~~Table of Contents~~UNITED STATES

~~UNITED STATES~~ SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(MARK ONE)

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

For the quarterly period ending ~~September~~March 3031, ~~2006~~ 2008

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

oFor the ~~TRANSITION~~transition ~~REPORT~~period ~~PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934~~from______________ to______________

~~For~~Commission File ~~the~~Number: ~~transition period from to~~ 000-51418

~~Commission~~Equity Media ~~File~~Holdings ~~Number 0-51418~~ Corporation

~~Coconut~~(Exact name ~~Palm~~of ~~Acquisition~~registrant ~~Corp.~~ as specified in its charter)

(Exact Name of Registrant as Specified in its Charter)

Delaware	20-2763411
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

Delaware (State or Other Jurisdiction of Incorporation or Organization)		20-2763411 (I.R.S. Employer Identification No.)
595 South Federal Highway, Suite 500 Boca Raton, Florida (Address of Principal Executive Offices)		33432 (Zip Code)

One Shackleford Drive, Suite 400

~~Registrant’s telephone number~~Little Rock, ~~including~~Arkansas ~~area code (561) 955-7300~~ 72211

~~Indicate by check mark whether the registrant~~ (~~1) has filed all reports required to be~~Address ~~filed by Section 13 or 15(d)~~ of ~~the~~principal ~~Securities~~executive ~~Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports)~~offices, ~~and~~including ~~(2) has been~~zip ~~subject to such filing requirements for the past 90 days.~~ code)

~~Yesx No o~~ (501) 219-2400

~~Indicate~~(Registrant’s telephone ~~by check mark whether the registrant is a large accelerated filer~~number, anincluding ~~accelerated filer,~~area ~~or a non-accelerated filer. See definition of “accelerated filer and large accelerated filer” in Rule 12b-2 of the Exchange Act.~~ code)

~~Large~~ Indicate by ~~accelerated~~check ~~filer~~mark ~~o Accelerated~~whether ~~filer~~the ~~o Non-accelerated~~registrant ~~filer~~(1) has xfiled 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. Yesþ No o

Indicate by check mark whether the registrant is a ~~shell~~large ~~company~~accelerated ~~(as~~filer, ~~defined~~an accelerated filer, or a non-accelerated filer. See definition of “accelerated filer and large accelerated filer” in ~~Rule~~ rule 12b-2 of the Exchange Act). ~~Yes x No o~~(Check one):

AsLarge of accelerated ~~November 13,~~filero Accelerated ~~2006, 14,000,000 shares of common stock, $0.0001 par value per share, were outstanding.~~filerþ Non-accelerated filero

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

As of May 19, 2008, 40,278,642 shares of the Company’s common stock, $0.0001 par value per share, were outstanding.

~~COCONUT~~EQUITY MEDIA ~~PALM~~HOLDINGS ~~ACQUISITION CORP.~~ CORPORATION

INDEX

	Page	~~Page~~
Part I—Financial Information
PART I—FINANCIAL INFORMATION
Item 1. Financial Statements
Condensed Balance Sheets — As of September 30, 2006 (unaudited) and As of December 31, 2005			3
Condensed Consolidated Balance Sheets — As of March 31, 2008 (unaudited) and As of December 31, 2007	3
Condensed Statements of Operations (unaudited) — Three Months Ended September 30, 2006, Three Months Ended September 30, 2005, Nine Months Ended September 30, 2006, From April 29, 2005 (date of inception) to September 30, 2005 and From April 29, 2005 (date of inception) to September 30, 2006			4
Condensed Consolidated Statements of Operations (unaudited) — Three Months Ended March 31, 2008 and March 31, 2007	5
Condensed Statement of Changes in Common Stockholders’ Equity — From April 29, 2005 (date of inception) through December 31, 2005 and (unaudited) for the nine months ended September 30, 2006			5
Condensed Consolidated Statements of Cash Flows (unaudited) — Three Months Ended March 31, 2008 and March 31, 2007	6
Condensed Statements of Cash Flows (unaudited) — Nine Months Ended September 30, 2006, From April 29, 2005 (date of inception) to September 30, 2005, and From April 29, 2005 (date of inception) to September 30, 2006			6
Notes to Unaudited Condensed Consolidated Financial Statements	7
Notes to Condensed Unaudited Financial Statements			7-12
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	15
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations			13-17
Item 3. Quantitative and Qualitative Disclosures About Market Risk	22
Item 3. Quantitative and Qualitative Disclosures About Market Risk			18
Item 4 . Controls and Procedures	22
Item 4. Controls and Procedures			18
PART II—OTHER INFORMATION
Part II—Other Information
Item 3. Defaults Upon Senior Securities	24
Item 1A. Risk Factors			19
Item 6. Exhibits	24
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds			19
Signatures	25
Item 5. Other Information			19
Exhibit Index	26
Item 6. Exhibits			20
EX-31.1 Section 302 Certification of COO
Signatures			20
EX-31.2 Section 302 Certification of CFO
Exhibit Index			21
EX-32.1 Section 906 Certification of COO
Certifications
EX-32.2 Section 906 Certification of CFO
EX-31.1 Section 302 Certification of CEO
EX-10.37 Second Amendment to Third Amended and Restated Credit Agreement and Forbearance Agreement dated April 28, 2008 and related schedules
EX-31.2 Section 302 Certification of CFO
EX-32.1 Section 906 Certification of CEO
EX-32.2 Section 906 Certification of CFO

~~Table~~PART I—FINANCIAL ~~of Contents~~INFORMATION

~~PART~~ITEM 1. I—FINANCIAL ~~INFORMATION~~ STATEMENTS

~~ITEM~~EQUITY MEDIA 1.HOLDINGS ~~FINANCIAL STATEMENTS~~ CORPORATION

~~COCONUT PALM ACQUISITION CORP.~~CONDENSED (a CONSOLIDATED ~~development~~BALANCE ~~stage company)~~ SHEETS

CONDENSED BALANCE SHEETS

	March 31, 2008
	(Unaudited)			December 31, 2007
ASSETS
Current assets
Cash and cash equivalents	$	1,193,880		$	634,314
Restricted cash		202			4,162,567
Certificate of deposit		112,107			112,107
Trade accounts receivable, net of allowance for uncollectible accounts		3,414,300			3, 514,635
Program broadcast rights		6,449,330			6,921,465
Assets held for sale		9,526,922			9,520,849
Other current assets		221,827			321,434
Prepaid expenses - related party		—			100,000
Total current assets		20,918,568			25,287,371

Property and equipment
Land and improvements		2,017,698			2,017,698
Buildings		3,989,424			3,956,229
Broadcast equipment		29,237,513			29,174,079
Transportation equipment		283,151			283,151
Furniture and fixtures		4,417,428			4,422,527
Construction in progress		102,889			163,716
		40,048,103			40,017,400
Accumulated depreciation		(17,369,146	)		(16,350,882	)
Net property and equipment		22,678,957			23,666,518

Intangible assets
Indefinite-lived assets, net
Broadcast licenses		67,018,665			66,498,347
Goodwill		1,940,282			1,940,282
Total indefinite-lived assets, net		68,958,947			68,438,629

Other assets
Broadcasting construction permits		399,302			885,665
Program broadcast rights		4,228,549			4,001,625
Investment in joint ventures		435,706			435,860
Deposits and other assets		101,121			98,705
Broadcasting station acquisition rights pursuant to assignment agreements		440,000			440,000
Total other assets		5,604,678			5,861,855

Total assets	$	118,161,150		$	123,254,373

	September 30, 2006
	(unaudited)		December 31, 2005
ASSETS
Current assets:
Cash and cash equivalents	$	319,606	$	934,086
Prepaid expenses		54,228		14,999
Total current assets		373,834		949,085
Other assets:
Investments held in trust fund		64,630,034		63,120,584
Deferred acquisition costs		1,617,759		—
Total other assets		66,247,793		63,120,584
Total assets	$	66,621,627	$	64,069,669
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	1,105,652	$	29,271
Accrued expenses		436,462		46,306
Accrued Delaware franchise fees		21,617		—
Income taxes payable		81,522		25,756
Total current liabilities		1,645,253		101,333
COMMITMENTS AND CONTINGENCIES (Note H)		—		—
Common stock subject to possible conversion - 2,298,850 shares		12,517,738		12,517,738
Interest attributable to common stock, subject to possible conversion		401,806		100,067
STOCKHOLDERS’ EQUITY
Preferred stock — $.0001 par value; 1,000,000 shares authorized; 0 issued and outstanding		—		—
Common stock — $.0001 par value; 50,000,000 shares authorized; 14,000,000 issued and outstanding (which includes 2,298,850 shares subject to possible conversion)		1,400		1,400
Additional paid-in-capital		51,114,006		51,114,006
Income accumulated during the development stage		941,424		235,125
Total stockholders’ equity		52,056,830		51,350,531
Total liabilities and stockholders’ equity	$	66,621,627	$	64,069,669

See Notes to Condensed Financial Statements

	March 31, 2008
	(Unaudited)			December 31, 2007
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities
Trade accounts payable	$	5,264,044		$	3,644,475
Due to affiliates and related parties		3,318,579			2,509,480
Lines of credit		998,322			994,495
Accrued expenses and other liabilities		2,188,549			1,777,240
Deposits held for sales of broadcast licenses		1,024,601			1,024,601
Deferred revenue		242,314			271,728
Current portion of program broadcast rights obligations		2,038,691			2,094,741
Current portion of deferred barter revenue		4,139,385			4,393,637
Note payable to Univision		15,000,000			15,000,000
Current portion of notes payable		54,477,112			52,233,322
Current portion of capital lease obligations		39,191			44,546
Total current liabilities		88,730,788			83,988,265

Non-current liabilities
Notes payable, net of current portion		8,870,532			8,996,705
Capital lease obligations, net of current portion		136,721			141,491
Program broadcast rights obligations, net of current portion		1,337,607			1,140,641
Deferred barter revenue, net of current portion		2,608,670			2,618,143
Due to affiliates and related parties		32,656			6,262
Security and other deposits		213,500			213,500
Other liabilities		740,376			556,795
Total non-current liabilities		13,940,062			13,673,537

Commitments and Contingencies		—			—

Mandatorily redeemable preferred stock — $.0001 par value; 25,000,000 shares authorized; 2,050,519 issued and outstanding		10,519,162			10,519,162

STOCKHOLDERS’ EQUITY
Common stock — $.0001 par value; 100,000,000 shares authorized; 40,278,642 issued and outstanding at March 31, 2008 and December 31, 2007		4,028			4,028
Additional paid-in-capital		136,570,040			136,217,425
Accumulated deficit		(131,601,578	)		(121,146,692	)
		4,972,490			15,074,761
Treasury stock, at cost		(1,352	)		(1,352	)
Total stockholders’ equity		4,971,138			15,073,409

Total liabilities and stockholders’ equity	$	118,161,150		$	123,254,373

3See Notes to Unaudited Condensed Consolidated Financial Statements

~~Table of Contents~~4

~~COCONUT PALM ACQUISITION CORP.~~EQUITY (a MEDIA ~~development~~HOLDINGS ~~stage company)~~ CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(UNAUDITED)

											April 29, 2005			April 29, 2005
	Three Months Ended
	Three months ended				Three months ended			Nine months ended			(Date of Inception)			(Date of Inception)
	March 31, 2008			March 31, 2007
	September 30, 2006				September 30, 2005			September 30, 2006			to September 30, 2005			to September 30, 2006
Broadcast Revenue	$	7,322,112		$	6,774,075
Operating costs	$	(127,119	)		$	(10,178	)	$	(433,510	)	$	(10,254	)	$	(580,433	)
Operating Expenses
Other income:
Program, production & promotion		4,810,556			3,420,928
Bank interest		3,131				—			14,307			—			21,594
Selling, general & administrative		7,513,477			5,750,069
Interest on investments held in Trust Fund		535,962				75,262			1,509,451			75,262			2,010,035
Selling, general & administrative – related party		249,681			186,566
Total other income		539,093				75,262			1,523,758			75,262			2,031,629
Management agreement settlement		—			8,000,000
Income before provision for income taxes		411,974				65,084			1,090,248			65,008			1,451,196
Management fees – related party		375,000			347,749
Provision for income taxes — current		(29,649	)			(3,037	)		(82,210	)		(3,037	)		(107,966	)
Depreciation & amortization		1,018,264			944,057
Net income	$	382,325			$	62,047		$	1,008,038		$	61,971		$	1,343,230
Rent		676,140			605,031
Interest income attributable to common stock subject to possible conversion		(107,139	)			(15,045	)		(301,739	)		(15,045	)		(401,806	)
Total operating expenses		14,643,118			19,254,400
Net income allocable to common stockholders not subject to possible conversion	$	275,186			$	47,002		$	706,299		$	46,926		$	941,424
Loss from operations		(7,321,006	)		(12,480,325	)
Weighted average number of shares outstanding:
Other income (expense)
Basic		14,000,000				4,543,478			14,000,000			3,712,903
Interest income		21,483			3,875
Diluted		15,582,831				4,752,867			15,803,173			3,837,186
Interest expense		(2,792,851	)		(2,120,674	)
Net income per share:
Interest expense – related party		(262,500	)		—
Basic	$	0.03			$	0.01		$	0.07		$	0.02
Gain on sale of assets		—			453,753
Diluted	$	0.02			$	0.01		$	0.06		$	0.02
Other income, net		83,728			160,399
Weighted average number of shares outstanding exclusive of shares subject to possible conversion:
Losses from affiliates and joint ventures		(159	)		(30,261	)
Basic		11,701,150				4,134,987			11,701,150			3,470,444
Total other expense, net		(2,950,299	)		(1,532,908	)
Diluted		13,283,981				4,344,376			13,504,323			3,594,726
Loss before provision for income taxes		(10,271,305	)		(14,013,233	)
Net income per share not subject to possible conversion:
Provision for income taxes		—			—
Basic	$	0.02			$	0.01		$	0.06		$	0.01
Net loss		(10,271,305	)		(14,013,233	)
Diluted	$	0.02			$	0.01		$	0.05		$	0.01
Preferred dividend		(183,581	)		(12,134,943	)
Net loss available to common shareholders	$	(10,454,886	)	$	(26,148,176	)
Weighted average number of common shares outstanding:
Basic and diluted		40,278,642			25,668,789
Net loss available to common shareholders per share:
Basic amd Diluted	$	(0.26	)	$	(1.02	)

See Notes to Unaudited Condensed Consolidated Financial Statements .

4 5

~~Table~~EQUITY MEDIA ofHOLDINGS ~~Contents~~CORPORATION

~~COCONUT PALM ACQUISITION CORP.~~CONDENSED (a CONSOLIDATED ~~development~~STATEMENTS ~~stage~~OF ~~company)~~ CASH FLOWS

~~CONDENSED STATEMENT OF CHANGES IN COMMON STOCKHOLDERS’ EQUITY~~ (UNAUDITED)

For period from April 29, 2005 (Date of Inception) through September 30, 2006

	Three Months Ended
	March 31, 2008			March 31, 2007
Cash flows from operating activities:
Net loss	$	(10,271,305	)	$	(14,013,233	)
Adjustments to reconcile net loss to net cash used by operating activities:
Provision for bad debt		94,446			432,335
Depreciation		1,018,264			913,871
Amortization of intangibles		—			30,186
Amortization of program broadcast rights		2,871,648			1,706,926
Amortization of discounts on interest-free debt		—			14,634
Equity in losses of subsidiaries and joint ventures		155			30,261
(Gain) on sale of equipment		—			(453,753	)
Management agreement settlement		—			4,800,000
Shared based compensation		352,615			—
Changes in operating assets and liabilities:
Trade accounts receivable		5,889			(456,865	)
Deposits and other assets		197,191			(409,806	)
Restricted cash		4,162,365			—
Accounts payable and accrued expenses		2,030,876			1,308,084
Program broadcast rights		(2,626,438	)		(1,843,102	)
Program broadcast obligations		140,917			955,479
Deferred barter revenue		(263,725	)		—
Security deposits		—			(5,513	)
Deferred income		(29,414	)		(780,125	)
Net cash used by operating activities		(2,316,516	)		(7,770,621	)

Cash flows from investing activities:
Purchases of property and equipment		(36,777	)		(1,126,822	)
Proceeds from sale of property and equipment		—			621,462
Acquisition of broadcast assets		—			(1,225,000	)
Purchase of certificate of deposit		—			(1,220	)
Net advances from (to) affiliates		801,538			(227,011	)
Net cash used in investing activities		764,761			(1,958,591	)
Cash flows from financing activities:
Proceeds from notes payable		53,378,802			4,750,980
Payments of notes payable		(51,257,357	)		(706,081	)
Payments of capital lease obligations		(10,124	)		(7,556	)
Recapitalization through merger		—			52,906,853
Purchase of preferred stock		—			(25,000,000	)
Net cash provided by financing activities		2,111,321			31,944,196
Net increase (decrease) in cash and cash equivalents		559,566			22,214,984
Cash and cash equivalents — beginning of period		634,314			1,630,973

Cash and cash equivalents — end of period	$	1,193,880		$	23,845,957

									Income
Supplemental cash flow information:
	Common Stock					Paid-in Capital			Accumulated
Cash paid during the period for interest	$	3,384,724	$	1,859,178
						in			During the
Supplemental non-cash activities:
	Shares			Amount		Excess of Par			Development Stage			Total
Issuance of note payable to redeem preferred stock	$	—	$	15,000,000
Balance — April 29, 2005 (date of inception)
Settlement with dissenting shareholders	$	—	$	10,899,882
Initial capitalization from founding stockholder		2,500,000		$	250	$	24,750		$	—		$	25,000
Issuance of mandatory redeemable preferred stock to pay accrued preferred dividends	$	—	$	10,519,162
Sale of 11,500,000 units net of underwriters’ discount and offering expenses (includes 2,298,850 shares subject to possible conversion)		11,500,000			1,150		63,606,894						63,608,044
Issuance of common stock to pay preferred dividends	$	—	$	1,615,781
Proceeds subject to possible conversion of 2,298,850 shares							(12,517,738	)					(12,517,738	)
Acquisition of real property through assumption of debt	$	—	$	205,347
Accretion of trust fund relating to common stock subject to possible conversion										(100,067	)		(100,067	)
Charge to stockholders’ equity for prepaid merger costs	$	—	$	750,006
Proceeds from issuance of option							100						100
Assumption of net liabilities of Coconut Palm Acquisition Corporation	$	—	$	(2,267,340	)
Net income for the period										335,192			335,192
Accretion of preferred dividends	$	183,581	$	—
Balance at December 31, 2005		14,000,000		$	1,400	$	51,114,006		$	235,125		$	51,350,531
Accretion of trust fund relating to common stock subject to possible conversion										(301,739	)		(301,739	)
Net income for the period										1,008,038			1,008,038
Balance at September 30, 2006 (unaudited)		14,000,000		$	1,400	$	51,114,006		$	941,424		$	52,056,830

See Notes to Unaudited Condensed Consolidated Financial Statements .

