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TABLE OF CONTENTS
INDEX TO FINANCIAL STATEMENTS Capstar Acquisition Corp. (a development stage company)

As filed with the Securities and Exchange Commission on December 12, 2007

Registration No. 333-147096

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

AMENDMENT NO. 1 TO
FORM S-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933

CAPSTAR ACQUISITION CORP.
(Exact name of registrant as specified in its charter)

600 Congress Ave., Suite 1400
Austin, TX 78701
(512) 340-7800
(Address, including zip code, and telephone number, including area code, of registrant's principal executive offices)

R. Steven Hicks
c/o Capstar Acquisition Corp.
600 Congress Ave., Suite 1400
Austin, TX 78701
(512) 340-7800
(Name, address, including zip code, and telephone number, including area code, of agent for service)

        Approximate date of commencement of proposed sale to the public: As soon as practicable after the effective date of this registration statement.

        If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933 check the following box. o

        If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. o

        If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. o

        If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. o

CALCULATION OF REGISTRATION FEE

(1)

Estimated solely for the purpose of calculating the registration fee.

(2)

Includes 3,000,000 Units, consisting of 3,000,000 shares of Common Stock and 3,000,000 Warrants, which may be issued on exercise of a 30-day option granted to the underwriters to cover over-allotments, if any.

(3)

No fee pursuant to Rule 457(g).

(4)

Previously paid.

        The registrant hereby amends this registration statement on such date or dates as may be necessary to delay its effective date until the registrant shall file a further amendment which specifically states that this registration statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until the registration statement shall become effective on such date as the Commission, acting pursuant to said Section 8(a), may determine.

The information in this prospectus is not complete and may be changed. We may not sell these securities until the registration statement filed with the Securities and Exchange Commission is effective. This prospectus is not an offer to sell these securities and is not soliciting an offer to buy these securities in any jurisdiction where the offer or sale is not permitted.

SUBJECT TO COMPLETION, DATED DECEMBER 12, 2007

PROSPECTUS

$200,000,000

CAPSTAR ACQUISITION CORP.

20,000,000 Units

        Capstar Acquisition Corp. is a newly organized blank check company formed for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or other similar business combination with one or more operating businesses, which we refer to as our initial business combination. If we are unable to consummate our initial business combination within 24 months from the date of this prospectus, we will liquidate and distribute the proceeds held in the trust account described herein to our public stockholders. We will focus on an acquisition or acquisitions in the media and entertainment industry, but we may effect a business combination with a company outside that industry. To date, our efforts have been limited to organizational activities as well as activities related to this offering. We have not identified any acquisition target and we have not, nor has anyone on our behalf, initiated any substantive discussions with an entity with which we may effect our initial business combination.

        This is an initial public offering of our securities. We are offering 20,000,000 units. Each unit has an offering price of $10.00 and consists of one share of our common stock and one warrant. Each warrant entitles the holder to purchase one share of our common stock at a price of $7.50, subject to adjustment as described in this prospectus. The warrants will become exercisable on the later of the completion of our initial business combination or twelve months from the closing of this offering, provided in each case that we have an effective registration statement covering the shares of common stock issuable upon exercise of the warrants and a current prospectus relating to them is available, and will expire four years from the date of this prospectus, unless earlier redeemed.

        We have also granted the underwriters a 30-day option to purchase up to an additional 3,000,000 units to cover over-allotments, if any.

        Capstar Acquisition Management, LP, which we refer to throughout this prospectus as our sponsor, has agreed to purchase an aggregate of 5,000,000 warrants at a price of $1.00 per warrant ($5,000,000 in the aggregate) in a private placement that will occur simultaneously with the consummation of this offering. We refer to these warrants throughout this prospectus as the sponsor warrants. The proceeds from the sale of the sponsor warrants in the private placement will be deposited into the trust account, and will be part of the funds distributed to our public stockholders in the event we are unable to complete our initial business combination. Each of the sponsor warrants will be substantially similar to the warrants included in the units sold in this offering except that the sponsor warrants: (i) will not be redeemable by us so long as they are held by our sponsor or its permitted transferees, (ii) will be subject to certain transfer restrictions and entitled to certain registration rights described in more detail in this prospectus and (iii) may be exercised for cash or on a cashless basis, as described in this prospectus.

        Currently, there is no public market for our units, common stock or warrants. We have applied to have the units listed on the American Stock Exchange. Assuming that the units are listed on the American Stock Exchange, the units will be listed under the symbol CRB.U on or promptly after the date of this prospectus. The common stock and warrants comprising the units will begin separate trading on the 45th day following the date of this prospectus unless Lazard Capital Markets informs us of its decision to allow earlier separate trading, subject to our filing a Current Report on Form 8-K with the Securities and Exchange Commission containing an audited balance sheet reflecting our receipt of the gross proceeds of this offering and issuing a press release announcing when such separate trading will begin. Once the securities comprising the units begin separate trading, the common stock and warrants will be traded on the American Stock Exchange under the symbols "CRB" and "CRB.WS," respectively.

        Investing in our securities involves a high degree of risk. See "Risk Factors" beginning on page 20 for a discussion of information that should be considered in connection with an investment in our securities.

        Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense.

(1)

Includes $0.30 per unit, or $6.0 million in the aggregate (approximately $6.9 million if the underwriters' over-allotment option is exercised in full), payable to the underwriters for deferred underwriting commissions to be placed in the trust account described below. Such funds will be released to the underwriters only on completion of our initial business combination, as described in this prospectus.

        The underwriters are offering the units on a firm commitment basis. The underwriters expect to deliver the units to purchasers on or about            , 2008. Of the proceeds we receive from this offering and the sale of the sponsor warrants described in this prospectus, approximately $9.81 per unit, or $196,195,000 in the aggregate (approximately $9.78 per unit or $224,995,000 if the underwriters' over-allotment option is exercised in full) will be deposited into a trust account at [                        ], with Continental Stock Transfer & Trust Company, as trustee. These funds will not be released to us until the earlier of the completion of our initial business combination or our liquidation.

Lazard Capital Markets

                             , 2008

        You should rely only on the information contained in this prospectus. We have not, and the underwriters have not, authorized anyone to provide you with different information. We are not, and the underwriters are not, making an offer of these securities in any jurisdiction where the offer is not permitted. You should not assume that the information contained in this prospectus is accurate as of any date other than the date on the front of this prospectus.

TABLE OF CONTENTS

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Summary

        This summary only highlights the more detailed information appearing elsewhere in this prospectus. As this is a summary, it does not contain all of the information that you should consider in making an investment decision. You should read this entire prospectus carefully, including the information under "Risk Factors" and our financial statements and the related notes included elsewhere in this prospectus, before investing. References in this prospectus to "we," "us" or "our company" refer to Capstar Acquisition Corp. References in this prospectus to "public stockholders" refer to those persons that purchase the securities offered by this prospectus and our sponsor (as defined below) to the extent our sponsor purchases these securities either in this offering or the aftermarket, provided that our sponsor's status as a "public stockholder" shall only exist with respect to those securities so purchased in this offering. References in this prospectus to our "management" or our "management team" refer to our officers and directors and references to our "sponsor" refer to Capstar Acquisition Management, LP, a Texas limited partnership. References to our "initial stockholders" refer to our sponsor, James R. Huffines, Frederick G. Kraegel and Timothy J. Lindgren. Unless we tell you otherwise, the information in this prospectus assumes that the underwriters will not exercise their over-allotment option. Any discrepancies in the tables included herein between the amounts listed and the totals thereof are due to rounding.

        We are a blank check company formed under the laws of the State of Delaware on September 28, 2007. We were formed to effect a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or other similar business combination with one or more operating businesses. We will focus on an acquisition or acquisitions in the media and entertainment industry but we may effect our initial business combination with a company outside that industry if an attractive acquisition opportunity is identified in another industry prior to the time we identify an acquisition opportunity in the media and entertainment industry. To date, our efforts have been limited to organizational activities as well as activities related to this offering. We have not, nor has anyone on our behalf, contacted or been contacted by any potential target business or had any substantive discussions, formal or otherwise, with respect to such a transaction. Additionally, we have not, nor have we engaged or retained any agent, to conduct any research or take any steps to identify, locate or contact any suitable acquisition candidate.

        We will seek to capitalize on the significant investing and operating experience of our management team.

        Our chairman and chief executive officer is R. Steven Hicks. Since 2000, Mr. Hicks has served as executive chairman and sole member of Capstar Partners, LLC, a private investment firm of Mr. Hicks and his family focused on buyouts, real estate development, and public investing. Capstar Partners, LLC (or affiliated persons) is the controlling shareholder in DMX Holdings, Inc. ("DMX Holdings"), a company engaged in the provision of business media services, including video, music and scent technologies, and Andrew Harper, Inc. ("Andrew Harper"), a high-end travel publishing and services firm. Prior to founding Capstar Partners, LLC, Mr. Hicks was a 28 year veteran of the radio industry. In 1996, Mr. Hicks founded and served as chief executive officer of Capstar Broadcasting Corp. ("Capstar Broadcasting"). Mr. Hicks led Capstar Broadcasting, an owner of 350 radio stations, through a successful initial public offering on the New York Stock Exchange in 1998. In 1999, Capstar Broadcasting merged with Chancellor Media Corp. ("Chancellor Media") in a stock swap valued at $4.1 billion, and the combined company was renamed AMFM Inc. ("AMFM"). Mr. Hicks served as vice-chairman and chief executive officer of the new media division of AMFM until it was acquired by Clear Channel Communications, Inc. ("Clear Channel") in 2000 for $23 billion. Prior to Capstar Broadcasting, Mr. Hicks also co-founded and served as CEO of SFX Broadcasting, Inc. ("SFX") from 1989 until 1996 and led SFX through a successful initial public offering on the NASDAQ in 1993.

        John D. Cullen, our president and one of our directors since inception, serves as chief executive officer of DMX, Inc., the operating subsidiary of DMX Holdings, and as president of Andrew Harper.

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Mr. Cullen has 25 years of experience, including many working with Mr. Hicks, in executive management, broadcast sales and sales management in the media industry. Mr. Cullen served as the chief operating officer of Capstar Broadcasting from 1998 to 1999 and, with Mr. Hicks, helped lead Capstar Broadcasting through a successful initial public offering in 1998. After Capstar Broadcasting's merger with Chancellor Media, Mr. Cullen served as president of the new media division of AMFM from 1999 to 2000 where he supervised the systems, services and technology initiatives of the television and radio representation firm Katz Media Group, Prophet Media Distribution Systems, Galaxy and the training academy, Star Performance. From 2000 to 2003, Mr. Cullen served as a member of the executive team of Clear Channel as president of the International Division and as senior vice president of Clear Channel. Mr. Cullen was president and chief executive officer of GulfStar Broadcasting Inc. ("GulfStar Broadcasting") from 1996 to 1998. GulfStar Broadcasting grew from a privately owned company consisting of 8 radio stations into an 87 station group under Mr. Cullen's supervision. Prior to 1996, Mr. Cullen held various management positions within SFX, Cox Communications and Sterling Communications.

        The past experience of our management and members of our board of directors does not guarantee that we will be successful in consummating a business combination. There are numerous risks and uncertainties detailed elsewhere in this prospectus that are outside of the control of our management and could impact our ability to consummate a business combination. As a result, we cannot assure you that we will be able to consummate a business combination at all or on terms favorable to us, nor can we guarantee that we will be successful following the consummation of our initial business combination.

        If we do not complete our initial business combination within 24 months after the date of this prospectus and expend all of the net proceeds of this offering, other than the proceeds deposited in the trust account, and without taking into account interest, if any, earned on the trust account, the initial per-share liquidation amount for the shares issued in this offering would be $9.81, or $0.19 less than the per-unit offering price of $10.00. This per share liquidation price of $9.81 includes approximately $6.0 million in deferred underwriting commissions (or approximately $6.9 million if the underwriters' over-allotment option is exercised in full) and takes into account that the initial stockholders have waived their right to participate in any liquidating distribution on their founders' common stock.

        Our executive offices are located at 600 Congress Avenue, Suite 1400, Austin, Texas, 78701, and our telephone number is (512) 340-7800.

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THE OFFERING

        In making your decision on whether to invest in our securities, you should take into account not only the background of the members of our management team, but also the special risks we face as a blank check company and the fact that this offering is not being conducted in compliance with Rule 419 promulgated under the Securities Act of 1933, as amended (the "Securities Act"). You will not be entitled to protections normally afforded to investors in Rule 419 blank check offerings. You should carefully consider these and the other risks set forth in the section below entitled "Risk Factors" beginning on page 20 of this prospectus.

(1)

This number includes an aggregate of 750,000 founders' common stock held by our initial stockholders that are subject to forfeiture to the extent that the over-allotment option is not exercised by the underwriters.

(2)

Assumes no exercise of the over-allotment option and the resulting forfeiture of 750,000 shares held by our initial stockholders.

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Risks

        We are a newly formed company that has conducted no operations and has generated no revenues. Until we complete our initial business combination, we will have no operations and will generate no operating revenues. In making your decision on whether to invest in our securities, you should take into account not only the background of our management team, but also the special risks we face as a blank check company. This offering is not being conducted in compliance with Rule 419 promulgated under the Securities Act. Accordingly, you will not be entitled to protections normally afforded to investors in Rule 419 blank check offerings. For additional information concerning how Rule 419 black check offerings differ from this offering, please see "Proposed Business—Comparison of This Offering to Those of Blank Check Companies Subject to Rule 419." You should carefully consider these and the other risks set forth in the section entitled "Risk Factors" beginning on page 20 of this prospectus.

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SUMMARY FINANCIAL DATA

        The following table summarizes the relevant financial data for our business and should be read with our financial statements, which are included in this prospectus. We have not had any significant operations to date, so only balance sheet data is presented.

---

(1)

If we consummate our initial business combination, the conversion rights afforded to our public stockholders may result in the conversion into cash of up to 30% (minus one share) of the aggregate number of shares sold in this offering at a per-share conversion price equal to the aggregate amount then on deposit in the trust account (initially approximately $9.81 per share (or approximately $9.78 per share if the underwriters' over-allotment option is exercised in full)), before payment of deferred underwriting discounts and commissions and including accrued interest, net of any income taxes due on such interest, which income taxes, if any, shall be paid from the trust account, and net of interest income previously released to us for working capital requirements, as of two business days prior to the proposed consummation of our initial business combination, divided by the number of shares sold in this offering. We will not consummate any business combination if holders owning more than 30% (minus one share) of our outstanding shares of common stock sold in this offering exercise their conversion rights.

        The "as adjusted" information gives effect to the sale of the units in this offering, the sale of the sponsor warrants, repayment of the $200,000 loan agreed to be made to us by Mr. Hicks, our founder, chairman of the board and chief executive officer, and the payment of the estimated expenses of this offering. The "as adjusted" working capital and "as adjusted" total assets include $6.0 million being held in the trust account (approximately $6.9 million if the underwriters' over-allotment option is exercised in full) representing deferred underwriting commissions.

        The "as adjusted" working capital and total assets amounts include approximately $196,195,000 to be held in the trust account (approximately $224,995,000 if the underwriters' over-allotment option is exercised in full), including $6.0 million being held in the trust account representing deferred underwriting commissions, which will be available to us as described in this prospectus. If no initial business combination is consummated, the proceeds held in the trust account, including the deferred underwriting commissions and all interest thereon, net of income taxes on such interest and interest income of up to $3.0 million on the trust account balance released to us to fund our working capital requirements, will be distributed solely to our public stockholders as part of a plan of distribution upon termination of our corporate existence.

        We will not proceed with a business combination if public stockholders owning 30% or more of the shares sold in this offering vote against the business combination and exercise their conversion rights. Accordingly, we may effect a business combination if public stockholders owning up to 30% (minus one share) of the shares sold in this offering exercise their conversion rights. If this occurred, we would be required to convert to cash up to 30% (minus one share) of the 20,000,000 shares sold in this offering, or 5,999,999 shares of common stock, for an initial per-share conversion price of approximately $9.81

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(for an aggregate maximum conversion price of approximately $58,858,490), without taking into account interest earned on the trust account. The actual per-share conversion price will be equal to:

•

the amount in the trust account, including all accrued interest after distribution of interest income on the trust account balance to us as described above, as of two business days prior to the proposed consummation of the business combination,



•

divided by the number of shares of common stock sold in the offering.

        Because converting stockholders will receive their proportionate share of the deferred underwriting discounts and commissions and the underwriters will be paid the full amount of their deferred underwriting compensation at the time of the consummation of our initial business combination, we (and, therefore, the non-converting stockholders) will bear the financial effect of such payments to both the converting stockholders and the underwriters.

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RISK FACTORS

        An investment in our securities involves a high degree of risk. You should consider carefully all of the material risks described below, together with the other information contained in this prospectus before making a decision to invest in our units. If any of the following events occur, our business, financial condition and operating results may be materially adversely affected. In that event, the trading price of our securities could decline, and you could lose all or part of your investment. This prospectus also contains forward-looking statements that involve risks and uncertainties. Our actual results could differ materially from those anticipated in the forward-looking statements as a result of specific factors, including the risks described below.

We are a newly formed development stage company with no operating history and no revenues, and you have no basis on which to evaluate our ability to achieve our business objective.

        We are a recently formed development stage company with no operating results, and we will not commence operations until obtaining funding through this offering. Because we lack an operating history, you have no basis upon which to evaluate our ability to achieve our business objective of completing our initial business combination with one or more target businesses. We have no plans, arrangements or understandings with any prospective target business concerning a business combination and may be unable to complete a business combination. If we fail to complete a business combination, we will never generate any operating revenues.

We may not be able to consummate a business combination within 24 months after the date of this prospectus, in which case our corporate existence would cease and we would liquidate our assets.

        Pursuant to our amended and restated certificate of incorporation, which we intend to adopt immediately prior to the closing of this offering, we must complete our initial business combination within 24 months after the date of this prospectus. If we fail to consummate our initial business combination within such time period, our corporate existence will cease and we will liquidate and wind up. The foregoing requirements are set forth in Article IX of our amended and restated certificate of incorporation and, until the consummation of our initial business combination, may not be eliminated without the vote of our board and the vote of 100% of the shares of our outstanding voting stock cast at a meeting of the stockholders at which a quorum is present. We may not be able to find suitable target businesses within such time period. In addition, our negotiating position and our ability to conduct adequate due diligence on any potential target may be reduced as we approach the deadline for the consummation of our initial business combination.

If we liquidate before concluding our initial business combination, our public stockholders will receive less than $10.00 per share on our liquidation and our warrants will expire worthless.

        If we are unable to complete our initial business combination and must liquidate, the per-share liquidation distribution will be less than $10.00 because of the expenses of this offering, our general and administrative expenses and the anticipated costs of seeking our initial business combination. If we were unable to conclude our initial business combination and expended all of the net proceeds of this offering, other than the proceeds deposited in the trust account, and without taking into account interest, if any, earned on the trust account, net of income taxes payable on such interest and net of up to $3.0 million in interest income on the trust account balance previously released to us to fund working capital requirements, the initial per-share liquidation amount for the shares issued in this offering would be $9.81, or $0.19 less than the per-unit offering price of $10.00. Furthermore, our outstanding warrants are not entitled to participate in a liquidating distribution and the warrants will therefore expire worthless if we liquidate before completing our initial business combination.

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If we are unable to consummate our initial business combination, our public stockholders will be forced to wait, at a minimum, the full 24 months before receiving liquidation distributions.

        We have until the date that is 24 months after the date of this prospectus to consummate our initial business combination. If we do not consummate our initial business combination during such time period, we will liquidate in accordance with our amended and restated certificate of incorporation. We have no obligation to return funds to public stockholders prior to such date unless we consummate our initial business combination prior thereto and only then in cases where public stockholders have sought conversion of their shares. Only after the expiration of this full time period will public stockholders be entitled to liquidation distributions if we are unable to complete our initial business combination. Further, we may not be able to disburse the funds in our trust account immediately following the expiration of such 24-month period until we have commenced the liquidation process in accordance with our amended and restated certificate of incorporation and Delaware law. If we have not consummated our initial business combination at the expiration of the 24-month period, we will automatically liquidate and dissolve without need of a stockholder vote.

We may require stockholders who wish to convert their shares to comply with specific requirements for conversion that may make it more difficult for them to exercise their conversion rights prior to the deadline for exercising conversion rights.

        We currently intend to require public stockholders who wish to convert their shares to physically tender their stock certificates to our transfer agent prior to the stockholder meeting or to deliver their shares to the transfer agent electronically using the Depository Trust Company's DWAC (Deposit/Withdrawal At Custodian) System, although we may choose not to do so at the time of our initial business combination. In order to obtain a physical stock certificate, a stockholder's broker and/or clearing broker, DTC and our transfer agent will need to act to facilitate this request. It is our understanding that stockholders should generally allot at least two weeks to obtain physical certificates from the transfer agent. However, because we do not have any control over this process or over the brokers or DTC, it may take significantly longer than two weeks to obtain a physical stock certificate. If we elect to require physical tender and it takes longer than we anticipate to obtain a physical certificate, stockholders who wish to convert may be unable to obtain physical certificates by the deadline for exercising their conversion rights and thus will be unable to convert their shares.

You will not be entitled to protections normally afforded to investors of blank check companies.

        Since the net proceeds of this offering are intended to be used to complete an initial business combination with a target business that has not been identified, we may be deemed to be a "blank check" company under the United States securities laws. However, since our securities will be listed on the American Stock Exchange, a national securities exchange, and we will have net tangible assets in excess of $5.0 million upon the successful consummation of this offering and will file a Current Report on Form 8-K, including an audited balance sheet demonstrating this fact, we are exempt from rules promulgated by the Securities and Exchange Commission, which we refer to throughout this prospectus as the Securities and Exchange Commission, to protect investors in blank check companies, such as Rule 419. Accordingly, investors will not be afforded the benefits or protections of those rules. Among other things, this means our units will be immediately tradable and we will have a longer period of time to complete a business combination in some circumstances than do companies subject to Rule 419. Moreover, offerings subject to Rule 419 would prohibit the release of any interest earned on funds held in the trust account to us unless and until the funds in the trust account were released to us in connection with our consummation of an initial business combination. For a more detailed comparison of our offering to offerings that comply with Rule 419, please see "Proposed Business—Comparison of This Offering to Those of Blank Check Companies Subject to Rule 419."

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

        Since August 2003, based upon publicly available information as of October 28, 2007, approximately 128 similarly structured blank check companies have completed initial public offerings in the United States. Of these companies, only 36 companies have consummated a business combination, while 25 companies have announced they have entered into a definitive agreement for a business combination, but have not consummated such business combination, and seven companies have failed to complete business combinations and have either dissolved or announced their intention to dissolve and return trust proceeds to their stockholders. Accordingly, as of October 28, 2007, there were approximately 60 blank check companies with more than $7.8 billion of proceeds that are seeking initial business combinations. Furthermore, there are a number of additional offerings for blank check companies that are still in the registration process but have not completed initial public offerings and there are likely to be more blank check companies filing registration statements for initial public offerings after the date of this prospectus and prior to our completion of a business combination. While some of those companies must complete a business combination in specific industries, a number of them may consummate a business combination in any industry they choose. Therefore, we may be subject to competition from these and other companies seeking to consummate a business plan similar to ours. Because of this competition, we cannot assure you that we will be able to effectuate a business combination within the required time periods.

If the net proceeds of this offering not being held in the trust account, together with the $3.0 million of interest in the trust account which may be released to us for working capital purposes, are insufficient to allow us to operate for at least the next 24 months, we may be unable to complete our initial business combination.

        We believe that, upon closing of this offering, the funds available to us outside of the trust account, plus the interest earned on the funds held in the trust account that may be available to us, will be sufficient to allow us to operate for at least the next 24 months, assuming that our initial business combination is not consummated during that time. However, we cannot assure you that our estimate will be accurate. We could use a portion of the funds available to us to pay fees to consultants to assist us with our search for a target business. We could also use a portion of the funds as a down payment or to fund a "no-shop" provision (a provision in letters of intent designed to keep target businesses from "shopping" around for transactions with other companies on terms more favorable to such target businesses) with respect to a particular proposed business combination, although we do not have any current intention to do so. If we entered into a letter of intent where we paid for the right to receive exclusivity from a target business and were subsequently required to forfeit such funds (whether as a result of our breach or otherwise), we might not have sufficient funds to continue searching for, or conduct due diligence with respect to, a target business.

