results of Operations” regarding our financial position, business strategy and the plans and objectives of management for future operations, are forward looking statements. When used in this Form 10-Q, words such as “anticipate,” “believe,” “estimate,” “expect,” “intend” and similar expressions, as they relate to us or our management, identify forward looking statements. Such forward looking statements are based on the beliefs of management, as well as assumptions made by, and information currently available to, our management. Actual results could differ materially from those contemplated by the forward looking statements as a result of certain factors detailed in our filings with the Securities and Exchange Commission. All subsequent written or oral forward looking statements attributable to us or persons acting on our behalf are qualified in their entirety by this paragraph.

Overview

The Company is a blank check company organized under the laws of the State of Delaware on July 8, 2005. We were formed to effect a merger, capital stock exchange, asset acquisition or other similar business combination with an operating business limited to the entertainment, media and communications industries. On March 14, 2007, the Company completed its initial public offering of 10,800,000 units (which consist of one share of our common stock and one redeemable common stock purchase warrant) at a price of $8.00 per unit. The Company received total net proceeds of $81,420,447 from its initial public offering, taking into account $4,979,553 of underwriting fees and other offering expenses. Simultaneously with the consummation of the initial public offering, the Company privately sold an aggregate of 2,700,000 warrants to Messrs. Granath, Seslowsky, Maggin and Clauser and The Hearst Corporation and one of their affiliates, Transmedia Corporation (together, the “existing stockholders”) at a price of $1.00 per warrant, for an aggregate purchase price of $2,700,000.

On March 23, 2007, the Company completed the sale of an additional 1,620,000 units that were granted to the underwriters as an over-allotment option at a price of $8.00 per unit. The initial public offering, including the exercise of the over-allotment option generated total gross proceeds of $99,360,000 to the Company, excluding the proceeds from the offering of the 2,700,000 warrants on a private basis to the existing stockholders.

The aggregate net proceeds of the initial public offering, the exercise of the over-allotment option, and the sale of warrants on a private basis to the Company’s existing stockholders of $96,618,800 were placed in the Trust Account.

Upon the closing of our initial public offering, on March 14, 2007, the Company sold and issued an option, for $100 to the representatives of the underwriters, to purchase up to 540,000 units, at an exercise price of $10.00 per unit.

12

Overview (continued)

The Company intends to utilize cash derived from the proceeds of our recently completed initial public offering, our capital stock, debt or a combination of cash, capital stock and debt, to effect a Business Combination.

Business Combination with Potential Target

On July 8, 2008, the Company executed a letter of intent for a Business Combination with a potential target, which is still in effect as of the date of this report.

On October 2, 2008, the Company executed a second letter of intent for a Business Combination with a potential target.

Results of Operations

For the three months ended September 30, 2008, we had net income of $77,425 after provision for income taxes of $38,839, as compared to the prior year’s net income of $391,367, after provision for income taxes of $380,339. The difference is primarily due to the interest rate, which was 5% as of September 2007, and 1.5% as of September 30, 2008 which caused the interest and dividend income to decrease to $301,138 for the three months ended September 30, 2008 from $993,755 for the three months ended September 30, 2007. For the three months ended September 30, 2008 and 2007, respectively, the Company’s interest and dividend income was offset by $20,844 and $20,844 of stock based compensation, $114,543 and $144,484 of expenses related to filing requirements as a public entity, $34,998 and $34,908 of costs of searching for an acquisition target, and $14,489 and $21,813 of general and administrative expenses, aggregating $184,874 and $222,049, respectively.

For the six months ended September 30, 2008, we had a net income of $160,689 after provision for income taxes of $78,341, as compared to the prior periods net income of $931,923, after provision for income taxes of $854,748. The difference is primarily due to the decrease in the interest rate, which was 5% as of September 30, 2007, and 1.5% as of September 30, 2008. For the six months ended September 30, 2007, the Company’s net income of $931,923 consisted of $2,157,718 of interest and dividend income on the Trust Account offset by $41,688 of stock based compensation, $230,510 of expenses related to filing requirements as a public entity, $53,498 of costs of searching for an acquisition target, and $45,351 of general and administrative expenses, aggregating $371,047 in operating costs. During the six months ending

September 30, 2008, the Company earned interest and dividend income of $621,554 and incurred expenses related to the Company’s filing requirements as a public entity of $246,735, costs of searching for an acquisition target of $63,471, stock based compensation of $41,688, as well as general and administrative expenses of $30,630, aggregating $382,524 in operating costs.