5 6

~~Table~~EQUITY MEDIA ofHOLDINGS ~~Contents~~CORPORATION

~~COCONUT~~NOTES TO ~~PALM~~UNAUDITED ~~ACQUISITION~~CONDENSED ~~CORP. (a~~CONSOLIDATED ~~development~~FINANCIAL ~~stage company)~~ STATEMENTS

~~CONDENSED~~NOTE 1 ~~STATEMENTS~~— BASIS OF ~~CASH~~PRESENTATION ~~FLOWS~~

The unaudited condensed consolidated financial statements include the accounts of the Company and its subsidiaries, all significant inter-company balances and transactions have been eliminated. The accounting policies followed by the Company and other pertinent information are set forth in the notes to the Company’s financial statements for the fiscal year ended December 31, 2007 included in the Form 10-K/A filed with the Securities and Exchange Commission on April 1, 2008 (~~UNAUDITED~~the “Form 10-K/A”). The accompanying condensed consolidated balance sheet as of December 31, 2007, which has been derived from audited consolidated financial statements, and the unaudited condensed consolidated financial statements for the three months ended March 31, 2008 and 2007 included herein have been prepared in accordance with the instructions for Form 10-Q under the Securities Exchange Act of 1934, as amended, and Article 10 of Regulation S-X. Certain information and footnote disclosures normally included in financial statements prepared in conformity with accounting principles generally accepted in the United States of America have been condensed or omitted pursuant to such rules and regulations relating to interim financial statements.

				April 29, 2005			April 29, 2005
	Nine months ended			(Date of Inception)			(Date of Inception)
	September 30, 2006			to September 30, 2005			to September 30, 2006
Cash flows from operating activities:
Net income	$	1,008,038		$	61,971		$	1,343,230
Increase (decrease) in cash attributable to changes in:
Prepaid expenses		(39,229	)		(34,002	)		(54,228	)
Accounts payable		82,677			174,941			111,948
Accrued expenses		(36,705	)		1,500			9,601
Accrued franchise fees		21,617			—			21,617
Income tax payable		55,766			3,037			81,522
Net cash provided by operating activities		1,092,164			207,447			1,513,690
Cash flows from investing activities:
Principal deposited into Trust Fund		—			(62,620,000	)		(62,620,000	)
Increase in investments in a fund		(1,509,450	)		(75,262	)		(2,010,034	)
Deferred acquisition costs		(197,194	)		—			(197,194	)
Net cash used in investing activities		(1,706,644	)		(62,695,262	)		(64,827,228	)
Cash flows from financing activities:
Proceeds from sale of common stock, net of offering costs		—			63,633,044			63,633,044
Proceeds from notes payable to founding stockholders		—			75,000			75,000
Repayment of notes payable to founding stockholders		—			—			(75,000	)
Proceeds from issuance of underwriters’ purchase option		—			100			100
Net cash provided by financing activities		—			63,708,144			63,633,144
Net (decrease) increase in cash and cash equivalents		(614,480	)		1,220,329			319,606
Cash and cash equivalents — beginning of period		934,086			—			—
Cash and cash equivalents — end of period	$	319,606		$	1,220,329		$	319,606
Supplemental cash flow information:
Income taxes paid	$	46,769		$	—		$	42,869
Supplemental non-cash activity:
Accretion of Trust Fund income relating to common stock subject to possible conversion	$	301,739		$	15,045		$	401,806
Accrual of deferred acquisition costs	$	1,420,565					$	1,420,565

In the opinion of management, the accompanying unaudited condensed consolidated financial statements contain only normal recurring adjustments necessary to present fairly the Company’s financial position as of March 31, 2008 and the results of its operations for the three months ended March 31, 2008 and 2007 and cash flows for the three months ended March 31, 2008 and 2007. The results of operations for the three months ended March 31, 2008 and 2007 are unaudited and are not necessarily indicative of the results to be expected for the full year. The unaudited condensed consolidated financial statements included herein should be read in conjunction with the Company’s consolidated financial statements and related footnotes included in the Annual Report on our Form 10-K/A for the year ended December 31, 2007.

~~See~~Certain changes ~~Notes~~in classifications have been made to ~~Condensed~~the ~~Financial~~prior ~~Statements~~period financial statements to conform to the current financial statement presentation.

6NOTE 2— LIQUIDITY AND CAPITAL RESOURCES

~~Table~~The Company currently has a working capital deficit of ~~Contents~~approximately $67.8 million and has experienced losses from operations since inception. During the year ended December 31, 2007, the Company had a net loss of approximately $40.8 million and experienced cash outflows from operations during the same period of approximately $30.8 million. For the three months ended March 31, 2008, the Company had a net loss of approximately $10.3 million and experienced cash outflows from operations of approximately $2.3 million. In the past, the Company has relied on equity and debt financing and the sale of assets to provide the necessary liquidity for the business to operate and will need to have access to substantial funds over the next twelve months in order to fund its operations. As of March 31, 2008, the Company has approximately $1.2 million of unrestricted cash on hand.

~~COCONUT~~In February ~~PALM~~2008, ~~ACQUISITION~~we ~~CORP~~refinanced our previous credit facility with our existing lender group. The amended $53.0 million credit facility, comprised of an $8.0 million revolving credit line and term loans of $45.0 million, maturing on February 13, 2011, was used to refinance the existing indebtedness senior credit facility. Outstanding principal balance under the credit facility bears interest at LIBOR or the alternate base rate, plus the applicable margin. The applicable margin is 9.5% for the LIBOR loans and 8.5% on the alternate base rate loan. The minimum LIBOR is 4.5%. The alternate base rate is (i) the greatest of (A) the Prime Rate, (B) the Federal Funds Rate in effect on such day plus fifty (50) basis points (0.50%), and (C) seven and one-half percent (7.50%) per annum. We are required to pay an unused line fee of .5% on the unused portion of the credit facility. The credit facility is secured by the majority of the assets of the company. We are subject to new financial and operating covenants and restrictions based on trailing monthly and twelve month information. We have borrowed $50,512,500 under the new facility as of March 11, 2008. Due to certain restrictions based on the value of the loan collateral, the Company does not have access to the remaining $2,487,500 at this time.

~~NOTES~~On March 19, TO2008, ~~CONDENSED~~the ~~UNAUDTED~~Company ~~FINANCIAL~~entered ~~STATEMENTS~~into an amendment (“Amendment”) to its Third Amended and Restated Credit Agreement (“Credit Agreement”) with Silver Point Finance, LLC and Wells Fargo Foothill, Inc. Under the terms of the Amendment, the lender group has agreed to forbear from exercising certain of their rights and remedies with respect to designated defaults under the Credit Agreement through the earlier of (a) April 18, 2008 and (b) the date of occurrence of certain events or by which certain events have failed to occur, including the Company’s failure to enter into agreements with respect to the sale of certain of its assets and the Company’s failure to secure approvals for, and meet other criteria with respect to, financing alternatives necessary to meet the Company’s immediate capital requirements. Additionally, the applicable margins on LIBOR loans and base rate loans were increased to 10.0% and 9.0% respectively. Pursuant to the Amendment the Lenders may exercise any and all remedies available under the Credit Agreement, including making the loan immediately due and payable.

~~September 30~~On April 28, ~~2006~~2008, the Company entered into a second amendment (“Second Amendment”) to its Credit Agreement which had been previously amended on March 19, 2008 as noted above. Under the terms of the Second Amendment, the lender group has agreed to forbear from exercising certain of its rights and remedies with respect to existing defaults and any other defaults or events of default under the Credit Agreement other than any specified defaults described in the Second Amendment (which include, but are not limited to, breaches of certain affirmative and negative covenants, among others) through the earlier of (a) May 5, 2008 and (b) the date of occurrence of certain events or by which certain events have failed to occur, including the Company’s failure to consummate a proposed financing with certain investors. The Second Amendment also provides for the lender group to make additional loans to the Company in an amount not to exceed $5,495,541 (which includes additional loans funded pursuant to the First Amendment) and increases the applicable margins on LIBOR loans and base rate loans to 12.0% and 110% respectively.

~~Basis of Presentation~~ 7

~~The~~Even with the ~~accompanying~~refinanced ~~unaudited~~Credit ~~condensed~~Facility, ~~financial~~the ~~statements~~additional ~~have~~funds ~~been~~provided ~~prepared~~by inthe ~~accordance~~Amended ~~with~~ Credit ~~accounting~~Facility ~~principles~~are ~~generally~~not ~~accepted~~sufficient into ~~the~~meet ~~United~~all ~~States~~ of ~~America~~the ~~for~~anticipated ~~interim financial~~liquidity ~~information~~ needs ~~and~~to ~~with~~continue operations of the ~~instruction~~Company tofor ~~Form~~the ~~10-Q.~~next twelve months. Accordingly, ~~they~~the doCompany ~~not~~will ~~include~~have ~~all~~to ofraise ~~the information~~additional ~~and~~capital ~~footnotes~~or ~~required~~increase its debt byimmediately ~~accounting~~to ~~principles~~continue ~~generally~~operations. ~~accepted~~If in the ~~United~~Company ~~States of~~is ~~America~~unable ~~for~~to ~~complete~~obtain additional ~~financial~~funds ~~statements.~~when Inthey ~~the~~are ~~opinion~~required ofor ~~management,~~if ~~all~~the ~~adjustments (consisting~~funds ofcannot ~~normal~~be ~~recurring~~obtained on favorable ~~accrual)~~terms, ~~considered~~management ~~necessary~~may ~~for~~be arequired ~~fair~~to ~~presentation~~liquidate ~~have~~available ~~been~~assets, ~~included.~~ restructure ~~Operating results for~~ the ~~interim~~company ~~period~~or ~~presented~~in ~~are~~the ~~not~~extreme ~~necessarily~~event, ~~indicative~~cease ofoperations. ~~the~~The financial ~~results~~ statements todo benot ~~expected~~include ~~for~~ any ~~other~~adjustments ~~interim~~that ~~period~~might orresult ~~for~~from ~~full~~the ~~year.~~outcome of these uncertainties.

~~These unaudited condensed financial statements should be read in conjunction with the~~NOTE ~~financial~~ 3 ~~statements~~— ~~and~~SUMMARY ~~notes~~OF ~~thereto~~SIGNIFICANT ~~for~~ACCOUNTING the fiscal year ended December 31, 2005 included in Coconut Palm Acquisition Corp.’s Form 10-K for the fiscal year ended December 31, 2005, filed with the Securities and Exchange Commission on March 31, 2006. Subject to the foregoing, the accounting policies used in preparing these unaudited condensed financial statements are consistent with those described in the December 31, 2005 financial statements. POLOCIES

~~As of September 30, 2006, the current liabilities of $1,645,253 of Coconut Palm Acquisition~~Adoption ~~Corp. (the “Company”) exceed its current assets~~ of ~~$373,834,~~New ~~creating~~Accounting a working capital deficit of $1,271,419. The Founding Stockholder has agreed with the Company and the underwriters to be personally liable to pay debts and obligations to target businesses or vendors or other entities that are owed money by the Company for services rendered or contracted for or products sold to the Company in excess of the net proceeds of the offering not held in the trust account (the “Trust Fund”). Management believes these factors will contribute towards eliminating the working capital deficit. The Company can not guarantee that the Founding Stockholder would be able to satisfy these obligations. If the Founding Stockholder is unable to meet these obligations, the Company may be forced to liquidate. These factors raise substantial doubt about the Company’s ability to continue as a going concern. The financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern. Standards

InEffective January 1, ~~the~~2008, ~~event that~~ the Company ~~does~~adopted ~~not~~Financial ~~consummate~~Accounting anStandards ~~Acquisition~~ Board (~~as defined below~~"FASB") ~~within~~Statement ~~18 months from the date~~ of ~~the~~Financial ~~consummation~~Accounting ofStandards ~~the~~("SFAS") ~~Offering~~No. 157, "Fair orValue 24Measurements" ("SFAS ~~months~~157") ~~from~~for ~~the~~its ~~consummation~~financial ofassets ~~the~~and ~~Offering~~ liabilities. ~~(as~~In ~~defined~~February ~~below)~~2008, ifthe ~~certain~~FASB ~~extension~~issued ~~criteria~~FASB ~~have~~Staff ~~been~~Position ~~satisfied~~ (~~the “Acquisition Period”~~"FSP") No. FAS 157-2, ~~the~~"Effective ~~proceeds~~Date ~~held~~of inFASB ~~the~~Statement ~~Trust~~No. 157", ~~Fund~~which ~~will be distributed to~~ delays the ~~Company’s~~effective ~~Public Stockholders~~date ~~(as~~of ~~defined~~SFAS 157 ~~below).~~for Innonfinancial ~~the~~assets ~~event~~and ofliabilities, except ~~such~~for ~~distribution,~~items itthat isare ~~likely~~recognized ~~that~~or ~~the~~disclosed ~~per share~~at fair value ofin the ~~residual~~financial statements ~~assets~~on ~~remaining~~a ~~available~~recurring ~~for~~basis ~~distribution~~ (~~including~~at ~~Trust~~least ~~Fund assets~~annually), ~~will~~to befiscal ~~less~~years ~~than~~beginning after ~~the~~November 15, ~~initial~~2008 ~~public~~and ~~offering~~interim ~~price~~periods ~~per~~within ~~share~~those infiscal ~~the~~years. SFAS 157 ~~Offering~~establishes ~~due~~a toframework ~~costs related~~for tomeasuring ~~the~~fair ~~Offering,~~value ~~costs~~under ~~related~~generally accepted toaccounting ~~pursuing~~principles ~~possible acquisitions~~ and ~~general~~expands ~~and administrative~~disclosures ~~expenses~~about ~~incurred~~fair ~~prior~~value measurement. toThe ~~the~~adoption ~~liquidation~~of ~~event~~SFAS 157 ~~and~~on ~~since~~January 1, no2008 ~~value~~did ~~would~~not behave ~~attributed~~ a tomaterial ~~the~~effect ~~Warrants~~on ~~contained~~the inCompany's ~~the~~Unaudited ~~Units~~Condensed ~~(discussed~~Consolidated inFinancial Statements. See Note ___ C)for additional information.

~~NOTE~~In February A2007, ~~— ORGANIZATION~~the ~~AND~~FASB ~~BUSINESS~~issued ~~OPERATIONS~~SFAS No. 159, "The Fair Value Option for Financial Assets and Financial Liabilities - Including an amendment of FASB Statement No. 115" ("SFAS 159") effective as of the beginning of the first fiscal year that begins after November 15, 2007. SFAS 159 permits entities to choose to measure many financial instruments and certain other items at fair value with changes in fair value recognized in earnings for each reporting period. The adoption of SFAS 159 on January 1, 2008 did not have any effect on the Company's Unaudited Condensed Consolidated Financial Statements as the Company did not elect any eligible items for fair value measurement.

~~Coconut Palm Acquisition Corp. was incorporated in Delaware on April 29, 2005. It was formed~~Recent to Accounting serve as a vehicle for the acquisition of an operating business through a merger, capital stock exchange, asset acquisition and/or other similar transaction. The Company has neither engaged in any operations nor generated revenue, and is considered to be a development stage company, subject to the risks associated with activities of development stage companies. As such, the Company’s operating results relate to early stage organizational activities. Pronouncements

~~The registration statement for the Company’s initial public offering of Units (as described in~~In ~~Note~~ March 2008, ~~C) (~~the ~~“Offering”)~~FASB ~~was~~issued ~~declared~~SFAS ~~effective on September~~No. 8161, ~~2005.~~“Disclosures ~~The~~about ~~Company consummated the~~Derivative ~~Offering~~ Instruments ~~on September 14, 2005~~ and ~~received~~Hedging ~~net proceeds of approximately $55.2 million. On September 19~~Activities, ~~2005,~~an ~~the~~amendment ~~Company consummated the closing~~ of ~~the~~FASB ~~over-allotment~~Statement ~~option and the Company received additional net proceeds of approximately $8~~No.4 ~~million. The Company’s management~~133” has broad discretion with respect to the specific application of the net proceeds of the Offering, although substantially all of the net proceeds of the Offering are intended to be generally applied toward acquiring an operating company (“~~Acquisition~~SFAS 161”)~~. Furthermore~~, ~~there~~which isrequires noenhanced ~~assurance~~disclosures ~~that~~for ~~the Company~~derivative ~~will~~and ~~be able to successfully effect an Acquisition. At September 30, 2006, an amount of~~hedging ~~$64~~ activities.~~6 million~~ ofSFAS ~~the~~161 ~~net~~will ~~proceeds~~become ofeffective ~~the~~beginning ~~Offering, including interest earned to date, is being held~~ in ~~a trust account and invested in government securities until~~ the ~~earlier of (i) the consummation of its~~ first ~~Acquisition~~quarter ~~or (ii) the distribution~~ of ~~the Trust Fund as described below~~ 2009. The ~~remaining~~ ~~net~~Company ~~proceeds~~is ~~(not~~currently ~~held~~evaluating in the ~~Trust~~impact ~~Fund)~~of ~~may~~adopting beSFAS ~~used~~161 ~~to pay for business, legal and accounting due diligence~~ on ~~prospective acquisitions and continuing general and administrative~~ ~~expenses.~~ the financial statements.

7In December 2007, the FASB issued SFAS No. 141 (revised 2007) “Business Combinations” (“FASB No. 141(R)”). FASB No. 141(R) retains the fundamental requirements of the original pronouncement requiring that the purchase method be used for all business combinations. FASB No. 141(R) defines the acquirer as the entity that obtains control of one or more businesses in the business combination, establishes the acquisition date as the date that the acquirer achieves control and requires the acquirer to recognize the assets acquired, liabilities assumed and any non-controlling interest at their fair values as of the acquisition date. FASB No. 141(R) also requires that acquisition-related costs be recognized separately from the acquisition. FASB No. 141(R) is effective for business combinations for which the acquisition date is on or after the beginning of the first annual reporting period beginning on or after December 15, 2008. The impact of adopting SFAS No. 141(R) will be dependent on the future business combinations that the Company may pursue after its effective date, if any.