Subsequent to our consummation of our initial business combination, we may be required to subsequently take write-downs or write-offs, restructuring and impairment or other charges that could have a significant negative effect on our financial condition, results of operations and our stock price, which could cause you to lose some or all of your investment.

        Even if we conduct extensive due diligence on a target business with which we combine, we cannot assure you that this diligence will surface all material issues that may be present inside a particular target business, that it would be possible to uncover all material issues through a customary amount of due diligence, or that factors outside of the target business and outside of our control will not later arise. As a result of these factors, we may be forced to later write-down or write-off assets, restructure our operations, or incur impairment or other charges that could result in our reporting losses. Even if our due diligence successfully identifies certain risks, unexpected risks may arise and previously known risks may materialize in a manner not consistent with our preliminary risk analysis. Even though these

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charges may be non-cash items and not have an immediate impact on our liquidity, the fact that we report charges of this nature could contribute to negative market perceptions about us or our securities. In addition, charges of this nature may cause us to violate net worth or other covenants to which we may be subject as a result of assuming pre-existing debt held by a target business or by virtue of our obtaining post-combination debt financing.

A decline in interest rates could limit the amount available to fund our search for a target business or businesses and complete our initial business combination since we will depend on interest earned on the trust account to fund our search, to pay our taxes and to complete our initial business combination.

        Of the net proceeds of this offering, only $200,000 will be available to us initially outside the trust account to fund our working capital requirements. We will depend on sufficient interest being earned on the proceeds held in the trust account to provide us with up to $3.0 million of additional working capital we may need to identify one or more target businesses and to complete our initial business combination, as well as to pay any taxes that we may owe. A substantial decline in interest rates may result in our having insufficient funds available with which to structure, negotiate or close our initial business combination. In such event, we would need to borrow funds from our sponsor or management team to operate or may be forced to liquidate. Neither our sponsor nor our management team is under any obligation to advance funds in such circumstances.

If third parties bring claims against us, the proceeds held in the trust account could be reduced and the per-share liquidation price received by stockholders may be less than approximately $9.81 per share.

        Our placing of funds in the trust account may not protect those funds from third party claims against us. Although we will seek to have all vendors, prospective target businesses and other entities with which we do business execute agreements waiving any right, title, interest or claim of any kind in or to any monies held in the trust account, there is no guarantee that they will execute such agreements, and the execution of such an agreement is not a condition to our doing business with anyone. Even if they do execute such agreements, they would not be prevented from bringing claims against the trust account. There is also no guarantee that a court would uphold the validity of such waivers and, if a court failed to uphold the validity of such waivers, we would not be indemnified by Mr. Hicks.

        Mr. Hicks, our founder, chairman of the board and chief executive officer, has agreed that he will be liable to us if and to the extent any claims by a third party for services rendered or products sold, or by a prospective target business, reduce the amounts in the trust account, except as to (i) any claims by a third party who executed a waiver (even if such waiver is subsequently found to be invalid and unenforceable) of any and all rights to seek access to the trust funds and (ii) any claims under our indemnity of the underwriters of this offering against certain liabilities, including liabilities under the Securities Act. Based on representations made to us by Mr. Hicks, we currently believe that Mr. Hicks is of substantial means and capable of funding his indemnity obligations, even though we have not asked him to reserve funds for such an eventuality. However, we cannot assure you that Mr. Hicks will be able to satisfy those obligations. Accordingly, the proceeds held in the trust account could be subject to claims which could take priority over those of our public stockholders and, as a result, the per-share liquidation amount would be less than $10.00 due to claims of such creditors.

        Additionally, if we are forced to file a bankruptcy case or an involuntary bankruptcy case is filed against us which is not dismissed, the proceeds held in the trust account could be subject to applicable bankruptcy law, and may be included in our bankruptcy estate and subject to the claims of third parties with priority over the claims of our stockholders. To the extent any bankruptcy claims deplete the trust account, we cannot assure you we will be able to return to our public stockholders the liquidation amounts described in this prospectus.

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If we are deemed to be an investment company under the Investment Company Act, we may be required to institute burdensome compliance requirements and our activities may be restricted, which may make it difficult for us to complete a business combination.

        If we are deemed to be an investment company under the Investment Company Act of 1940, as amended, our activities may be restricted, including:

•

restrictions on the nature of our investments; and



•

restrictions on the issuance of securities,

each of which may make it difficult for us to complete a business combination.

        In addition, we may have imposed upon us burdensome requirements, including:

•

registration as an investment company;



•

adoption of a specific form of corporate structure; and



•

reporting, record keeping, voting, proxy and disclosure requirements and other rules and regulations.

        We do not believe that our anticipated principal activities will subject us to the U.S. Investment Company Act. The proceeds held in the trust account may be invested by the trustee only in U.S. government treasury bills with a maturity of 180 days or less or in money market funds meeting certain conditions under Rule 2a-7 under the Investment Company Act. Because the investment of the proceeds will be restricted to these instruments, we believe we will meet the requirements for the exemption provided in Rule 3a-1 promulgated under the Investment Company Act. If we were deemed to be subject to the Investment Company Act, compliance with these additional regulatory burdens would require additional expenses for which we have not allotted.

Our stockholders may be held liable for claims by third parties against us to the extent of distributions received by them.

        Under Sections 280 through 282 of the Delaware General Corporation Law, stockholders may be held liable for claims by third parties against a corporation to the extent of distributions received by them in a dissolution conducted in accordance with the Delaware General Corporation Law. If the corporation complies with certain procedures set forth in Section 280 of the Delaware General Corporation Law intended to ensure that it makes reasonable provision for all claims against it, including a 60-day notice period during which any third-party claims can be brought against the corporation, a 90-day period during which the corporation may reject any claims brought, and an additional 150-day waiting period before any liquidating distributions are made to stockholders, any liability of stockholders with respect to a liquidating distribution is limited to the lesser of such stockholder's pro rata share of the claim or the amount distributed to the stockholder, and any liability of the stockholder would be barred after the third anniversary of the dissolution. However, it is our intention to make liquidating distributions to our stockholders as soon as reasonably possible after we liquidate; therefore, we do not intend to comply with those procedures.

        Because we will not be complying with those procedures, we are required, pursuant to Section 281(b) of the Delaware General Corporation Law, to adopt a plan of distribution that will reasonably provide for our payment, based on facts known to us at such time, of (i) all existing claims including those that are contingent, (ii) all pending proceedings to which we are a party and (iii) all claims that may be potentially brought against us within the subsequent 10 years. Accordingly, we would be required to provide for any creditors known to us at that time or those that we believe could be potentially brought against us within the subsequent 10 years prior to distributing the funds held in the trust to stockholders. However, because we are a blank check company, rather than an operating company, and our operations will be limited to searching for prospective target businesses to acquire,

24

the most likely claims, if any, to arise would be from our vendors that we engage after the closing of this offering (such as accountants, lawyers, investment bankers, etc.) and potential target businesses. If our plan of distribution complies with Section 281(b) of the Delaware General Corporation Law, any liability of stockholders with respect to a liquidating distribution is limited to the lesser of such stockholder's pro rata share or the amount distributed to the stockholder. We cannot assure you that we will properly assess all claims that may be potentially brought against us. As such, our stockholders could potentially be liable for any claims to the extent of distributions received by them (but no more) and any liability of our stockholders may extend well beyond the third anniversary of the date of distribution. Accordingly, we cannot assure you that third parties will not seek to recover from our stockholders amounts owed to them by us.

        If we are forced to file a bankruptcy case or an involuntary bankruptcy case is filed against us which is not dismissed, any distributions received by stockholders could be viewed under applicable debtor/creditor and/or bankruptcy laws as either a "preferential transfer" or a "fraudulent conveyance." As a result, a bankruptcy court could seek to recover all amounts received by our stockholders. Furthermore, because we intend to distribute the then-remaining proceeds held in the trust account to our public stockholders promptly after our liquidation in the event our initial business combination has not been consummated within 24 months, such distributions may be viewed or interpreted as giving preference to our public stockholders over any potential creditors with respect to access to or distributions from our assets. Also, our board of directors may be viewed as having breached its fiduciary duties to our creditors and/or acting in bad faith by paying public stockholders from the trust account prior to addressing the claims of creditors, which may expose the board and our company to claims of punitive damages. We cannot assure you that claims will not be brought against us for these reasons.

We are not registering the shares of common stock issuable upon exercise of the warrants at this time. Although we have agreed to file a registration statement registering such shares prior to the time the warrants become exercisable, an effective registration statement may not be in place when an investor desires to exercise warrants, thus precluding such investor from being able to exercise his, her or its warrants and causing such warrants to expire worthless.

        No warrant held by public stockholders will be exercisable and we will not be obligated to issue shares of common stock unless, at the time such holder seeks to exercise such warrant, we have a registration statement under the Securities Act in effect covering the shares of common stock issuable upon the exercise of the warrants and a current prospectus relating to the common stock or the common stock issuable upon exercise is deemed to be exempt from registration under the Securities Act. Under the terms of the warrant agreement, we have agreed to use our best efforts to file and have a registration statement in effect covering shares of common stock issuable upon exercise of the warrants from the date the warrants became exercisable and to maintain a current prospectus relating to the common stock issuable upon exercise of the warrants until the expiration of the warrants. However, we cannot assure you that we will be able to do so, and if we do not maintain a current prospectus related to the common stock issuable upon exercise of the warrants, and the common stock is not exempt from registration, holders will be unable to exercise their warrants and we will not be required to settle any such warrant exercise, whether by net cash settlement or otherwise. If the prospectus relating to the common stock issuable upon the exercise of the warrants is not current, the warrants held by public stockholders may have no value, we will have no obligation to settle the warrants for cash, the market for such warrants may be limited, such warrants may expire worthless and, as a result, an investor may have paid the full unit price solely for the shares of common stock included in the units.

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An investor will only be able to exercise a warrant if the issuance of common stock upon such exercise has been registered or qualified or is deemed exempt under the securities laws of the state of residence of the holder of the warrants.

        No warrants will be exercisable and we will not be obligated to issue shares of common stock unless the common stock issuable upon such exercise has been registered or qualified or deemed to be exempt under the securities laws of the state of residence of the holder of the warrants. Because the exemptions from qualification in certain states for resales of warrants and for issuances of common stock by the issuer upon exercise of a warrant may be different, a warrant may be held by a holder in a state where an exemption is not available for issuance of common stock upon an exercise and the holder will be precluded from exercise of the warrant. At the time that the warrants become exercisable (following the later of our completion of an initial business combination or 12 months from the date of this prospectus), we expect to either continue to be listed on a national securities exchange, which would provide an exemption from registration in every state, or we would register the warrants in every state (or seek another exemption from registration in such states). Accordingly, we believe holders in every state will be able to exercise their warrants as long as our prospectus relating to the common stock issuable upon exercise of the warrants is current. However, we cannot assure you of this fact. As a result, the warrants may be deprived of any value, the market for the warrants may be limited and the holders of warrants may not be able to exercise their warrants and they may expire worthless if the common stock issuable upon such exercise is not qualified or exempt from qualification in the jurisdictions in which the holders of the warrants reside.

Since we have not yet selected a target business with which to complete our initial business combination, you will be unable to currently ascertain the merits or risks of the business' operations.

        Because we have not yet identified a prospective target business, investors in this offering currently have no basis to evaluate the possible merits or risks of the target business' operations. To the extent we complete a business combination with a financially unstable company or an entity in its development stage, we may be affected by numerous risks inherent in the business operations of such entities. Although our management will evaluate the risks inherent in a particular target business, we cannot assure you that they will properly ascertain or assess all of the significant risk factors. We also cannot assure you that an investment in our units will ultimately prove to be more favorable to investors than a direct investment, if such opportunity were available, in a target business. Except for the limitation that a target business have a fair market value of at least 80% of the balance in the trust account (excluding deferred underwriting discounts and commissions) and that we will focus on a business combination in the media and entertainment sector, we will have virtually unrestricted flexibility in identifying and selecting a prospective business combination candidate.

Your only opportunity to evaluate and affect the investment decision regarding a potential initial business combination will be limited to voting for or against our initial business combination submitted to our stockholders for approval.

        At the time of your investment in us, you will not be provided with an opportunity to evaluate the specific merits or risks of one or more target businesses. Accordingly, your only opportunity to evaluate and affect the investment decision regarding a potential initial business combination will be limited to voting for or against our initial business combination submitted to our stockholders for approval. In addition, a proposal that you vote against could still be approved if a sufficient number of stockholders vote for the proposed initial business combination. Alternatively, a proposal that you vote for could still be rejected, even if approved by the affirmative vote of a majority of our outstanding common stock, if holders owning more than up to 30% (minus one share) of our outstanding shares of common stock sold in this offering elect to exercise their conversion rights.

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We may not obtain an opinion from an unaffiliated third party as to the fair market value of acquisition candidates or the fairness of the transaction to our stockholders.

        We are not required to obtain an opinion from an unaffiliated third party that the price we are paying is fair to our public stockholders. In addition, we are not required to obtain an opinion from an unaffiliated third party that any initial business combination we select has a fair market value of at least 80% of the initial amount held in the trust account (less deferred underwriting commissions), the threshold value to constitute our initial business combination.

        If our board of directors is not able to independently determine the fair market value of our initial business combination, we will obtain an opinion from an unaffiliated, independent investment banking firm which is subject to oversight by the Financial Industry Regulatory Authority ("FINRA") as to the fair market value. The willingness of an investment banking firm to provide for such reliance by the stockholders acquiring units in this offering would be a factor considered by us in selecting an independent investment banking firm. If no opinion is obtained, our public stockholders will be relying solely on the judgment of our board of directors.

We may issue additional common or preferred shares to complete our initial business combination or under an employee incentive plan after consummation of our initial business combination, which would dilute the interest of our stockholders and likely present other risks.

        Our amended and restated certificate of incorporation authorizes the issuance of up to 100,000,000 shares of common stock, par value $0.0001 per share, and 1,000,000 shares of preferred stock, par value $0.0001 per share. Immediately after this offering, there will be 75,000,000 (assuming that the underwriters have not exercised their over-allotment option) authorized but unissued shares of common stock available for issuance. We may issue a substantial number of additional shares of common or preferred stock to complete our initial business combination or under an employee incentive plan after consummation of our initial business combination. The issuance of additional shares of common or preferred stock:

•

may significantly dilute the equity interest of investors in this offering;



•

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



•

could cause a change in control if a substantial number of common stock is issued, which may affect, among other things, our ability to use our net operating loss carry forwards, if any, and could result in the resignation or removal of our present officers and directors; and



•

may adversely affect prevailing market prices for our common stock and/or warrants.

Resources could be wasted in researching acquisitions that are not consummated, which could materially adversely affect subsequent attempts to locate and acquire or merge with another business.

        It is anticipated that the investigation of each specific target business and the negotiation, drafting, and execution of relevant agreements, disclosure documents, and other instruments will require substantial management time and attention and substantial costs for accountants, attorneys and others. If a decision is made not to complete a specific initial business combination, the costs incurred up to that point for the proposed transaction likely would not be recoverable. Furthermore, even if an agreement is reached relating to a specific target business, we may fail to consummate our initial business combination for any number of reasons including those beyond our control, such as if a majority of our stockholders do not approve an amendment to our amended and restated certificate of incorporation to provide for our perpetual existence or the number of our public stockholders that vote against the business combination and opt to have us repurchase their stock represent more than 30% (minus one share) of our outstanding shares of common stock sold in this offering, even if holders of a majority of votes cast by our public stockholders at a duly held stockholders meeting approve the

27

business combination. Any such event will result in a loss to us of the related costs incurred which could materially adversely affect subsequent attempts to locate and acquire or merge with another business.

We are dependent upon Mr. Hicks and Mr. Cullen and our loss of their services could adversely affect our ability to operate.

        Our operations are dependent upon a relatively small group of individuals and, in particular, upon our founder, chairman of the board and chief executive officer, Mr. Hicks and our president, Mr. Cullen. We believe that our success depends on the continued service of Mr. Hicks and Mr. Cullen, at least until we have consummated a business combination. In addition, Mr. Hicks and Mr. Cullen are not required to commit any specified amount of time to our affairs and, accordingly, will have conflicts of interest in allocating management time among various business activities, including identifying potential business combinations and monitoring the related due diligence. We do not have an employment agreement with, or key-man insurance on the life of, Mr. Hicks or Mr. Cullen. The unexpected loss of the services of either Mr. Hicks or Mr. Cullen could have a detrimental effect on us.

Our ability to successfully effect our initial business combination and to be successful thereafter will be totally dependent upon the efforts of our key personnel, some of whom may join us following our initial business combination.

        Our ability to successfully effect our initial business combination is dependent upon the efforts of our key personnel. The role of our key personnel in the target business, however, cannot presently be ascertained. Although some of our key personnel may remain with the target business in senior management or advisory positions following a business combination, it is likely that some or all of the management of the target business will remain in place. While we intend to closely scrutinize any individuals we engage after a business combination, we cannot assure you that our assessment of these individuals will prove to be correct. These individuals may be unfamiliar with the requirements of operating a company regulated by the Securities and Exchange Commission, which could cause us to have to expend time and resources helping them become familiar with such requirements. This could be expensive and time-consuming and could lead to various regulatory issues which may adversely affect our operations.

Our key personnel may negotiate employment or consulting agreements with a target business in connection with a particular business combination. These agreements may provide for them to receive compensation following a business combination and as a result, may cause them to have conflicts of interest in determining whether a particular business combination is the most advantageous.

        Our key personnel may be able to remain with the company after the consummation of a business combination only if they are able to negotiate employment or consulting agreements in connection with the business combination. Such negotiations would take place simultaneously with the negotiation of the business combination and could provide for such individuals to receive compensation in the form of cash payments and/or our securities for services they would render to the company after the consummation of the business combination. The personal and financial interests of such individuals may influence their motivation in identifying and selecting a target business. However, we believe the ability of such individuals to remain with the company after the consummation of a business combination will not be the determining factor in our decision as to whether or not we will proceed with any potential business combination. There is no certainty, however, that any of our key personnel will remain with the combined company after the consummation of a business combination. We cannot assure you that any of our key personnel will remain in senior management or advisory positions with the combined company. The determination as to whether any of our key personnel will remain with the combined company will be made at the time of our initial business combination.

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The officers and directors of an acquisition candidate may resign upon consummation of a business combination.

        The role of an acquisition candidate's key personnel upon the consummation of a business combination cannot be ascertained at this time. Although we contemplate that certain members of an acquisition candidate's management team will remain associated with the acquisition candidate following a business combination, it is possible that members of the management of an acquisition candidate will not wish to remain in place.

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

        Our officers and directors are not required to commit their full time to our affairs, which could create a conflict of interest when allocating their time between our operations and their other commitments. We do not intend to have any full time employees prior to the consummation of a business combination. All of our executive officers are engaged in several other business endeavors and are not obligated to devote any specific number of hours to our affairs. If our officers' and directors' other business affairs require them to devote more substantial amounts of time to such affairs, it could limit their ability to devote time to our affairs and could have a negative impact on our ability to consummate a business combination. We cannot assure you that these conflicts will be resolved in our favor.

Certain of our officers and directors are now, and all of them may in the future become, affiliated with entities engaged in business activities similar to those intended to be conducted by us and, accordingly, may have conflicts of interest in allocating their time and determining to which entity a particular business opportunity should be presented.

        Certain of our officers and directors are now, and all of them may in the future become, affiliated with entities, engaged in business activities similar to those intended to be conducted by us. In the event that any of our officers becomes aware of a business combination opportunity that falls within the line of business of any entity to which he or she has pre-existing fiduciary or contractual obligations, he or she may be required to present such business combination opportunity to such entity prior to presenting such business combination opportunity to us.

        Each of R. Steven Hicks, our founder, chairman and chief executive officer; John D. Cullen, our president and one of our directors; Kimberly K. Shipman, our chief financial officer; Christopher S. Harrison, one of our vice presidents; Benjamin M. Hanson, one of our vice presidents and our secretary and Robert S. Hicks, one of our vice presidents, is an officer, member or partner of Capstar Partners, LLC, a private investment firm, DMX, Inc., a controlled subsidiary of Capstar Partners, LLC and a company engaged in the provision of business media services, including video, music and scent technologies, or Andrew Harper, Inc., a controlled subsidiary of Capstar Partners, LLC and a high-end travel publishing and services firm. In order to minimize potential conflicts of interest which may arise from multiple corporate affiliations, each of our officers has agreed, pursuant to a written agreement with us, that until the earliest of our initial business combination, our liquidation or such time as he or she ceases to be an officer, to present to us for our consideration, prior to presentation to any other entity, any business opportunity with a fair market value of $160 million or more, except to the extent that an existing fiduciary or contractual obligation to which such officer is subject restricts such presentation. As more fully discussed in "Management—Conflicts of Interest" on page 80, in the event that any of our officers becomes aware of a business combination opportunity that falls within the line of business of any entity to which he or she has such a fiduciary or contractual obligation, he or she may be required to present such business combination opportunity to such entity prior to presenting such business combination opportunity to us.

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        Our officers may become involved with subsequent blank check companies similar to our company, although they have agreed not to participate in the formation of, or become an officer or director of, any blank check company that is focused on effecting a business combination with a company in the media and entertainment industry until we have entered into a definitive agreement regarding our initial business combination or we have failed to complete our initial business combination within 24 months after the date of this prospectus. As discussed above, our officers may become aware of business opportunities which may be appropriate for presentation to us and the other entities to which they owe certain fiduciary duties. Accordingly, they may have conflicts of interest in determining to which entity a particular business opportunity should be presented. We cannot assure you that these conflicts will be resolved in our favor or that a potential target business would not be presented to another entity prior to its presentation to us.

Certain of our officers and directors own shares of our common stock issued prior to this offering and some of them will own warrants following this offering. These shares and warrants will not participate in liquidation distributions if our initial business combination is not consummated and, therefore, our officers and directors may have a conflict of interest in determining whether a particular target business is appropriate for our initial business combination.

        Our sponsor and certain of our directors own shares of our common stock issued prior to this offering. On October 25, 2007 our sponsor, Capstar Acquisition Management, LP, whose general partner is Capstar Acquisition Management GP, LLC, of which R. Steven Hicks, our founder, chairman of the board, and chief executive officer, is the sole member, purchased an aggregate of 5,750,000 shares of founders' common stock for a purchase price of $25,000, or $0.004 per share. On [            ], 2007, our sponsor transferred an aggregate of 86,250 shares of founders' common stock to James R. Huffines, Frederick G. Kraegel and Timothy J. Lindgren, each of whom has agreed to serve on our board of directors upon the closing of this offering. In addition, our sponsor has committed to purchase 5,000,000 sponsors' warrants simultaneously in connection with this offering. Such individuals and individuals on behalf of such entity have waived their rights to receive distributions with respect to the founders' common stock and sponsors' warrants upon our liquidation if we are unable to consummate a business combination. Accordingly, the founders' common stock and the sponsors' warrants will be worthless if we do not consummate our initial business combination within 24 months after the date of this prospectus resulting in potentially significant losses for our initial stockholders. Furthermore, the $5.0 million purchase price of the sponsors' warrants will be held in the trust account and will be distributed to our public stockholders in the event of our liquidation.

        The personal and financial interests of our directors and officers may influence their motivation in timely identifying and selecting a target business and completing a business combination. Consequently, our initial stockholders' desire to avoid rendering their securities worthless and our directors' and officers' discretion in identifying and selecting a suitable target business may result in a conflict of interest when determining whether the terms, conditions and timing of a particular business combination are appropriate and in our stockholders' best interest and the conflict of interest will increase as we approach the 24^th month following the consummation of this offering and we have not consummated a business combination.

The American Stock Exchange may delist our securities from quotation on its exchange which could limit investors' ability to make transactions in our securities and subject us to additional trading restrictions.

        We anticipate that our securities will be listed on the American Stock Exchange, a national securities exchange, upon consummation of this offering. Although after giving effect to this offering we expect to meet the minimum initial listing standards set forth in Section 101(c) of the American Stock Exchange Company Guide, which only requires that we meet certain requirements relating to stockholders' equity, market capitalization, aggregate market value of publicly held shares and

30

distribution requirements, but we cannot assure you that our securities will continue to be listed on the American Stock Exchange in the future prior to an initial business combination. Additionally, in connection with our initial business combination, it is likely that the American Stock Exchange will require us to file a new initial listing application and meet its initial listing requirements as opposed to its more lenient continued listing requirements. We cannot assure you that we will be able to meet those initial listing requirements at that time.