Net income for the period from July 8, 2005 (inception) through September 30, 2008 was $2,051,751, after a provision for income taxes of $1,176,528. This was due to the interest and dividends earned of $4,670,779 on the proceeds from the initial public offering offset by the stock based compensation of $257,077, expenses related to the filing requirements as a public entity of $879,305, costs of searching for an acquisition target of $197,136, as well as general and administrative expenses of $108,982, aggregating, $1,442,500.

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Results of Operations (continued)

The Company’s entire activity for the period from July 8, 2005 (inception) through March 14, 2007 had been to prepare for our initial public offering, and for the period from March 15, 2007 through September 30, 2008 our entire activity has been to identify an acquisition candidate.

Off-Balance Sheet Arrangements

The Company has not entered into any off-balance sheet financing arrangements, established any special purpose entities, guaranteed any debt or commitments of other entities, or entered into any options on non-financial assets.

Contractual Obligations

The Company does not have any long-term debt, capital lease obligations, operating lease obligations, purchase obligations or other long-term liabilities.

Critical Accounting Policies

The Company’s significant accounting policies are more fully described in Note 1 to the condensed interim financial statements contained herein and Note 2 of the Company’s Form 10-K for the fiscal year ended March 31, 2008, which was filed on June 16, 2008, which is referenced herewith. However, certain accounting policies are particularly important to the portrayal of financial position and results of operations and require the application of significant judgments by management. As a result, the condensed interim financial statements are subject to an inherent degree of uncertainty. In applying those policies, management uses its judgment to determine the appropriate assumptions to be used in the determination of certain estimates. These estimates are based on the Company’s historical experience, terms of existing contracts, observance of trends in the industry and information available from outside sources, as appropriate. The Company’s significant accounting policies have remained unchanged from those used during its fiscal year ended March 31, 2008.

Liquidity and Capital Resources

$96,618,800 of the net proceeds of our initial public offering, over-allotment exercise, private sale of warrants, and a portion of the underwriters’ discounts and expense allowance were deposited in the Trust Account, with the remaining net proceeds being placed in our operating account. We plan to use the interest and dividend income earned on the trust proceeds (up to a maximum of $1,800,000 which we have received as of September 30, 2008) to identify, evaluate and negotiate with prospective acquisition candidates as well as cover our ongoing operating expenses until a transaction is approved by our stockholders or the funds in the Trust Account are returned to them.

We intend to utilize our cash, including the funds held in the Trust Account, capital stock, debt or a combination of the foregoing to effect a Business Combination.  To the extent that our capital stock or debt securities are used in whole or in part as consideration to effect a Business Combination, the proceeds held in the Trust Account as well as any other available cash will be used to finance the operations of the target business.  At September 30, 2008, we had cash outside of the Trust Account of $819,236, other current assets of $21,899 and total liabilities of $111,524. The Company has $5,899 of interest and dividend income available for the payment

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Liquidity and Capital Resources (continued)

of taxes which has been classified as cash held in the Trust Account, interest and dividend income available for working capital and income taxes on the unaudited interim condensed balance sheet.

Given our limited sources of working capital and income there exists the possibility that we will not have sufficient capital to sustain us until a Business Combination can be consummated. In addition there can be no assurance that the Company will enter into a Business Combination and would therefore need to liquidate as described below. These factors raise substantial doubt as to our ability to continue as a going concern.

Our certificate of incorporation requires that we take all actions necessary to liquidate in the event that we do not consummate a Business Combination within 24 months from the consummation of our initial public offering or March 14, 2009.  In the event of a liquidation, it is likely that the per share value of the residual assets remaining available for distribution (including assets deposited in the Trust Account) will be less than the offering price per unit in our initial public offering and over-allotment option due to costs related to the initial public offering and since no value would be attributed to the warrants contained in the units sold. 