~~Table~~In December 2007, the FASB issued Statement No. 160, “Noncontrolling Interests in Consolidated Financial Statements—an amendment of ~~Contents~~ARB No. 51 (“FASB No. 160”) .” The objective of FASB No. 160 is to improve the relevance, comparability, and transparency of the financial information that a reporting entity provides in its consolidated financial statements by establishing accounting and reporting standards for the non-controlling interest in a subsidiary and for the deconsolidation of a subsidiary. This Statement applies to all entities that prepare consolidated financial statements, except not-for-profit organizations. FASB No. 160 amends ARB 51 to establish accounting and reporting standards for the non-controlling interest in a subsidiary and for the deconsolidation of a subsidiary. It also amends certain of ARB 51’s consolidation procedures for consistency with the requirements of FASB No. 141 (R). This Statement is effective for fiscal years, and interim periods within those fiscal years, beginning on or after December 15, 2008. Earlier adoption is prohibited. The effective date of this Statement is the same as that of the related Statement 141(R). This Statement shall be applied prospectively as of the beginning of the fiscal year in which this Statement is initially applied, except for the presentation and disclosure requirements. The presentation and disclosure requirements shall be applied retrospectively for all periods presented.

~~The Company, after signing a definitive agreement for an Acquisition, will submit such~~NOTE ~~transaction~~ 4 ~~for~~— ~~stockholder~~ASSET ~~approval.~~PURCHASE In the event that holders of 20% or more of the shares of the Company’s common stock issued as part of the Units in the Offering vote against the Acquisition and exercise their conversion rights described below, the Acquisition will not be consummated. AGREEMENT

~~The Company’s initial stockholder (the “Founding Stockholder”) has agreed to vote its~~Purchase ~~2,500,000~~ from ~~shares~~Renard ofCommunications ~~common stock in accordance with the vote of the majority in interest of all other stockholders of the Company (“Public Stockholders”) with respect to an Acquisition~~Corp. ~~After consummation of an Acquisition, these voting safeguards will no longer be applicable.~~

~~With respect to an Acquisition which is approved and consummated, any Public Stockholders~~The ~~voting against such Acquisition may demand that the~~ Company ~~convert~~entered ~~their shares~~ into ~~cash.~~an ~~The per~~asset ~~share~~purchase ~~conversion~~agreement ~~price~~(“Agreement”) ~~will~~with ~~equal the amount in the Trust Fund including all accrued interest,~~Renard ~~calculated~~ Communications asCorp. of(“Seller”) ~~two~~for ~~business days prior to~~ the ~~consummation~~purchase of ~~the~~certain ~~proposed Acquisition~~licenses, ~~divided~~ by construction ~~the~~permits ~~number~~and ofother ~~shares~~instruments of ~~common~~authorization ~~stock held by Public Stockholders. Accordingly~~(collectively “Licenses,” ~~Public Stockholders~~described ~~holding~~below) ~~19.99%~~issued ~~of the aggregate number of shares owned~~ by ~~all Public Stockholders may seek conversion of their shares in~~ the ~~event~~Federal ofCommunications ~~an Acquisition. Such Public Stockholders are~~Commission ~~entitled~~ (“FCC”) toand ~~receive~~certain ~~their~~other ~~per~~assets ~~share~~(together ~~interest~~with in the ~~Trust~~Licenses, ~~Fund~~“Assets”). ~~computed without regard to the~~The ~~shares~~ Agreement ~~held~~became byeffective ~~the~~on ~~Founding Stockholder. Accordingly~~August 15, a2007 ~~portion~~upon ofapproval ~~the~~by ~~net proceeds from~~ the ~~Offering~~ Company’s ~~(19.99%~~board of ~~the~~directors ~~amount originally held in the Trust Fund) has been classified as common stock subject to possible conversion in the accompanying balance sheets~~ and ~~19.99% of~~ the ~~related interest earned on the trust fund has been recorded as interest attributable to common stock subject to possible conversion~~lender.

In the event that the Company does not consummate an Acquisition within 18 months from the date of the consummation of the Offering, or 24 months from the consummation of the Offering if certain extension criteria have been satisfied (the “Acquisition Period”), the proceeds held in the Trust Fund will be distributed to the Company’s Public Stockholders. In the event of such distribution, it is likely that the per share value of the residual assets remaining available for distribution (including Trust Fund assets) will be less than the initial public offering price per share in the Offering due to costs related to the Offering, costs related to pursuing possible acquisitions and general and administrative expenses incurred prior to the liquidation event and since no value would be attributed to the Warrants contained in the Units (discussed in Note C). 8

~~Upon consummation of the Offering the Founding Stockholder placed the shares it owned into an~~The ~~escrow~~ Assets ~~account.~~include ~~These~~Licenses ~~shares~~for ~~will~~Class A ~~not~~television bestation ~~transferable during the escrow period and will not be released from escrow until the earliest of three years following the date of the offering~~WMBQ-CA, ~~liquidation,~~ ~~and~~Channel ~~the consummation of a liquidation~~46, ~~merger stock exchange or other similar~~ ~~transaction which results in all of the stockholders having the right to exchange their shares of common stock for cash~~ Manhattan, ~~securities~~New orYork ~~other property subsequent to the Company consummating a business combination~~ with a ~~target~~corresponding ~~business.~~digital ~~During~~authorization ~~the~~for ~~escrow period, the Founding Stockholder~~Channel ~~will not be able to sell or transfer its securities~~ 10 (~~except~~WMBQ-LD) ~~to its limited partners, its limited partners’ spouses~~ and ~~children or trusts established for their benefit)~~WBQM-LP, ~~but~~Channel ~~will retain all other rights as the Company’s stockholder~~3, ~~including~~Brooklyn, ~~without~~New ~~limitation~~York (collectively, the ~~right to vote its shares of~~ ~~common stock and the right to receive cash dividends~~“Stations”), ~~if declared. If dividends are declared~~ and ~~payable~~ inrelated ~~shares~~items ofas ~~common~~specified ~~stock, such dividends will also be placed~~ in ~~escrow. If~~ the Company is unable to effect a business combination and is forced to liquidate, the Company’s Founding Stockholder will not receive any portion of the liquidation proceeds with respect to common stock owned by it prior to the date of this prospectusAgreement.

The Company 2will pay an aggregate of $8,~~500~~000,000 ~~shares~~for ofthe ~~common~~Assets, ~~stock~~which ~~issued~~constitute all the toassets ~~Founding~~used ~~Stockholder~~in ~~are~~connection ~~entitled~~with tooperating the Stations. In connection with ~~registration~~ the ~~rights~~transaction, the Company deposited $400,000 (“Deposit”), which will be held in escrow pending closing. ~~The~~At ~~Founding~~the ~~Stockholder~~closing, isthe ~~entitled~~Company towill ~~make~~pay up$6,000,000 in immediately toavailable ~~two~~funds, ~~demands~~which ~~that~~amount will include the Deposit, and will ~~Company~~ deliver ~~register~~a ~~these~~secured ~~shares~~promissory note (“Note”) for the remaining $2,000,000. The Note ~~holder~~will ofhave ~~these~~a ~~shares~~three-year ~~can~~term ~~elect~~and towill ~~exercise~~accrue ~~these~~interest ~~registration rights~~ at ~~any~~6% per ~~time~~year, requiring ~~commencing~~monthly ~~three~~interest ~~months~~payments ~~prior~~only tountil the ~~date~~expiration onof the term, at which ~~these~~time ~~shares~~the ofprincipal ~~common~~amount ~~stock~~will become due and payable. The Seller will ~~are~~ have toa besecurity ~~released~~interest, ~~from~~documented ~~escrow.~~by Ina ~~addition~~Security Agreement executed simultaneously with the closing, ~~such~~in ~~stockholder~~the ~~has~~Brooklyn ~~certain~~station ~~“piggy-back”~~only. The payment ~~registration~~ will be ~~rights~~increased ~~with~~or ~~respect~~decreased tosuch ~~registration~~that ~~statements~~Seller ~~filed~~is ~~subsequent~~entitled to ~~the~~all ~~date~~revenue onand ~~which~~is ~~these~~ liable ~~shares~~for ofall ~~common~~expenses ~~stock~~allocable ~~are~~to ~~released~~the ~~from~~period ~~escrow.~~prior ~~The~~to ~~Company~~the ~~will~~closing ~~bear~~and the Company is entitled to all revenue and is liable for all expenses ~~incurred~~allocable in to the ~~connection~~period ~~with~~following the ~~filing~~closing. ofSeller ~~any~~will ~~such~~assign ~~registration~~and ~~statements.~~the Company will assume certain listed contracts.

~~NOTE~~The closing Bof ~~— SUMMARY~~the OFAgreement ~~SIGNIFICANT~~is ~~ACCOUNTING~~subject ~~POLICIES~~to conditions, including FCC consent to the assignment of the Licenses. Seller and the Company agree to promptly prepare an application for assignment of the Licenses and to fully prosecute the application, but neither party is required to engage in a trial-type hearing. Each party will bear its own costs, and the filing fees shall be split evenly. The closing will occur between five business days after the FCC grants consent and ten business days after the grant becomes a final order.

~~[1]~~The Agreement ~~Cash~~may ~~and~~be ~~cash~~terminated ~~equivalents:~~by ~~All~~either ~~highly~~party ~~liquid~~if ~~investments~~the ~~with~~closing ~~original~~has ~~maturities~~not ~~of three~~occurred ~~months~~ by June 1, or2008; ~~less~~the ~~are~~conditions ~~considered~~of tothe beother ~~cash~~party ~~equivalents.~~have ~~The~~not ~~Company~~been ~~maintains~~met ~~cash~~as ~~balances~~of ~~in two~~the ~~accounts~~ closing atdate; ~~the~~or ~~same bank. These accounts are insured by~~ the ~~Federal~~other ~~Deposit~~party ~~Insurance~~is ~~Corporation up~~in ~~to $100,000~~breach.

[The FCC granted its consent to the assignment by Public Notice dated February 7, 2008. By letter dated May 2], ~~Fair~~2008, ~~value~~counsel offor ~~financial~~Seller ~~instruments:~~alleged ~~The~~the ~~carrying~~Company is ~~amounts~~in breach of the ~~Company’s~~Agreement ~~financial~~by ~~assets~~failing to set a Closing Date. However, ~~including~~ the ~~cash~~Stations ~~and~~are ~~cash~~only ~~equivalents,~~operating ~~and~~pursuant ~~investment~~to ~~held~~six inmonth ~~trust~~special ~~fund~~temporary authorizations ~~approximate~~from ~~fair~~a ~~value~~replacement tower site. Seller has not yet filed at ~~because~~ the ofFCC ~~their~~for ~~short~~permanent ~~maturities~~authority to operate from this tower site. The Company believes that under the Agreement it is a condition to closing that Seller have permanent licenses issued for the two New York stations, and that until those are issued by the FCC, closing cannot occur.

~~[3] Earnings per common share: Basic income per share is based on the weighted average number of~~Sale common shares outstanding during the period. 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~~Luken ~~common~~Communications, ~~shares at the average market price during the period.~~ LLC

8On April 3, 2008, EBC Southwest Florida, Inc. (“Seller”), a subsidiary of the Company entered into an asset purchase agreement (“Purchase Agreement”) with Luken Communications, LLC (“Buyer”) and Henry G. Luken III, individually (“Luken”), for the sale of all of the assets used in the business and operations of five low power and Class A television stations in Naples and Fort Myers, Florida (“Stations”), including licenses, construction permits and other instruments of authorization (“Licenses”) issued by the Federal Communications Commission (“FCC”) and certain other assets (together with the Licenses, the “Assets”). The Buyer is owned by Henry Luken, a shareholder of the Company and the former Chairman of the Board, Chief Executive Officer and President of the Company and Thomas M. Arnost, the President and Chief Executive Officer of the Company’s Broadcasting Station Group. Seller entered into the Purchase Agreement in order for the Company to satisfy its obligations under the terms of an amendment, dated as of March 19, 2008, to its Third Amended and Restated Credit Agreement (“Credit Agreement”) with Silver Point Finance, LLC and Wells Fargo Foothill, Inc., pursuant to which the lender group agreed to forbear from exercising certain of their rights and remedies with respect to designated defaults under the Credit Agreement through the earlier of (a) April 18, 2008 and (b) the date of occurrence of certain events or by which certain events have failed to occur, including the Company’s failure to enter into agreements with respect to the sale of certain of its assets and the Company’s failure to secure approvals for, and meet other criteria with respect to, financing alternatives necessary to meet its immediate capital requirements.

~~Table~~Buyer has agreed to pay an aggregate of ~~Contents~~$8,000,000 for the Assets (“Purchase Price”) in immediately available funds at the closing (“Closing”). Luken has agreed to personally guarantee the Buyer’s obligation to pay the Purchase Price. In addition to the Purchase Price, if within the 12-month period following the Closing, Buyer enters into an agreement to sell the Stations, collectively or individually, to an unaffiliated third party, then 50% of the purchase price from that transaction that are of an amount greater than the Purchase Price will be paid to Seller. If, within the second 12-month period following the Closing, Buyer enters into an agreement to sell the Stations, collectively or individually, to an unaffiliated third party, then 25% of the purchase price from that transaction that are of an amount greater than the Purchase Price will be paid to Seller.

~~[4]~~The Closing ~~Use~~is ofsubject ~~estimates:~~to ~~The~~certain ~~preparation~~conditions, including FCC consent to the assignment of ~~financial~~the ~~statements~~Licenses in(“FCC ~~conformity~~Consent”). ~~with~~Seller ~~accounting principles~~and ~~generally~~Buyer ~~accepted~~have inagreed ~~the~~to promptly ~~United~~prepare ~~States~~an ofapplication ~~America~~for ~~requires~~assignment ~~management~~of tothe ~~make~~Licenses ~~estimates~~ and ~~assumptions~~to ~~that~~fully prosecute ~~affect~~ the ~~reported~~application. ~~amounts~~Each ofparty ~~assets~~will ~~and~~bear ~~liabilities~~its own costs, and ~~disclosure~~the offiling ~~contingent~~ fees ~~assets~~will ~~and~~be ~~liabilities~~split atevenly. The Closing will occur within ten business days after the ~~date~~grant of ~~the~~FCC ~~financial~~Consent ~~statements~~becomes ~~and~~a ~~the~~final ~~reported~~order ~~amounts~~ or, upon waiver of ~~revenue~~such ~~and~~condition by ~~expenses~~Buyer, ~~during~~within ~~the~~ten ~~reporting~~business ~~period.~~days ~~Actual~~following ~~results~~the ~~could~~publication ~~differ~~of ~~from~~the ~~those~~grant of ~~estimates~~ FCC Consent.

[5] Income taxes: Deferred income taxes are provided for the differences between the bases of assets and liabilities for financial reporting and income tax purposes. Deferred tax assets and liabilities are measured using tax rates in effect for the year in which those temporary differences are expected to be recovered or settled. A valuation allowance is established when necessary to reduce deferred tax assets to the amount expected to be realized. 9

~~[6] New Accounting Pronouncement:~~ The ~~Financial Accounting Standards Board (“FASB”) has issued~~ ~~interpretation~~ Purchase ~~No. 48,~~Agreement ~~“Accounting~~may for Uncertainty in Income Taxes—An Interpretation of FASB Statement No. 109” (“FIN 48”), regarding accounting for, and disclosure of, uncertain tax positions. FIN 48 clarifies the accounting for uncertainty in income taxes recognized in an enterprise’s financial statements in accordance with FASB Statement No. 109, “Accounting for Income Taxes.” FIN 48 prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be ~~taken~~terminated inunder a tax return. FIN 48 also provides guidance on derecognition, classification, interest and penalties, accounting in interim periods, disclosure, and transition. FIN 48 is effective for fiscal years beginning after December 15, 2006. The Company is currently evaluating the ~~impact FIN 48 will have~~following on its results of operations and financial position. The cumulative effect of applying the provisions of FIN 48 if any, will be reported as an adjustment to the opening balance of retained earnings accumulated during the development stage on January 1, 2007. circumstances:

~~NOTE~~· Cby ~~— INITIAL~~Seller ~~PUBLIC~~for ~~OFFERING~~ any reason prior to the Closing with ten days’ written notice to Buyer if Seller is not otherwise in breach of its obligations under the Purchase Agreement, provided that the Seller will reimburse Buyer for expenses incurred in entering into the Purchase Agreement. Seller has agreed to exercise this termination right if it refinances or retires a significant portion of its debt with its current lender. Therefore, the Company continues to account for the related assets as held for use.

On· ~~September 14,~~by ~~2005,~~Buyer if the ~~Company~~Closing ~~sold~~has ~~10,000,000~~not ~~units~~occurred ~~(“Units”)~~within in12 ~~the~~months ~~Offering~~from ~~and on September 19, 2005,~~ the ~~Company~~date ~~sold an additional 1,500,000 Units pursuant to~~ the ~~underwriters’ over~~application ~~allotment~~for ~~option.~~FCC ~~Each~~Consent ~~Unit~~is ~~consists~~accepted offor ~~one~~filing ~~share~~by of the ~~Company~~FCC; upon Seller’s ~~common~~failure ~~stock and two warrants (“Warrants”). Each Warrant entitles the holder~~ to ~~purchase~~perform ~~from~~environmental ~~the~~remediation ~~Company one share of common stock at an exercise price of $5.00 commencing~~ on ~~the~~issues ~~later~~set offorth ~~(a) September 14,~~in ~~2006 or (b) the completion of~~ an ~~Acquisition.~~environmental ~~The~~audit ~~Warrants~~to ~~will expire on September 13, 2009. The Warrants may~~ be ~~redeemed,~~performed atthat ~~the~~exceed Company’s option, with the prior consent of Morgan Joseph and Co. Inc. and EarlyBirdCapital, Inc., the representatives of the underwriters in the Offering (the “Representatives”) in whole and not part, at a price of $~~.01 per Warrant upon 30 days notice after the Warrants become exercisable~~25,000; ~~only~~or inif ~~the~~regular ~~event~~broadcast ~~that~~transmission ~~the last sale price of the common stock~~ is at ~~least~~interrupted ~~$8.50 per share~~ for ~~any 20 trading days within~~ a 30continuous ~~trading day~~ period ~~ending~~of on72 ~~the~~hours ~~third day~~or more prior to the ~~date~~Closing onsolely ~~which~~as ~~notice~~a result of ~~redemption is given. The underwriters received $4,830,000 representing~~ the ~~underwriter~~actions ~~discount~~of ~~and commissions~~Seller.