        If the American Stock Exchange delists our securities from trading on its exchange, we could face significant material adverse consequences, including:

•

a limited availability of market quotations for our securities;



•

a determination that our common stock is a "penny stock" which will require brokers trading in our common stock to adhere to more stringent rules, possibly resulting in a reduced level of trading activity in the secondary trading market for our common stock;



•

a limited amount of news and analyst coverage for our company; and



•

a decreased ability to issue additional securities or obtain additional financing in the future.

We may only be able to complete one business combination with the proceeds of this offering, which will cause us to be solely dependent on a single business which may have a limited number of products or services.

        Our initial business combination must be with a target business having a fair market value of at least 80% of the balance in the trust account (excluding deferred underwriting discounts and commissions) at the time of such acquisition, although this may entail the simultaneous acquisitions of several businesses or assets at the same time. However, we may not be able to acquire more than one target business because of various factors, including the existence of complex accounting issues and the requirement that we prepare and file pro forma financial statements with the Securities and Exchange Commission that present operating results and the financial condition of several target businesses as if they had been operated on a combined basis. By consummating an initial business combination with only a single entity, our lack of diversification may subject us to numerous economic, competitive and regulatory developments. Further, we would not be able to diversify our operations or benefit from the possible spreading of risks or offsetting of losses, unlike other entities which may have the resources to complete several business combinations in different industries or different areas of a single industry. Accordingly, the prospects for our success may be:

•

solely dependent upon the performance of a single business, or



•

dependent upon the development or market acceptance of a single or limited number of products, processes or services.

        This lack of diversification may subject us to numerous economic, competitive and regulatory developments, any or all of which may have a substantial adverse impact upon the particular industry in which we may operate subsequent to our initial business combination.

        Alternatively, if we determine to simultaneously acquire several businesses or assets, which are owned by different sellers, we will need for each of such sellers to agree that our purchase of its business is contingent on the simultaneous closings of the other business combinations, which may make it more difficult for us, and delay our ability, to complete our initial business combination. With multiple business combinations, we could also face additional risks, including additional burdens and costs with respect to possible multiple negotiations and due diligence investigations (if there are multiple sellers) and the additional risks associated with the subsequent assimilation of the operations and services or products of the acquired companies in a single operating business. If we are unable to adequately address these risks, it could negatively impact our profitability and results of operations. We

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may seek to effect our initial business combination with one or more privately held companies, which may present certain challenges to us including the lack of available information about these companies.

        In pursuing our acquisition strategy, we may seek to effect our initial business combination with a privately held company. By definition, very little public information exists about private companies, and we could be required to make our decision on whether to pursue a potential initial business combination on the basis of limited information.

We may be dependent on a single business or asset that is likely to operate in a non-diverse industry or segment and which may have a limited number of products or services.

        The prospects for our success may be solely dependent upon the performance of a single business, property or asset that we acquire through our initial business combination. In this case, we will not be able to diversify our operations or benefit from the possible spreading of risks or offsetting of losses, unlike other entities which may have the resources to complete several business combinations in different industries or different areas of a single industry.

The ability of our public stockholders to exercise their conversion rights may not allow us to consummate a desirable initial business combination or optimize our capital structure.

        When we seek the approval of our public stockholders for our initial business combination, each public stockholder will have the right to elect to convert its shares for cash if such public stockholder votes against our initial business combination and our initial business combination is approved and completed and the public stockholder holds its shares through the closing of our initial business combination. Such holder must both vote against such business combination and elect to convert its shares by notifying us of such election to convert at the appropriate time, as described in the proxy materials. We will be permitted to proceed with our initial business combination if we are able to confirm that we have sufficient funds to pay the consideration to close the business combination plus all sums due to our public stockholders who vote against the business combination and duly exercise their right to elect to convert their shares for cash. Therefore, we may not be able to consummate an initial business combination that requires us to use all of the funds held in the trust account as part of the purchase price, or we may be required to incur an amount of leverage that is not optimal for our business combination. In addition, we will not consummate an initial business combination if holders of more than 30% (minus one share) of our outstanding shares of common stock purchased in this offering exercise their conversion rights. These restrictions may limit our ability to consummate the most attractive business combinations available to us.

We may proceed with an initial business combination even if public stockholders owning up to 30% (minus one share) of the shares sold in this offering exercise their conversion rights. This requirement may make it easier for us to have an initial business combination approved over stockholder dissent.

        We may proceed with an initial business combination as long as public stockholders owning no more than 30% (minus one share) of the shares sold in this offering both vote against the business combination and exercise their conversion rights. Accordingly, public stockholders holding up to 5,999,999 shares of our common stock (or 6,899,999 shares of our common stock if the over-allotment option is exercised in full) may both vote against the business combination and exercise their conversion rights and we could still consummate a proposed business combination. We have set the conversion percentage at 30% (minus one share) in order to reduce the likelihood that a small group of investors holding a block of our stock will be able to stop us from completing a business combination that is otherwise approved by a large majority of our public stockholders. However, this may have the effect of making it easier for us to have a business combination approved over stockholder dissent than other blank check companies. While there are some other offerings similar to ours which include conversion provisions greater than 30%, the 30% threshold is common for offerings

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similar to ours. Because we permit a larger number of stockholders to exercise their conversion rights, it may be easier for us to obtain stockholder approval of an initial business combination than other blank check companies. After the announcement of our initial business combination, our initial stockholders, officers or directors may purchase our common stock from holders who submit proxies against, or who announce their intention to submit proxies against, our initial business combination. Thus, any additional purchases of our common stock by our initial stockholders, officers or directors would likely allow them to exert additional influence over the approval of our initial business combination.

        Our initial business combination may require us to use substantially all of our cash to pay the purchase price. In such case, because we will not know how many stockholders may exercise such conversion rights, we may need to arrange third party financing to help fund our initial business combination in case a larger percentage of stockholders exercise their conversion rights than we expect. Additionally, even if our business combination does not require us to use substantially all of our cash to pay the purchase price, if a significant number of stockholders exercise their conversion rights, we will have less cash available to use in furthering our business plans following a business combination and may need to arrange third party financing. We have not taken any steps to secure third party financing for either situation. We cannot assure you that we will be able to obtain such third party financing on terms favorable to us or at all.

Because of our limited resources and structure, we may not be able to consummate an attractive initial business combination.

        We expect to encounter intense competition from entities in addition to blank check companies having a business objective similar to ours, including venture capital funds, leveraged buyout funds and operating businesses competing for acquisitions. Many of these entities are well established and have extensive experience in identifying and effecting business combinations directly or through affiliates. Many of these competitors possess greater technical, human and other resources than we do and our financial resources will be relatively limited when contrasted with those of many of these competitors. While we believe that there are numerous potential target businesses that we could acquire with the net proceeds of this offering, our ability to compete in acquiring certain sizable target businesses will be limited by our available financial resources. This inherent competitive limitation gives others an advantage in pursuing the acquisition of certain target businesses. Furthermore, the obligation we have to seek stockholder approval of our initial business combination may delay the consummation of a transaction. Additionally, our outstanding warrants, and the future dilution they potentially represent, may not be viewed favorably by certain target businesses. Any of these obligations may place us at a competitive disadvantage in successfully negotiating a business combination. Because, as of October 28, 2007, only 61 of the 128 blank check companies that have gone public in the United States since August 2003 have either consummated a business combination or entered into a definitive agreement for a business combination and seven companies have failed to complete business combinations and have either dissolved or announced their intention to dissolve and return trust proceeds to their stockholders, it may indicate that there are fewer attractive target businesses available to such entities like our company or that many privately held target businesses are not inclined to enter into these types of transactions with publicly held blank check companies like ours. If we are unable to consummate our initial business combination with a target business within 24 months after the date of this prospectus, we will be forced to liquidate.

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

        Although we believe that the net proceeds of this offering, including the interest earned on the proceeds held in the trust account that may be available to us for a business combination, will be sufficient to allow us to consummate our initial business combination, because we have not yet identified any prospective target business we cannot ascertain the capital requirements for any particular transaction. If the net proceeds of this offering prove to be insufficient, either because of the size of our initial business combination, the depletion of the available net proceeds in search of a target business, or the obligation to repurchase for cash a significant number of shares from stockholders who elect conversion in connection with our initial business combination, we will be required to seek additional financing. We cannot assure you that such financing will be available on acceptable terms, if at all. To the extent that additional financing proves to be unavailable when needed to consummate our initial business combination, we would be compelled to either restructure the transaction or abandon that particular initial business combination and seek an alternative target business candidate. Even if we do not need additional financing to consummate our initial business combination we may require such financing to fund the operations or growth of the target business. The failure to secure additional financing could have a material adverse effect on the continued development or growth of the target business. None of our officers, directors or stockholders is required to provide any financing to us in connection with or after a business combination.

Our initial stockholders control a substantial interest in us and thus may influence certain actions requiring a stockholder vote.

        Upon closing of this offering, our initial stockholder will own collectively 20% of our issued and outstanding shares of common stock (assuming it does not purchase any units in this offering). Our board of directors is and will be divided into three classes, each of which will generally serve for a term of three years with only one class of directors being elected in each year. It is unlikely that there will be an annual meeting of stockholders to elect new directors prior to the consummation of a business combination, in which case all of the current directors will continue in office until at least the consummation of the business combination. If there is an annual meeting, as a consequence of our "staggered" board of directors, only a minority of the board of directors will be considered for election and our sponsor, because of its ownership position, will have considerable influence regarding the outcome. Accordingly, our sponsor will continue to exert control at least until the consummation of our initial business combination.

Our initial stockholders paid us an aggregate of $25,000, or approximately $0.004 per share of founders' common stock (assuming no exercise of the underwriters' over-allotment option and the resulting forfeiture of 750,000 shares of founders' common stock) and, accordingly, you will experience immediate and substantial dilution from the purchase of our common stock.

        The difference between the public offering price per share (allocating all of the stock purchase price to the common stock and none to the warrant included in the unit) and the pro forma net tangible book value per share of our common stock after this offering constitutes the dilution to you and the other investors in this offering. Our initial stockholders acquired the founders' common stock at a nominal price, significantly contributing to this dilution. Upon closing of this offering, and assuming no value is ascribed to the warrants included in the units, you and the other public stockholders will incur an immediate and substantial dilution of approximately 30.8% or $3.08 per share (the difference between the pro forma net tangible book value per share of $6.92, and the initial offering price of $10.00 per unit).

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We may redeem your unexpired warrants prior to their exercise at a time that is disadvantageous to you, thereby making your warrants worthless.

        We have the ability to redeem outstanding warrants at any time after they become exercisable and prior to their expiration, at a price of $0.01 per warrant, provided that the last reported sales price of the common stock equals or exceeds $13.50 per share for any 20 trading days within a 30 trading-day period ending on the third business day prior to proper notice of such redemption provided that on the date we give notice of redemption and during the entire period thereafter until the time we redeem the warrants, we have an effective registration statement under the Securities Act covering the shares of common stock issuable upon exercise of the warrants and a current prospectus relating to them is available. Redemption of the outstanding warrants could force you (i) to exercise your warrants and pay the exercise price therefor at a time when it may be disadvantageous for you to do so, (ii) to sell your warrants at the then current market price when you might otherwise wish to hold your warrants or (iii) to accept the nominal redemption price which, at the time the outstanding warrants are called for redemption, is likely to be substantially less than the market value of your warrants. None of the sponsor warrants will be redeemable by us so long as they are held by the sponsor or its permitted transferees.

Our outstanding warrants may have an adverse effect on the market price of our common stock and make it more difficult to effect a business combination.

        We will be issuing warrants to purchase 20,000,000 shares of our common stock (or up to 23,000,000 shares of common stock if the underwriters' over-allotment option is exercised) as part of the units offered by this prospectus and, simultaneously with the closing of this offering, we will be issuing in a private placement sponsor warrants to purchase 5,000,000 shares of common stock. The sponsor warrants are identical to the warrants sold as part of the units in this offering except that (i) they will not be redeemable by us so long as they are held by, as applicable, our initial stockholders, our sponsor or their permitted transferees, (ii) they (including the common stock issuable upon exercise of these warrants) may not, subject to certain limited exceptions, be transferred, assigned or sold by the sponsor until 30 days after the completion of our initial business combination and (iii) may be exercised by the holders on a cashless basis.

The determination of the offering price of our units and the size of this offering is more arbitrary than the pricing of securities and size of an offering of an operating company in a particular industry and therefore may not accurately reflect the value of your investment.

        Prior to this offering there has been no public market for any of our securities. The public offering price of the units and the terms of the warrants were negotiated between us and the underwriters. In determining the size of this offering, management held customary organizational meetings with representatives of the underwriters, both prior to our inception and thereafter, with respect to the state of capital markets, generally, and the amount the representatives believed they reasonably could raise on our behalf. Factors considered in determining the size of this offering, prices and terms of the units, including the common stock and warrants underlying the units, include:

•

the history and prospects of companies whose principal business is the acquisition of other companies;



•

prior offerings of those companies;



•

our prospects for acquiring an operating business at attractive values;



•

a review of debt to equity ratios in leveraged transactions;



•

our capital structure;

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•

an assessment of our management and their experience in identifying operating companies;



•

general conditions of the securities markets at the time of this offering; and



•

other factors as were deemed relevant.

        However, although these factors were considered, the determination of our offering price is more arbitrary than the pricing of securities of an operating company in a particular industry since we have no historical operations or financial results. As a result, the offering price of our units may not accurately reflect the value of your investment in our securities.

There is currently no market for our securities and a market for our securities may not develop, which would adversely affect the liquidity and price of our securities.

        There is currently no market for our securities. Stockholders therefore have no access to information about prior market history on which to base their investment decision. Following this offering, the price of our securities may vary significantly due to our reports of operating losses, one or more potential business combinations and general market or economic conditions. Furthermore, an active trading market for our securities may never develop or, if developed, it may not be sustained. You may be unable to sell your securities unless a market can be established and sustained. Moreover, if the closing of the offering does not occur the offering will be withdrawn, all subscriptions for the units will be disregarded, any allotments made will be deemed not to have been made and any subscription payments made will be annulled.

Because we must furnish our stockholders with target business financial statements, we may not be able to complete an initial business combination with some prospective target businesses.

        We will provide stockholders with audited financial statements of the prospective target business as part of the proxy solicitation materials sent to stockholders to assist them in assessing the target business. In all likelihood, these financial statements will need to be prepared in accordance with United States generally accepted accounting principles. We cannot assure you that any particular target business identified by us as a potential acquisition candidate will have financial statements prepared in accordance with United States generally accepted accounting principles or that the potential target business will be able to prepare its financial statements in accordance with United States generally accepted accounting principles. To the extent that this requirement cannot be met, we may not be able to acquire the proposed target business. These financial statement requirements may limit the pool of potential target businesses with which we may combine.

Compliance with the Sarbanes-Oxley Act of 2002 will require substantial financial and management resources and may increase the time and costs of completing an acquisition.

        Section 404 of the Sarbanes-Oxley Act of 2002 requires that we evaluate and report on our system of internal controls and requires that we have such system of internal controls audited beginning with our Annual Report on Form 10-K for the year ending December 31, 2009. If we fail to maintain the adequacy of our internal controls, we could be subject to regulatory scrutiny, civil or criminal penalties and/or stockholder litigation. Any inability to provide reliable financial reports could harm our business. A target company may not be in compliance with the provisions of the Sarbanes-Oxley Act regarding adequacy of their internal controls. The development of the internal controls of any such entity to achieve compliance with the Sarbanes-Oxley Act may increase the time and costs necessary to complete any such acquisition. Furthermore, any failure to implement required new or improved controls, or difficulties encountered in the implementation of adequate controls over our financial processes and reporting in the future, could harm our operating results or cause us to fail to meet our reporting obligations. Inferior internal controls could also cause investors to lose confidence in our reported financial information, which could have a negative effect on the trading price of our stock.

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Under Delaware law, the requirements and restrictions relating to this offering contained in our amended and restated certificate of incorporation may be amended, which could reduce or eliminate the protection afforded to our stockholders by such requirements and restrictions.

        Our amended and restated certificate of incorporation contains certain requirements and restrictions relating to this offering that will apply to us until the consummation of our initial business combination. Specifically, our amended and restated certificate of incorporation provides, among other things, that:

•

upon closing of this offering, $196,195,000, or approximately $224,995,000 if the underwriters' over-allotment option is exercised in full (including $5.0 million from the sale of the sponsor warrants and $6.0 million in deferred underwriting commissions or approximately $6.9 million if the underwriters over-allotment option is exercised in full), will be placed into the trust account;



•

we shall submit any proposed business combination to our stockholders for approval prior to consummating our initial business combination;



•

our public stockholders will have the right to convert their shares of common stock into cash in accordance with the conversion rights described below;



•

public stockholders who exercise their conversion rights and vote against our initial business combination may convert their shares into a pro rata share of the aggregate amount then on deposit in the trust account;



•

we will consummate a business combination only if it has a fair market value equal to at least 80% of the initial amount held in trust (excluding deferred underwriting commissions of $6.0 million or approximately $6.9 million if the underwriters' over-allotment option is exercised in full);



•

prior to our initial business combination, we may not issue additional stock that participates in any manner in the proceeds of the trust account, or that votes as a class with the common stock sold in this offering on a business combination;



•

we will consummate our initial business combination only if (i) the initial business combination is approved by holders of a majority of our outstanding shares of common stock at a duly held stockholders meeting, (ii) an amendment to our amended and restated certificate of incorporation to provide for our perpetual existence is approved by holders of a majority of our outstanding shares of common stock, (iii) public stockholders owning no more than 30% (minus one share) of our outstanding shares of common stock sold in this offering both vote against the business combination and exercise their conversion rights, and (iv) we have confirmed that we have sufficient cash resources to pay both (x) the consideration required to close our initial business combination, and (y) the cash due to public stockholders who vote against the business combination and who exercise their conversion rights; and



•

if we do not consummate our initial business combination within 24 months, our corporate purposes and powers will immediately thereupon be limited to acts and activities related to liquidating and winding up our affairs, including liquidation, and we will not be able to engage in any other business activities.

        Our amended and restated certificate of incorporation requires that we obtain the vote of our board of directors and the unanimous consent of our stockholders, either by written consent or by a vote of all outstanding shares at a meeting of stockholders, to amend the above-described provisions. However, the validity of unanimous consent provisions under Delaware law has not been settled. This unanimous consent requirement is more stringent than the minimum stockholder consent requirement under Delaware law, and a court could conclude that the unanimous consent requirement constitutes a practical prohibition on amendment in violation of the stockholders' implicit rights to amend the

37

corporate charter. In that case, the above-described provisions would be amendable without unanimous consent and any such amendment could reduce or eliminate the protection afforded to our stockholders.

Provisions in our amended and restated certificate of incorporation may inhibit a takeover of us, which could limit the price investors might be willing to pay in the future for our common stock and could entrench management.

        Our amended and restated certificate of incorporation contains provisions that may discourage unsolicited takeover proposals that stockholders may consider to be in their best interests. These provisions include a staggered board of directors and the ability of the board of directors to designate the terms of and issue new series of preference shares, which may make more difficult the removal of management and may discourage transactions that otherwise could involve payment of a premium over prevailing market prices for our securities.

There may be tax consequences to our business combinations that may adversely affect us.

        While we expect to undertake any merger or acquisition so as to minimize taxes both to the acquired business and/or asset and us, such business combination might not meet the statutory requirements of a tax-free reorganization, or the parties might not obtain the intended tax-free treatment upon a transfer of shares or assets. A non-qualifying reorganization could result in the imposition of substantial taxes.

Risks associated with the Media and Entertainment Industry

        We believe the following risks would apply to us following the completion of a business combination with a target business in the media and entertainment industry.

The speculative nature of the media and entertainment industry may result in our inability to produce products or services that receive sufficient market acceptance for us to be successful.

        Certain segments of the media and entertainment industry are highly speculative and historically have involved a substantial degree of risk. For example, the success of a particular film, video game, program or recreational attraction depends upon unpredictable and changing factors, including the success of promotional efforts, the availability of alternative forms of entertainment and leisure time activities, general economic conditions, public acceptance and other tangible and intangible factors, many of which are beyond our control. If we complete a business combination with a target business in such a segment, we may be unable to produce products or services that receive sufficient market acceptance for us to be successful.

Changes in technology may reduce the demand for the products or services we may offer following a business combination.

        The media and entertainment industry is substantially affected by rapid and significant changes in technology. These changes may reduce the demand for certain existing services and technologies used in these industries or render them obsolete. We cannot assure you that the technologies used by or relied upon or produced by a target business with which we effect a business combination will not be subject to such occurrence. While we may attempt to adapt and apply the services provided by the target business to newer technologies, we cannot assure you that we will have sufficient resources to fund these changes or that these changes will ultimately prove successful.

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If following a business combination, the products or services that we market or sell are not accepted by the public, our profits may decline.

        Certain segments of the media and entertainment industry are dependent on developing and marketing new products and services that respond to technological and competitive developments and changing customer needs and tastes. We cannot assure you that the products and services of a target business with which we effect a business combination will gain market acceptance. Any significant delay or failure in developing new or enhanced technology, including new product and service offerings, could result in a loss of actual or potential market share and a decrease in revenues.

If we are unable to protect our patents, trademarks, copyrights and other intellectual property rights following a business combination, competitors may be able to use our technology or intellectual property rights, which could weaken our competitive position.

        If we are successful in acquiring a target business and the target business is the owner of patents, trademarks, copyrights and other intellectual property, our success will depend in part on our ability to obtain and enforce intellectual property rights for those assets, both in the United States and in other countries. In those circumstances, we may file applications for patents, copyrights and trademarks as our management deems appropriate. We cannot assure you that these applications, if filed, will be approved, or that we will have the financial and other resources necessary to enforce our proprietary rights against infringement by others. Additionally, we cannot assure you that any patent, trademark or copyright obtained by us will not be challenged, invalidated or circumvented.

If we are alleged to have infringed on the intellectual property rights or other rights of third parties it could subject us to significant liability for damages and invalidation or our proprietary rights.

        If, following a business combination, third parties allege that we have infringed on their intellectual property rights, privacy rights or publicity rights or have defamed them, we could become a party to litigation. These claims and any resulting lawsuits could subject us to significant liability for damages and invalidation of our proprietary rights and/or restrict our ability to publish and distribute the infringing or defaming content.

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CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

        The statements contained in this prospectus that are not purely historical are forward-looking statements. Our forward-looking statements include, but are not limited to, statements regarding our or our management's expectations, hopes, beliefs, intentions or strategies regarding the future. In addition, any statements that refer to projections, forecasts or other characterizations of future events or circumstances, including any underlying assumptions, are forward-looking statements. The words "anticipates," "believe," "continue," "could," "estimate," "expect," "intends," "may," "might," "plan," "possible," "potential," "predicts," "project," "should," "would" and similar expressions may identify forward-looking statements, but the absence of these words does not mean that a statement is not forward-looking. Forward-looking statements in this prospectus may include, for example, statements about:

•

our ability to complete our initial business combination;



•

our success in retaining or recruiting, or changes required in, our officers, key employees or directors following our initial business combination;



•

our officers and directors allocating their time to other businesses and potentially having conflicts of interest with our business or in approving our initial business combination, as a result of which they would then receive expense reimbursements;



•

our potential ability to obtain additional financing to complete our initial business combination;



•

our pool of prospective target businesses;



•

the ability of our officers and directors to generate a number of potential investment opportunities;



•

our public securities' potential liquidity and trading;



•

the listing or delisting of our securities from the American Stock Exchange or the ability to have our securities listed on the American Stock Exchange or any other securities exchange following a business combination;



•

the use of proceeds not held in the trust account or available to us from interest income on the trust account balance; or



•

our financial performance following this offering.