As of September 30, 2008, we had total cash of $98,424,191, of which $97,599,056 is restricted cash held in the Trust Account. Until the initial public offering, our only source of liquidity was loans made by our four members of management. Those loans were all repaid out of the proceeds of the initial public offering. Our other liabilities are all relate to costs associated with our initial public offering, income taxes due, and other administrative items.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

Market risk is a broad term for the risk of economic loss due to adverse changes in the fair value of a financial instrument. These changes may be the result of various factors, including interest rates, foreign exchange rates, commodity prices and/or equity prices. Our exposure to market risk is limited to interest income sensitivity with respect to the funds placed in the Trust Account. However, the funds held in our Trust Account have been invested in only U.S. “government securities” defined as any Treasury Bill issued by the United States having a maturity of one hundred and eighty days or less or in money market funds meeting certain conditions under Rule 2a-7 under the Investment Company Act of 1940, so we are not deemed to be an investment company under the Investment Company Act. Thus, we are subject to market risk primarily through the effect of changes in interest rates on government securities. The effect of other changes, such as foreign exchange rates, commodity prices and/or equity prices, does not pose significant market risk to us.

The Company was investing at an effective annual interest rate of approximately 2.00% as of September 30, 2008. If the effective interest rate were to decrease by 100 basis points, the Company’s potential earnings would drop approximately $82,000 per month.

The Company was not engaged in any hedging transactions as of September 30, 2008.

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ITEM 4T. CONTROLS AND PROCEDURES.

Disclosure controls and procedures are controls and other procedures that are designed to ensure that information required to be disclosed in company reports filed or submitted under the Securities Exchange Act of 1934 (the “Exchange Act”) is recorded, processed, summarized and reported, within the time periods specified in the Securities and Exchange Commission’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed in company reports filed or submitted under the Exchange Act is accumulated and communicated to management, including our chief executive officer and treasurer, as appropriate to allow timely decisions regarding required disclosure.

As required by Rules 13a-15 and 15d-15 under the Exchange Act, our principal executive officer and principal financial and accounting officer carried out an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures as of September 30, 2008. Based upon their evaluation, they concluded that our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) were effective.

Our internal control over financial reporting is a process designed by, or under the supervision of, our president and chief financial and accounting officer and effected by our board of directors, management and other personnel, to provide reasonable assurance regarding the reliability of our financial reporting and the preparation of our financial statements for external purposes in accordance with GAAP.

Internal control over financial reporting includes policies and procedures that pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of our assets; provide reasonable assurance that transactions are recorded as necessary to permit preparation of our financial statements in accordance with GAAP, and that our receipts and expenditures are being made only in accordance with the authorization of our board of directors and management; and provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on our financial statements.

During the most recently completed fiscal quarter, there has been no change in our internal control over financial reporting in connection with the evaluation required by Rule 13a-15(d) under the Exchange Act that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

PART II

OTHER INFORMATION

ITEM 1: LEGAL PROCEEDINGS.

We are not a party to any pending legal proceedings.

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ITEM 1A: RISK FACTORS.

There have been no material changes to the risk factors previously disclosed in our registration statement on Form S-1 (File No. 333-128218) filed in connection with our initial public offering.

ITEM 2: UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.

None

ITEM 3: DEFAULTS UPON SENIOR SECURITIES.

Not applicable.

ITEM 4: SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.

Not applicable.

ITEM 5: OTHER INFORMATION.

Not applicable.

ITEM 6: EXHIBITS.

 

(a) Exhibits:

31.1 – Certification by Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.2 – Certification by Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

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

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SIGNATURES

     Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

Dated: November 10, 2008

MEDIA & ENTERTAINMENT HOLDINGS, INC.
By:	/s/ Herbert A. Granath
	Herbert A Granath
	Chairman of the Board and Chief Executive Officer (Principal Executive Officer)

By:	/s/ Robert C. Clauser, Jr.
	Robert C. Clauser, Jr.
	Executive Vice President and Chief Financial Officer (Principal Financial Officer)

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