~~Under~~· ~~the~~by ~~terms~~either ofparty ~~the~~if ~~warrant agreement,~~ the ~~Company~~conditions ~~has agreed to use its best efforts to register these warrants and maintain such registration. In order to clarify the Company’s intent with respect to the effect~~ of ~~a lack of a current registration statement on~~ the ~~Company’s~~other ~~warrants issued~~party ~~under~~have ~~the~~not ~~Warrant~~been ~~Agreement,~~met ~~dated~~ as of ~~September 8, 2005, between~~ the ~~Company~~Closing; ~~and Continental Stock Transfer & Trust Company, as Warrant Agent (~~the ~~“Warrant~~other ~~Agreement”),~~party ~~the~~becomes ~~Company and~~or ~~the~~is ~~Warrant~~declared ~~Agent~~insolvent; ~~entered~~or ~~into a Warrant Clarification Agreement, dated as of August 17, 2006, clarifying~~ the ~~Warrant Agreement to provide that in no event will the registered holder of a warrant be entitled to receive a net cash settlement or~~ other ~~consideration~~party inis ~~lieu of physical settlement~~ in ~~shares of Common Stock of the Company if the Common Stock underlying the warrants is not covered by an effective registration statement~~breach.

9NOTE 5 — NOTES PAYABLE

~~Table of Contents~~Long-Term Debt

~~NOTE~~Long-term debt Das ~~— INCOME~~of ~~TAXES~~March 31, 2008 and December 31, 2007 consisted of the following:

The current and deferred components of taxes on income from operations are comprised of the following:

	March 31, 2008			December 31, 2007
	(In thousands)
Senior Credit Facility	$	52,562		$	50,317
Merger Related Party - Univision		15,000			15,000
Installment Notes and other debt		10,786			10,913
Line of Credit		998			994
Capital Lease Obligations		176			186

Total Debt	$	79,522		$	77,410
Less: Current maturities		(70,515	)		(68,272	)

Long-term debt	$	9,007		$	9,138

	Three Months Ended			Nine Months Ended
	September 30, 2006			September 30, 2006
Current tax provision
Federal	$	—		$	—
State		( 29,649	)		( 82,210	)
Total current tax provision	$	(29,649	)	$	(82,210	)
Deferred income tax provision (benefit)
Federal	$	—		$	—
State		—			—
Total deferred tax provision		—			—
Total provision for taxes	$	(29,649	)	$	(82,210	)

Senior Credit Facility

On February 13, 2008, the Company and its lenders entered into the Third Amended and Restated Credit Agreement (“Credit Agreement”) in which the Company refinanced its previous credit facility. The ~~sources~~amended $53.0 million credit facility, comprised of ~~deferred~~an ~~tax~~$8.0 ~~assets~~million asrevolving credit line and term loans of $45.0 ~~September 30~~million, ~~2006~~matures on February 13, 2011, was used to refinance the existing indebtedness senior credit facility. Outstanding principal balance under the credit facility bears interest at LIBOR or the alternate base rate, plus the applicable margin. The applicable margin is 9.5% for the LIBOR loans and ~~December 31~~8.5% on the alternate base rate loan. The minimum LIBOR is 4.5%. The alternate base rate is (i) the greatest of (A) the Prime Rate, ~~2005~~(B) ~~were~~the asFederal ~~follows:~~Funds Rate in effect on such day plus fifty (50) basis points (0.50%), and (C) seven and one-half percent (7.50%) per annum. We are required to pay an unused line fee of .5% on the unused portion of the credit facility. The credit facility is secured by the majority of the assets of the company. We are subject to new financial and operating covenants and restrictions based on trailing monthly and twelve month information. The Company borrowed $50,512,500 under the new facility. Due to certain restrictions based on the value of the loan collateral, the Company does not have access to the remaining $2,487,500 at this time.

	September 30,			December 31,
	2006			2005
Total current deferred tax assets	$	—		$	—
Net operating losses	$	27,776		$	11,305
Startup costs		218,795			43,471
Total non-current deferred tax assets	$	246,571		$	54,776
Valuation allowance		(246,571	)		(54,776	)
Net deferred tax assets	$	—		$	—

On March 19, 2008, the Company entered into an amendment (“First Amendment”) to its Credit Agreement. Under the terms of the First Amendment, the lender group has agreed to forbear from exercising certain of their rights and remedies with respect to designated defaults under the Credit Agreement through the earlier of (a) April 18, 2008 and (b) the date of occurrence of certain events or by which certain events have failed to occur, including the Company’s failure to enter into agreements with respect to the sale of certain of its assets and the Company’s failure to secure approvals for, and meet other criteria with respect to, financing alternatives necessary to meet the Company’s immediate capital requirements. Additionally, the applicable margins on LIBOR loans and base rate loans were increased to 10.0% and 9.0% respectively. Pursuant to the First Amendment the Lenders may exercise any and all remedies available under the Credit Agreement, including making the loan immediately due and payable.

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 recorded a deferred income tax asset for the tax effect of net operating loss carryforwards and temporary differences, aggregating $246,571 at September 30, 2006. The net operating loss of $79,361 can be carried forward to 2025. The amount of temporary differences relating to start up costs amounted to $540,235. Realization of these tax benefits is dependent on acquiring an operating company and the ability to use the net operating loss to offset operating income. Management believes such realization is uncertain, hence the Company has recorded a full valuation allowance both at September 30, 2006 and December 31, 2005. 10

~~NOTE~~On April 28, E2008, ~~— NOTE~~the ~~PAYABLE~~Company TOentered ~~FOUNDING~~into ~~STOCKHOLDER~~a second amendment (“Second Amendment”) to its Credit Agreement which had been previously amended on March 19, 2008 as noted above. Under the terms of the Second Amendment, the lender group has agreed to forbear from exercising certain of its rights and remedies with respect to existing defaults and any other defaults or events of default under the Credit Agreement other than any specified defaults described in the Second Amendment (which include, but are not limited to, breaches of certain affirmative and negative covenants, among others) through the earlier of (a) May 5, 2008 and (b) the date of occurrence of certain events or by which certain events have failed to occur, including the Company’s failure to consummate a proposed financing with certain investors. The Second Amendment also provides for the lender group to make additional loans to the Company in an amount not to exceed $5,495,541 (which includes additional loans funded pursuant to the First Amendment) and increases the applicable margins on LIBOR loans and base rate loans to 12.0% and 11.0% respectively.

OnThe Company ~~May 10,~~is ~~2005,~~currently ~~the~~in ~~Company~~default ~~issued~~under aits ~~$75,000~~existing ~~unsecured~~loan ~~promissory~~agreements ~~note~~with toSilver Point ~~Royal~~and ~~Palm~~Wells ~~Capital Management,~~Fargo. ~~LLLP~~Existing events of default include, anbut ~~entity~~are ~~affiliated~~not ~~with~~limited to, the ~~Founding~~Company’s ~~Stockholder~~failure ~~(“Affiliate”).~~to ~~The~~pay ~~note was non-~~interest ~~bearing~~when ~~and~~due, ~~payable~~lateness ~~from~~on ~~non-Trust~~certain ~~Fund~~payments due ~~proceeds.~~under ~~The~~the ~~note~~Company’s ~~was~~satellite ~~paid~~and inprogramming ~~full~~agreements onand failure to ~~October 18,~~ achieve ~~2005~~certain ~~from~~performance ~~the~~metrics, ~~net~~including ~~proceeds~~minimum ofmonthly ~~the~~revenue ~~Offering.~~and EBITDA benchmarks.

~~NOTE~~As noted above, Fon ~~— INVESTMENTS~~April ~~HELD~~28, IN2008, ~~TRUST~~the Company entered into a Second Amendment to its Third Amended and Restated Credit Agreement with Silver Point and Wells Fargo. The credit agreement had been previously amended on March 19, 2008. Under the terms of the two amendments, the lenders agreed to forbear from exercising certain of their rights and remedies with respect to the Company’s existing defaults through the earlier of May 5, 2008 and the date of occurrence of certain events or by which certain events have failed to occur, including the Company’s failure to consummate a proposed financing with certain investors.

~~The~~As of ~~Company~~the date ~~holds~~of ~~investments~~this inreport, athe ~~mutual~~above-described ~~fund~~forbearance ~~which~~period has ended. If the Company is ~~principally~~unable ~~invested~~to insecure ~~municipal government~~an ~~securities~~extension ~~and~~of issuch ~~carried~~forbearance ator ~~market~~the ~~value.~~lenders otherwise ~~The~~elect ~~earnings~~to ofdeclare a default under the ~~fund~~credit asagreement, ~~currently~~the lenders ~~invested~~ would ~~are~~have ~~not~~all ~~taxable~~rights ~~for~~and ~~federal~~remedies ~~income~~available ~~tax~~to ~~purposes~~them under the terms of the Credit Agreement. The ~~investment~~Company isand ~~held~~the inlenders acontinue ~~Trust~~to ~~Fund as~~discuss ~~described~~all inoptions acceptable ~~Note~~to Aboth parties.

10Merger Related - Univision

~~Table~~Pursuant to the March 2007 Merger Transaction, the Company issued a promissory note to Univision Television Group, Inc. as partial consideration for the exchange of their ~~Contents~~shares of EBC Series A preferred stock. This promissory note in the amount of $15.0 million was payable March 30, 2008 with interest accruing at an annual rate of 7.0%.

~~NOTE~~The promissory Gnote ~~— RELATED~~is ~~PARTY~~secured ~~TRANSACTION~~by two television stations, originally sought to be transferred under an asset purchase agreement entered into for the same purpose. The Company has the option to transfer the two television stations securing the obligation in lieu of a cash payment for the debt principal. Both the Company and Univision have applied with the FCC for transfer of those licenses, which, as of the date of this report, has yet to act on those requests. Until such time as the requests are granted, interest continues to accrue at an annual rate of 7% and the note remains unpaid.

~~The Company presently occupies office space provided by an Affiliate of the Founding~~Line Stockholder. The Affiliate has agreed that, until an Acquisition, it will make such office space, as well as certain office and secretarial services, available to the Company, as may be required by the Company from time to time. The Company has agreed to pay the Affiliate $7,500 per month for such services commencing on September 8, 2005. From April 29, 2005 (date of ~~inception) through September 30, 2006, $95,500 related to this agreement is included in operating costs.~~ Credit

~~NOTE~~At March 31, H2008, ~~— COMMITMENTS~~the ~~AND~~Company ~~OTHER~~had ~~MATTERS~~a $1.0 million line of credit with an Arkansas bank, with interest payable monthly at 7.75%, due April 23, 2008 and secured by various broadcast assets and Company guarantees. The outstanding balance at March 31, 2008 was $998,322. On May 7, 2008, the line of credit was extended until October 31, 2008, with interest payable monthly at 7.5% and secured by the same assets and guarantees.

~~The Company sold to the Representatives an option, for $100, to purchase up to a total of~~NOTE 1,000,000 units at $7.50 per Unit. The Company accounted for the fair value of the option, inclusive of the receipt of the $100 cash payment, as an expense of the Offering resulting in an increase and a charge directly to stockholders’ equity. The option has been valued at the date of issuance at $780,000 based upon a Black-Scholes model, using an expected life of five years, volatility of 15.90% and a risk-free interest rate of 3.980%. The volatility calculation is based on the 180-day volatility of the Russell 2000 Index. Although an expected life of five years was taken into account for purposes of assigning a fair value to the option, if the Company does not consummate an Acquisition within the prescribed time period and liquidates, the option would become worthless. The option may be exercised for cash, or on a “cashless” basis, at the holder’s option, such that the holder may receive a net amount of shares equal to the appreciated value of the option (the difference between the exercise prices of the option and the underlying Warrants, and the market price of the underlying securities). The Units issuable upon exercise of this option are identical to the Units in the Offering except that the Warrants included in the option have an exercise price of $ 6~~.00.~~ ~~Although~~— ~~the~~STOCK ~~purchase~~OPTION option and its underlying securities have been registered under the Offering, the option grants to holders demand and “piggy back” rights for periods of five and seven years, respectively, from the date of the Offering with respect to the registration under the Securities Act of the securities directly and indirectly issuable upon exercise of the option. The Company will bear all fees and expenses attendant to registering the securities, other than underwriting commissions which will be paid for by the holders themselves. The exercise price and number of units issuable upon exercise of the option may be adjusted in certain circumstances including in the event of a stock dividend, or recapitalization, reorganization, merger or consolidation. However, the option will not be adjusted for issuances of common stock at a price below its exercise price. PLANS

~~NOTE~~Stock-based compensation Iexpense ~~— OFFICERS~~for ~~AND~~each ~~DIRECTORS~~of the three months ended March 31, 2008 and 2007 was $0.35 million and $0 respectively. The total deferred tax benefit related thereto was $0 for the three months ended March 31, 2008 compared to $0 during the same period in 2007. As of March 31, 2008, there was $3.4 million of total unrecognized compensation cost related to unvested share-based compensation awards granted under the Incentive Plan, which does not include the effect of future grants of equity compensation, if any. Of the total $3.4 million, we expect to recognize approximately 30.6% during the remainder of in 2008 and the balance in 2009 through 2012. The weighted average period over which the $3.4 million is to be recognized is 2.67 years.

~~The Company’s officers and directors agreed with the Representatives that within the first~~NOTE ~~forty~~ 7 ~~trading~~— ~~day~~CONTINGENCIES period after the separate trading of Warrants has commenced, they or certain of their affiliates or designees collectively would purchase up to 2,000,000 Warrants in the public marketplace at prices not to exceed $0.70 per Warrant. They have further agreed that any Warrants purchased by them or its affiliates or designees will not be sold or transferred until the completion of an Acquisition. As of September 30, 2006, and December 31, 2005 they had purchased all 2,000,000 warrants.

~~NOTE~~Stock options Jto ~~— PENDING MERGER~~ underwriters

OnIn connection ~~April 7,~~with ~~2006~~the initial public offering (“Offering”), the Company ~~entered~~sold ~~into~~to the anrepresentatives ~~Agreement~~of ~~and~~the ~~Plan~~underwriters ofin ~~Merger (~~the offering (“~~Merger Agreement~~Representatives”) ~~with~~an option, ~~Equity~~for ~~Broadcasting~~$100, ~~Corporation~~to purchase up to a total of 1,000,000 anunits ~~Arkansas~~at ~~corporation~~$7.50 ~~(“EBC”)~~per Unit. The Company accounted for the fair value of the option, ~~and~~inclusive ~~certain~~of ~~shareholders~~ the receipt of ~~EBC~~the $100 cash payment, ~~pursuant~~as toan ~~which~~expense ~~EBC~~of ~~will~~the ~~merge~~Offering ~~with~~resulting in an increase and ~~into~~a ~~the~~charge ~~Company~~directly ~~with~~to stockholders’ equity. The option has been valued at the ~~Company~~date of issuance at $780,000 based upon a Black-Scholes valuation ~~remaining~~ model, asusing an expected life of five years, volatility of 15.90% and a risk-free interest rate of 3.980%. The volatility calculation is based on the 180-day ~~surviving~~volatility ~~corporation~~of (the ~~“Merger”)~~Russell 2000 Index. ~~Outstanding~~An ~~stock~~expected ~~options~~life toof ~~purchase~~five ~~EBC~~years ~~Class A~~ was taken ~~Common~~into ~~Stock~~account ~~shall~~for bepurposes ~~converted~~of atassigning ~~the~~a ~~effective~~fair ~~time~~value ofto the ~~Merger~~option. toThe option ~~options~~may tobe ~~purchase~~exercised for cash, or on a “cashless” basis, at the holder’s option, such that the ~~Company~~holder ~~Common~~may ~~Stock~~receive ata ~~fair~~net ~~market~~amount ~~value,~~of ~~subject~~shares equal to ~~certain~~the appreciated ~~adjustments~~value toof the option. The Units issuable upon exercise ~~price~~of this option in are identical to the ~~event~~Units in the ~~fair~~Offering, ~~market~~except ~~value~~that ofthe Warrants included in the ~~Company~~option ~~Common~~have ~~Stock~~an ~~exceeds~~exercise price of $76.5000. ~~per~~Although ~~share,~~the aspurchase ~~provided~~option and in its underlying securities have been registered under the ~~Merger~~Offering, ~~Agreement.~~the ~~The~~option ~~Merger~~grants ~~Agreement~~ to ~~was~~holders ~~amended~~demand asand “piggy back” registration rights for periods of ~~May 5~~five and seven years, ~~2006~~respectively, ~~primarily~~from the date of the Offering with respect to ~~provide~~the registration ~~for~~under the ~~extension~~Securities Act of the ~~due~~securities ~~diligence~~directly and indirectly ~~review~~ issuable ~~period~~upon ~~for~~exercise anof ~~additional~~the ~~one~~option. ~~week~~The ~~beyond~~Company will bear all fees and expenses relating to the ~~initial~~registration ~~four~~of ~~week~~the ~~period.~~securities, other than underwriting ~~The~~ commissions ~~Merger~~which ~~Agreement~~will be paid for by the holders themselves. The exercise price and ~~Voting~~number ~~Agreement~~of ~~are~~units ~~attached~~issuable asupon ~~exhibits~~exercise toof the ~~Form~~option ~~8-K~~may ~~filed~~be byadjusted in ~~the~~ certain ~~Company~~circumstances ~~with~~including in the ~~SEC~~event onof ~~April 13~~a stock dividend, ~~2006~~or recapitalization, reorganization, merger or consolidation. However, the option will not be adjusted for issuances of common stock at a price below its exercise price.