        The forward-looking statements contained in this prospectus are based on our current expectations and beliefs concerning future developments and their potential effects on us. There can be no assurance that future developments affecting us will be those that we have anticipated. These forward-looking statements involve a number of risks, uncertainties (some of which are beyond our control) or other assumptions that may cause actual results or performance to be materially different from those expressed or implied by these forward-looking statements. These risks and uncertainties include, but are not limited to, those factors described under the heading "Risk Factors" beginning on page 20. Should one or more of these risks or uncertainties materialize, or should any of our assumptions prove incorrect, actual results may vary in material respects from those projected in these forward-looking statements. We undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required under applicable securities laws.

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USE OF PROCEEDS

        We are offering 20,000,000 units at an offering price of $10.00 per unit. We estimate that the net proceeds of this offering, in addition to the funds we will receive from the sale of the sponsor warrants (all of which will be deposited into the trust account), will be as set forth in the following table.

Use of net proceeds not held in trust account and up to $3,000,000 of interest earned on our trust account (net of taxes payable) that may be released to us to cover operating expenses

(1)

A portion of the offering expenses have been paid from the proceeds of a $200,000 loan to be provided by Mr. Hicks, as described in this prospectus, of which $188,861 is outstanding as of December 7, 2007. This loan will be repaid upon consummation of this offering out of the proceeds of this offering not held in the trust account.

(2)

The underwriters have agreed to defer $6.0 million of their underwriting commissions (or approximately $6.9 million if the over-allotment option is exercised in full), which equals 3.0% of the gross proceeds of this offering, until consummation of our initial business combination. Upon consummation of our initial business combination, $6.0 million, which constitutes the underwriters'

41

deferred commissions (or approximately $6.9 million if the underwriters' over allotment option is exercised in full), will be paid to the underwriters from the funds held in the trust account, and the remaining funds will be released to us and can be used to pay all or a portion of the purchase price of the business or businesses with which our initial business combination occurs, general corporate purposes, payment of principal or interest on indebtedness incurred in connection with our initial business combination, to fund the purchases of other companies or for working capital.

        A total of $196,195,000 (or $224,995,000 if the underwriters' over-allotment option is exercised in full), of the net proceeds from this offering and the sale of the sponsor warrants described in this prospectus, including $6.0 million (or approximately $6.9 million if the underwriters' over-allotment option is exercised in full) of deferred underwriting commissions will be placed in a trust account at [                        ], with Continental Stock Transfer & Trust Company, as trustee, and will be invested only in U.S. government treasury bills with a maturity of 180 days or less or in money market funds meeting certain conditions under Rule 2a-7 under the Investment Company Act. Except for a portion of the interest income that may be released to us, the proceeds held in trust will not be released from the trust account until the earlier of the completion of our initial business combination or our liquidation.

        Commencing on the closing of this offering, we have agreed to pay Capstar Investment Partners, LP, an affiliate of Capstar Partners, LLC, an entity owned and controlled by Mr. Hicks, our founder, chairman of the board and chief executive officer, a total of $10,000 per month for office space, administrative services and secretarial support. This arrangement is being agreed to by Mr. Hicks for our benefit and is not intended to provide Mr. Hicks compensation in lieu of salary or other remuneration because it is anticipated that the expenses to be paid by Mr. Hicks will approximate the monthly reimbursement. We believe that such fees are at least as favorable as we could have obtained from an unaffiliated person. Upon completion of our initial business combination or our liquidation, we will cease paying these monthly fees.

        If we complete a business combination, the out-of-pocket expenses incurred by members of our management team prior to the business combination's closing will become an obligation of the post-combination business, assuming these out-of pocket expenses have not been reimbursed prior to the closing. These expenses would be a liability of the post-combination business and would be treated in a manner similar to any other account payable of the combined business. Members of our management team may, as part of any such combination, negotiate the repayment of some or all of any such expenses. If the target business' owners do not agree to such repayment, this could cause our management team to view such potential business combination unfavorably and result in a conflict of interest.

        We believe that amounts not held in trust as well as the interest income of up to $3.0 million earned on the trust account balance (net of taxes payable) that may be released to us will be sufficient to pay the costs and expenses to which such proceeds are allocated. This belief is based on the fact that while we may begin preliminary due diligence of a target business in connection with an indication of interest, we intend to undertake in-depth due diligence, depending on the circumstances of the relevant prospective acquisition, only after we have negotiated and signed a letter of intent or other preliminary agreement that addresses the terms of a business combination. However, if our estimate of the costs of undertaking in-depth due diligence and negotiating a business combination is less than the actual amount necessary to do so, we may be required to raise additional capital, the amount, availability and cost of which is currently unascertainable. In this event, we could seek such additional capital through loans or additional investments from members of our management team, but such members of our management team are not under any obligation to advance funds to, or invest in, us.

        As of the date of this prospectus, Mr. Hicks, our founder, chairman of the board and chief executive officer, has agreed to advance to us a total of $200,000 to be used for a portion of the

42

expenses of this offering, of which $188,861 is outstanding as of December 7, 2007. This loan is non-interest bearing, unsecured and is due at the earlier of March 31, 2008 or the closing of this offering. The loan will be repaid out of the proceeds of this offering not being placed in the trust account.

        The net proceeds of this offering not held in the trust account and not immediately required for the purposes set forth above will be invested by the trustee only in U.S. government treasury bills with a maturity of 180 days or less or in money market funds meeting certain conditions under Rule 2a-7 under the Investment Company Act. Because the investment of the proceeds will be restricted to these instruments, we believe we will meet the requirements for the exemption provided in Rule 3a-1 promulgated under the U.S. Investment Company Act of 1940. Interest income of up to $3.0 million on the trust account balance (net of taxes payable) may be released to us from the trust account to fund a portion of our working capital requirements.

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DIVIDEND POLICY

        We have not paid any dividends on our common stock to date and will not pay cash dividends prior to the completion of our initial business combination. After we complete our initial business combination, the payment of dividends will depend on our revenues and earnings, if any, our capital requirements and our general financial condition. The payment of dividends after our initial business combination will be within the discretion of our board of directors at that time. Our board of directors currently intends to retain any earnings for use in our business operations and, accordingly, we do not anticipate that our board will declare any dividends in the foreseeable future. Further, any credit agreements we enter into in connection with our initial business combination may restrict or prohibit payment of dividends. In the event that we do issue dividends, our board of directors will determine the dates on which any entitlements to dividends arise, the methods of calculating such dividends and the cumulative or non-cumulative nature of dividend payments.

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DILUTION

        The difference between the public offering price per share of common stock, assuming no value is attributed to the warrants included in the units we are offering pursuant to this prospectus or the sponsor warrants, and the pro forma net tangible book value per share of our common stock after this offering constitutes the dilution to investors in this offering. Such calculation does not reflect any dilution associated with the sale and exercise of warrants, including the sponsor warrants. Net tangible book value per share is determined by dividing our net tangible book value, which is our total tangible assets less total liabilities (including the value of common stock which may be repurchased for cash), by the number of outstanding shares of our common stock.

        At October 26, 2007, our net tangible book value was a deficiency of $57,500, or approximately $(.01) per share of common stock. After giving effect to the sale of 20,000,000 shares of common stock included in the units we are offering by this prospectus, the sale of the 5,000,000 sponsor warrants and the deduction of underwriting commissions and estimated expenses of this offering, our pro forma net tangible book value at October 26, 2007 would have been $131,559,010 or $6.92 per share, representing an immediate increase in net tangible book value of $6.93 per share to the initial stockholders as of the date of this prospectus and an immediate dilution of $3.08 per share or 30.8% to our public stockholders.

        The following table illustrates the dilution to the public stockholders on a per-share basis, assuming no value is attributed to the warrants included in the units or the sponsor warrants:

        The following table sets forth information with respect to our initial stockholders and the public stockholders assuming that the over-allotment option has not been exercised:

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        The pro forma net tangible book value per share after the offering is calculated as follows:

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CAPITALIZATION

        The following table sets forth our capitalization at December 7, 2007 and as adjusted to give effect to the sale of our units and the sponsor warrants and the application of the estimated net proceeds derived from the sale of such securities:

(1)

Includes the $5.0 million we will receive from the sale of the sponsor warrants.

(2)

Note payable to affiliate is a promissory note issued in the amount of $200,000 in the aggregate to Mr. Hicks. The note is non-interest bearing and is payable on the earlier of March 31, 2008 or the consummation of this offering. As of December 7, 2007, $188,861 has been drawn by the company.

(3)

If we consummate our initial business combination, the conversion rights afforded to our public stockholders may result in the conversion into cash of up to 30% (minus one share) of the aggregate number of shares sold in this offering at a per-share conversion price equal to the aggregate amount then on deposit in the trust account (initially approximately $9.81 per share (or approximately $9.78 per share if the underwriters' over-allotment option is exercised in full)), before payment of deferred underwriting discounts and commissions and including accrued interest, net of any income taxes due on such interest, which income taxes, if any, shall be paid from the trust account, and net of interest income previously released to us for working capital requirements, as of two business days prior to the proposed consummation of our initial business combination divided by the number of shares sold in this offering. We will not consummate any business combination if holders of more than 30% (minus one share) of our outstanding shares of common stock sold in this offering exercise their conversion rights.

(4)

Assumes the over-allotment option has not been exercised and an aggregate of 750,000 shares held by our initial stockholders have been forfeited and excludes $600 of capital attributable to 5,999,999 shares of common stock subject to conversion.

        Because converting stockholders will receive their proportionate share of the deferred underwriting discounts and commissions and the underwriters will be paid the full amount of their deferred underwriting compensation at the time of the consummation of our initial business combination, we (and, therefore, the non-converting stockholders) will bear the financial effect of such payments to both the converting stockholders and the underwriters.

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MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Overview

        We are a blank check company formed under the laws of the State of Delaware on September 28, 2007. We were formed to effect a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or other similar business combination with one or more operating businesses, which we refer to throughout this prospectus as a business combination. We will focus on an acquisition or acquisitions in the media and entertainment industry but we may effect a business combination with a company outside that industry if an attractive acquisition opportunity is identified in another industry prior to the time we identify an acquisition opportunity in the media and entertainment industry. To date, our efforts have been limited to organizational activities as well as activities related to this offering. We have not, nor has anyone on our behalf, contacted or been contacted by any potential target business or had any substantive discussions, formal or otherwise, with respect to such a transaction. Additionally, we have not, nor have we engaged or retained any agent or other representative, to conduct any research or take any steps to identify, locate or contact any suitable acquisition candidate.

        The issuance of additional shares of our stock in a business combination:

•

may significantly dilute the equity interest of investors in this offering;



•

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



•

could cause a change in control if a substantial number of shares of our common stock is issued, which may affect, among other things, our ability to use our net operating loss carry forwards, if any, and could result in the resignation or removal of our present officers and directors;



•

may have the effect of delaying or preventing a change of control of us by diluting the stock ownership or voting rights or a person seeking to obtain control of our company; and



•

may adversely affect prevailing market prices for our common stock and/or warrants.

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

•

default and foreclosure on our assets if our operating revenues after our initial business combination are insufficient to repay our debt obligations;



•

acceleration of our obligations to repay the indebtedness even if we make all principal and interest payments when due if we breach certain covenants that require the maintenance of certain financial ratios or reserves without a waiver or renegotiation of that covenant;



•

our immediate payment of all principal and accrued interest, if any, if the debt security is payable on demand; and



•

our inability to obtain necessary additional financing if the debt security contains covenants restricting our ability to obtain such financing while the debt security is outstanding.

        As indicated in the accompanying financial statements, at October 26, 2007, we had $25,000 in cash and deferred offering costs of $80,000. Further, we expect to continue to incur significant costs in the pursuit of our acquisition plans. Our management's plans to address this uncertainty through this offering are discussed above. We cannot assure you that our plans to raise capital or to consummate our initial business combination will be successful.

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Results of Operations and Known Trends or Future Events

        We have neither engaged in any operations nor generated any revenues to date. Our only activities since inception have been organizational activities and those necessary to prepare for this offering. Following this offering, we will not generate any operating revenues until after completion of our initial business combination. We will generate non-operating income in the form of interest income on cash and cash equivalents after this offering. There has been no significant change in our financial or trading position and no material adverse change has occurred since the date of our audited financial statements. After this offering, we expect to incur increased expenses as a result of being a public company (for legal, financial reporting, accounting and auditing compliance), as well as for due diligence expenses. We expect our expenses to increase substantially after the closing of this offering.

Liquidity and Capital Resources

        Our liquidity needs have been satisfied to date through receipt of $25,000 from the sale of the founders' common stock to our initial stockholders and a loan from Mr. Hicks, our founder, chairman of the board and chief executive officer, for an amount of up to $200,000, of which $188,861 is outstanding as of December 7, 2007. We estimate that the net proceeds from (i) the sale of the units in this offering, after deducting offering expenses of approximately $605,000, but including deferred underwriting commissions of $6.0 million (or approximately $6.9 million if the underwriters' over-allotment option is exercised in full), and (ii) the sale of the sponsor warrants for a purchase price of $5.0 million, will be approximately $196,395,000 (or $225,195,000 if the underwriters' over-allotment option is exercised in full). Approximately $196,195,000 (or approximately $224,995,000 if the underwriters' over-allotment option is exercised in full), will be held in trust, which includes $6.0 million (or approximately $6.9 million if the underwriters' over-allotment option is exercised in full) of deferred underwriting commissions. The remaining $200,000 will not be held in trust.

        We may apply the cash released to us from the trust account for general corporate purposes, including for maintenance or expansion of operations of acquired businesses, the payment of principal or interest due on indebtedness incurred in consummating a business combination, to fund the purchase of other companies or for working capital.

        We will use substantially all of the net proceeds of this offering in connection with acquiring one or more target businesses, including identifying and evaluating prospective target businesses, selecting one or more target businesses, and structuring, negotiating and consumating our initial business combination. To the extent we use our capital stock in whole or in part as consideration for our initial business combination, the proceeds held in the trust account (less amounts paid to any public stockholders who exercise their conversion rights and deferred underwriting commissions paid to the underwriters) as well as any other net proceeds not expended prior to that time will be used to finance the operations of the target business or businesses. Such working capital funds could be used in a variety of ways including continuing or expanding the target business' operations and for strategic acquisitions. Such funds could also be used to repay any operating expenses or finders' fees which we had incurred prior to the completion of our initial business combination if the funds available to us outside of the trust account were insufficient to cover such expenses.

        As a recently formed blank check company, we currently do not have sufficient working capital for the next 24 months. We intend to obtain such working capital through this offering and interest income of up to $3.0 million on the balance (net of taxes payable) of the trust account to be released to us for working capital requirements, which we believe will be sufficient to allow us to operate for at least the next 24 months, assuming our initial business combination is not completed during that time. We expect our primary liquidity requirements during that period to include approximately $[    ] million for legal, accounting and other expenses associated with structuring, negotiating and documenting business combinations; $[    ] for office space, administrative services and support payable to Capstar Investment

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Partners, LP, an affiliate of Capstar Partners, LLC, representing $10,000 per month for up to 24 months; $[            ] for legal and accounting fees related to regulatory reporting requirements; and approximately $[    ] million for general working capital that will be used for miscellaneous expenses and reserves, including additional expenses that may be incurred by us in connection with this offering over and above the amounts listed in the section of this prospectus entitled "Use of Proceeds."

        We do not believe we will need to raise additional funds following this offering in order to meet the expenditures required for operating our business. However, we will rely on the funds available to us outside of the trust account and interest earned of up to $3.0 million on the trust account to fund such expenditures and if our estimates of the costs of undertaking in-depth due diligence and negotiating an initial business combination is less than the actual amount necessary to do so, we may have insufficient funds available to operate our business prior to our initial business combination. Moreover, we may need to obtain additional financing either to consummate our initial business combination or because we become obligated to convert into cash a significant number of shares of public stockholders voting against our initial business combination, in which case we may issue additional securities or incur debt in connection with such business combination. Following our initial business combination, if cash on hand is insufficient, we may need to obtain additional financing in order to meet our obligations.

Controls and Procedures

        We are not currently required to maintain an effective system of internal controls as defined by Section 404 of the Sarbanes-Oxley Act of 2002. We will be required to comply with the internal control requirements of the Sarbanes-Oxley Act for the fiscal year ending December 31, 2009. As of the date of this prospectus, we have not completed an assessment, nor have our auditors tested our systems, of internal control. We expect to assess the internal controls of our target business or businesses prior to the completion of our initial business combination and, if necessary, to implement and test additional controls as we may determine are necessary in order to state that we maintain an effective system of internal controls. A target business may not be in compliance with the provisions of the Sarbanes-Oxley Act regarding the adequacy of internal controls. Many small and mid-sized target businesses we may consider for a business combination may have internal controls that need improvement in areas such as:

•

staffing for financial, accounting and external reporting areas, including segregation of duties;



•

reconciliation of accounts;



•

proper recording of expenses and liabilities in the period to which they relate;



•

evidence of internal review and approval of accounting transactions;



•

documentation of processes, assumptions and conclusions underlying significant estimates; and



•

documentation of accounting policies and procedures.

        Because it will take time, management involvement and perhaps outside resources to determine what internal control improvements are necessary for us to meet regulatory requirements and market expectations for our operation of a target business, we may incur significant expense in meeting our public reporting responsibilities, particularly in the areas of designing, enhancing, or remediating internal and disclosure controls. Doing so effectively may also take longer than we expect, thus increasing our exposure to financial fraud or erroneous financing reporting.

        Once our management's report on internal controls is complete, we will retain our independent auditors to audit such report when required by Section 404. The independent auditors may identify additional issues concerning a target business's internal controls while performing their audit of internal control over financial reporting.

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Quantitative and Qualitative Disclosures about Market Risk

        The net proceeds of this offering, including amounts in the trust account, will be invested in U.S. government treasury bills with a maturity of 180 days or less or in money market funds meeting certain conditions under Rule 2a-7 under the Investment Company Act. Due to the short-term nature of these investments, we believe there will be no associated material exposure to interest rate risk.

Related Party Transactions

        On October 25, 2007, our sponsor purchased 5,750,000 shares of founders' common stock for an aggregate purchase price of $25,000. Mr. Hicks, our founder, chairman of the board and chief executive officer, is the sole member of Capstar Acquisition Management GP, LLC, the general partner of our sponsor. On [            ], 2007, our sponsor transferred an aggregate of 86,250 shares of founders' common stock to James R. Huffines, Frederick G. Kraegel and Timothy J. Lindgren, each of whom has agreed to serve on our board of directors upon the closing of this offering.

        As of the date of this prospectus, Mr. Hicks, our founder, chairman of the board and chief executive officer, has agreed to advance on our behalf a total of $200,000 for payment of offering expenses, of which $188,861 is outstanding as of December 7, 2007. This loan is non-interest bearing, unsecured and is due at the earlier of March 31, 2008 or the closing of this offering. The loan will be repaid out of the proceeds of this offering not placed in the trust account. We are also obligated, commencing on the date of this prospectus, to pay Capstar Investment Partners, LP, an affiliate of Capstar Partners, LLC, an entity owned and controlled by Mr. Hicks a monthly fee of $10,000 for office space and general administrative services.

        Our sponsor has committed to purchase an aggregate of 5,000,000 sponsor warrants at $1.00 per warrant (for a total purchase price of $5.0 million) from us simultaneously with the closing of this offering. Our sponsor will be permitted to transfer the sponsor warrants held by it to our officers and directors, and other persons or entities affiliated with our sponsor, but the transferees receiving such securities will be subject to the same agreements with respect to such securities as our sponsor. Otherwise, these warrants will not, subject to certain limited exceptions, be transferable or salable by the sponsor until 30 days after the completion of our initial business combination. The sponsor warrants will be non-redeemable so long as they are held by the sponsor or its permitted transferees. The sponsor warrants may also be exercised by the sponsor or its permitted transferees for cash or on a cashless basis. Otherwise, the sponsor warrants have terms and provisions that are identical to those of the warrants being sold as part of the units in this offering. Management does not believe that the sale of warrants to the sponsor will result in the recognition of stock-based compensation expense because the warrants are being sold at or below fair value. However, the actual fair value of the warrants and any stock-based compensation will be determined on the date of issuance.

Off-Balance Sheet Arrangements; Commitments and Contractual Obligations; Quarterly Results

        As of October 26, 2007, we did not have any off-balance sheet arrangements as defined in Item 303(a)(4)(ii) of Regulation S-K and did not have any commitments or contractual obligations. No unaudited quarterly operating data is included in this prospectus as we have conducted no operations to date.

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PROPOSED BUSINESS

Introduction

        We are a blank check company formed under the laws of the State of Delaware on September 28, 2007. We were formed to effect a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or other similar business combination with one or more operating businesses, which we refer to throughout this prospectus as a business combination. We will focus on an acquisition or acquisitions in the media and entertainment industry but we may effect a business combination with a company outside that industry if an attractive acquisition opportunity is identified in another industry prior to the time we identify an acquisition opportunity in the media and entertainment industry. To date, our efforts have been limited to organizational activities as well as activities related to this offering. We have not, nor has anyone on our behalf, contacted or been contacted by any potential target business or had any substantive discussions, formal or otherwise, with respect to such a transaction. Additionally, we have not, nor have we engaged or retained any agent or other representative, to conduct any research or take any steps to identify, locate or contact any suitable acquisition candidate.

        The media and entertainment industry encompasses those companies which create, produce, deliver, own, distribute and/or market entertainment and information content, products and services. These companies serve both domestic and international audiences. The media and entertainment industry represents a large and expanding segment of the United States economy. According to PricewaterhouseCoopers, LLP, global media and entertainment industry spending reached $1.4 trillion in 2006 and is expected to increase to $2.0 trillion in 2011. The United States marketplace accounts for $582 billion, or 41%, of the $1.4 trillion in spending.

        Growth in this industry has historically been driven by the introduction of new technologies and the expansion of domestic and international markets. The latter part of the 20th century witnessed the introduction and consumer acceptance of cable television, home video, video games and compact discs. The 1990s witnessed the emergence of additional products and improved delivery systems such as interactive multimedia entertainment software, simulator and virtual reality attractions and fiber optic cable. The beginning of the 21st century has witnessed even greater expansion as the emergence of next-generation technologies and the convergence of platforms have significantly strengthened growth opportunities for television distribution through direct broadcast satellite and digital cable, video games, Internet access and home video.

        The market is also in transition as digital distribution is growing rapidly and now playing a more important role in the overall market but also creating a new medium. More than 40% of total media and entertainment growth during the next five years will be generated through online and wireless technologies facilitated by the expansion of these universes.

        Our management team has extensive experience in the media and entertainment industry as senior executives, business consultants and/or entrepreneurs. We intend to leverage the industry experience of our executive officers by focusing our efforts on identifying a prospective target business in the media and entertainment industry. We believe that companies involved in this industry represent attractive business combination targets for a number of reasons, including a favorable economic environment for this industry, potentially attractive valuations and the large number of middle market business combination candidates. We believe, based solely on our management's collective business experience, that there are numerous business opportunities in the media and entertainment industry. However, we have not conducted any research with respect to identifying the number and characteristics of the potential business combination candidates within this industry or the likelihood or probability of success of any proposed business combination. Accordingly, we cannot assure you that we will be able to locate a target business in the media and entertainment industry or that we will be able to engage in a business combination with a target business on favorable terms.

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        Among the areas of particular interest to the company are businesses engaged in:

•

broadcast television;



•

cable, satellite and terrestrial television content delivery;



•

film, television and video content production and distribution;



•

newspaper, book, magazine, and specialty publishing;



•

motion picture exhibition and related services;



•

broadcast and satellite radio;



•

video game production and distribution;



•

Internet and mobile media production and distribution;



•

advertising agencies and other advertising services, including direct marketing and directories;



•

educational and training media services;



•

theme parks and amusement parks;



•

casino and other regulated gaming;



•

recorded music, music publishing and other audio content production and distribution; and



•

live event entertainment and venue management.

Our Competitive Strengths

        We believe we have the following competitive strengths:

Significant Mergers & Acquisitions Experience

        Our executive team has executed numerous mergers and acquisitions with an aggregate value of over $30 billion. At Capstar Broadcasting, Mr. Hicks and Mr. Cullen, as Chief Executive Officer and Chief Operating Officer, respectively, built the company via acquisition into an owner of 350 radio stations, making it the largest small and mid-sized market radio station operator in the U.S. Capstar Broadcasting completed over 50 acquisitions in a two and a half year period with an aggregate value of $2.9 billion. These acquisitions ranged in size from single station acquisitions to the largest, which was the $1.3 billion acquisition of SFX Broadcasting in 1998. In 1999, Capstar Broadcasting merged with Chancellor Media to form AMFM in a stock swap worth $4.1 billion. In 2000, AMFM was sold to Clear Channel for $23 billion.