On May 12, 2006, the Company completed its due diligence review of EBC in connection with the Merger Agreement and informed EBC that is was proceeding with the Merger pursuant to the terms of the Merger Agreement. The Company engaged Ernst & Young Transaction Advisory Services in completing its due diligence review. 11

On June 15, 2006, the Company was informed by EBC that EBC shareholders had approved the Merger. The Company was also informed that EBC and each member of the EBC board of directors had been named in a lawsuit filed by an EBC shareholder in the circuit court of Pulaski County, Arkansas on June 14, 2006. The lawsuit was filed as a class action, meaning that the plaintiff, Mr. Max Bobbitt, seeks to represent all shareholders in the class, provided the class is certified by the court. The complaint makes various allegations against EBC and the board of EBC with respect to the Merger and other matters. In addition to requesting unspecified compensatory damages, the plaintiff also requested injunctive relief to enjoin the EBC annual shareholder meeting and the vote. An injunction hearing was not held before the EBC annual meeting regarding the Merger so the meeting and shareholder vote proceeded as planned and the EBC shareholders approved the Merger. On August 9, 2006, EBC’s motion to dismiss the lawsuit was denied and the matter is in the pre-discovery phase. According to EBC, EBC views the lawsuit as baseless and they will continue to vigorously defend the matter. The Company and EBC are proceeding with the Merger in accordance with the terms of the Merger Agreement. Litigation

11In connection with the merger between the Company and Equity Broadcasting Corporation ("EBC") in March, 2007, EBC and each member of EBC’s board of directors was named in a lawsuit filed by an EBC shareholder in the circuit court of Pulaski County, Arkansas on June 14, 2006. As a result of the merger between EBC and the Company, pursuant to which EBC merged into the Company, the Company, which was renamed Equity Media Holdings Corporation, is a party to the lawsuit. The lawsuit contains both a class action component and derivative claims. The class action claims allege various deficiencies in EBC’s proxy used to inform its shareholders of the special meeting to consider the merger. These allegations include: (i) the failure to provide sufficient information regarding the fair value of EBC’s assets and the resulting fair value of EBC’s Class A common stock; (ii) that the interests of holders of EBC’s Class A common stock are improperly diluted as a result of the merger to the benefit of the holders of EBC’s Class B common stock; (iii) failure to sufficiently describe the further dilution that would occur post-merger upon exercise of the Company’s outstanding warrants; (iv) failure to provide pro-forma financial information; (v) failure to disclose alleged related party transactions; (vi) failure to provide access to audited consolidated financial statements during previous years; (vii) failure to provide shareholders with adequate time to review a fairness opinion obtained by EBC’s board of directors in connection with the merger; and (viii) alleged sale of EBC below appraised market value of its assets. The derivative components of the lawsuit allege instances of improper self-dealing, including through a management agreement between EBC and Arkansas Media.

~~Table~~In addition ofto ~~Contents~~requesting unspecified compensatory damages, the plaintiff also requested injunctive relief to enjoin EBC’s annual shareholder meeting and the vote on the merger. An injunction hearing was not held before EBC’s annual meeting regarding the merger so the meeting and shareholder vote proceeded as planned and EBC’s shareholders approved the merger. On August 9, 2006, EBC’s motion to dismiss the lawsuit was denied. On February 21, 2007, the plaintiff filed a “Motion to Enforce Settlement Agreement” with the court alleging the parties reached an oral agreement to settle the lawsuit. The plaintiff subsequently filed a motion to withdraw the motion to settle and filed a “Third Amended Complaint” on April 10, 2007. This motion added two additional plaintiffs and expanded on the issues recited in the previous complaints. On July 31, 2007, the plaintiff filed a “Fourth Amended Complaint”. This pleading added three new plaintiffs and three new defendants to the proceedings. The three additional defendants bear a fiduciary relationship to three previously named defendants. On July 31, 2007, the plaintiffs filed a “Motion for Class Certification.” Although the motion has been fully briefed by the parties, the plaintiffs have not yet sought a hearing date on the class certification issue. Currently, the parties continue to engage in discovery. No court date has been set for this case.

OnManagement believes ~~September 14,~~that ~~2006,~~this ~~the~~lawsuit ~~Company,~~has ~~EBC~~no ~~and~~merit ~~certain EBC shareholders entered into the Second Amendment to the Agreement~~ and ~~Plan~~asserts ofthat ~~Merger (~~the ~~“Second~~Company ~~Amendment”). The Second Amendment~~has ~~amended~~ negotiated ~~the~~in ~~Merger~~good ~~Agreement~~faith to ~~provide~~attempt ~~for~~to ~~(i) the~~settle ~~increase in~~ the ~~number~~lawsuit. ofRegardless ~~members~~ of the ~~combined~~ outcome ~~company’s~~management ~~board~~does ofnot ~~directors~~expect ~~from~~this ~~seven~~proceeding to ~~nine,~~have ~~(ii) the~~a ~~extension~~material ~~of the termination~~impact ~~date~~ of ~~the Merger Agreement from December 31, 2006 to March 31, 2007, and (iii) the increase in~~ ~~the~~ its ~~EBC~~financial ~~Maximum~~condition ~~Indebtedness~~or ~~(as~~results ~~defined~~of ~~in the Merger Agreement) from $62,000,000 to $72,000,000 to reflect EBC’s~~ operations, ~~and~~ in ~~particular~~2008 ~~the~~or ~~acquisition~~any ~~and disposition of assets, for the~~future period ~~from September 14, 2006 to March 31, 2007~~. In the event EBC shall not have contracted or otherwise committed to the sale or transfer of its TV stations WBMM and KPOU and such TV stations remain as assets of EBC, which are freely transferable, then the Maximum EBC Indebtedness shall be increased to $84,000,000. The Second Amendment was attached as Exhibit 2.3 to the Company’s Form 8-K filed with the Securities and Exchange Commission on September 20, 2006.

~~On September 15, 2006,~~ Although the Company ~~filed~~is a ~~Registration~~party ~~Statement~~to oncertain ~~Form~~other ~~S-4~~pending ~~with~~legal ~~the Securities~~proceedings ~~and Exchange Commission for the registration of the Company’s securities to be issued~~ in ~~the~~ ~~Merger and containing important information for~~ the ~~Company’s stockholders concerning the~~normal ~~Merger.~~ course Asof ~~set~~business, ~~forth~~management inbelieves the ~~Form~~ultimate ~~S-4,~~outcome inof ~~response~~these ~~to a lawsuit initiated by an EBC shareholder,~~matters ~~and~~ will asnot abe ~~result~~material ~~of the Second Amendment~~ to the ~~Merger~~financial ~~Agreement,~~condition ~~EBC’s~~and ~~board~~future ofoperations ~~directors will call a special meeting~~ of ~~its shareholders for reconsideration of~~ the ~~Merger Agreement following the~~ ~~date the Form S-4 is declared effective~~ Company. The ~~vote~~Company ~~taken~~maintains atliability ~~EBC’s~~insurance ~~special~~against ~~meeting~~risks ~~will~~arising ~~supercede the~~out ~~vote taken at~~ of the ~~June 15,~~normal ~~2006~~course ~~annual~~of ~~meeting~~its business.

The obligations of the parties to consummate the Merger are subject to certain closing conditions including, among others, the Company stockholder approval, government approvals (including without limitation those approvals relating to antitrust, FCC licenses and the effectiveness of a registration statement filed with the SEC) and the execution and closing by Univision of the Asset Purchase Agreement providing for the sale to Univision of two EBC TV ~~stations.~~ Dissenting ~~The Company is continuing with the preparation of its proxy statement in connection with the Merger among other filings relating to the Merger.~~ Shareholders

~~NOTE~~In connection Kwith ~~— CONTINGENT~~the ~~LIABILITIES~~March, 2007 Merger Transaction shareholders of EBC representing 66,500 shares of EBC Class A common stock elected to convert their shares to cash in accordance with Arkansas law. The Company recorded a liability in the amount of $368,410 to convert the shares plus $9,970 of accrued interest based on a conversion rate of $5.54 per share plus interest accruing from the date of the Merger Transaction at the rate of 9.78% per annum. On July 10, 2007, the dissenting shareholders were paid $378,380 in cash for the value of their shares including all interest accrued to date. Pursuant to Arkansas Code, the dissenting shareholders exercised their right to contest the Company’s valuation and have demanded payment of an additional $17.78 per share plus accrued interest at 9.78% per annum. In accordance with Arkansas Code, the Company has petitioned the court for a determination of the fair value of the shares and believes its valuation will prevail. A court date of December 8, 2008, has been set.

~~On March 3, 2006, the Company engaged Morgan Joseph & Co. Inc. (“Morgan Joseph”) to render~~FCC financial advisory and investment banking services to the Company in connection with its possible acquisition of an initial platform company. In consideration for Morgan Joseph providing various financial advisory and investment banking services the Company agreed to pay Morgan Joseph a fee, in cash, at the closing of the acquisition of an initial platform company equal to $1.0 million. In addition, the Company, agreed to pay to Morgan Joseph, on a monthly basis, out-of-pocket expenses (including legal fees and disbursements) in connection with the engagement without regards to whether an acquisition is consummated. On April 10, 2006, the Company entered into a supplement to the engagement letter dated March 3, 2006, whereby Morgan Joseph was engaged as the exclusive financial advisor in connection with the possible acquisition of EBC. In consideration for these financial advisory and investment banking services, Morgan Joseph is to be paid an additional fee at closing of the EBC transaction of $250,000. Inquiry

~~On June 5~~In 2007, the ~~2006~~FCC’s Enforcement Bureau commenced an inquiry into whether Montana License Sub, Inc. (a wholly owned subsidiary of the Company), ~~engaged~~violated ~~Jones-Sagansky~~the ~~Broadcast~~multiple ownership ~~Group,~~rules ~~LLC~~in connection with its operation of KLMN(~~“JSBG”~~TV), toGreat ~~provide~~Falls, ~~media~~ Montana ~~advisory~~and ~~services~~its inrelationship ~~regard~~with toother television stations in the ~~contemplated~~market. A ~~acquisition~~competitor byin the ~~Company~~market ofsubsequently ~~Equity Broadcasting~~filed ~~Corporation.~~a ~~The~~petition ~~agreement~~to ~~provides~~deny ~~for~~the ~~60 days~~license renewal ofapplication ~~media~~for ~~advisory~~KLMN(TV), ~~and~~Great ~~due~~Falls, ~~diligence~~Montana. The Company filed ~~related~~ appropriate ~~services~~responses in ~~regard~~each toproceeding. The ~~the~~FCC ~~acquisition~~staff ~~and~~has ~~consultation~~informed the ~~with~~Company that the ~~Company’s~~pendency ~~management~~of onthis ancomplaint has resulted in a tolling on as processing ~~needed~~other ~~basis~~assignment ~~for~~and ~~such~~modification ~~purposes.~~applications involving the Company. In ~~consideration~~an ~~for~~attempt ~~JSBG’s~~to ~~services,~~resolve the ~~Company~~KLMN ~~paid JSBG $100~~dispute,~~000.~~ ~~Additionally,~~ the Company ~~agreed~~is exploring the opportunity to ~~pay~~enter ~~JSBG~~into a ~~success~~Consent ~~fee~~Decree, ofwhereby ~~$150,000~~the Company will pay an agreed-upon forfeiture to the ~~closing~~FCC, and in exchange, subject to of certain ~~the~~reporting ~~Company’s~~conditions, ~~acquisition~~will ofhave ~~Equity~~the ~~Broadcasting~~two ~~Corporation.~~pending complaints dismissed.

~~NOTE L — DEFERRED ACQUISTION COSTS~~ 12

~~As of September 30, 2006, the Company has accumulated $1,617,759 in deferred costs related to~~NOTE ~~the~~ 8 ~~proposed~~— ~~acquisition~~RELATED ofPARTY Equity Broadcasting Corporation. These costs will be capitalized contingent upon the completion of the Acquisition following the required approval by the Company’s stockholders and the fulfillment of certain other conditions. If the Acquisition is not completed these costs will be recorded as expense. Deferred acquisition costs are comprised of $543,494 to Morgan Joseph for financial advisory and investment banking services, $204,450 to Ernst & Young for due diligence services, $681,615 to Akerman Senterfitt for legal services, $100,000 to JSBG for consulting services, $51,684 to Eisner LLP for accounting services and $36,516 for other costs. TRANSACTIONS

12Amounts due (to) from affiliates and related parties at March 31, 2008 and December 31, 2007 consist of the following:

	March 31, 2008			December 31, 2007
Univision Communications, Inc.	$	(2,808,103	)	$	(2,295,837	)
Arkansas Media, LLC and affiliates		13,559			19,581
Royal Palm Capital Management, LLP		(500,000	)		(225,000	)
Little Rock TV 14, LLC		(78,626	)		(78,626	)
Retro Television Network, Inc		(24,035	)		(8,224	)
Other		45,970			72,364

Due (to) from affiliates and related parties		(3,351,235	)		(2,515,742	)
Less current portion		(3,318,579	)		(2,509,480	)

Non – current portion	$	(32,656	)	$	(6,262	)

~~ITEM~~NOTE 9 2.- ~~MANAGEMENT’S~~FAIR ~~DISCUSSION~~VALUE ~~AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS~~ MEASUREMENTS

The Company ~~following~~adopted ~~discussion~~SFAS ofNo. 157 ~~the~~effective January 1, 2008 for financial assets ~~condition~~and financial liabilities measured on a recurring basis. SFAS No. 157 applies to all financial assets and ~~results~~financial ofliabilities ~~operations~~that are being measured and reported on a fair value basis. There was no impact for adoption of SFAS No. 157 to the ~~Company~~Unaudited Condensed Consolidated Financial ~~should~~ Statements beas ~~read~~it inrelates ~~conjunction~~to ~~with~~financial ~~our~~assets ~~consolidated~~and financial ~~statements~~liabilities. SFAS No. 157 requires disclosure that establishes a framework for measuring fair value and ~~the~~expands ~~notes~~disclosure ~~thereto~~about fair value measurements. The statement requires fair value measurement be classified and disclosed in one of the following three categories:

We were formed on April 29, 2005 to serve as a vehicle to effect a merger, capital stock exchange, asset acquisition or other similar business combination. We intend to utilize cash derived from the proceeds of our recently completed public offering, our capital stock, debt or a combination of cash, capital stock and debt, in effecting a business combination. 13

~~We consummated our initial public offering on September 14, 2005. All activity from April 29,~~NOTE ~~2005~~ 10 through September 14, 2005 is related to our formation and our initial public offering. On September 19, 2005, we closed on an additional 1,500,000 units that were subject to the underwriters’ over-~~allotment~~ ~~option.~~ SEGMENT DATA

~~Since~~The Company ~~closing~~operates ~~our~~its ~~initial~~business ~~public~~in ~~offering~~three onprimary ~~September 14,~~reporting ~~2005,~~segments; ~~we have been actively engaged~~the in Television ~~identifying~~Group, anRetro ~~appropriate~~Television ~~business~~Network ~~combination candidate. We have met with target companies~~(RTN), ~~service~~ ~~professionals~~ and ~~other~~Uplink ~~intermediaries~~Services. Operations toof ~~discuss~~the ~~with~~Television ~~them~~Group ~~our~~consist ~~Company,~~of the ~~background~~sale of ~~our~~ ~~management~~air ~~and~~time ~~our~~for advertising, ~~combination~~the ~~preferences.~~production Inand ~~the~~broadcasting ~~course~~ of ~~these discussions~~news, weand ~~have~~the ~~also~~broadcasting ~~spent~~ of entertainment ~~time~~and ~~explaining~~other ~~the~~programming ~~capital~~through ~~structure of~~ the ~~initial~~Company’s ~~public~~television ~~offering, the combination~~stations. ~~approval~~ Operations ~~process,~~of ~~and~~RTN ~~the~~consist ~~timeline~~primarily ~~under~~of ~~which we are operating before~~ the ~~proceeds~~combination of ~~the~~popular ~~offering~~entertainment ~~are~~ programs ~~returned~~of topast ~~investors.~~decades Wewith ~~would~~local ~~gauge~~sports, ~~the~~weather ~~environment~~and ~~for~~news ~~target companies~~ to beprovide ~~highly~~a ~~competitive.~~ customized ~~While~~digital wefeed ~~have~~to ~~executed~~its anaffiliate ~~Agreement~~television ~~and~~stations. ~~Plan~~Uplink ofServices operations ~~Merger~~include ~~with~~the aprovision ~~possible~~of ~~merger~~programming, ~~partner as described below~~traffic, ~~there~~accounting ~~are~~and ~~still~~billing services ~~closing conditions~~ to beCompany-owned ~~satisfied~~television stations and ~~therefore~~third ~~there~~party ~~can be~~broadcasters no through ~~assurance~~the ~~that~~Company’s wecentralized ~~will~~facility ~~ultimately~~in ~~find~~Little ~~and~~Rock, ~~close~~Arkansas. aThe ~~suitable~~Company does ~~business~~not ~~combination~~allocate incorporate overhead or the ~~time allotted~~eliminations ~~for~~of usintercompany transactions to ~~close~~the aprimary ~~transaction~~reporting ~~with a business combination candidate~~segments.

Developments in Finding Suitable Business Combination Partner

	Three months ended March 31,
	2008			2007
	(in thousands)
Broadcast Revenue
Television	$	6,857		$	6,693
Retro Television Network		428			70
Uplink Services		218			174
Corporate and eliminations		(181	)		(162	)
	$	7,322		$	6,775

Depreciation and amortization
Television	$	492		$	563
Retro Television Network		8			-
Uplink Services		369			258
Corporate and eliminations		149			123
	$	1,018		$	944

Segment operating income (loss)
Television	$	(2,514	)	$	(2,165	)
Retro Television Network		(1,228	)		(216	)
Uplink Services		(269	)		(334	)
Corporate and eliminations		(3,310	)		(9,765	)

Consolidated	$	(7,321	)	$	(12,480	)

Impairment charge		-			-

Operating income (loss)	$	(7,321	)	$	(12,480	)

~~As reported in our Current Report on Form 8-K filed with the Securities and Exchange Commission on April~~NOTE ~~13, 2006, the Company entered into an Agreement and Plan of Merger (the “Merger~~11— ~~Agreement”)~~ SUBSEQUENT with Equity Broadcasting Corporation, an Arkansas corporation (“EBC”), and certain shareholders of EBC, pursuant to which EBC will merge with and into the Company with the Company remaining as the surviving corporation (the “Merger”). In addition to the Merger Agreement, the form of Voting Agreement and Proxy executed by certain stockholders of EBC were attached as exhibits to the Form 8-K filed by the Company with the SEC on April 13, 2006. Following completion of the Merger, it is anticipated that the Company will change its name to Equity Broadcasting Corporation or a similar name in order to more properly reflect its status as a diversified media company. EBC is headquartered in Little Rock, Arkansas and is a leading operator of television stations serving Spanish-language markets in the U.S. As of April 13, 2006, EBC’s broadcasts reached approximately 15.1 million households, nearly 14% of all U.S. households. The Merger Agreement was amended as of May 5, 2006 primarily to provide for the extension of the due diligence review period for an additional one week beyond the initial four week period. On May 12, 2006, the Company completed its due diligence review of EBC in connection with the Merger Agreement and informed EBC that is was proceeding with the Merger pursuant to the terms of the Merger Agreement. The Company engaged Ernst & Young Transaction Advisory Services in completing its due diligence review. Morgan Joseph & Co. Inc. and Jones Sagansky Broadcast Group, LLC, among other entities, provided acquisition related services to the Company. EVENTS

~~On June 15, 2006, the Company was informed by EBC that EBC shareholders had approved the~~Asset ~~Merger.~~ Purchase The Company was also informed that EBC and each member of the EBC board of directors had been named in a lawsuit filed by an EBC shareholder in the circuit court of Pulaski County, Arkansas on June 14, 2006. The lawsuit was filed as a class action, meaning that the plaintiff, Mr. Max Bobbitt, seeks to represent all shareholders in the class, provided the class is certified by the court. The complaint makes various allegations against EBC and the board of EBC with respect to the Merger and other matters. In addition to requesting unspecified compensatory damages, the plaintiff also requested injunctive relief to enjoin the EBC annual shareholder meeting and the vote. An injunction hearing was not held before the EBC annual meeting regarding the Merger so the meeting and shareholder vote proceeded as planned and the EBC shareholders approved the Merger. On August 9, 2006, EBC’s motion to dismiss the lawsuit was denied and the matter is in the pre-discovery phase. According to EBC, EBC views the lawsuit as baseless and they will continue to vigorously defend the matter. The Company and EBC are proceeding with the Merger in accordance with the terms of the Merger Agreement.

13On April 3, 2008, EBC Southwest Florida, Inc. (“Seller”), a subsidiary of the Company entered into an asset purchase agreement (“Purchase Agreement”) with Luken Communications, LLC (“Buyer”) and Henry G. Luken III, individually (“Luken”), for the sale of all of the assets used in the business and operations of five low power and Class A television stations in Naples and Fort Myers, Florida (“Stations”), including licenses, construction permits and other instruments of authorization (“Licenses”) issued by the Federal Communications Commission (“FCC”) and certain other assets (together with the Licenses, the “Assets”). The Buyer is owned by Henry Luken, the former Chairman of the Board, Chief Executive Officer and President of the Company and Thomas M. Arnost, the President and Chief Executive Officer of the Company’s Broadcasting Station Group. See Note 4 for further details.

~~Table~~New Retro ofTelevision ~~Contents~~Network (“RTN”) affiliates and contracts

~~On August 17, 2006 the Company and Continental Stock Transfer and Trust Company, as the~~The ~~Warrant~~ following ~~Agent,~~table ~~entered~~shows ~~into~~stations athat ~~Warrant~~have ~~Clarification~~been ~~Agreement,~~launched ~~dated~~ as ofRTN ~~August 17,~~affiliates since March ~~2006~~31, ~~clarifying~~ ~~an accounting issue relating to derivative financial instruments.~~ 2008:

On September 14, 2006, the Company, EBC and certain EBC shareholders entered into the Second Amendment to the Agreement and Plan of Merger (the “Second Amendment”). The Second Amendment amended the Merger Agreement to provide for (i) the increase in the number of members of the combined company’s board of directors from seven to nine, (ii) the extension of the termination date of the Merger Agreement from December 31, 2006 to March 31, 2007, and (iii) the increase in the EBC Maximum Indebtedness (as defined in the Merger Agreement) from $62,000,000 to $72,000,000 to reflect EBC’s operations, and in particular the acquisition and disposition of assets, for the period from September 14, 2006 to March 31, 2007. In the event EBC shall not have contracted or otherwise committed to the sale or transfer of its TV stations WBMM and KPOU and such TV stations remain as assets of EBC, which are freely transferable, then the Maximum EBC Indebtedness shall be increased to $84,000,000. The Second Amendment was attached as Exhibit 2.3 to the Company’s Form 8-K filed with the Securities and Exchange Commission on September 20, 2006.

DMA Ranking	Station	DMA	Launched
11	WXYZ-DT2	Detroit	4/1/08
55	KAIL-DT	Fresno – Visalia	4/1/08
69	KGPT-LP	Wichita – Hutchinson	4/1/08
87	KWWL-DT3	Cedar Rapids – Waterloo	4/1/08
41	WHTM-DT	Harrisburg – Lancaster	5/12/08
144	KDPX	Palm Springs	5/12/08

~~On September 15, 2006, the Company filed a Registration Statement on Form S-4 with the~~Amendment ~~Securities and Exchange Commission for the registration of the Company’s securities~~ to beSenior ~~issued~~Credit in the Merger and containing important information for the Company’s stockholders concerning the Merger. As set forth in the Form S-4, in response to a lawsuit initiated by an EBC shareholder, and as a result of the Second Amendment to the Merger Agreement, EBC’s board of directors will call a special meeting of its shareholders for reconsideration of the Merger Agreement following the date the Form S-4 is declared effective. The vote taken at EBC’s special meeting will supercede the vote taken at the June 15, 2006 annual meeting. Facility

~~The~~On April 28, ~~obligations~~2008, of the ~~parties~~Company toentered ~~consummate~~into ~~the~~a ~~Merger~~second ~~are~~amendment ~~subject~~(“Second Amendment”) to its ~~certain~~Credit ~~closing conditions~~Agreement ~~including,~~which ~~among~~had ~~others~~been previously amended on March 19, 2008 as noted above in Note 5. Under the ~~Company~~terms ~~stockholder~~of ~~approval~~the Second Amendment, ~~government~~the ~~approvals~~lender ~~(including~~ group has ~~without~~agreed ~~limitation~~to ~~those~~forbear ~~approvals~~from ~~relating~~exercising tocertain ~~antitrust,~~of ~~FCC~~its ~~licenses~~rights and remedies with respect to existing defaults and any other defaults or events of default under the Credit Agreement other than any specified defaults described in the Second ~~effectiveness~~ Amendment (which include, but are not limited to, breaches of acertain affirmative ~~registration~~and ~~statement~~negative ~~filed~~covenants, ~~with~~among others) through the ~~SEC~~earlier of (a) May 5, 2008 and (b) the ~~execution~~date ~~and~~of ~~closing~~occurrence of certain events or by which certain ~~Univision~~ events ofhave failed to occur, including the ~~Asset~~Company’s ~~Purchase~~failure ~~Agreement~~to ~~providing~~consummate a proposed financing with certain investors. The Second Amendment also provides for the ~~sale~~lender group to ~~Univision~~make ofadditional ~~two~~loans ~~EBC~~to TVthe Company in an amount ~~stations.~~ not to exceed $5,495,541 (which includes additional loans funded pursuant to the First Amendment).

14As of the date of this report, the above-described forbearance period has ended. If the Company is unable to secure an extension of such forbearance or the lenders otherwise elect to declare a default under the credit agreement, the lenders would have all rights and remedies available to them under the terms of the Credit Agreement. The Company and the lenders continue to discuss all options acceptable to both parties.

~~Table of Contents~~NASDAQ

~~Results~~On May 14, 2008 NASDAQ notified the Company of ~~Operations~~non-compliance ~~for~~with Marketplace Rule 4310(c)(4) due to failure of the ~~period~~Company’s ~~from~~common ~~July~~ stock to close above the required $1, ~~2006~~minimum ~~through~~bid ~~September~~ price for 30 consecutive business days. The Company will now have 180 days until November 10, ~~2006~~2008 to regain compliance. Compliance can be achieved if the bid price of the common stock closes above $1 for a minimum of 10 consecutive business days. The Company will also issue an 8K and a press release relating to this notification in accordance with Marketplace rule 4803(a).

~~For the three months ended September 30, 2006 operating costs of $127,119 consisted~~Changes primarily of $51,047 of professional fees, $34,396 for state filing fees, $22,500 for office rent, $18,904 for directors and officers liability insurance, $272 of other expense, and $29,649 provision for taxes; interest income on the trust fund investments, including interest allocable to ~~shares~~ ~~subject to possible conversion, in~~ the ~~amount~~Board of ~~$535,962 and interest on cash and cash equivalents of $3,131. This resulted in net income for the three months ended September 30, 2006 of $382,325.~~ Directors

~~Results~~On May 15, 2008, the Company announced that Henry Luken resigned from the Company’s Board of ~~Operations~~Directors ~~for~~and as CEO and President. The Board of Directors has engaged Richard Rochon as a member of the ~~period~~Board ~~from~~to ~~January 1~~fill an existing vacancy. John Oxendine, ~~2006~~an ~~through~~existing ~~September 30~~board member, ~~2006~~was named Vice Chairman on an interim basis. The Board of Directors has commenced a search for a new CEO and President.

For the nine months ended September 30, 2006 operating costs of $433,510 consisted primarily of $208,877 of professional fees, $64,957 for state filing fees, $67,500 for office rent, $56,095 for directors and officers liability insurance, $5,274 of other expense, $30,807 for Florida intangible tax and $82,210 provision for taxes; interest income on the trust fund investments, including interest allocable to shares subject to possible conversion, in the amount of $1,509,451 and interest on cash and cash equivalents of $14~~,307. This resulted in net income for the nine months ended September 30, 2006 of $1,008,038.~~

~~Liquidity~~ITEM 2. ~~and~~MANAGEMENT’S ~~Capital~~DISCUSSION ~~Resources~~AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

~~Of the net proceeds of our initial public offering consummated on September 14, 2005,~~The ~~$62,620,000~~ following ~~was~~is ~~placed in~~ a ~~trust~~discussion ~~fund,~~of ~~with~~ the ~~remaining~~Company’s ~~net~~financial ~~proceeds~~condition ~~of approximately $988,044 available to pay for business, legal~~ and ~~accounting~~results ~~due diligence on prospective acquisitions and continuing general and administrative expenses. As~~ of ~~September 30, 2006 the balance held in the~~ ~~trust~~ operations ~~was~~comparing ~~$64,630,034, representing~~ the ~~original~~interim ~~principal~~quarters ~~plus~~ended ~~interest~~March ~~of $2~~31,~~010,034.~~ We2008 ~~will use substantially all of the net proceeds of our initial public offering not held in trust to identify~~ and ~~evaluate~~March ~~prospective acquisition candidates~~31, ~~select the target business, and~~ ~~structure, negotiate and consummate the business combination~~ 2007. WeYou ~~intend~~should toread ~~utilize~~this ~~our~~section ~~cash, including~~together ~~the~~with ~~funds held in~~ the ~~trust~~Company’s ~~fund, capital stock, debt or a combination of the foregoing~~consolidated to financial ~~effect~~statements aincluding ~~business combination. To~~ the ~~extent~~notes ~~that our capital stock or debt securities are used in whole or in part as consideration~~ to ~~effect~~those afinancial ~~business combination~~statements, ~~the proceeds held in the trust fund~~ as ~~well as any other available cash will be used to finance the operations of the target~~ ~~business. At September 30~~ applicable, ~~2006,~~for ~~we had cash outside of~~ the ~~trust~~years ~~fund of $319,606, prepaid expenses of $54,228, deferred acquisition costs of $1,617,759~~ and ~~total~~periods ~~current~~mentioned ~~liabilities of $1,645,253, leaving us with working capital deficiency of $1,271,419, excluding investments held in trust and interest attributable to common stock, subject to possible conversion~~above.

As of September 30, 2006, the Company has accumulated $1,617,759 in deferred costs related to the proposed acquisition of Equity Broadcasting Corporation. These costs will be capitalized contingent upon the completion of the Acquisition following the required approval by the Company’s stockholders and the fulfillment of certain other conditions. If the Acquisition is not completed these costs will be recorded as expense. Overview

15Equity Media Holdings Corporation (the “Company”) was incorporated in Delaware on April 29, 2005 as Coconut Palm Acquisition Corp. (“Coconut Palm”) to serve as a vehicle for the acquisition of an operating business through a merger, capital stock exchange, asset acquisition and/or other similar transaction. On March 30, 2007, Coconut Palm merged with Equity Broadcasting Corporation (“EBC”), with Coconut Palm remaining as the legal surviving corporation; however, the financial statements and continued operations are those of EBC as the accounting acquirer. Immediately following the merger, Coconut Palm changed its name to Equity Media Holdings Corporation.

~~Table~~As of March 31, 2008, the Company has built and aggregated a total of ~~Contents~~120 full and low power permits, licenses and applications that it owns or has contracts to acquire. The Company’s FCC license asset portfolio includes 23 full power stations, 38 Class A stations and 59 low power stations, including two metropolitan New York City low power stations that the Company is currently under contract to purchase. The Company’s English and Spanish-language stations are in 41 markets that represent more than 32% of the U.S. population.

~~The Founding Stockholder has agreed with~~ While the Company ~~and~~originally ~~the~~targeted ~~underwriters~~small to bemedium-sized ~~personally liable~~markets tofor ~~pay~~development, it has ~~debts~~been ~~and~~able ~~obligations~~ to ~~target~~leverage ~~businesses~~its ororiginal ~~vendors~~properties orinto ~~other~~stations ~~entities~~in ~~that~~larger metropolitan ~~are~~markets, ~~owed money~~including byDenver, ~~the~~Detroit, ~~Company~~Salt ~~for~~Lake ~~services~~City, ~~rendered~~Minneapolis and Oklahoma orCity. ~~contracted~~The ~~for~~Company’s orstations ~~products~~are ~~sold~~affiliated towith ~~the~~broadcast ~~Company~~networks inas ~~excess~~ follows:, of19 ~~the~~are ~~net~~affiliated ~~proceeds~~with ofUnivision, ~~the~~12 ~~offering~~are ~~not~~affiliated ~~held~~with in the ~~trust account. The~~ Company ~~can not~~’s ~~guarantee~~ Retro ~~that~~Television ~~the~~Network ~~Founding~~(“RTN”), ~~Stockholder~~five ~~would~~are beaffiliated ~~able~~with toMyNetworkTV, ~~satisfy~~four ~~these obligations. If the~~are ~~Founding~~ affiliated ~~Stockholder~~with isFOX, ~~unable~~three toare ~~meet~~affiliated ~~these~~with ~~obligations~~TeleFutura, ~~the~~and ~~Company~~one ~~may~~is ~~be forced to liquidate.~~affiliated ~~These~~ with ~~factors raise substantial doubt about the Company’s ability to continue as a going concern~~ABC.

~~Off~~The Company is the second-~~Balance~~largest ~~Sheet~~affiliate ~~Arrangements~~group of the top-ranked Univision and TeleFutura networks with 19 affiliates, 13 of which are in the nation’s top-65 Hispanic television markets. The Company believes that it has growth opportunity in these Hispanic properties because each station has a 15-year affiliation agreement with either Univision or TeleFutura, respectively.

WeRTN was developed ~~have~~to ~~never~~fulfill ~~entered~~a ~~into~~need ~~any~~in ~~off-balance~~the ~~sheet~~broadcasting ~~financing~~industry ~~arrangements~~that ~~and~~is ~~have never~~occurring ~~established~~ now and ~~any~~will ~~special~~continue ~~purpose~~to ~~entities.~~occur Weas ~~have~~broadcast ~~not~~stations ~~guaranteed~~switch ~~any~~over ~~debt~~to ordigital programming ~~commitments~~pursuant ofto ~~other entities~~a orFederal ~~entered~~Communications ~~into~~Commission ~~any~~mandate ~~options~~with ona February ~~non-financial~~19, ~~assets~~2009 deadline.

16Digital Television (“DTV”), will allow broadcasters to offer television content with movie-quality picture and CD-quality sound. DTV is a much more efficient technology, allowing broadcasters to provide a “high definition” (“HDTV”), program and multiple “standard definition” DTV programs simultaneously. Providing several programs streams on one broadcast channel is called “multicasting.” The challenge facing many broadcasters is how to effectively program and monetize the value created by DTV.

~~Table~~RTN is the first network designed for the digital arena. RTN takes some of ~~Contents~~the most popular and entertaining programs from the 60s, 70s, 80s, and 90s, all ratings proven and digitally re-mastered, and provides them to their RTN affiliates. RTN affiliates enjoy a scalable, cost efficient content solution for their digital channels. A major differentiator between RTN and other potential digital solutions is RTN’s ability to deliver local news, sports, and weather updates to the local RTN affiliate, in addition to the quality RTN programming. This enables the local affiliate to sell local advertising spots to generate revenue.

~~Risk~~The ability ~~Factors~~to ~~That~~deliver ~~May~~localized ~~Affect~~programs ~~Future~~to ~~Results~~the RTN affiliate is accomplished through utilization of the Company’s proprietary digital satellite technology system known as “C.A.S.H.” The Central Automated Satellite Hub (“CASH”), system provides the means of delivering a fully automated, 24 hour a day custom feed for each local affiliate. The Company has the capability to launch localized network feeds in all 210 U.S. TV markets and internationally as well.

~~This Quarterly Report on Form 10-Q includes forward-looking statements within the meaning of~~The ~~Section 27A~~ Company ofhas ~~the~~historically ~~Securities~~focused ~~Act~~on ofaggregating ~~1933,~~stations ~~as amended,~~ and ~~Section 21E~~developing ~~of the Securities Exchange~~delivery ~~Act of 1934, as amended~~ systems. InOver ~~some~~the ~~cases,~~past ~~you~~eight ~~can identify forward-looking statements by terminology such as “may~~years,” ~~“should,” “could,” “would,” “expect,” “plan,” “anticipate,” “believe,” “estimate,” “continue,” or~~ the ~~negative~~Company offinanced ~~such~~itself ~~terms~~largely ~~or other similar expressions. We have based these~~by ~~forward-looking~~ acquiring ~~statements~~television onconstruction ~~our~~permits ~~current expectations~~ and ~~projections~~stations ~~about~~at ~~future~~attractive ~~events~~valuations. ~~These~~ ~~forward-looking~~ After ~~statements~~acquiring ~~are~~the ~~subject to known and unknown risks~~stations, ~~uncertainties~~the ~~and~~Company ~~assumptions about~~would usconstruct ~~that may cause our actual results, levels of activity, performance~~ and/or ~~achievements~~upgrade ~~to be~~the ~~materially~~ facilities ~~different from any future results~~and, levels of activity, performance or achievements expressed or implied by such forward-looking statements. Factors that might cause or contribute to such a discrepancy include, but are not limited to, our being a development stage company with no operating history, our dependence on ~~key personnel some of whom may join us following~~ a ~~business combination,~~selective ~~our~~market ~~personnel allocating their time to other businesses and potentially having conflicts of interest with our business~~basis, ~~our~~sell ~~potentially~~the ~~being~~station ~~unable~~at toan ~~obtain additional~~increased ~~financing~~ valuation to ~~complete~~fund aoperations ~~business combination, the ownership of our securities being concentrated,~~ and ~~those~~acquisitions ~~other risks~~ and ~~uncertainties~~to ~~detailed~~service in the Company’s filings with the Securities and Exchange Commission including our registration statement on Form S-1/A as filed on August 26, 2005 and our annual report on Form 10-K filed on March 31, 2006debt.