        As President and Chief Executive Officer of GulfStar Broadcasting, Mr. Cullen grew the company from 8 radio stations in 1996 to 87 stations in 1998. GulfStar Broadcasting was acquired and became a part of Capstar Broadcasting in 1997.

        Capstar Partners, LLC (or its affiliated persons) have made multiple acquisitions and investments in the media, hospitality and real estate sectors since its inception in 2000. Some of the more recent examples include, DMX Holdings, Andrew Harper, Harden Healthcare, and the Big EZ Ranch.

Proven Ability to Identify Hidden Value

        Our officers and directors have demonstrated a consistent ability to identify attractive investment opportunities that others neglected and to successfully invest ahead of major trends.

        As Chief Executive Officer of Capstar Communications, the predecessor to SFX Broadcasting, in 1990, Mr. Hicks formed the radio industry's first Local Marketing Agreement (LMA), an agreement in which one company agrees to operate a radio station owned by another licensee. The formation of

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LMAs dramatically changed how the broadcasting industry functioned by allowing radio stations to consolidate their operations without merging. The widespread adoption of LMA's in the mid-1990s was a significant factor in Congress' decision to make significant changes to the radio industry's ownership rules in the Telecom Act of 1996, removing the cap on the maximum number of radio stations that could be owned by a single company and increasing the number of stations allowed per market.

        In response to the changes in the radio industry prompted by the Telecom Act of 1996, Mr. Hicks founded Capstar Broadcasting in 1996 in order to consolidate small and mid-sized market radio stations where value was previously overlooked. At the time of its merger with Chancellor Media, Capstar Broadcasting owned 350 radio stations around the country and was the largest owner of small and mid-sized market radio stations in the U.S.

        In December 2002, Mr. Hicks facilitated a recapitalization of XM Satellite Radio (Nasdaq: XMSR) ("XM"), when the satellite radio industry was at its low point. As a result of the recapitalization, Mr. Hicks joined the Board of Directors of XM and helped enable satellite radio to become a widely adopted service. The new equity investors earned multiples on their investment as the stock price increased approximately seven-fold within 12 months.

        In 2002, Capstar Partners founded Harden Healthcare to purchase skilled nursing facilities at a time when these investments were out of favor. Harden acquired and built facilities throughout Texas and, in 2005, sold a number of the facilities and entered into long term management agreements for such facilities. Harden has made subsequent acquisitions in the home health and hospice sectors, and is significantly benefiting from the favorable demographic trends of the aging U.S. population. Today, Harden owns or manages 25 skilled nursing facilities and 39 home health and hospice agencies.

        In 2005, Capstar Partners purchased the assets of DMX Holdings, Inc. from Liberty Media in a bankruptcy auction for $73 million. The Capstar Partners team identified and executed on significant opportunities for operational improvements and increased the profitability of the business. In 2006, Capstar Partners sold DMX's European business and its Inflight business and a small manufacturing division named RCI. In 2007, DMX announced that it is contemplating a future combination with Muzak Holdings, LLC ("Muzak"). The proposed combination is contingent on a sale of the combined entity to an as yet unidentified third party buyer following clearance by federal regulators. The parties have submitted a Hart-Scott-Rodino filing seeking clearance for such proposed combination.

        We believe that our executive team's foresight will enable us to find attractive acquisition opportunities.

Deep Operating Experience in the Media Sector

        Our management team has significant experience founding, building and operating companies in the media sector. Mr. Hicks is a 28 year veteran of the radio industry. He purchased his first station at age 29 and has been a business owner and operator for nearly three decades. He co-founded SFX Broadcasting in 1989 and served as its Chief Executive Officer from 1989 until 1996. Mr. Hicks founded Capstar Broadcasting in 1996 and served as its Chief Executive Officer until its merger with Chancellor Media in 1999 to form AMFM. He served as AMFM's Vice Chairman and Chief Executive Officer of the new media division until it was sold to Clear Channel in 2000.

        Mr. Cullen has 25 years of management and marketing experience, including 20 years in executive management, broadcast sales and sales management. He served as President and Chief Executive Officer of GulfStar Broadcasting, Inc. from 1996 to 1998, Chief Operating Officer of Capstar Broadcasting from 1998 to 1999, President of AMFM's new media division from 1999 to 2000 and President of Clear Channel's International division from 2000-2003. Mr. Cullen is currently President of DMX, Inc. and Andrew Harper, Inc., which are both controlled by Capstar Partners.

        In addition, nearly all of our executives are currently acting in a management capacity at DMX Holdings, a portfolio company of Capstar Partners (and its affiliated persons).

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        We believe that our management team's operating experience and significant experience working together will enable us to rapidly identify attractive acquisition opportunities and evaluate potential operational improvements and realize merger-related synergies. In addition, we believe that our executives' collective operating experience will complement the strengths of the target company's existing management team if members of our management team remain with the combined company after the consummation of a business combination.

Experience with Bringing Companies Public

        Our executive team has significant experience in executing initial public offerings. Mr. Hicks led SFX Broadcasting, Inc. (formerly NASDAQ: SFXB) through a $36 million IPO in 1993 and Messrs. Hicks and Cullen led Capstar Broadcasting Corp. through a $589 million IPO in 1998, in what was at the time the largest radio industry IPO. We believe this experience will enable us to evaluate the suitability of the target company to become a public company.

Business Strategy

        We have identified the following general criteria and guidelines that we believe are important in evaluating prospective target businesses. We will use these criteria and guidelines in evaluating acquisition opportunities. However, we may decide to enter into a business combination with a target business that does not meet these criteria and guidelines.

•

Established Companies with Proven Franchises and Market Leadership.    We will seek to acquire established companies with strong historical operating and financial results. However, we may acquire a company that is undergoing financial difficulties if such company demonstrates strong prospects for future growth. We do not intend to acquire start-up companies.



•

Companies with Strong Free Cash Flow Characteristics.    We will seek to acquire companies that have a history of, or potential for, strong, stable free cash flow generation. We will focus on companies that have predictable, recurring revenue streams and an emphasis on low working capital and capital expenditure requirements.



•

Strong Franchise and Competitive Industry Position.    We will seek to acquire businesses that have strong fundamentals. The factors we will consider include growth prospects, competitive dynamics, level of consolidation, need for capital investment and barriers to entry. We will focus on companies that have a leading or niche market position. We will analyze the strengths and weaknesses of target businesses relative to their competitors, focusing on product quality, customer loyalty, cost impediments associated with customers switching to competitors, patent protection and brand positioning. We will seek to acquire businesses that demonstrate advantages when compared to their competitors, which may help to protect their market position and profitability and deliver strong free cash flow.



•

Foundation for Strong and Experienced Management Team.    We will seek to acquire businesses that either have strong, experienced management teams or those that provide a foundation for us to assemble an effective and experienced management team. We will focus on management teams with a proven track record of driving revenue growth, enhancing profitability and generating strong free cash flow. We believe that the operating expertise of our officers and directors will complement, not replace the target's management team.

Effecting our initial business combination

General

        We are not presently engaged in, and we will not engage in, any operations for an indefinite period of time following this offering. We intend to utilize the cash proceeds of this offering and the private placement of the sponsor warrants, our capital stock, debt or a combination of these as the

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consideration to be paid in our initial business combination. While no less than 98.1% of the net proceeds of this offering are allocated to completing our initial business combination, the proceeds are not otherwise designated for more specific purposes. Accordingly, prospective investors will at the time of their investment in us not be provided an opportunity to evaluate the specific merits or risks of a target business. We may seek to consummate our initial business combination with a company or business that may be experiencing financial difficulties, which would subject us to the numerous risks inherent in such companies and businesses. If our initial business combination is paid for using our capital stock or debt securities or with proceeds that are less than those in the trust account, we may apply the remaining cash released to us from the trust account for general corporate purposes, including for maintenance or expansion of operations of acquired businesses, the payment of principal or interest due on indebtedness incurred in consummating our initial business combination, to fund the purchase of other companies or for working capital.

        We have not identified any acquisition target and we have not, nor has anyone on our behalf, initiated any substantive discussions with an entity that we will acquire in our initial business combination. Additionally, we have not engaged or retained any agent or other representative to identify or locate any suitable acquisition candidate, to conduct any research or take any measures, directly or indirectly, to locate or contact a target business.

        Prior to completion of our initial business combination, we will seek to have all vendors, prospective target businesses or other entities, which we refer to as potential contracted parties or a potential contracted party, that we engage, execute agreements with us waiving any right, title, interest or claim of any kind in or to any monies held in the trust account for the benefit of our public stockholders. If a potential contracted party refuses to execute such a waiver, then Mr. Hicks, our founder, chairman of the board and chief executive officer, will be personally liable to cover the potential claims made by such party for services rendered and goods sold, in each case to us. However, the agreement entered into by Mr. Hicks specifically provides for two exceptions to this indemnity; there will be no liability (i) as to any claimed amounts owed to a third party who executed a waiver (even if such waiver is subsequently found to be invalid and unenforceable) or (ii) as to any claims under our indemnity of the underwriters of this offering against certain liabilities, including liabilities under the Securities Act. However, there is no guarantee that vendors, prospective target businesses or other entities will execute such waivers, or even if they execute such waivers that they would be prevented from bringing claims against the trust account, including but not limited to fraudulent inducement, breach of fiduciary responsibility and other similar claims, as well as claims challenging the enforceability of the waiver, in each case in order to seek recourse against our assets, including the funds held in the trust account. Further, we could be subject to claims from parties not in contract with us who have not executed a waiver, such as a third party claiming tortious interference as a result of our business combination. In addition, the indemnification provided by Mr. Hicks is limited to claims by vendors that do not execute such waivers as described above. Claims by target businesses or other entities and vendors that execute agreements waiving any right, title, interest or claim of any kind in or to any monies held in the trust account would not be indemnified by Mr. Hicks. Based on representations made to us by Mr. Hicks, we currently believe that he has substantial means and is capable of funding a shortfall in our trust account to satisfy his foreseeable indemnification obligations, but we have not asked him for any security or funds for such an eventuality. Despite our belief, we cannot assure you Mr. Hicks will be able to satisfy those obligations. The indemnification obligations may be substantially higher than he currently foresees or expects and/or his financial resources may deteriorate in the future. As a result, the steps outlined above may not effectively mitigate the risk of creditors' claims reducing the amounts in the trust account.

        Subject to the requirements that our initial business combination have a fair market value of at least 80% of the initial amount held in the trust account (excluding deferred underwriting commissions of $6.0 million or approximately $6.9 million if the underwriters' over-allotment is exercised in full) and that we focus on the media and entertainment industry, we will have virtually unrestricted flexibility in

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identifying and selecting one or more prospective target businesses. Accordingly, there is no current basis for investors in this offering to evaluate the possible merits or risks of the target business with which we may ultimately complete our initial business combination. Although our management will assess the risks inherent in a particular target business with which we may combine, we cannot assure you that this assessment will result in our identifying all risks that a target business may encounter. Furthermore, some of those risks may be outside of our control, meaning that we can do nothing to control or reduce the chances that those risks will adversely impact a target business.

Sources of target businesses

        We anticipate that target business candidates could be brought to our attention from various unaffiliated sources, including investment bankers, venture capital funds, private equity funds, leveraged buyout funds, management buyout funds and other members of the financial community. Target businesses may be brought to our attention by such unaffiliated sources as a result of being solicited by us through calls or mailings. These sources may also introduce us to target businesses they think we may be interested in on an unsolicited basis, since many of these sources will have read this prospectus and know what types of businesses we are targeting. Our officers and directors, as well as their affiliates, may also bring to our attention target business candidates that they become aware of through their business contacts as a result of formal or informal inquiries or discussions they may have, as well as attending trade shows or conventions. In addition, we expect to receive a number of proprietary deal flow opportunities that would not otherwise necessarily be available to us as a result of the track record and business relationships of Mr. Hicks, our founder, chairman of the board and chief executive officer. While we do not presently anticipate engaging the services of professional firms or other individuals that specialize in business acquisitions on any formal basis, we may engage these firms or other individuals in the future, in which event we may pay a finder's fee, consulting fee or other compensation to be determined in an arm's length negotiation based on the terms of the transaction. We will engage a finder only to the extent our management determines that the use of a finder may bring opportunities to us that may not otherwise be available to us or if finders approach us on an unsolicited basis with a potential transaction that our management determines is in our best interest to pursue. Payment of finder's fees is customarily tied to completion of a transaction, in which case any such fee will be paid out of the funds held in the trust account. In no event, however, will our sponsor or any of our existing officers or directors, or any entity with which they are affiliated, be paid any finder's fee, consulting fee or other compensation prior to, or for any services they render in order to effectuate, the consummation of our initial business combination (regardless of the type of transaction that it is). Also, we will not enter into an initial business combination with any entity that is affiliated with our sponsor, officers or directors, including any businesses that are either portfolio companies of, or have otherwise received a material financial investment from, companies or funds affiliated with our officers, directors or sponsor, unless we have obtained an opinion from an independent investment banking firm, which is a member of FINRA, reasonably acceptable to the underwriter, and the approval of a majority of our independent directors, that the business combination is fair to our stockholders from a financial point of view. Such opinion, however, will not address whether or not the particular transaction is in the best interests of the public stockholders. The investment bank rendering such opinion may or may not agree to address the opinion directly to our stockholders or otherwise permit them to rely directly on such opinion. While we will consider whether such an opinion may be relied on directly by our stockholders, it will not be dispositive as to which investment bank we seek a fairness opinion from. Other factors contributing to our choice of an investment bank to render such opinion are expected to include, among others: reputation of the independent investment bank, specifically their knowledge in our particular industry, timing and cost.

Selection of a target business and structuring of our initial business combination

        Our initial business combination must be with one or more target businesses whose fair market value, individually or collectively, is equal to at least 80% of the balance in the trust account (excluding

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deferred underwriting discounts and commissions of $6.0 million, or $6.9 million if the underwriters' over-allotment option is exercised in full) at the time of such business combination. This may be accomplished by identifying and acquiring a single business or multiple operating businesses, which may or may not be related, contemporaneously. In order to consummate such a business combination, we may issue a significant amount of our debt or equity securities to the sellers of such business and/or seek to raise additional funds through a private offering of debt or equity securities. There are no limitations on our ability to incur debt or issue securities in order to consummate a business combination regardless of whether or not we acquire a target business or businesses having a collective fair market value substantially in excess of 80% of the balance in the trust account. If we issue securities in order to consummate a business combination, our stockholders could end up owning a minority of the combined company's voting securities as there is no requirement that our stockholders own a certain percentage of our company (or, depending on the structure of our initial business combination, an ultimate parent company that may be formed) after our business combination. Since we have no specific business combination under consideration, we have not entered into any such arrangement to issue our debt or equity securities and have no current intention of doing so.

        We have not established any other specific attributes or criteria (financial or otherwise) for prospective target businesses. In evaluating a prospective target business, our management may consider a variety of factors, including one or more of the following:

•

financial condition and results of operations;



•

growth potential;



•

brand recognition and potential;



•

experience and skill of management and availability of additional personnel;



•

capital requirements;



•

stage of development of the business and its products or services;



•

existing distribution arrangements and the potential for expansion;



•

degree of current or potential market acceptance of the products or services;



•

proprietary aspects of products and the extent of intellectual property or other protection for products or formulas;



•

impact of regulation on the business;



•

regulatory environment of the industry;



•

costs associated with effecting the business combination;



•

industry leadership, sustainability of market share and attractiveness of market sectors in which target business participates; and



•

macro competitive dynamics in the industry within which the company competes.

        These criteria are not intended to be exhaustive and our management may consider additional factors it deems to be relevant. Any evaluation relating to the merits of a particular initial business combination may be based, to the extent relevant, on the above factors as well as other considerations our management deems relevant to our business objective. In evaluating a prospective target business, we expect to conduct an extensive due diligence review which will encompass, among other things, meetings with incumbent management and employees, document reviews, interviews of customers and suppliers, inspection of facilities, as well as review of financial and other information which will be made available to us.

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        The time required to select and evaluate a target business and to structure and complete our initial business combination, and the costs associated with this process, are not currently ascertainable with any degree of certainty. Any costs incurred with respect to the identification and evaluation of a prospective target business with which a business combination is not ultimately completed will result in our incurring losses and will reduce the funds we can use to complete another business combination. We will not pay any finders or consulting fees to members of our management team, or any of their respective affiliates, for services rendered to or in connection with a business combination.

Fair market value of target business or businesses

        In order to constitute our initial business combination, a business combination must satisfy the threshold fair market value requirement of at least 80% of the initial amount held in the trust account (excluding the amount held in the trust account representing the underwriters' deferred commission). Our board of directors will determine the fair market value based on standards generally accepted by the financial community (such as actual and potential sales, the values of comparable businesses, earnings and cash flow and/or book value). If our board of directors is not able to independently determine the fair market value of our initial business combination, we will obtain an opinion from an unaffiliated, independent investment banking firm which is subject to oversight by FINRA as to the fair market value. We expect that any such opinion would be included in our proxy soliciting materials furnished to our stockholders in connection with a business combination, and that such independent investment banking firm will be a consenting expert. As the opinion will be addressed to our board of directors for their use in evaluating the transaction, we do not anticipate that our stockholders will be entitled to rely on such opinion, in which case we would provide support for such a determination in our proxy soliciting materials. However, as the opinion will be attached to, and thoroughly described in, our proxy soliciting materials, we believe investors will be provided with sufficient information in order to allow them to properly analyze the transaction, even if the proposed transaction involves a target business that is affiliated with our initial stockholders, officers, directors or their affiliates, because our stockholders will still have the benefit of reading a copy of the opinion and all the supporting facts surrounding the conclusion set forth in the opinion. Accordingly, the willingness of an investment banking firm to provide for such reliance by the stockholders acquiring units in this offering would be a factor considered by us in selecting an independent investment banking firm. If no opinion is obtained, our public stockholders will be relying solely on the judgment of our board of directors. Our proxy statement provided to our holders in connection with our initial business combination will set forth our determination as to fair market value as well as the basis for such determination.

Lack of business diversification

        For an indefinite period of time after consummation of our initial business combination, the prospects for our success may depend entirely on the future performance of a single business. Unlike other entities that have the resources to complete business combinations with multiple entities in one or several industries, it is probable that we will not have the resources to diversify our operations and mitigate the risks of being in a single line of business. By consummating a business combination with only a single entity, our lack of diversification may:

•

subject us to negative economic, competitive and regulatory developments, any or all of which may have a substantial adverse impact on the particular industry in which we operate after our initial business combination, and



•

cause us to depend on the marketing and sale of a single product or limited number of products or services.

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Limited ability to evaluate the target's management team

        Although we intend to closely scrutinize the management of a prospective target business when evaluating the desirability of effecting a business combination with that business, we cannot assure you that our assessment of the target business' management will prove to be correct. In addition, we cannot assure you that the future management will have the necessary skills, qualifications or abilities to manage a public company. Furthermore, the future role of members of our management team, if any, in the target business cannot presently be stated with any certainty. While it is possible that one or more of our directors will remain associated in some capacity with us following a business combination, it is unlikely that any of them will devote their full efforts to our affairs subsequent to a business combination. Moreover, we cannot assure you that members of our management team will have significant experience or knowledge relating to the operations of the particular target business. We cannot assure you that any of our key personnel will remain in senior management or advisory positions with the combined company. The determination as to whether any of our key personnel will remain with the combined company will be made at the time of our initial business combination.

        Following a business combination, we may seek to recruit additional managers to supplement the incumbent management of the target business. We cannot assure you that we will have the ability to recruit additional managers, or that additional managers will have the requisite skills, knowledge or experience necessary to enhance the incumbent management.

Opportunity for stockholder approval of our initial business combination

        Prior to the completion of our initial business combination, we will submit a business combination to our stockholders for approval, even if the nature of the acquisition is such as would not ordinarily require stockholder approval under applicable law or regulations. In connection with our initial business combination, we will also submit to our stockholders for approval a proposal to amend our amended and restated certificate of incorporation to provide for our corporate life to continue perpetually following the consummation of such business combination. Any vote to extend our corporate life to continue perpetually following the consummation of our initial business combination will be taken only if such business combination is approved. We will only consummate our initial business combination if (i) the business combination is approved by a majority of votes cast by our public stockholders at a duly held stockholders meeting, (ii) an amendment to our amended and restated certificate of incorporation to provide for our perpetual existence is approved by a holders of a majority of our outstanding shares of common stock and (iii) public stockholders owning no more than 30% (minus one share) of our outstanding shares of common stock sold in the offering both vote against the business combination and exercise their conversion rights. This may have the effect of making it easier for us to have a business combination approved over stockholder dissent than other blank check companies with a business purpose similar to ours.

        In connection with seeking the approval of our stockholders for any business combination, we will furnish our stockholders with proxy solicitation materials prepared in accordance with the Securities Exchange Act of 1934, as amended (the "Exchange Act"), which, among other things, will include a description of the operations of target candidates and audited historical financial statements of the target candidates.

        In connection with the vote required for our initial business combination, our initial stockholders have agreed to vote their founders' common stock in accordance with the majority of the shares of common stock voted by the public stockholders and in favor of an amendment to our amended and restated certificate of incorporation to provide for our perpetual existence in connection with a vote to approve the initial business combination. Our initial stockholders and our officers and directors have also agreed to vote any shares acquired by them following this offering in the open market in favor of an initial business combination and in favor of an amendment to our amended and restated certificate of incorporation to provide for our perpetual existence in connection with a vote to approve the initial

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business combination. Also, after the announcement of our initial business combination, our initial stockholders, officers or directors may purchase our common stock from holders who submit proxies against, or who announce their intention to submit proxies against, our initial business combination. Thus, any additional purchases of our common stock by our initial stockholders, officers or directors would likely allow them to exert additional influence over the approval of our initial business combination.

Conversion rights

        At the time we seek stockholder approval of our initial business combination, each public stockholder will have the right to convert its shares of common stock into a pro rata share of the aggregate amount then on deposit in the trust account (before payment of deferred underwriting commissions and including interest earned on their pro rata portion of the trust account, net of income taxes payable on such interest an net of interest income of up to $3.0 million on the trust account previously released to us to fund our working capital requirements) if our initial business combination is approved and completed. Our initial stockholders will not have such conversion rights with respect to founders' common stock. The actual per-share conversion price will be equal to the per share amount of $9.81 initially deposited in the trust account (plus any interest earned on the proceeds in the trust account in excess of the amount released to us for working capital purposes, net of taxes payable on such interest, on such amount per share). As this amount is lower than the $10.00 per unit offering price and it may be less than the market price of the common stock on the date of repurchase, there may be a disincentive on the part of public stockholders to exercise their conversion rights. Because converting stockholders will receive their proportionate share of the deferred underwriting discounts and commissions and the underwriters will be paid the full amount of their deferred underwriting compensation at the time of the consummation of our initial business combination, we (and, therefore, the non-converting stockholders) will bear the financial effect of such payments to both the converting stockholders and the underwriters.

        An eligible public stockholder who wishes to exercise its conversion rights may request conversion of its shares at any time after the mailing to our stockholders of the proxy statement and prior to the vote taken with respect to a proposed business combination at a meeting held for that purpose, but the request will not be granted unless the public stockholder votes against our initial business combination, our initial business combination is approved and completed, the public stockholder holds its shares through the closing of our initial business combination and the public stockholder follows the specific procedures for conversion that will be set forth in the proxy statement relating to the stockholder vote on a proposed initial business combination. Following the approval of our initial business combination by our stockholders and until the completion of our initial business combination or termination of the definitive agreement relating to the proposed initial business combination, any transfer of shares owned by a public stockholder who has requested to exercise its conversion rights will be blocked. If a public stockholder votes against our initial business combination but fails to properly exercise its conversion rights, such public stockholder will not have its shares of common stock converted. Any request for conversion, once made, may be withdrawn at any time up to the date of the meeting of stockholders being held for the purpose of approving the initial business combination. It is anticipated that the funds to be distributed to public stockholders who elect conversion will be distributed promptly after completion of our initial business combination. Public stockholders who exercise their conversion rights will still have the right to exercise any warrants they still hold.

        We currently intend to require public stockholders to tender their certificates to our transfer agent prior to the meeting or to deliver their shares to the transfer agent electronically using the Depository Trust Company's DWAC (Deposit/Withdrawal At Custodian) System, although we may choose not to do so at the time of the initial business combination. We will notify our public stockholders on a Current Report on Form 8-K and in our proxy statement related to the initial business combination if we impose this requirement. Accordingly, a public stockholder would have from the time we send out

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our proxy statement through the vote on the business combination to tender his shares if he wishes to seek to exercise his conversion rights. This time period varies depending on the specific facts of each transaction. However, as the delivery process can be accomplished by the stockholder, whether or not he is a record holder or his shares are held in "street name," in a matter of hours by simply contacting the transfer agent or his broker and requesting delivery of his shares through the DWAC System, we believe this time period is sufficient for an average investor. However, because we do not have control over this process, it may take significantly longer than we anticipated. Accordingly, we will only require stockholders to deliver their certificates prior to the vote if we give stockholders at least two weeks between the mailing of the proxy solicitation materials and the meeting date. Traditionally, in order to perfect conversion rights in connection with a blank check company's business combination, a holder could simply vote against a proposed business combination and check a box on the proxy card indicating such holder was seeking to exercise their conversion rights. After the business combination was approved, the company would contact such stockholder to arrange for him to deliver his certificate to verify ownership. As a result, the stockholder then had an "option window" after the consummation of the business combination during which he could monitor the price of the stock in the market. If the price rose above the conversion price, he could sell his shares in the open market before actually delivering his shares to the company for cancellation in consideration for the conversion price. Thus, the conversion right, to which stockholders were aware they needed to commit before the stockholder meeting, would become a "put" right surviving past the consummation of the business combination until the converting holder delivered his certificate. The requirement for physical or electronic delivery prior to the meeting ensures that a converting holder's election to convert is irrevocable once the business combination is approved.

        If we elect to require physical delivery of the share certificates, we would expect that stockholders would have to comply with the following steps. If the shares are held in street name, stockholders must instruct their account executive at the stockholders' bank or broker to withdraw the shares from the stockholders' account and request that a physical certificate be issued in the stockholders' name. Our transfer agent will be available to assist with the process. No later than the day prior to the stockholder meeting, the written instructions stating that the stockholder wishes to convert his or her shares into a pro rata share of the trust account and confirming that the stockholder has held the shares since the record date and will continue to hold them through the stockholder meeting and the closing of our business combination must be presented to our transfer agent. Certificates that have not been tendered in accordance with these procedures by the day prior to the stockholder meeting will not be converted into cash. In the event that a stockholder tenders his or her shares and decides prior the stockholder meeting that he or she does not want to convert his or her shares, the stockholder may withdraw the tender. In the event that a stockholder tenders shares and our business combination is not completed, these shares will not be converted into cash and the physical certificates representing these shares will be returned to the stockholder.

        There is a nominal cost associated with the above-referenced tendering process and the act of certificating the shares or delivering them through the DWAC system. The transfer agent will typically charge the tendering broker $35 and it would be up to the broker whether or not to pass this cost on to the converting holder. Accordingly, if a stockholder holds only a few shares of common stock, this fee may make seeking conversion less beneficial to such stockholder than selling his shares in the open market depending on the then current trading price of our common stock. The fee would be incurred regardless of whether or not we require holders seeking to exercise conversion rights to tender their shares prior to the meeting—the need to deliver shares is a requirement of conversion regardless of the timing of when such delivery must be effectuated. However, if a proposed business combination is ultimately rejected and we are unable to complete another business combination, such fee would have been incurred unnecessarily.

        We will not consummate a business combination if holders of more than 30% (minus one share) of our outstanding shares of common stock sold in this offering exercise their conversion rights. This may

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have the effect of making it easier for us to have a business combination approved over stockholder dissent than other blank check companies with a business purpose similar to ours. After the announcement of our initial business combination, our initial stockholders, officers or directors may purchase our common stock from holders who submit proxies against, or who announce their intention to submit proxies against, our initial business combination. Thus, any additional purchases of our common stock by our initial stockholders, officers or directors would likely allow them to exert additional influence over the approval of our initial business combination.

        Our initial business combination may require us to use substantially all of our cash to pay the purchase price. In such case, because we will not know how many stockholders may exercise such conversion rights, we may need to arrange third party financing to help fund our initial business combination in case a larger percentage of stockholders exercise their conversion rights than we expect. Additionally, even if our business combination does not require us to use substantially all of our cash to pay the purchase price, if a significant number of stockholders exercise their conversion rights, we will have less cash available to use in furthering our business plans following a business combination and may need to arrange third party financing. We have not taken any steps to secure third party financing for either situation. We cannot assure you that we will be able to obtain such third party financing on terms favorable to us or at all.

        If a vote on our initial business combination is held and our initial business combination is not approved, we may continue to try to consummate our initial business combination with a different target until 24 months after the date of this prospectus.

Liquidation if no business combination

        Our amended and restated certificate of incorporation, which we intend to adopt immediately prior to the consummation of this offering, will provide that our corporate existence will automatically cease 24 months after the date of this prospectus except for the purposes of winding up our affairs and liquidating pursuant to Section 278 of the Delaware General Corporation Law. This has the same effect as if our board of directors and stockholders had formally voted to approve our dissolution pursuant to Section 275 of the Delaware General Corporation Law. Limiting our corporate existence to a specified date as permitted by Section 102(b)(5) of the Delaware General Corporation Law removes the necessity to obtain formal stockholder approval of our dissolution and liquidation and to file a certificate of dissolution with the Delaware Secretary of State. Instead, we will notify the Delaware Secretary of State in writing on the termination date that our corporate existence is ceasing, and include with such notice payment of any franchise taxes then due to or assessable by the state. We view this provision terminating our corporate life by 24 months from the date of this prospectus as an obligation to our stockholders and will not take any action to amend or waive this provision to allow us to survive for a longer period of time except in connection with the consummation of our initial business combination. An approval of a business combination by our stockholders prior to the expiration of such 24 month period will include an amendment to this provision necessary to a continuation of our existence.

        Our corporate existence automatically terminates 24 months after the date of this prospectus, unless we complete a business combination prior to such date. As promptly as practicable after such a termination we will adopt a plan of distribution in accordance with Section 281(b) of the Delaware General Corporation Law. Section 278 of the Delaware General Corporation Law provides that our existence will continue for at least three years after its expiration for the purpose of prosecuting and defending suits, whether civil, criminal or administrative, by or against us, and of enabling us gradually to settle and close our business, to dispose of and convey our property, to discharge our liabilities and to distribute to our stockholders any remaining assets, but not for the purpose of continuing the business for which we were organized. Our existence will continue automatically even beyond the three-year period for the purpose of completing the prosecution or defense of suits begun prior to the expiration of the three-year period, until such time as any judgments, orders or decrees resulting from

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such suits are fully executed. Section 281(b) will require us to pay or make reasonable provision for all then-existing claims and obligations, including all contingent, conditional, or unmatured contractual claims known to us, and to make such provision as will be reasonably likely to be sufficient to provide compensation for any then-pending claims and for claims that have not been made known to us or that have not arisen but that, based on facts known to us at the time, are likely to arise or to become known to us within 10 years after the date of dissolution. Under Section 281(b), the plan of distribution must provide for all of such claims to be paid in full or make provision for payments to be made in full, as applicable, if there are sufficient assets. If there are insufficient assets, the plan must provide that such claims and obligations be paid or provided for according to their priority and, among claims of equal priority, ratably to the extent of legally available assets. Any remaining assets will be available for distribution to our stockholders. We will distribute to all of our public stockholders, in proportion to their respective equity interests, an aggregate sum equal to the amount in the trust account, inclusive of any interest, plus any remaining net assets (subject to our obligations under Delaware law to provide for claims of creditors as described below).

        We anticipate notifying the trustee of the trust account to begin liquidating such assets promptly after our dissolution and anticipate it will take no more than 10 business days to effectuate such distribution. Our initial stockholders have waived their rights to participate in any liquidation distribution with respect to its founders' common stock. There will be no distribution from the trust account with respect to our warrants, which will expire worthless. We will pay the costs of liquidation from our remaining assets outside of the trust account. If the assets remaining outside of the trust account are insufficient to pay such liquidation costs, we will pay the remaining liquidation costs from the proceeds of the trust account prior to distributing the funds in the trust account to our public stockholders. In such event, the initial per-share liquidation price could be less than the $9.81 per-share liquidation price described below.

        If we do not complete our initial business combination within 24 months after the date of this prospectus and expend all of the net proceeds of this offering, other than the proceeds deposited in the trust account, and without taking into account interest, if any, earned on the trust account, the initial per-share liquidation amount for the shares issued in this offering would be $9.81, or $0.19 less than the per-unit offering price of $10.00. The per share liquidation price includes approximately $6.0 million in deferred underwriting commissions (or approximately $6.9 million if the underwriters' over-allotment option is exercised in full) that would also be distributable to our public stockholders, and takes into account that the initial stockholders have waived their right to participate in any liquidation distribution on their founders' common stock.

        The proceeds deposited in the trust account could, however, become subject to the claims of our creditors (which could include vendors and service providers we have engaged to assist us in any way in connection with our search for a target business and that are owed money by us, as well as target businesses themselves) which could have higher priority than the claims of our public stockholders. Mr. Hicks, our founder, chairman of the board and chief executive officer has agreed that he will be liable to us if and to the extent any claims by a third party for services rendered or products sold, or by a prospective target business, reduce the amounts in the trust account, except as to (i) any claims by a third party who executed a waiver (even if such waiver is subsequently found to be invalid and unenforceable) of any and all rights to seek access to the funds in the trust account, or (ii) any claims under our indemnity of the underwriters of this offering against certain liabilities, including liabilities under the Securities Act. In the event Mr. Hicks has liability to us under this indemnification arrangement, we cannot assure you that he will have the assets necessary to satisfy those obligations. Accordingly, the actual per-share liquidation price could be less than $9.81, plus interest, due to claims of creditors. Additionally, if we are forced to file a bankruptcy case or an involuntary bankruptcy case is filed against us which is not dismissed, the proceeds held in the trust account could be subject to applicable bankruptcy law, and may be included in our bankruptcy estate and subject to the claims of third parties with priority over the claims of our stockholders. To the extent any bankruptcy claims deplete the trust account, we cannot assure you we will be able to return to our public stockholders at least $9.81 per share.

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        Under the Delaware General Corporation Law, stockholders may be held liable for claims by third parties against a corporation to the extent of distributions received by them in a dissolution. If the corporation complies with certain procedures set forth in Section 280 of the Delaware General Corporation Law intended to ensure that it makes reasonable provision for all claims against it, including a 60-day notice period during which any third-party claims can be brought against the corporation, a 90-day period during which the corporation may reject any claims brought, and an additional 150-day waiting period before any liquidating distributions are made to stockholders, any liability of stockholders with respect to a liquidating distribution is limited to the lesser of such stockholder's pro rata share of the claim or the amount distributed to the stockholder, and any liability of the stockholder would be barred after the third anniversary of the dissolution. However, we do not intend to comply with those procedures since, as stated above, it is our intention to make liquidating distributions to our stockholders as soon as reasonably possible after 24 months after the date of this prospectus in the event our initial business combination has not been consummated. As such, our stockholders could potentially be liable for any claims to the extent of distributions received by them (but no more) and any liability of our stockholders may extend beyond the third anniversary of such date. Because we will not be complying with Section 280, Section 281(b) of the Delaware General Corporation Law requires us to adopt a plan that will provide for our payment, based on facts known to us at such time, of (i) all existing claims, (ii) all pending claims and (iii) all claims that may be potentially brought against us within the subsequent 10 years. Accordingly, we would be required to provide for any claims of creditors known to us at that time or those that we believe could be potentially brought against us within the subsequent 10 years prior to our distributing the funds in the trust account to our public stockholders. As a result, if we liquidate, the per-share distribution from the trust account could be less than $9.81 due to claims or potential claims of creditors. However, because we are a blank check company, rather than an operating company, and our operations will be limited to searching for prospective target businesses to acquire, the most likely claims, if any, to arise would be from our vendors and service providers (such as accountants, lawyers, investment bankers, etc.) and potential target businesses.

        If we are forced to file a bankruptcy case or an involuntary bankruptcy case is filed against us which is not dismissed, any distributions received by stockholders could be viewed under applicable debtor/creditor and/or bankruptcy laws as either a "preferential transfer" or a "fraudulent conveyance." As a result, a bankruptcy court could seek to recover all amounts received by our stockholders. Furthermore, because we intend to distribute the then-remaining proceeds held in the trust account, this may be viewed or interpreted as giving preference to our public stockholders over any potential creditors with respect to access to or distributions from our assets. Furthermore, our board of directors may be viewed as having breached its fiduciary duties to our creditors and/or may have acted in bad faith, and thereby exposed itself and our company to claims of punitive damages, by paying public stockholders from the trust account prior to addressing the claims of creditors. We cannot assure you that claims will not be brought against us for these reasons.

Amended and Restated Certificate of Incorporation

        Our amended and restated certificate of incorporation will set forth certain requirements and restrictions relating to this offering that apply to us until the consummation of our initial business combination. Specifically, our amended and restated certificate of incorporation will provide, among other things, that:

•

upon closing of this offering, $196,195,000, or approximately $224,995,000 if the underwriters' over-allotment option is exercised in full (including $5.0 million from the sale of the sponsor warrants and $6.0 million in deferred underwriting commissions or approximately $6.9 million if the underwriters over-allotment option is exercised in full) will be placed into the trust account;

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•

we shall submit any proposed business combination to our stockholders for approval prior to consummating our initial business combination;



•

our public stockholders will have the right to convert their shares of common stock into cash in accordance with the conversion rights described in this prospectus;



•

public stockholders who exercise their conversion rights and vote against our initial business combination may convert their shares into a pro rata share of the aggregate amount then on deposit in the trust account;



•

we will consummate a business combination only if it has a fair market value equal to at least 80% of the initial amount held in trust (excluding deferred underwriting commissions of $6.0 million or approximately $6.9 million if the underwriters' over-allotment option is exercised in full);



•

we may not consummate any business combination, merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar transaction prior to our initial business combination;



•

prior to our initial business combination, we may not issue additional stock that participates in any manner in the proceeds of the trust account, or that vote as a class with the common stock sold in this offering on a business combination;



•

we will consummate our initial business combination only if (i) the business combination is approved by a majority of votes cast by our public stockholders at a duly held stockholders meeting or by a written consent of a majority of our outstanding shares of common stock, (ii) an amendment to our amended and restated certificate of incorporation to provide for our perpetual existence is approved by holders of a majority of our outstanding shares of common stock, (iii) public stockholders owning no more than 30% (minus one share) of our outstanding shares of common stock sold in the offering both vote against the business combination and exercise their conversion rights and (iv) we have confirmed that we have sufficient cash resources to pay both (x) the consideration required to close our initial business combination, and (y) the cash due to public stockholders who vote against the business combination and who exercise their conversion rights; and



•

if we do not consummate our initial business combination within 24 months after the date of this prospectus, our corporate purposes and powers will immediately thereupon be limited to acts and activities related to liquidating and winding up our affairs, including liquidation, and we will not be able to engage in any other business activities.

        Our amended and restated certificate of incorporation will require that the above-referenced requirements and restrictions may only be amended prior to consummation of our initial business combination with the vote of our board of directors and the unanimous affirmative vote, or unanimous written consent, of our stockholders. In light of the requirement that we obtain the unanimous approval of our stockholders, we do not anticipate any changes to such requirements and restrictions prior to our consummation of our initial business combination, if any.

Comparison of This Offering to Those of Blank Check Companies Subject to Rule 419

        The following table compares the terms of this offering to the terms of an offering by a blank check company subject to the provisions of Rule 419. This comparison assumes that the gross proceeds, underwriting commissions and underwriting expenses of our offering would be identical to those of an offering undertaken by a company subject to Rule 419, and that the underwriters will not exercise their over-allotment option. None of the provisions of Rule 419 apply to our offering.

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Competition

        In identifying, evaluating and selecting a target business for a business combination, we may encounter intense competition from other entities having a business objective similar to ours, including other blank check companies, private equity groups and leveraged buyout funds, and operating businesses seeking strategic acquisitions. Many of these entities are well established and have extensive experience identifying and effecting business combinations directly or through affiliates. Moreover, many of these competitors possess greater financial, technical, human and other resources than us. Our ability to acquire larger target businesses will be limited by our available financial resources. This inherent limitation gives others an advantage in pursuing the acquisition of a target business. Furthermore:

•

our obligation to seek stockholder approval of a business combination or obtain necessary financial information may delay the completion of a transaction;



•

our obligation to repurchase for cash shares of common stock held by our public stockholders who vote against the business combination and exercise their conversion rights may reduce the resources available to us for a business combination;



•

we will not consummate a business combination if holders of more than 30% (minus one share) of our outstanding shares of common stock sold in this offering exercise their conversion rights;



•

our outstanding warrants, and the future dilution they potentially represent, may not be viewed favorably by certain target businesses; and



•

the requirement to acquire one or more businesses or assets that have a fair market value equal to at least 80% of the balance of the trust account at the time of the acquisition (excluding deferred underwriting discounts and commissions of $6.0 million, or approximately $6.9 million if

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the underwriters' over-allotment option is exercised in full) could require us to acquire the assets of several businesses at the same time, all of which sales would be contingent on the closings of the other sales, which could make it more difficult to consummate the initial business combination.

        Any of these factors may place us at a competitive disadvantage in successfully negotiating a business combination.

Facilities

        We currently maintain our executive offices at 600 Congress Ave., Suite 1400, Austin, Texas 78701. The cost for this space is included in the $10,000 per month fee described above that Capstar Investment Partners, LP, an affiliate of Capstar Partners, LLC, charges us for general and administrative services. We believe, based on rents and fees for similar services in the Austin metropolitan area that the fee charged by Capstar Investment Partners, LP is at least as favorable as we could have obtained from an unaffiliated person. We consider our current office space adequate for our current operations.

Employees

        We currently have six executive officers. These individuals are not obligated to devote any specific number of hours to our matters but they intend to devote as much of their time as they deem necessary to our affairs until we have completed our initial business combination. The amount of time they will devote in any time period will vary based on whether a target business has been selected for our initial business combination and the stage of the business combination process the company is in. We do not intend to have any full time employees prior to the consummation of our initial business combination.

Periodic Reporting and Financial Information

        We have registered our units, common stock and warrants under the Exchange Act, as amended, and have reporting obligations, including the requirement that we file annual, quarterly and current reports with the Securities and Exchange Commission. In accordance with the requirements of the Exchange Act, our annual reports will contain financial statements audited and reported on by our independent registered public accountants.

        We will provide stockholders with audited financial statements of the prospective target business as part of the proxy solicitation materials sent to stockholders to assist them in assessing the target business. In all likelihood, these financial statements will need to be prepared in accordance with United States generally accepted accounting principles. We cannot assure you that any particular target business identified by us as a potential acquisition candidate will have financial statements prepared in accordance with United States generally accepted accounting principles or that the potential target business will be able to prepare its financial statements in accordance with United States generally accepted accounting principles. To the extent that this requirement cannot be met, we may not be able to acquire the proposed target business. While this may limit the pool of potential acquisition candidates, we do not believe that this limitation will be material.

        We will be required to have our internal control procedures audited for the fiscal year ending December 31, 2009 as required by the Sarbanes-Oxley Act. A target company may not be in compliance with the provisions of the Sarbanes-Oxley Act regarding adequacy of their internal controls. The development of the internal controls of any such entity to achieve compliance with the Sarbanes-Oxley Act may increase the time and costs necessary to complete any such acquisition.

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Legal Proceedings

        There is no material litigation, arbitration or governmental proceeding currently pending against us or any members of our management team in their capacity as such, and we and the members of our management team have not been subject to any such proceeding in the 12 months preceding the date of this prospectus.

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MANAGEMENT

Directors and Executive Officers

        Our directors, executive officers and director nominees are as follows:

        R. Steven Hicks, our founder, has been our chairman of the board and chief executive officer since our inception. Since 2000, Mr. Hicks has served as executive chairman and sole member of Capstar Partners, LLC, a private investment firm of Mr. Hicks and his family focused on buyouts, real estate development, and public investing. Capstar Partners, LLC (or affiliated persons) is the controlling shareholder in DMX Holdings, Inc., the parent company of its operating subsidiary, DMX, Inc., a company engaged in the provision of business media services, including video, music and scent technologies, Andrew Harper, Inc., a high-end travel publishing and services firm, and Harden Healthcare Texas, LP, a company engaged in the skilled nursing, home health, and related fields. Mr. Hicks currently serves as chairman of DMX Holdings and chairman and chief executive officer of Andrew Harper, Inc. An affiliate of Capstar Partners, LLC is also a substantial stockholder of CPO Commerce, Inc., an e-commerce company that partners with manufacturers of leading brands to sell non-standard inventory. Other holdings of Mr. Hicks (or his affiliated entities) include the Big EZ Ranch, Ltd., an upscale bed and breakfast lodge and real estate development in Big Sky, Montana, and a residential real estate development project in St. Barth's. Mr. Hicks also currently serves as chairman of the board of directors of Healthtronics, Inc. (NASDAQ: HTRN), a company engaged in the delivery of urological products and services. Prior to founding Capstar Partners, LLC, Mr. Hicks was a 28 year veteran of the radio industry. In 1996, Mr. Hicks founded and served as chief executive officer of Capstar Broadcasting Corp (formerly NYSE:CRB). Mr. Hicks led Capstar Broadcasting Corp., an owner of 350 radio stations, through a successful initial public offering on the New York Stock Exchange in 1998. In 1999, Capstar Broadcasting Corp. merged with Chancellor Media Corp. in a stock swap valued at $4.1 billion, and the combined Company was renamed AMFM, Inc. Mr. Hicks served as vice-chairman and chief executive officer of the new media division of AMFM, Inc. until it was acquired by Clear Channel Communications, Inc. in 2000. Prior to Capstar Broadcasting Corp., Mr. Hicks also co-founded and served as CEO of SFX Broadcasting, Inc. (formerly NASDAQ: SFXB) from 1989 until 1996 and led SFX Broadcasting, Inc. through a successful initial public offering in 1993. Mr. Hicks received a Bachelor of Arts degree in government from the University of Texas in 1972. Mr. Hicks is the father of Robert S. Hicks, our vice president, and the father in law of Benjamin M. Hanson, our vice president and secretary.

        John D. Cullen has been our president and one of our directors since inception. Mr. Cullen currently serves as chief executive officer of DMX, Inc., a company engaged in the provision of business media services, including video, music and scent technologies, and as president of Andrew Harper, Inc., a high-end travel publishing and services firm. Capstar Partners, LLC (or affiliated persons), a private investment firm of Mr. Hicks focused on buyouts, real estate development, and public investing, is the controlling shareholder of both entities. Prior to his current roles, Mr. Cullen had 25 years of experience in management and marketing including 20 years of experience in broadcast

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sales, sales management, and general management. From 2000 to 2003, Mr. Cullen served as a member of the executive team with Clear Channel Communications, Inc. (NYSE:CCU) as president of the International Division and as senior vice president. In 1999, Mr. Cullen joined AMFM, Inc. when Capstar Broadcasting Corp. merged with Chancellor Media Corp. and served as the president of the new media division of AMFM, Inc. from 1999 to 2000, where he supervised the systems, services and technology initiatives including the television and radio representation firm Katz Media Group, Prophet Media Distribution Systems, Galaxy and the training academy, Star Performance. Prior to AMFM, Inc., Mr. Cullen served as the chief operating officer of Capstar Broadcasting Corp. from 1998 to 1999 and helped lead Capstar Broadcasting Corp. through a successful initial public offering on the New York Stock Exchange in 1998. From 1996 to 1998, Mr. Cullen served as president and chief executive officer of GulfStar Broadcasting Inc. GulfStar grew from a privately held group of 8 radio stations into an 87 station group in 1998 under Mr. Cullen's supervision. Prior to 1996, Mr. Cullen held various management positions within SFX Broadcasting, Inc., Cox Communications and Sterling Communications. Mr. Cullen received a Bachelor of Arts degree from Furman University in 1975.