17Following the March 2007 merger, the Company’s business focus shifted from primarily aggregating stations to increasing RTN affiliate penetration and maximizing revenue and profit for each station. The Company intends to achieve revenue growth and profitability through various entity and station-level initiatives. These initiatives, which the Company has recently begun to implement, include:

~~Table~~· continued growth of ~~Contents~~the RTN affiliate base in key U.S. television markets;

~~ITEM~~· 3.focusing ~~QUANTITATIVE~~on ~~AND~~growing ~~QUALITATIVE~~national ~~DISCLOSURES ABOUT MARKET RISK~~ business;

Market risk is the sensitivity of income to changes in interest rates, foreign exchanges, commodity prices, equity prices, and other market-driven rates or prices. We are not presently engaged in and, if a suitable business target is not identified by us prior to the prescribed liquidation date of the trust fund, we may not engage in, any substantive commercial business. Accordingly, we are not and, until such time as we consummate a business combination, we will not be, exposed to risks associated with foreign exchange rates, commodity prices, equity prices or other market-driven rates or prices. The net proceeds of our initial public offering held in the Trust Fund have been invested only in money market funds meeting certain conditions under Rule 2a-7 promulgated under the Investment Company Act of 1940. To date, our efforts have been limited to organizational activities and activities relating to our initial public offering and the identification 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 money market funds that invest primarily in short-term securities issued or guaranteed by the United States, we believe the exposure to interest rate fluctuations is limited, and therefore we do not believe we have a significant market risk related to interest rates. 15

~~ITEM~~· 4.addition ~~CONTROLS~~of ~~AND~~experienced ~~PROCEDURES~~ managers in select local markets;

~~The~~· ~~Company’s~~upgrading ~~Chief~~/ ~~Executive~~increasing ~~Officer~~sales ~~and~~staffs ~~Chief Financial Officer have evaluated the effectiveness of the Company’s disclosure controls and procedures (as such term is defined~~ in ~~Rules 13a-14(c)~~select ~~and~~local 15d-14(c) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) as of the end of the period covered by this quarterly report (the “Evaluation Date”). Based on such evaluation, such officers have concluded that, as of the Evaluation Date, the Company’s disclosure controls and procedures are effective in alerting them on a timely basis to material information relating to the Company required to be included in the Company’s periodic filings under the Exchange Act. markets;

~~Since~~· ~~the~~establishing ~~Evaluation~~market ~~Date,~~appropriate ~~there~~rate have not been any significant changes in the Company’s control over financial reporting that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting. cards;

18 · upgrading local news (where available) and expanding local programming in select markets;

~~Table~~· ofupgrading ~~Contents~~syndicated programming; and

~~PART~~· ~~II—OTHER~~enhancing ~~INFORMATION~~ cable and satellite distribution

~~ITEM~~Generally, it 1Atakes a few years for the Company’s newly acquired or built stations to generate operating cash flow. ~~RISK~~In ~~FACTORS~~addition, it requires time to gain viewer awareness of new station programming and to attract advertisers. Accordingly, the Company has incurred, and expects to continue to incur, with newly acquired or built stations, losses at a station in the first few years after it acquires or builds the station. Occasionally unforeseen expenses and delays increase the estimated initial start-up expenses. This requires the Company’s established stations to generate revenues and cash flow sufficient to meet its business plan including the significant expenses related to our newly acquired or built stations.

~~There~~The Company ~~has~~is ~~been~~one noof ~~material~~the ~~change~~largest inholders ~~our~~of ~~risk~~broadcast ~~factors~~spectrum in the ~~fiscal~~United States. ~~quarter~~Each ~~ended~~Company ~~September 30,~~station ~~2006~~is ~~from~~6MHz ~~those~~and ~~previously~~is ~~disclosed~~located in ~~our~~the ~~Form 10~~480-K680 ~~for~~MHz band. This spectrum adjoins the ~~fiscal~~700 ~~year~~MHz ~~ended~~band ~~December 31,~~and offers similar propagation ~~2005~~ characteristics. The Company anticipates that it will supplement its revenues by monetizing its significant spectrum portfolio through joint-ventures, leasing or sub-licensing to telecoms and new media companies.

~~ITEM~~The Company 2also launched a new corporate and investor relations website (www.EMDAholdings.com) in August ~~UNREGISTERED~~2007. ~~SALES~~The OFwebsite ~~EQUITY~~features ~~SECURITIES~~new ~~AND~~and ~~USE~~expanded OFcontent ~~PROCEEDS~~about the Company’s operating businesses, senior management, news and public filings. All key information on the website is available in an up-to-date, interactive format.

~~On September 14, 2005, we consummated our initial public offering of 10,000,000 Units, with~~Acquisition ~~each unit consisting of one share of our common stock~~ and ~~two~~Expansion warrants, each to purchase one share of our common stock at an exercise price of $5.00 per share. On September 19, 2005, we closed on an additional 1,500,000 units that were subject to the underwriters’ over-allotment option. The units were sold at an offering price of $6.00 per unit, generating total gross proceeds of $69,000,000. Morgan Joseph & Co. Inc. and EarlyBirdCapital, Inc. acted as lead underwriters. The securities sold in the offering were registered under the Securities Act of 1933 on a registration statement on Form S-1 (No. 333-125105). The Securities and Exchange Commission declared the registration statement effective on September 8, 2005. Activity

WeThe Company’s ~~paid~~classic television network, RTN, currently has a total of ~~$4,830,000~~73 affiliations inannounced. ~~underwriting~~Top ~~discounts~~DMA ~~and~~markets ~~commissions,~~include ~~and~~San ~~approximately~~Francisco, Atlanta, ~~$561~~ Washington,~~956~~ ~~has~~DC, ~~been~~Detroit, ~~paid~~Phoenix, ~~for~~Seattle, ~~costs~~Tacoma, ~~and~~Denver, ~~expenses~~Orlando, ~~related~~St. toLouis, Pittsburgh, ~~the~~and ~~offering~~Charlotte.

~~After deducting the underwriting discounts and commissions and the offering expenses, the~~RESULTS ~~total~~ OF ~~net~~OPERATIONS ~~proceeds~~— toTHREE usMONTHS ~~from~~ENDED ~~the~~MARCH ~~offering were approximately $63~~31,~~608,044,~~ of2008 ~~which~~COMPARED ~~$62,620,000~~TO ~~was deposited~~THREE ~~into~~MONTHS ~~a trust fund (or $5.45 per share sold in the offering) and the remaining proceeds~~ENDED ~~are~~ MARCH ~~available to be used to provide for business~~31, ~~legal and accounting due diligence on prospective business combinations and continuing general and administrative expenses.~~ 2007

~~For a description of the use of proceeds generated in our initial public offering, see Part I, Item 2 of this Form 10-Q.~~ Revenue

~~ITEM~~The following 5.table ~~OTHER~~sets ~~INFORMATION~~forth the principal types of broadcast revenue earned by the Company and its stations for the periods indicated and the change from one period to the next both in dollars and percent:

None

	For the Three Months Ended March 31,
								%
	2008		2007		Change			Change
	(In thousands, except percentages)
Broadcast Revenues
Local	$	2,244	$	2,405	$	(161	)		(6.7	)%
National		2,072		1,987		85			4.3
Other		461		247		214			86.6
Trade & Barter Revenue		2,545		2,136		409			19.1
Total Broadcast Revenue	$	7,322	$	6,775	$	547			8.1	%

19As noted in the Overview, the operating revenue of the Company’s stations is derived primarily from advertising revenue. The above table segregates revenue received from local sources compared to national sources, together with gross trade and barter revenues, which is non-cash. Other broadcast revenue is a combination of production, uplink services, news services, and other non-spot broadcast revenue.

~~Table~~Total Broadcast Revenue increased $0.5 million, or 8.1%, to $7.3 million. The increase in revenues is driven by an increase of ~~Contents~~$400,000 in trade and barter and $200,000 in other revenue. The increase in trade and barter includes an increase of $152,000 in trade programming and $200,000 in film barter income. This increase is due primarily to the continued growth in the Company’s investment in syndicated programming as it continues its commitment to reduce the amount of shopping and long-form commercials and increase traditional programming. Trade advertising revenue increased $58,000. The increase in other income is led by political sales of $115,000, uplink share services revenue of $77,000 and Joint Service Agreement’s revenue of $20,000.

~~ITEM 6. EXHIBITS~~ 16

~~Exhibits~~Local advertising revenue decreased $161,000 as result of lower direct and regional sales which was offset by higher revenues derived from advertising agencies. National sales increased $85,000 primarily due to higher billings to agencies which were offset by lower paid programming. With the Company’s shift to traditional programming, sales of available time shifts to spots advertisers. Total local and national revenue from the Company’s Spanish-language stations decreased by $.1 million or 6% when compared to the same period in 2007, while local and national revenue from the Company’s English-language stations decreased by $.1 million or 4%.

2.3		Second Amendment to Agreement and Plan of Merger, by and among Coconut Palm Acquisition Corp., Equity Broadcasting Corporation and certain shareholders of Equity Broadcasting Corporation, dated September 20, 2006 (incorporated by reference to the Company’s Form 8-K filed on September 20, 2006)
4.6		Warrant Clarification Agreement, dated August 17, 2006, between Coconut Palm Acquisition Corp. and Continental Stock Transfer & Trust Company (incorporated by reference to the Company’s Form 10-Q for the Quarter Ended June 30, 2006 filed on August 18, 2006)
31.1		Certification of Chief Executive Officer Pursuant to Rule 15A-14(A) or 15D-14(A) of the Securities Exchange Act of 1934, As Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2		Certification of Chief Financial Officer Pursuant to Rule 15A-14(A) or 15D-14(A) of the Securities Exchange Act of 1934, As Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1		Certification of Chief Executive Officer Pursuant to Rule 13a-14(b) or Rule 15d-14(b) and 18 U.S.C. Section 1350, As Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
32.2		Certification of Chief Financial Officer Pursuant to Rule 13a-14(b) or Rule 15d-14(b) and 18 U.S.C. Section 1350, As Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

Results of Operations

~~SIGNATURES~~The following table sets forth the Company’s operating results for the three month period ended March 31, 2008, as compared to the three month period ended March 31, 2007:

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

	For the Three Months Ended March 31,
										%
	2008			2007			Change			Change
	(In thousands, except percentages, net income per share and weighted average shares)
Broadcast Revenue	$	7,322		$	6,774		$	548			8.0
Program, production & promotion		4,811			3,421			1,390			40.6
Selling, general & administrative		8,138			6,284			1,854			29.5
Management agreement settlement		—			8,000			(8,000	)		(100.0	)
Depreciation expense		1,018			944			74			7.8
Rent		676			605			71			11.7
Operating (loss)		(7,321	)		(12,480	)		5,159			41.3

Interest income		21			4			17			425.0
Interest Expense, net		(3,055	)		(2,121	)		(934	)		(44.0	)
Gain on sale of assets		—			454			(454	)		(100.0	)
Other income, net		84			130			(46	)		(35.4	)
		(2,950	)		(1,533	)		(1,417	)		(42.4	)
(Loss) before income taxes		(10,271	)		(14,013	)		3,742			26.7
Income taxes		—			—			—			—
Net (loss)		(10,271	)		(14,013	)		3,742			26.7
Preferred dividend		(184	)		(12,135	)		11,951			98.5
Net loss available to common shareholders	$	(10,455	)	$	(26,148	)	$	15, 693			60.0
Basic net (loss) per common share	$	(0.26	)	$	(1.02	)
Basic shares used in earnings per share calculation		40,278,642			25,668,789

	COCONUT PALM ACQUISITION CORP.
Date: November 13, 2006	By:	/s/ Richard C. Rochon
		Chairman of the Board and Chief Executive Officer
		(principal executive officer)
Date: November 13, 2006	By:	/s/ Robert C. Farenhem
		Vice President and Secretary
		(principal financial and accounting officer)

Program, production and promotion expenses

20Program, production and promotion expense was $4.8 million in the three month period ended March 31, 2008, as compared to $3.4 million in the three month period ended March 31, 2007, an increase of $1.4 million, or 40.6%. The increase was due primarily to an increase in Syndicated Programming expense, barter/film expense and license fees.

~~Table~~Selling, general ofand ~~Contents~~administrative

~~Exhibit Index~~Selling, general and administrative expense was $8.1 million in the three month period ended March 31, 2008, as compared to $6.3 million in the three month period ended March 31, 2007, an increase of $1.8 million, or 29.5%. Contributing to this increase were increases in personnel costs, including benefits and share based compensation. This increase in personnel cost is attributed to hiring of management personnel following the March 2007 Merger Transaction to address the new strategic direction of the Company as well as demands of a publicly traded company, together with staff increases related to TV broadcast and RTN operations

2.3		Second Amendment to Agreement and Plan of Merger, by and among Coconut Palm Acquisition Corp., Equity Broadcasting Corporation and certain shareholders of Equity Broadcasting Corporation, dated September 20, 2006 (incorporated by reference to the Company’s Form 8-K filed on September 20, 2006)
4.6		Warrant Clarification Agreement, dated August 17, 2006, between Coconut Palm Acquisition Corp. and Continental Stock Transfer & Trust Company (incorporated by reference to the Company’s Form 10-Q for the Quarter Ended June 30, 2006 filed on August 18, 2006)
31.1		Certification of Chief Executive Officer Pursuant to Rule 15A-14(A) or 15D-14(A) of the Securities Exchange Act of 1934, As Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2		Certification of Chief Financial Officer Pursuant to Rule 15A-14(A) or 15D-14(A) of the Securities Exchange Act of 1934, As Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1		Certification of Chief Executive Officer Pursuant to Rule 13a-14(b) or Rule 15d-14(b) and 18 U.S.C. Section 1350, As Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
32.2		Certification of Chief Financial Officer Pursuant to Rule 13a-14(b) or Rule 15d-14(b) and 18 U.S.C. Section 1350, As Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

Depreciation and Amortization

21Depreciation and amortization was $1 million in the three month period ended March 31, 2008, as compared to $1 million in the three month period ended March 31, 2007. Of those expense amounts, amortization expense was $0.0 for the three month period ended March 31, 2008 compared to $30,186 for the three month period ended March 31, 2007, a decrease of $30,186.

Rent

Rent expense was $0.7 million in the three month period ended March 31, 2008, as compared to $0.6 million in the three month period ended March 31, 2007, an increase of $0.1 million, or 11.7%. An increase in tower rent expense was the primary factor.

Interest Expense, net

Interest expense, net of interest income, was $3.0 million in the three month period ended March 31, 2008, as compared to $2.1 million in the three month period ended March 31, 2007, an increase of $0.9 million, or 44.0%. This increase is primarily attributable to higher average outstanding debt ($20 million) and higher interest rates charged by lenders.. The combined average interest rates on the Company’s senior credit facility were 14.0% and 13.1% for the three months ended March 31, 2008 and 2007, respectively.

Gain on sale of assets

The gain on sale of assets was $0.0 million in the three month period ended March 31, 2008, as compared $0.5 million in the three month period ended March 31, 2007, a decrease of $0.5 million. The gain on sale in 2007 included the sale of a broadcast tower located in central Arkansas.

Other income, net

Other income, net was $84,000 for the three months ended March 31, 2008 as compared to $130,000 for the three months ended March 31, 2007, a decrease of $46,000.

Preferred dividend

Preferred dividend was $0.2 million in 2008 compared to $12.1 million in 2007. The decrease of $11.9 million is due to the payment of $12.1 million to the former preferred shareholders of EBC in connection with the March 2007 Merger Transaction. Current preferred shares accrete dividends quarterly.

Liquidity and Capital Resources

General

The following table and discussion presents data the Company believes is helpful in evaluating it liquidity and capital resources:

	As of
	March 31, 2008		December 31, 2007
	(In thousands)
Cash and cash equivalents	$	1,194	$	634
Long term debt including current portion and lines of credit	$	79,522	$	77,411
Available credit under senior credit agreement	$	-0-	$	─0─

The Company’s existing capital resources are not sufficient to fund its operations. If the Company is unable to obtain adequate additional sources of capital in the near term it will need to cease all or a portion of its operations, seek protection under U.S. bankruptcy laws and regulations, engage in a restructuring or undertake a combination of these and other actions. Additional sources of capital, if obtained, would likely come from sales by the Company of debt and/or equity and/or the sale of material assets of the Company. The Company is currently negotiating potential transactions that would supply it with capital necessary to meet its current requirements. However, these negotiations may not result in successful consummation of any transaction. If the Company is able to successfully consummate a transaction, such transaction may result in substantial dilution to the Company’s existing security holders and/or the incurrence of substantial indebtedness on relatively expensive terms. The terms of any such transaction would also likely involve covenants that serve to substantially restrict the operations of the Company and its management and could result in a change of control of the Company.

On February 13, 2008, the Company and its lenders entered into the Third Amended and Restated Credit Agreement to refinance the credit facility. The amended $53.0 million credit facility, comprised of an $8.0 million revolving credit line and term loans of $45.0 million, matures on February 13, 2011, was used to refinance the existing indebtedness senior credit facility. Outstanding principal balance under the credit facility bears interest at LIBOR or the alternate base rate, plus the applicable margin. The applicable margin is 9.5% for the LIBOR loans and 8.5% on the alternate base rate loan. The minimum LIBOR is 4.5%. The alternate base rate is (i) the greatest of (A) the Prime Rate, (B) the Federal Funds Rate in effect on such day plus fifty (50) basis points (0.50%), and (C) seven and one-half percent (7.50%) per annum. We are required to pay an unused line fee of .5% on the unused portion of the credit facility. The credit facility is secured by the majority of the assets of the company. We are subject to new financial and operating covenants and restrictions based on trailing monthly and twelve month information. We have borrowed $52,561,593 under the new facility as of March 31, 2008. Due to certain restrictions based on the value of the loan collateral, the Company does not have access to the remaining $2,487,500 at this time.