        Kimberly K. Shipman has been our chief financial officer since our inception. Since 2005, Ms. Shipman has served as chief financial officer of DMX, Inc., a company engaged in the provision of business media services, including video, music and scent technologies. From 2004 to 2005, Ms. Shipman was a manager with PricewaterhouseCoopers' Transaction Services group where she directed buy-side, sell-side and reverse diligence processes for both strategic and financial buyers. From 2001 to 2004, Ms. Shipman served as a Controller with Clear Channel Communications, Inc., a global media and entertainment company, with a focus on both international and domestic radio operations. From 1998 to 2001 Ms. Shipman served as a Controller for AMFM, Inc. (now Clear Channel Communications, Inc.) and its predecessor company Capstar Broadcasting Corp. As a Controller, Ms. Shipman led acquisition integration efforts following Capstar's merger with Chancellor Media Corporation to form AMFM, Inc. in 1999 and Clear Channel's purchase of AMFM in 2000. Prior to joining Capstar, Ms. Shipman served as an auditor with Ernst & Young, LLP. Ms. Shipman received a Bachelor of Business Administration from the University of Texas at Austin in 1995 and became a Certified Public Accountant in 1998. She earned a Master's of Business Administration, with distinction, from the University of Texas at Austin in 2004.

        Christopher S. Harrison has been a vice president since our inception. Since 2005, Mr. Harrison has worked for DMX, Inc., a company engaged in the provision of business media services, including video music and scent technologies and serves as Assistant Secretary of DMX, Inc.'s parent DMX Holdings, Inc. Mr. Harrison joined DMX, Inc. as its Vice President Business Affairs and Assistant General Counsel. Since that time, Mr. Harrison has transitioned into a management role, where he currently serves as Managing Director of DMX Residential, Inc., a wholly-owned subsidiary of DMX, Inc. engaged in the provision of linear audio programming services for multiple systems operators ("MSOs") in the U.S. In 2007, DMX Residential, Inc. served more than 6 million households in the U.S. through MSOs operated by Bright House Networks, Comcast, Cox Communications, Charter, Time Warner and the National Cable Television Cooperative. Mr. Harrison is also Managing Director and Board Member of AEI Collingham Holdings Co. Ltd. d/b/a DMX Latin America, a joint-venture between DMX, Inc. and Claxson Interactive Group, Inc., a portfolio company of HM Capital (formerly Hicks, Muse, Tate & Furst), for the provision of audio and video programming services for MSOs in Latin America. In 2007, DMX Latin America served more than 4 million households in Latin America through MSOs operated by Sky Mexico, Sky Chile, DirecTV Latin America, and Cablevision Argentina. Prior to joining DMX, Inc., Mr. Harrison practiced law with Fulbright & Jaworski, LLP in Austin, Texas, where he specialized in Lanham Act litigation involving pharmaceutical companies. Mr. Harrison received his J.D. from the University of North Carolina, Chapel Hill, in 2001. Mr. Harrison also received his Ph.D. in Political Science from the University of North Carolina, Chapel Hill, in 2001. He is the author of the book The Politics of the International Pricing of Prescription Drugs, Praeger © 2004.

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        Benjamin M. Hanson has been a vice president and secretary since our inception. Since 2006, Mr. Hanson has served as a manager and executive vice president of Capstar Partners, LLC, a private investment firm of Mr. Hicks, our chairman and chief executive officer, and his family that focuses on buyouts, real estate development and public investing. Mr. Hanson consulted for Capstar Partners, LLC on a part-time basis during the period 2003 to 2006. In addition, since 2005, Mr. Hanson has served as the secretary of DMX Holdings, Inc., and as general counsel and secretary of its wholly owned operating subsidiary, DMX, Inc., a company engaged in the provision of business media services, including video, music and scent technologies, and as the general counsel and assistant secretary of Andrew Harper, Inc., a high-end travel publishing and services firm. From 2003 to 2005, Mr. Hanson served both as a member of Texas Governor Rick Perry's senior staff, and as an assistant general counsel, and served as the chief of staff and general counsel to two different Texas Secretaries of State. From 2002 to 2003, Mr. Hanson served as general counsel and secretary for CLIX Network, Inc., a company engaged in the delivery of music to personal computers via proprietary software. From 1999 to 2002, Mr. Hanson practiced law with the law firm of Jenkens & Gilchrist, P.C., where he specialized in mergers and acquisitions, and debt and equity capital raising transactions. Mr. Hanson currently serves on the board of managers of the general partner of Harden Healthcare Texas, LP, a firm engaged in the skilled nursing, home health, and related fields, and also serves in various other officer capacities with respect to entities owned by or otherwise affiliated with Mr. Hicks. Mr. Hanson received his Bachelor of Arts degree from the Plan II Honors Program at the University of Texas at Austin in 1996, and received his Juris Doctorate from Southern Methodist University in 1999. Mr. Hanson is the son in law of our chairman and chief executive officer, R. Steven Hicks, and is the brother in law of Robert S. Hicks, our vice president.

        Robert S. Hicks has been a vice president since our inception. Since 2006, Mr. Hicks has served as an executive vice president of Capstar Partners, LLC, a private investment firm of R. Steven Hicks, our chairman and chief executive officer, and his family that focuses on buyouts, real estate development and public investing. Mr. Hicks consulted for Capstar Partners, LLC on a part-time basis from 2005 to 2006. In addition, since July 2007, Mr. Hicks has served as president of Capstar Partners, LLC. From 2003 to 2005, Mr. Hicks co-founded and served as Director of Finance for CPO Commerce, Inc., an e-commerce company that partners with manufacturers of leading brands to sell non-standard inventory. From 2002 to 2003, Mr. Hicks served as Director of Business Development and Analysis for CLIX Network, Inc., a company engaged in the delivery of music to personal computers via proprietary software. From 2000 to 2002, Mr. Hicks was an analyst in the media and telecommunications group of Credit Suisse, an investment banking firm. As an analyst, Mr. Hicks was involved in a number of private equity, mergers and acquisition advisory, and debt and equity financing transactions. Mr. Hicks currently serves on the board of managers of the general partner of Harden Healthcare Texas, LP, a firm engaged in the skilled nursing, home health, and related fields, and also serves in various other officer capacities with respect to entities owned by or otherwise affiliated with R. Steven Hicks. Mr. Hicks received his MBA from the Stanford Graduate School of Business in 2007 and graduated magna cum laude from Vanderbilt University with a double major in mathematics and economics in 2000. Mr. Hicks became a chartered financial analyst in 2005 and is currently a member of the CFA Institute. Mr. Hicks is the son of our chairman and chief executive officer, R. Steven Hicks, and is the brother in law of Benjamin M. Hanson, our vice president and secretary.

        James R. Huffines has agreed to serve as a director of our company and is expected to join our board prior to the closing of this offering. Since 2003, Mr. Huffines has served on The University of Texas System Board of Regents and has been its chairman since 2004. He is co-chairman of the Task Force on Planning and has served as chairman of the Facilities Planning and Construction Committee. He also served on various other committees such as the Finance and Planning Committee and as a Regental representative on the board of directors of the University of Texas Management Company. He also serves on the boards of privately held Energy Future Holdings (formerly TXU Corp.), Hester Capital Management, McAfee Mortgage and Prime Lending Mortgage Co. He is the chairman of

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PlainsCapital Bank in Austin and, since 2001, the senior executive vice president of PlainsCapital Corporation, one of the leading independent financial services companies in Texas. Mr. Huffines was co-chairman of the Texas Inauguration Committee for the inauguration of Texas Governor Rick Perry in January 2003 and January 2007. He is also a former Commissioner of the State of Texas Alcoholic Beverage Commission. Mr. Huffines currently is a member of the advisory board of Texas Lyceum, the board of trustees of the Bob Bullock Texas State History Museum Foundation and the executive committee of the chancellor's council at the University of Texas System. He previously served on boards and committees of various organizations and educational institutions, such as Harry Ransom Humanities Research Center at A.T. Austin, Dallas Council on World Affairs and Meadows School of the Arts at Southern Methodist University. Mr. Huffines attended Southwestern Graduate School of Banking at Southern Methodist University and graduated with a BBA degree in finance from U.T. Austin in 1973.

        Frederick G. Kraegel has agreed to serve as a director of our company and is expected to join our board prior to the closing of this offering. Mr. Kraegel has extensive experience in evaluating businesses and in working with companies with complex financial issues. He has been a senior consultant with Bridge Associates LLC since 2003 and in such capacity has served in a number of roles including as financial advisor to the Chapter 7 Trustee of Refco, LLC. From 2001 to 2002 Mr. Kraegel was executive vice president, chief administrative officer and director of AMF Bowling Worldwide, Inc. where he was hired to provide direction for the Chapter 11 process and financial, information technology and real estate functions. Mr. Kraegel was president and director of Acme Markets of Virginia, Inc. from 2000 to 2001 and led the effort in which the retail operations of the 32-store chain were sold. In 1998, he was hired as senior vice president and chief financial officer of Factory Card Outlet Corp., a public company, to direct the financial restructuring of the company including the filing of a Chapter 11 proceeding in 1999; Mr. Kraegel left the company in 2000 prior to its emergence from bankruptcy in 2002. Since 2007, Mr. Kraegel has been a director of Alternative Asset Management Acquisition Corp. (AAMAC), a blank check company formed to effect a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses or assets. Mr. Kraegel was a partner at Peat, Marwick, Mitchell & Co. (now KPMG LLP) and is a CPA. Mr. Kraegel graduated from Valparaiso University in 1970 with a Bachelor of Science in Business Administration with a concentration in Accounting.

        Timothy J. Lindgren has agreed to serve as a director of our company and is expected to join our board prior to the closing of this offering. He has more than 30 years of experience in hotel management and operations. Since 1992, Mr. Lindgren has been a senior vice president for Hyatt Hotels & Resorts, where he oversees all aspects of operations, owner relations, strategic planning, sales, profit and loss management and employee relations of 20 Hyatt Hotels in six states. Mr. Lindgren also serves on the Managing Committee of Global Hyatt Corporation, North America Operations. Since 1992, he has served as a member of the board of directors and executive committee of the Atlanta Convention & Visitors Bureau. Since 1993, he has been a member of the board of directors for Central Atlanta Progress. He served on the board of directors and was a member of the executive committee for the Metro Atlanta Chamber of Commerce in 2003 and 2004. In 2007, he was a co-chairman of the Atlanta Local Organizing Committee Executive Board for the NCAA Men's Final Four, of which he was on the executive committee in 2002. In 2002, he also served as a member of the executive committee of the Atlanta Host Committee for the 2002 Super Bowl. Since 2003, Mr. Lindgren has been a member of the board of directors of HealthTronics, Inc., a surgical services company, where he is also the chairman of the compensation committee and a member of the executive committee. Mr. Lindgren received his B.S. in Education from Southern Illinois University in 1970.

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Number and Terms of Office of Directors and Officers

        Our amended and restated certificate of incorporation, which we intend to adopt prior to the closing of this offering, divides our board of directors into three classes with only one class of directors being elected in each year and each class (except for those directors appointed prior to our first annual meeting of stockholders) serving a three-year term. The term of office of the first class of directors, consisting of [            ] and [            ], will expire at our first annual meeting of stockholders. The term of office of the second class of directors, consisting of [            ] and [            ], will expire at the second annual meeting of stockholders. The term of office of the third class of directors, consisting of [            ] and [            ], will expire at the third annual meeting of stockholders.

        Our officers are appointed by the board of directors and serve at the discretion of the board of directors, rather than for specific terms of office. Our board of directors is authorized to appoint persons to the offices set forth in our amended and restated bylaws as it deems appropriate. Our amended and restated bylaws provide that our officers may consist of a chairman of the board, chief executive officer, president, chief financial officer, vice presidents, secretary, treasurer and such other offices as may be determined by the board of directors.

        Collectively, through their positions described above, our officers and directors have extensive experience in consummating transactions and operating businesses. These individuals will play a key role in identifying and evaluating prospective acquisition candidates, selecting the target businesses, and structuring, negotiating and consummating their acquisition.

Executive Officer and Director Compensation

        None of our executive officers or directors received any cash compensation for services rendered. Commencing on the date of this prospectus through the earlier of consummation of our initial business combination or our liquidation, we will pay Capstar Partners, LLC, a total of $10,000 per month for office space and administrative services, including secretarial support. This arrangement is being agreed to by Capstar Partners, LLC for our benefit and is not intended to provide Mr. Hicks compensation in lieu of a salary. We believe that such fees are at least as favorable as we could have obtained from an unaffiliated third party for such services. Other than this $10,000 per month fee, no compensation of any kind, including finder's and consulting fees, will be paid to our sponsor, executive officers and directors, or any of their respective affiliates, for services rendered prior to or in connection with the consummation of a initial business combination. We are not party to any agreements with our executive officers and directors that provide for benefits upon termination of employment. However, these individuals will be reimbursed for any out-of-pocket expenses incurred in connection with activities on our behalf such as identifying potential target businesses and performing due diligence on suitable business combinations. After completion of our initial business combination, directors or members of our management team who remain with us may be paid consulting, management or other fees from the combined company with any and all amounts being fully disclosed to stockholders, to the extent then known, in the proxy solicitation materials furnished to our stockholders in connection with the stockholder meeting to approve a proposed business combination. It is unlikely the amount of such compensation will be known at the time of a stockholder meeting held to consider a business combination, as it will be up to the directors of the post-combination business to determine executive and director compensation. We do not intend to take any action to ensure that members of our management team maintain their positions with us after the consummation of our initial business combination, although it is possible that some or all of our executive officers and directors may negotiate employment or consulting arrangements to remain with the company after the initial business combination. The existence or terms of any such employment or consulting arrangements to retain their positions with the company may influence our management's motivation in identifying or selecting a target business but we do not believe that the ability of our management to remain with the company

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after the consummation of an initial business combination will be a determining factor in our decision to proceed with any potential business combination.

Director Independence

        The American Stock Exchange requires that a majority of our board of directors must be composed of "independent directors," which is defined generally as a person other than an officer or employee of the company or its subsidiaries or any other individual having a relationship, which, in the opinion of the company's board of directors would interfere with the director's exercise of independent judgment in carrying out the responsibilities of a director.

        Our board of directors has determined that each of Messrs. Huffines, Kraegel and Lindgren, who have agreed to join our board of directors and are expected to join our board of directors upon the closing of this offering, will be independent directors as such term is defined under the rules of the American Stock Exchange and Rule 10A-3 of the Exchange Act.

        We will not enter into our initial business combination with an entity which is affiliated with any of our officers, directors, or sponsor, unless we have obtained an opinion from an independent investment banking firm, which is a member of FINRA, reasonably acceptable to the underwriter, and the approval of a majority of our independent directors that the business combination is fair to our stockholders from a financial point of view. The investment bank rendering such opinion may or may not agree to address the opinion directly to our stockholders or otherwise permit them to rely directly on such opinion. While we will consider whether such an opinion may be relied on directly by our stockholders, it will not be dispositive as to which investment bank we seek a fairness opinion from. Other factors contributing to our choice of an investment bank to render such opinion are expected to include, among others: reputation of the independent investment bank, specifically their knowledge in our particular industry, timing and cost.

Nomination of Director Candidates

        The American Stock Exchange requires that nominees for election to our board must be either selected, or recommended for our full board's selection, by either a nominating committee comprised solely of our independent directors or by a majority of our independent directors. In addition, the American Stock Exchange requires that we adopt a formal written charter or resolution of our board, as applicable, addressing the director nomination process.

        We have not established a nominating committee or adopted a nominating committee charter. A majority of our independent directors shall select, or recommend to our full board for selection, all nominees for election to our board. Our independent directors will recruit, review and nominate candidates for election to our board, review candidates for election to our board proposed by our stockholders and conduct appropriate inquiries into the background and qualifications of any such candidates. Our board has adopted resolutions addressing the role of our independent directors in the director nomination process and our policy with regards to the consideration of director candidates proposed by our stockholders. Candidates for election to our board will be reviewed by our independent directors in the context of the current composition of our board, our current operating requirements and the long-term interests of our stockholders. In conducting this assessment, our independent directors will consider and evaluate each candidate for election to our board based upon an assessment of the following criteria:

•

Whether the candidate is independent pursuant to the requirements of the American Stock Exchange;



•

Whether the candidate is accomplished in his or her field and has a reputation, both personally and professionally, that is consistent with our image and reputation;

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•

Whether the candidate has the ability to read and understand basic financial statements, and, if applicable, whether the candidate satisfies the criteria for being an "audit committee financial expert," as defined by the Securities and Exchange Commission;



•

Whether the candidate has relevant experience and expertise and would be able to provide insights and practical wisdom based upon that experience and expertise;



•

Whether the candidate has knowledge of our company and issues affecting us;



•

Whether the candidate is committed to enhancing stockholder value;



•

Whether the candidate fully understands, or has the capacity to fully understand, the legal responsibilities of a director and the governance processes of a public company;



•

Whether the candidate is of high moral and ethical character and would be willing to apply sound, objective and independent business judgment and to assume broad fiduciary responsibility;



•

Whether the candidate would be willing to commit the required hours necessary to discharge the duties of board membership;



•

Whether the candidate has any prohibitive interlocking relationships or conflicts of interest; and



•

Whether the candidate is able to develop a good working relationship with other board members and contribute to our board's working relationship with our senior management.

Audit Committee

        Immediately following the closing of this offering, we will establish an audit committee of our board of directors, which will consist of Messrs. Huffines, Kraegel and Lindgren, each of whom has been determined to be "independent" as defined in Rule 10A-3 of the Exchange Act and the rules of the American Stock Exchange. The audit committee's duties, which are specified in our Audit Committee Charter, include, but are not limited to:

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reviewing and discussing with management and the independent auditor the annual audited financial statements;



•

discussing with management and the independent auditor significant financial reporting issues and judgments made in connection with the preparation of our financial statements;



•

discussing with management major risk assessment and risk management policies;



•

monitoring the independence of the independent auditor;



•

verifying the rotation of the lead (or coordinating) audit partner having primary responsibility for the audit and the audit partner responsible for reviewing the audit as required by law;



•

reviewing and approving all related-party transactions;



•

inquiring and discussing with management our compliance with applicable laws and regulations;



•

pre-approving all audit services and permitted non-audit services to be performed by our independent auditor, including the fees and terms of the services to be performed;



•

appointing or replacing the independent auditor;



•

determining the compensation and oversight of the work of the independent auditor (including resolution of disagreements between management and the independent auditor regarding financial reporting) for the purpose of preparing or issuing an audit report or related work; and

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•

establishing procedures for the receipt, retention and treatment of complaints received by us regarding accounting, internal accounting controls or reports which raise material issues regarding our financial statements or accounting policies.

        Prior to our completion of an initial business combination, the audit committee will also monitor compliance on a quarterly basis with the terms described below and the other material terms relating to this offering. If any noncompliance is identified, then the audit committee will be charged with the responsibility to immediately take all action necessary to rectify such noncompliance or otherwise cause compliance with the terms of this offering.

        There will be no fees or other cash payments paid to our existing stockholders, officers, directors or their affiliates prior to, or for any services they render in order to effectuate, the consummation of our initial business combination (regardless of the type of transaction that it is) other than:

•

repayment of a loan for up to $200,000 that is non-interest bearing made to us by Mr. Hicks, our founder, chairman of the board and chief executive officer, to cover operating expenses;



•

a payment of an aggregate of $10,000 per month to Capstar Investment Partners, LP, an affiliate of Capstar Partners, LLC, an affiliate of Mr. Hicks, for office space, secretarial and administrative services; and



•

reimbursements for any out-of-pocket expenses incurred in connection with actions on our behalf, such as identifying potential target businesses and performing due diligence on suitable business combinations.

Financial Expert on Audit Committee

        The audit committee will at all times be composed exclusively of "independent directors" who, as required by the American Stock Exchange, are able to read and understand fundamental financial statements, including a company's balance sheet, income statement and cash flow statement.

        In addition, we must certify to the American Stock Exchange that the committee has, and will continue to have, at least one member who has past employment experience in finance or accounting, requisite professional certification in accounting, or other comparable experience or background that results in the individual's financial sophistication. The board of directors has determined that Mr. Kraegel satisfies the American Stock Exchange's definition of financial sophistication and also qualifies as an "audit committee financial expert," as defined under rules and regulations of the Securities and Exchange Commission.

Code of Ethics and Committee Charters

        As of the date of this prospectus, we have adopted a code of ethics that applies to our officers, directors and employees and have filed copies of our code of ethics and our board committee charters as exhibits to the registration statement of which this prospectus is a part. You will be able to review these documents by accessing our public filings at the Securities and Exchange Commission's web site at www.sec.gov. In addition, a copy of the code of ethics will be provided without charge upon request to us. We intend to disclose any amendments to or waivers of certain provisions of our code of ethics in a Current Report on Form 8-K.

Conflicts of Interest

        In order to minimize potential conflicts of interest which may arise from multiple corporate affiliations, each of our officers has agreed, pursuant to a written agreement with us, that until the earliest of our initial business combination, our liquidation or such time as he or she ceases to be an officer, to present to us for our consideration, prior to presentation to any other entity, any business

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opportunity with a fair market value of $160 million or more, except to the extent that an existing fiduciary or contractual obligation to which such officer is subject restricts such presentation. In the event that any of our officers becomes aware of a business combination opportunity that falls within the line of business of any entity to which he or she has such a fiduciary or contractual obligation, he or she may be required to present such business combination opportunity to such entity prior to presenting such business combination opportunity to us.

        In the event that any of the foregoing officers becomes aware of a relevant business combination opportunity that falls within the line of business of any of the foregoing entities, he or she may be required to present such business combination opportunity to such entity prior to presenting such business combination opportunity to us or, in the case of a noncompete obligation, possibly prohibited from referring such opportunity to us. We do not believe that any of the foregoing pre-existing fiduciary duties or contractual obligations will materially undermine our ability to consummate a business combination because the foregoing entities have specific industry focuses and even, within those industries, may have constraints on the size of acquisitions they would consider.

        None of our directors and executive officers other than Mr. Kraegel, who is a director of AAMAC, have previously been involved in blank check companies. However, each of our principals may become involved with subsequent blank check companies similar to our company, although they have agreed in writing not to participate in the formation of, or become an officer or director of, any other blank check company until the closing of this offering. In addition, our officers and directors have agreed not to become involved with any blank check company that will seek to effect a business combination with a company in the media and entertainment industry, until we have entered into a definitive agreement regarding our initial business combination.

        Potential investors should also be aware of the following other potential conflicts of interest:

•

None of our officers and directors is required to commit his or her full time to our affairs and, accordingly, may have conflicts of interest in allocating his or her time among various business activities.



•

In the course of their other business activities, our officers and directors may become aware of investment and business opportunities which may be appropriate for presentation to our company as well as the other entities with which they are affiliated. Our management may have conflicts of interest in determining to which entity a particular business opportunity should be presented. For a complete description of our management's other affiliations, see "—Directors and Executive Officers."



•

Our initial stockholders have purchased founders' common stock prior to the date of this prospectus and our sponsor will purchase sponsor warrants in a transaction that will close simultaneously with the closing of this offering. If we do not complete our initial business combination within 24 months after the date of this prospectus, the proceeds of the sale of the sponsor warrants will become part of the distribution of the trust account to our public stockholders and the sponsor warrants will expire worthless. Additionally, our initial stockholders have agreed to waive their rights to participate in any liquidation distribution with respect to the founders' common stock if we fail to consummate our initial business combination. With certain limited exceptions, the founders' common stock and sponsor warrants (including the common stock issuable upon exercise of the sponsor warrants) will not be transferable, assignable or salable by our initial stockholders and the sponsor, as applicable, until one calendar year with respect to the founders' common stock and 30 days with respect to the sponsor warrant after completion of our initial business combination.



•

Our officers and directors may have a conflict of interest with respect to evaluating a particular business combination if the retention or resignation of any such officers and directors were

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included by a target business as a condition to any agreement with respect to a business combination.

•

In the event we dissolve and liquidate because we fail to complete a business combination, the shares and warrants owned by our initial stockholders will be worthless, resulting in potentially significant losses to them. Our initial stockholders' desire to avoid rendering their securities worthless may result in a conflict of interest when they determine whether the terms, conditions and timing of a particular business combination are appropriate and in our stockholders' best interests, and the conflict of interest will increase as we approach the 24^th month following the consummation of this offering and we have not consummated a business combination.