On March 19, 2008, the Company entered into an amendment to its Third Amended and Restated Credit Agreement (“Credit Agreement”) with Silver Point Finance, LLC and Wells Fargo Foothill, Inc. Under the terms of the Amendment, the lender group has agreed to forbear from exercising certain of their rights and remedies with respect to designated defaults under the Credit Agreement through the earlier of (a) April 18, 2008 and (b) the date of occurrence of certain events or by which certain events have failed to occur, including the Company’s failure to enter into agreements with respect to the sale of certain of its assets and the Company’s failure to secure approvals for, and meet other criteria with respect to, financing alternatives necessary to meet the Company’s immediate capital requirements. Additionally, the applicable margins on LIBOR loans and base rate loans were increased to 10.0% and 9.0% respectively. If the Company is unable to meet all criteria under the forbearance agreement, the lender group will have all remedies available to them under the Credit Agreement, including making the loan immediately due and payable.

On April 28, 2008, the Company entered into a second amendment (“Second Amendment”) to its Credit Agreement which had been previously amended on March 19, 2008 as noted above in Note 5. Under the terms of the Second Amendment, the lender group has agreed to forbear from exercising certain of its rights and remedies with respect to existing defaults and any other defaults or events of default under the Credit Agreement other than any specified defaults described in the Second Amendment (which include, but are not limited to, breaches of certain affirmative and negative covenants, among others) through the earlier of (a) May 5, 2008 and (b) the date of occurrence of certain events or by which certain events have failed to occur, including the Company’s failure to consummate a proposed financing with certain investors. The Second Amendment also provides for the lender group to make additional loans to the Company in an amount not to exceed $5,495,541 (which includes additional loans funded pursuant to the First Amendment) and increases the applicable margins on LIBOR loans and base rate loans to 12.0% and 11.0% respectively.

As of the date of this report, the above-described forbearance period has ended. If the Company is unable to secure an extension of such forbearance or the lenders otherwise elect to declare a default under the credit agreement, the lenders would have all rights and remedies available to them under the terms of the Credit Agreement. The Company and the lenders continue to discuss all options acceptable to both parties.

The principal ongoing uses of cash that affect the Company’s liquidity position include the following: the acquisition of and payments under syndicated programming contracts, capital and operational expenditures and interest payments on the Company’s debt. It should be noted that no principal is due on the existing senior credit facility (as refinanced in February 2008 - see below) until February 2011, except for mandatory principal payments from proceeds generated from the sale of any collateral assets through that period.

The Company currently has a working capital deficit of approximately $67.8 million.

Even with the refinanced Credit Facility, the additional funds provided by the Amended Credit Facility are not sufficient to meet all of the anticipated liquidity needs to continue operations of the Company for the next twelve months. Accordingly, the Company will have to raise additional capital or increase its debt immediately to continue operations. If the Company is unable to obtain additional funds when they are required or if the funds cannot be obtained on favorable terms, management may be required to liquidate available assets, restructure the Company or in the extreme event, cease operations. The financial statements do not include any adjustments that might result from the outcome of these uncertainties.

Sources and Uses of Cash

	For the Three Months
	Ended March 31,
	2008			2007
	(In thousands)
Net cash used by operating activities	$	(2,317	)	$	(7,771	)
Net cash provided (used) by investing activities		765			(1,959	)
Net cash provided by financing activities		2,111			31,944
Net increase in cash and cash equivalents	$	559		$	22,214

Operating Activities

Net cash used in operating activities for the three month periods ending March 31, 2008 and 2007 was $2.3 million and $7.8 million, respectively. The decrease in net cash used by operating activities of $5.5 million was due primarily to an decrease in the net loss of $3.8 million and a decrease in Management Agreement Settlement of $4.8 million, a non-cash operating expense.

Investing Activities

Net cash provided by investing activities was $0.8 million in the three month period ended March 31, 2008, a variance of $2.7 million compared to the three month period ended March 31, 2007, when $1.9 million was used by investing activities. The variance was largely due to the acquisition of three low power television stations located in Oklahoma and Arkansas, including KLRA, the Univision affiliate in Little Rock, Arkansas in 2007 combined with cash received from affiliates in repaymnet of advances.

Financing Activities

Net cash provided by financing activities was $2.1 million in the three month period ended March 31, 2008, compared to $31.9 million in the three month period ended March 31, 2007, a decrease of $29.8 million. During the three month period ended March 31, 2007, the Company completed its merger with Coconut Palm. As part of the Merger Transaction, the Company acquired the existing assets and liabilities of Coconut Palm, including operating cash of $22.8 million and $10.9 million of funds held in trust for the retirement of the stock held by Coconut Palm shareholders who elected not to participate in the merger. The funds held in trust are restricted and not available for any use by the Company. The Company’s net increase in debt was $2.1 million for the three months ended March 31, 2008 as compared to $4.0 million for the three months ended March 31, 2007.

Debt Instruments and Related Covenants

The Company’s Credit Facility is collateralized by substantially all of the assets, including real estate, of the Company and its subsidiaries. The Credit Facility contains certain restrictive provisions which include, but are not limited to, requiring the Company to achieve certain revenue and earnings goals, limiting the amount of annual capital investments, incur additional indebtedness, make certain acquisitions and investments, sell assets or make other restricted payments, including dividends (all are as defined in the loan agreement and subsequent amendments.) As of December 31, 2007, the Company was not in compliance with all covenants as required by the credit facility before its amendment and restatement on February 13, 2008. In connection with and as part of the amendment and restatement of the credit facility, the lenders waived and eliminated the covenant requirements as of December 31, 2007. The Company is subject to amended covenants as per the new credit agreement.

On March 19, 2008, the Company entered into an amendment to its Third Amended and Restated Credit Agreement (“Credit Agreement”) with Silver Point Finance, LLC and Wells Fargo Foothill, Inc. Under the terms of the Amendment, the lender group has agreed to forbear from exercising certain of their rights and remedies with respect to designated defaults under the Credit Agreement through the earlier of (a) April 18, 2008 and (b) the date of occurrence of certain events or by which certain events have failed to occur, including the Company’s failure to enter into agreements with respect to the sale of certain of its assets and the Company’s failure to secure approvals for, and meet other criteria with respect to, financing alternatives necessary to meet the Company’s immediate capital requirements. Additionally, the applicable margins on LIBOR loans and base rate loans were increased to 10.0% and 9.05 respectively. If the Company is unable to meet all criteria under the forbearance agreement, the lender group will have all remedies available to them under the Credit Agreement, including making the loan immediately due and payable.

On April 28, 2008, Equity Media Holdings Corporation (“Company”) entered into a second amendment (“Second Amendment”) to its third amended and restated credit agreement (“Credit Agreement”) with Silver Point Finance, LLC and Wells Fargo Foothill, Inc which had been previously amended on March 19, 2008 (“First Amendment Under the terms of the Second Amendment, the lender group has agreed to forbear from exercising certain of its rights and remedies with respect to existing defaults and any other defaults or events of default under the Credit Agreement other than any specified defaults described in the Second Amendment (which include, but are not limited to, breaches of certain affirmative and negative covenants, among others) through the earlier of (a) May 5, 2008 and (b) the date of occurrence of certain events or by which certain events have failed to occur, including the Company’s failure to consummate a proposed financing with certain investors. The Second Amendment also provides for the lender group to make additional loans to the Company in an amount not to exceed $5,495,541 (which includes additional loans funded pursuant to the First Amendment) and increases the applicable margins on LIBOR loans and base rate loans to 12.0% and 11.0% respectively.

As of March 31, 2008, the applicable margins for base rate advances and LIBOR advances under the revolver component of the Credit Facility were 9.0% and 10.0%, respectively. The amount outstanding under the Credit Facility as of March 31, 2008 was $52.6 million and is allocated as follows: term loan facility of $12.0 million, term loans B of $35.1 million and a fully drawn revolving loan of $5.5 million. At March 31, 2008, approximately $1 million was available to borrow under the term loan B component of the Credit Facility.

Off-Balance Sheet Arrangements

The Company does not have any off-balance sheet arrangements.

Critical Accounting Policies and Estimates

The preparation of consolidated financial statements in conformity with generally accepted accounting principles requires the appropriate application of certain accounting policies, many of which require the Company to make estimates and assumptions about future events and their impact on amounts reported in the Company’s consolidated financial statements and related notes. Since future events and their impact cannot be determined with certainty, the actual results may differ from the Company’s estimates. Such differences may be material to the consolidated financial statements.

The Company believes its application of accounting policies, and the estimates inherently required therein, are reasonable.

These accounting policies and estimates are periodically reevaluated, and adjustments are made when facts and circumstances dictate a change. Historically, the Company has found its application of accounting policies to be appropriate, and actual results have not differed materially from those determined using necessary estimates.

The Securities and Exchange Commission has defined a company’s critical accounting policies as the ones that are most important to the portrayal of the company’s financial condition and results of operation, and which require the company to make its most difficult and subjective judgments, often as the result of the need to make estimates of matters that are inherently uncertain. Our critical accounting policies and estimates include the estimates used to determine the recoverability of indefinite-lived assets, including goodwill, the recoverability of long-lived tangible assets, the value of television broadcast rights, the amount of allowance of doubtful accounts, the existence and accounting for variable interest entities and the amount of stock-based compensation. For a detailed discussion of our critical accounting policies and estimates, please refer to our 2007 audited financial statements as reported in our Form 10-K/A filed on April 1, 2008 with the Securities and Exchange Commission. There have been no material changes in the application of our critical accounting policies and estimates subsequent to that report.

Recent Accounting Pronouncements

In March 2008, the FASB issued SFAS No. 161, “Disclosures about Derivative Instruments and Hedging Activities, an amendment of FASB Statement No. 133” (“SFAS 161”), which requires enhanced disclosures for derivative and hedging activities. SFAS 161 will become effective beginning in the first quarter of 2009. The Company is currently evaluating the impact of adopting SFAS 161 on the financial statements.

In December 2007, the FASB issued SFAS No. 141 (revised 2007) “Business Combinations” (“FASB No. 141(R)”). FASB No. 141(R) retains the fundamental requirements of the original pronouncement requiring that the purchase method be used for all business combinations. FASB No. 141(R) defines the acquirer as the entity that obtains control of one or more businesses in the business combination, establishes the acquisition date as the date that the acquirer achieves control and requires the acquirer to recognize the assets acquired, liabilities assumed and any non-controlling interest at their fair values as of the acquisition date. FASB No. 141(R) also requires that acquisition-related costs be recognized separately from the acquisition. FASB No. 141(R) is effective for business combinations for which the acquisition date is on or after the beginning of the first annual reporting period beginning on or after December 15, 2008. The impact of adopting SFAS No. 141(R) will be dependent on the future business combinations that the Company may pursue after its effective date, if any.

In December 2007, the FASB issued Statement No. 160, “Noncontrolling Interests in Consolidated Financial Statements—an amendment of ARB No. 51 (“FASB No. 160”) .” The objective of FASB No. 160 is to improve the relevance, comparability, and transparency of the financial information that a reporting entity provides in its consolidated financial statements by establishing accounting and reporting standards for the non-controlling interest in a subsidiary and for the deconsolidation of a subsidiary. This Statement applies to all entities that prepare consolidated financial statements, except not-for-profit organizations. FASB No. 160 amends ARB 51 to establish accounting and reporting standards for the non-controlling interest in a subsidiary and for the deconsolidation of a subsidiary. It also amends certain of ARB 51’s consolidation procedures for consistency with the requirements of FASB No. 141 (R). This Statement is effective for fiscal years, and interim periods within those fiscal years, beginning on or after December 15, 2008. Earlier adoption is prohibited. The effective date of this Statement is the same as that of the related Statement 141(R). This Statement shall be applied prospectively as of the beginning of the fiscal year in which this Statement is initially applied, except for the presentation and disclosure requirements. The presentation and disclosure requirements shall be applied retrospectively for all periods presented.

Forward-Looking Statements

This Quarterly Report on Form 10-Q includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. We have based these forward-looking statements on our current expectations and projections about future events. These forward-looking statements are subject to known and unknown risks, uncertainties and assumptions about us that may cause our actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by such forward-looking statements. In some cases, you can identify forward-looking statements by terminology such as “may,” “should,” “could,” “would,” “expect,” “plan,” “anticipate,” “believe,” “estimate,” “continue,” or the negative of such terms or other similar expressions. Factors that might cause or contribute to such a discrepancy include, but are not limited to, those described in our other filings with the Securities and Exchange Commission, including our Annual Report on Form 10-K for the fiscal year ended December 31, 2007. The forward-looking statements included in this Quarterly Report are made only as of the date hereof. The Company undertakes no obligation to update such forward-looking statements to reflect subsequent events or circumstances, except as required by law.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

General

The Company is exposed to market risk from changes in domestic and international interest rates (i.e. prime and LIBOR). This market risk represents the risk of loss that may impact the financial position, results of operations and/or cash flows of the Company due to adverse changes in interest rates. This exposure is directly related to our normal funding activities. The Company does not use financial instruments for trading and, as of March 31, 2008, was not a party to any interest-rate derivative agreements.

Interest Rates

At March 31, 2008, the entire outstanding balance under our credit agreement, approximately 66% of the Company’s total outstanding debt (credit agreement, lines of credit, asset purchase loans, real estate mortgage, etc.) bears interest at variable rates. The fair value of the Company’s fixed rate debt is estimated based on current rates offered to the Company for debt of similar terms and maturities and is not estimated to vary materially from its carrying value.

Based on amounts outstanding at March 31, 2008, if the interest rate on the Company’s variable debt were to increase by 1.0%, its annual interest expense would be higher by approximately $.6 million.

ITEM 4. CONTROLS AND PROCEDURES

Evaluation and Disclosure of Controls and Procedures

Management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Exchange Act Rules 13a-15(f) and 15d-15(f). The Company’s internal control system is a process designed by, or under the supervision of, the Company’s principal executive and principal financial officers, or persons performing similar functions, and effected by the Company’s board of directors, management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with U.S. generally accepted accounting principles (U.S. GAAP).

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

The Company’s management, under the supervision and with the participation of the Chief Executive Officer and the Chief Financial Officer, evaluated the effectiveness of the design and operation of the Company’s disclosure controls and procedures, as defined in Exchange Act Rule 13a-15(e), as of December 31, 2007. Based on this evaluation Management identified and reported in the December 31, 2007 10-K/A, filed April 1, 2008 a material weakness in the Company's internal control over financial reporting as of December 31, 2007 relating to effective internal controls over the preparation, review, and approval surrounding certain account reconciliations, journal entries and accruals; including and related to analysis and evidence of management review. As result of this material weakness, management concluded that the disclosure controls and procedures were not effective as of December 31, 2007.

During 2008, the Company has taken and will continue to take actions to remediate the material weakness discussed above and it is continuing to assess additional controls that may be required to substantially reduce the risk of similar material weakness occurring in the future. The Company is in the process of establishing more robust reconciliation and review procedures and has required its accounting managers and supervisors to adequately review all reconciliations, journal entries and accruals and to provide evidence of such review and analysis.

As part of its fiscal 2008 assessment of internal control over financial reporting, management will conduct sufficient testing and evaluation of the controls being implemented as part of this remediation plan to ascertain that they operate effectively. While the Company has taken measures to remediate the material weakness and strengthen its internal control over financial reporting, these steps may not be adequate to fully remediate the material weakness, and additional measures may be required. The effectiveness of this remediation measures will not be fully known until the Company completes its annual evaluation of the effectiveness of its internal control over financial reporting for the year ending December 31, 2008. Therefore, management has concluded that it can not assert that the control deficiencies related to the reported material weakness have been effectively remediated.

Procedures were undertaken so that management could conclude that reasonable assurance exists regarding the reliability of financial reporting and the preparation of the condensed consolidated financial statements contained in this filing.

Changes in Internal Control Over Financial Reporting

During the first quarter of 2008, other than discussed above, there has been no changes in the Company’s internal control over financial reporting that materially affect or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

PART II—OTHER INFORMATION

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

The Company is currently in default under its existing loan agreements with Silver Point and Wells Fargo. Existing events of default include, but are not limited to, the Company’s failure to pay interest when due, lateness on certain payments due under the Company’s satellite and programming agreements and failure to achieve certain performance metrics, including minimum monthly revenue and EBITDA benchmarks.

On April 28, 2008, the Company entered into a Second Amendment to its Third Amended and Restated Credit Agreement with Silver Point and Wells Fargo. The credit agreement had been previously amended on March 19, 2008. Under the terms of the two amendments, the lenders agreed to forbear from exercising certain of their rights and remedies with respect to the Company’s existing defaults through the earlier of May 5, 2008 and the date of occurrence of certain events or by which certain events have failed to occur, including the Company’s failure to consummate a proposed financing with certain investors.

As of the date of this report, the above-described forbearance period has ended. If the Company is unable to secure an extension of such forbearance or the lenders otherwise elect to declare a default under the credit agreement, the lenders would have all rights and remedies available to them under the terms of the credit agreement. The Company and the Lender continue to discuss all options acceptable to both parties.

ITEM 6. EXHIBITS

Exhibits

31.1		Certification of Chief Operating Officer Pursuant to Rule 13a-14(a) or 15d-14(a) of the Securities Exchange Act of 1934, As Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.2		Certification of Chief Financial Officer Pursuant to Rule 13a-14(a) or 15d-14(a) of the Securities Exchange Act of 1934, As Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

32.1		Certification of Chief Operating Officer Pursuant to Rule 13a-14(b) or 15d-14(b) and 18 U.S.C. Section 1350, As Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

32.2		Certification of Chief Financial Officer Pursuant to Rule 13a-14(b) or 15d-14(b) and 18 U.S.C. Section 1350, As Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

10.37		Second Amendment to Third Amended and Restated Credit Agreement and Forbearance Agreement dated April 28, 2008 and Related Schedules.

SIGNATURES

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

	EQUITY MEDIA HOLDINGS CORPORATION

Date: May 19, 2008	By:	/s/ Gregory Fess
		Chief Operating Officer
		(principal executive officer)


Date: May 19, 2008	By:	/s/ Patrick Doran
		Chief Financial Officer
		(principal financial and accounting officer)

EXHIBIT INDEX

31.1		Certification of Chief Operating Officer Pursuant to Rule 13a-14(a) or 15d-14(a) of the Securities Exchange Act of 1934, As Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.2		Certification of Chief Financial Officer Pursuant to Rule 13a-14(a) or 15d-14(a) of the Securities Exchange Act of 1934, As Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

32.1		Certification of Chief Operating Officer Pursuant to Rule 13a-14(b) or 15d-14(b) and 18 U.S.C. Section 1350, As Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

32.2		Certification of Chief Financial Officer Pursuant to Rule 13a-14(b) or 15d-14(b) and 18 U.S.C. Section 1350, As Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

10.37		Second Amendment to Third Amended and Restated Credit Agreement and Forbearance Agreement dated April 28, 2008 and Related Schedules.

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