        To minimize potential conflicts of interest, we will not consummate a business combination with an entity which is affiliated with our sponsor, officers or directors, including any businesses that are either portfolio companies of, or have otherwise received a material financial investment from, companies or funds affiliated with our sponsor, officers or directors, unless we have obtained an opinion from an independent investment banking firm which is a member of FINRA, reasonably acceptable to the underwriter and the approval of a majority of our independent directors that the business combination is fair to our stockholders from a financial point of view. The investment bank rendering such opinion may or may not agree to address the opinion directly to our stockholders or otherwise permit them to rely directly on such opinion. While we will consider whether such an opinion may be relied on directly by our stockholders, it will not be dispositive as to which investment bank we seek a fairness opinion from. Other factors contributing to our choice of an investment bank to render such opinion are expected to include, among others: reputation of the independent investment bank, specifically their knowledge in our particular industry, timing and cost. Furthermore, in no event will our sponsor or any of our existing officers or directors, or any entity with which they are affiliated, be paid any finder's fee, consulting fee or other compensation prior to, or for any services they render in order to effectuate, the consummation of our initial business combination.

        In general, officers and directors of a corporation incorporated under the laws of the State of Delaware are required to present business opportunities to a corporation if:

•

the corporation could financially undertake the opportunity;



•

the opportunity is within the corporation's line of business; and



•

it would not be fair to the corporation and its stockholders for the opportunity not to be brought to the attention of the corporation.

        Accordingly, as a result of multiple business affiliations, our officers and directors may have similar legal obligations relating to presenting business opportunities meeting the above-listed criteria to multiple entities. In order to minimize potential conflicts of interest which may arise from multiple corporate affiliations, each of our officers has agreed, pursuant to a written agreement with us, that until the earliest of our initial business combination, our liquidation or such time as he or she ceases to be an officer, to present to us for our consideration, prior to presentation to any other entity, any business opportunity with a fair market value of $160 million or more, subject to any pre-existing fiduciary or contractual obligations he or she might have.

        In addition, conflicts of interest may arise when our board evaluates a particular business opportunity with respect to the above-listed criteria. We cannot assure you that any of the above mentioned conflicts will be resolved in our favor.

        In connection with the vote required for any business combination, our initial stockholders have agreed to vote their founders' common stock in accordance with the majority of the vote cast by the public stockholders and to vote any shares purchased during or after the offering held by it in favor of our initial business combination. In addition, our initial stockholders have agreed to vote all shares of

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our common stock owned by them in favor of an amendment to our amended and restated certificate of incorporation to provide for our perpetual existence in connection with a vote to approve our initial business combination and have also waived its rights to participate in any liquidation distribution with respect to the founders' common stock.

Limitation on Liability and Indemnification of Directors and Officers

        Our amended and restated certificate of incorporation provides that our directors and officers will be indemnified by us to the fullest extent authorized by Delaware law as it now exists or may in the future be amended. In addition, our amended and restated certificate of incorporation provides that our directors will not be personally liable for monetary damages to us for breaches of their fiduciary duty as directors, unless they violated their duty of loyalty to us or our stockholders, acted in bad faith, knowingly or intentionally violated the law, authorized unlawful payments of dividends, unlawful stock purchases or unlawful redemptions, or derived an improper personal benefit from their actions as directors.

        We will enter into agreements with our officers and directors to provide contractual indemnification in addition to the indemnification provided for in our amended and restated certificate of incorporation. We believe that these provisions and agreements are necessary to attract qualified directors. Our amended and restated bylaws also will permit us to secure insurance on behalf of any officer, director or employee for any liability arising out of his or her actions, regardless of whether Delaware law would permit such indemnification. We will purchase a policy of directors' and officers' liability insurance that insures our directors and officers against the cost of defense, settlement or payment of a judgment in some circumstances and insures us against our obligations to indemnify our directors and officers.

        These provisions may discourage stockholders from bringing a lawsuit against our directors for breach of their fiduciary duty. These provisions also may have the effect of reducing the likelihood of derivative litigation against directors and officers, even though such an action, if successful, might otherwise benefit us and our stockholders. Furthermore, a stockholder's investment may be adversely affected to the extent we pay the costs of settlement and damage awards against directors and officers pursuant to these indemnification provisions. We believe that these provisions, the insurance and the indemnity agreements are necessary to attract and retain talented and experienced directors and officers.

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PRINCIPAL STOCKHOLDERS

        The following table sets forth information regarding the beneficial ownership of our common stock as of the date of this prospectus, and as adjusted to reflect the sale of our common stock included in the units offered by this prospectus, and assuming no purchase of units in this offering, by:

•

each person known by us to be the beneficial owner of more than 5% of our outstanding shares of common stock;



•

each of our officers and directors; and



•

all our officers and directors as a group.

        Unless otherwise indicated, we believe that all persons named in the table have sole voting and investment power with respect to all shares of common stock beneficially owned by them. The following table does not reflect record or beneficial ownership of the sponsor warrants as these warrants are not exercisable within 60 days of the date of this prospectus.

(1)

Assumes no exercise of the over-allotment option and the resulting forfeiture of an aggregate of 750,000 founders' common stock held by our initial stockholders.

(2)

Mr. Hicks is the sole member of Capstar Acquisition Management GP, LLC, the general partner of Capstar Acquisition Management, LP, our sponsor, and may be considered to have beneficial

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ownership of our sponsor's interests in us. Mr. Hicks disclaims beneficial ownership of any shares of our common stock in which he does not have a pecuniary interest.

        On October 25, 2007, our sponsor purchased 5,750,000 shares of founders' common stock for an aggregate purchase price of $25,000, or $0.004 per share. On [            ], 2007, our sponsor transferred an aggregate of 86,250 shares of founders' common stock to James R. Huffines, Frederick G. Kraegel and Timothy J. Lindgren, each of whom has agreed to serve on our board of directors upon the closing of this offering.

        Immediately after this offering (assuming no exercise of the underwriters' over-allotment option), our initial stockholders will beneficially own 20% of the then issued and outstanding shares of our common stock. Because of this ownership block, they may be able to effectively influence the outcome of all matters requiring approval by our stockholders, including the election of directors and approval of significant corporate transactions other than approval of our initial business combination.

        To the extent the underwriters do not exercise the over-allotment option, up to an aggregate of 750,000 shares of founders' common stock held by our initial stockholders will be subject to forfeiture. Our initial stockholders will be required to forfeit only a number of shares of common stock necessary to maintain our initial stockholder's 20% ownership interest in our common stock on a fully-diluted basis after giving effect to the offering and the exercise, if any, of the underwriters' over-allotment option.

        Our sponsor has entered into an agreement with us to purchase, at a price of $1.00 per warrant, sponsor warrants to purchase 5,000,000 shares of our common stock. Our sponsor is obligated to purchase such sponsor warrants from us simultaneously with the closing of this offering. The purchase price of the sponsor warrants will be added to the proceeds from this offering to be held in the trust account pending our completion of our initial business combination. If we do not complete our initial business combination within 24 months after the date of this prospectus, the proceeds of the sale of the sponsor warrants will become part of the distribution of the trust account to our public stockholders and the sponsor warrants will expire worthless. The sponsor warrants are subject to the transfer restrictions described below. The sponsor warrants will not be redeemable by us so long as they are held by our sponsor or its permitted transferees. If the sponsor warrants are held by holders other than the sponsor or its permitted transferees, the sponsor warrants will be redeemable by us and exercisable by the holders on the same basis as the warrants included in the units being sold in this offering. The sponsor warrants may also be exercised by the sponsor or its permitted transferees on a cashless basis. Otherwise, the sponsor warrants have terms and provisions that are identical to those of the warrants being sold as part of the units in this offering.

Transfers of Common Stock and Warrants by our Initial Stockholders and our Sponsor

        The founders' common stock, sponsor warrants and any shares of common stock and warrants purchased in the offering or in the open market or issued upon exercise of the sponsor's warrants are each subject to transfer restrictions pursuant to lockup provisions in the letter agreements with us and the underwriters to be entered into by our initial stockholders and our officers and directors. Those lockup provisions provide that our initial stockholders and our officers and directors may not sell, offer to sell, contract or agree to sell, hypothecate, pledge, grant any option to purchase or otherwise dispose of or agree to dispose of, directly or indirectly, or establish or increase a put equivalent position or liquidate or decrease a call equivalent position within the meaning of Section 16 of the Securities Exchange Act of 1934, as amended, and the rules and regulations of the SEC promulgated thereunder, such securities are not transferable or salable until one year in the case of the founders' common stock, 30 days in the case of the sponsor warrants and 180 days in all other cases after the completion of our initial business combination, as the case may be, except (i) to our officers or directors, any affiliates or family members of any of our officers or directors or any affiliates of our sponsor, (ii) in the case of an

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initial stockholder (other than our sponsor), by gift to a member of the initial stockholder's immediate family or to a trust, the beneficiary of which is a member of the initial stockholder's immediate family, an affiliate of the initial stockholder or to a charitable organization, (iii) in the case of an initial stockholder (other than our sponsor) by virtue of the laws of descent and distribution upon death of the initial stockholder (other than our sponsor), (iv) with respect to our sponsor by virtue of the laws of the state of Delaware or our sponsor's limited partnership agreement upon dissolution of our sponsor; (v) in the case of an initial stockholder (other than our sponsor) pursuant to a qualified domestic relations order; (vi) in the event of our liquidation prior to our completion of our initial business combination or (vii) in the event of our consummation of a liquidation, merger, stock exchange or other similar transaction which results in all of our stockholders having the right to exchange their shares of common stock for cash, securities or other property subsequent to our consummation of our initial business combination; provided, however, that these permitted transferees must enter into a written agreement agreeing to be bound by these transfer restrictions.

        In addition, in connection with the vote required to approve a initial business combination, initial stockholders have agreed to vote the founders' common stock in the same manner as a majority of the public stockholders and will vote any shares acquired by them in the offering or the after market in favor of our initial business combination. As a result, our initial stockholders will not be able to exercise conversion rights with respect to the founders' common stock. In addition, our initial stockholders have agreed to vote all shares of the company's common stock owned by them in favor of an amendment to our amended and restated certificate of incorporation to provide for our perpetual existence in connection with a vote to approve our business combination and have waived their rights to participate in any liquidation distribution with respect to the founders' common stock if we fail to consummate an initial business combination.

Registration Rights

        Our initial stockholders and our sponsor, will hold registration rights to require us to register a sale of any of our securities held by them pursuant to a registration rights agreement to be signed prior to or on the effective date of this offering. These stockholders will be entitled to make up to three demands that we register such securities for sale under the Securities Act. In addition, these stockholders will have "piggy-back" registration rights to include their securities in other registration statements filed by us. However, the registration rights agreement provides that we will not permit any registration statement filed under the Securities Act to become effective until termination of the applicable lock-up period, which occurs 180 days after the completion of our initial business combination. We will bear the costs and expenses of filing any such registration statements.

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CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

        On October 25, 2007, we issued an aggregate of 5,750,000 shares of founders' common stock to our sponsor for a purchase price of $25,000 in cash, or $0.004 per share. On [            ], 2007, our sponsor transferred an aggregate of 86,250 shares of founders' common stock to James R. Huffines, Frederick G. Kraegel and Timothy J. Lindgren, each of whom has agreed to serve on our board of directors upon the closing of this offering.

        If the underwriters do not exercise all or a portion of their over-allotment option, our initial stockholders have agreed, pursuant to a written agreement with us, that they will forfeit up to an aggregate of 750,000 shares of founders' common stock in proportion to the portion of the over-allotment option that was not exercised. If such shares are forfeited, we would record the aggregate fair value of the shares forfeited and reacquired to treasury stock and a corresponding credit to additional paid-in capital based on the difference between the fair market value of the forfeited shares and the price paid to us for such forfeited shares (which would be an aggregate total of approximately $7,357,500 for all 750,000 shares). Upon receipt, such forfeited shares would then be immediately cancelled, which would result in the retirement of the treasury stock and a corresponding charge to additional paid-in capital.

        Our sponsor has also committed, pursuant to a written subscription agreement with us, to purchase 5,000,000 warrants, which we refer to as sponsor warrants, from us in a private placement to take place simultaneously with the closing of this offering. Each sponsor warrant entitles the holder to purchase one share of our common stock. Our sponsor has agreed that the sponsor warrants (including the common stock issuable upon exercise of the sponsor warrants) will not, subject to certain limited exceptions, be transferred, assigned or sold by it until 30 days after the completion of our initial business combination.

        In order to minimize potential conflicts of interest which may arise from multiple corporate affiliations, each of our officers has agreed, pursuant to a written agreement with us, that until the earliest of our initial business combination, our liquidation or such time as he or she ceases to be an officer, to present to us for our consideration, prior to presentation to any other entity, any business opportunity with a fair market value of $160 million or more, except to the extent that an existing fiduciary or contractual obligation to which such officer is subject restricts such presentation. As more fully discussed in "Management—Conflicts of Interest" on page 80, in the event that any of our officers becomes aware of a business combination opportunity that falls within the line of business of any entity to which he or she has such a fiduciary or contractual obligation, he or she may be required to present such business combination opportunity to such entity prior to presenting such business combination opportunity to us.

        Capstar Investment Partners, LP, an affiliate of Capstar Partners, LLC, an entity owned and controlled by Mr. Hicks, our founder, chairman of the board and chief executive officer, has agreed to, from the date of the closing of this offering through the earlier of our consummation of a business combination or our liquidation, make available to us office space and certain office and secretarial services, as we may require from time to time. We have agreed to pay Capstar Investment Partners, LP $10,000 per month for these services. However, this arrangement is solely for our benefit and is not intended to provide Mr. Hicks compensation in lieu of salary. We believe, based on rents and fees for similar services in the Austin metropolitan area, that the fee charged by Capstar Investment Partners, LP is at least as favorable as we could have obtained from an unaffiliated person.

        As of the date of this prospectus, Mr. Hicks has also agreed to advance to us an aggregate of $200,000 to cover expenses related to this offering, of which $188,861 is outstanding as of December 7, 2007. This loan will be payable without interest on the earlier of March 31, 2008 or the closing of this offering. We intend to repay this loan from the proceeds of this offering not placed in trust.

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        Other than the $10,000 per-month administrative fee paid to Capstar Investment Partners, LP and reimbursement of any out-of-pocket expenses incurred in connection with activities on our behalf such as identifying potential target businesses and performing due diligence on suitable business combinations, no compensation or fees of any kind, including finder's fees, consulting fees or other similar compensation, will be paid to our sponsor, officers or directors, or to any of their respective affiliates, prior to or with respect to our initial business combination (regardless of the type of transaction that it is).

        After our initial business combination, members of our management team who remain with us may be paid consulting, management or other fees from the combined company with any and all amounts being fully disclosed to our stockholders, to the extent then known, in the proxy solicitation materials furnished to our stockholders. It is unlikely the amount of such compensation will be known at the time of a stockholder meeting held to consider our initial business combination, as it will be up to the directors of the post-combination business to determine executive and director compensation.

        All ongoing and future transactions between us and any member of our management team or his or her respective affiliates, including loans by members of our management team, will be on terms believed by us at that time, based upon other similar arrangements known to us, to be no less favorable to us than are available from unaffiliated third parties. Such transactions or loans, including any forgiveness of loans, will require prior approval in each instance by our audit committee which will have access, at our expense, to our attorneys or independent legal counsel. It is our intention to obtain estimates from unaffiliated third parties for similar goods or services to ascertain whether such transactions with affiliates are on terms that are no less favorable to us than are otherwise available from such unaffiliated third parties. If a transaction with an affiliated third party were found to be on terms less favorable to us than with an unaffiliated third party, we would not engage in such transaction.

        We have entered into a registration rights agreement with respect to the shares of founders' common stock and sponsor warrants, which is described under the heading "Principal Stockholders—Registration Rights" on page 86.

        Our initial stockholders are our "promoters" as that term is defined under Federal securities laws.

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DESCRIPTION OF SECURITIES

        Our authorized capital stock consists of 100,000,000 shares of common stock, $0.0001 par value, and 1,000,000 shares of undesignated preferred stock, $0.0001 par value. The following description summarizes the material terms of our capital stock. Because it is only a summary, it may not contain all the information that is important to you. For a complete description you should refer to our amended and restated certificate of incorporation and bylaws, which are filed as exhibits to the registration statement of which this prospectus is a part, and to the applicable provisions of the Delaware General Corporation Law.

Units

        Each unit consists of one share of common stock and one warrant. Each warrant entitles the holder to purchase one share of common stock. The common stock and warrants comprising the units will begin separate trading on the 45th day following the date of this prospectus unless Lazard Capital Markets informs us of its decision to allow earlier separate trading, subject to our having filed the Current Report on Form 8-K described below and having issued a press release announcing when such separate trading will begin.

        In no event will the common stock and warrants be traded separately until we have filed with the Securities and Exchange Commission a Current Report on Form 8-K which includes an audited balance sheet reflecting our receipt of the gross proceeds of this offering. We will file a Current Report on Form 8-K which includes this audited balance sheet upon the consummation of this offering, which is anticipated to take place three business days after the date of this prospectus. The audited balance sheet will include proceeds we received from the exercise of the over-allotment option if such option is exercised prior to the filing of the Current Report on Form 8-K. If the underwriters' over-allotment option is exercised following the initial filing of such Current Report on Form 8-K, a second or amended Current Report on Form 8-K will be filed to provide updated financial information to reflect the exercise of the underwriters' over-allotment option.

Common Stock

        As of the date of this prospectus, there were 5,750,000 shares of our common stock outstanding, all of which were held of record by our sponsor and Messrs. Huffines, Kraegel and Lundgren, each of whom will be a member of our board of directors upon the closing of this offering. This includes an aggregate of 750,000 shares of common stock subject to forfeiture by our initial stockholders to the extent that the underwriters' over-allotment option is not exercised in full so that our initial stockholders will collectively own 20% of our issued and outstanding shares after this offering (assuming none of our initial stockholders purchase units in this offering). Upon closing of this offering, 25,000,000 shares of our common stock will be outstanding (assuming no exercise of the underwriters' over-allotment option). Holders of common stock will have exclusive voting rights for the election of our directors and all other matters requiring stockholder action, except with respect to amendments to our amended and restated certificate of incorporation that alter or change the powers, preferences, rights or other terms of any outstanding preferred stock if the holders of such affected series of preferred stock are entitled to vote on such an amendment. Holders of record of shares of common stock will be entitled to one vote per share on matters to be voted on by stockholders and also will be entitled to receive such dividends, if any, as may be declared from time to time by our board of directors in its discretion out of funds legally available therefore.

        Our amended and restated certificate of incorporation prohibits us from issuing new shares of common stock prior to our initial business combination. Our board of directors is divided into three classes, each of which will generally serve for a term of three years with only one class of directors being elected in each year. There is no cumulative voting with respect to the election of directors, with the result that the holders of more than 50% of the shares voted for the election of directors can elect all of the directors.

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        Our amended and restated certificate of incorporation, which we intend to adopt prior to the closing of this offering, contains certain requirements and restrictions relating to this offering that will apply to us until the consummation of our initial business combination. Specifically, our amended and restated certificate of incorporation provides, among other things, that:

•

upon closing of this offering, $196,195,000, or approximately $224,995,000 if the underwriters' over-allotment option is exercised in full (including $5.0 million from the sale of the sponsor warrants and $6.0 million in deferred underwriting commissions or approximately $6.9 million if the underwriters over-allotment option is exercised in full) will be placed into the trust account;



•

we shall submit any proposed business combination to our stockholders for approval prior to consummating our initial business combination;



•

our public stockholders will have the right to convert their shares of common stock into cash in accordance with the conversion rights described below;



•

public stockholders who exercise their conversion rights and vote against our initial business combination may convert their shares into a pro rata share of the aggregate amount then on deposit in the trust account;



•

we will consummate an initial business combination only if it has a fair market value equal to at least 80% of the initial amount held in trust (excluding deferred underwriting commissions of $6.0 million or approximately $6.9 million if the underwriters' over-allotment option is exercised in full);



•

we may not consummate any business combination, merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar transaction prior to our initial business combination;



•

prior to our initial business combination, we may not issue additional stock that participates in any manner in the proceeds of the trust account, or that votes as a class with the common stock sold in this offering on a business combination;



•

we will consummate our initial business combination only if (i) the business combination is approved by a majority of votes cast by our public stockholders at a duly held stockholders meeting or by a written consent of a majority of our outstanding shares of common stock, (ii) an amendment to our amended and restated certificate of incorporation to provide for our perpetual existence is approved by holders of a majority of our outstanding shares of common stock, (iii) public stockholders owning no more than 30% (minus one share) of our outstanding shares of common stock sold in the offering both vote against the business combination and exercise their conversion rights, and (iv) we have confirmed that we have sufficient cash resources to pay both (x) the consideration required to close our initial business combination, and (y) the cash due to public stockholders who vote against the business combination and who exercise their conversion rights;



•

if we do not consummate our initial business combination within 24 months after the date of this prospectus, our corporate purposes and powers will immediately thereupon be limited to acts and activities related to liquidating and winding up our affairs, including liquidation, and we will not be able to engage in any other business activities; and



•

if we are forced to liquidate prior to a business combination, our public stockholders will be entitled to share ratably in the funds in the trust account, including any interest, and any net assets remaining available for distribution to them after payment of our liabilities.

        Our amended and restated certificate of incorporation requires that we obtain the vote of our board of directors and the unanimous consent of the holders of all of our outstanding shares of common stock at a meeting of stockholders, to amend the above-described provisions.

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        In connection with the vote required for consummating our initial business combination, our initial stockholders will vote (i) the founders' common stock in accordance with the votes constituting the majority of the votes cast by our public stockholders, (ii) any shares acquired in the offering or the after market in favor of our initial business combination and (iii) all shares of the company owned by them in favor of an amendment to our amended and restated certificate of incorporation providing for our perpetual existence. In addition, our initial stockholders will not be able to exercise conversion rights with respect to the 5,750,000 founders' common stock. In connection with the vote required for any business combination, a majority of our issued and outstanding common stock (whether or not held by public stockholders) will constitute a quorum. If any other matters are voted on by our stockholders at an annual or special meeting, our sponsor may vote all its shares, whenever acquired, as it sees fit.

        If we do not consummate our initial business combination within 24 months after the date of this prospectus, our corporate existence will automatically cease except for the purposes of winding up our affairs and liquidating. This has the same effect as if our board of directors and stockholders had formally voted to approve our dissolution pursuant to Section 275 of the Delaware General Corporation Law. Accordingly, limiting our corporate existence to a specified date as permitted by Section 102(b)(5) of the Delaware General Corporation Law removes the necessity to obtain formal stockholder approval of our dissolution and liquidation and to file a certificate of dissolution with the Delaware Secretary of State. At the time we submit a proposed initial business combination to our stockholders for approval, we will also submit to them a proposal to amend our amended and restated certificate of incorporation to provide for our perpetual existence, thereby removing these limitations on our corporate existence. The approval of the proposal to amend our amended and restated certificate of incorporation to provide for our perpetual existence will require the affirmative vote of a majority of our outstanding shares of common stock.

        The underwriters have agreed to waive their rights to their deferred underwriting commission held in the trust account in the event of our failure to consummate our initial business combination within 24 months after the date of this prospectus and in such event such amounts will be included within the amounts of the funds held in the trust account that will be available for distribution to the public stockholders. Our initial stockholders has agreed to waive their rights to participate in any distribution of the funds held in the trust account if we fail to consummate our initial business combination within 24 months after the date of this prospectus, but only with respect to the founders' common stock. Additionally, if we fail to consummate our initial business combination within 24 months, the sponsor warrants will also expire worthless.

        Our stockholders have no repurchase, preemptive or other subscription rights and there are no sinking fund or redemption provisions applicable to the common stock, except that public stockholders have conversion rights in conjunction with stockholder approval of our initial business combination. If our initial business combination is approved and completed, public stockholders who vote against such business combination will be entitled to exercise their conversion rights or maintain their interest in us.

        The payment of dividends, if ever, on the common stock will be subject to the prior payment of dividends on any outstanding preferred stock, of which there is currently none.

Founders' common stock

        Holders of the founders' common stock have the same stockholder rights as public stockholders, except that holders of founders' common stock (i) will not participate in the distribution of the trust account in the event we fail to complete a business combination within 24 months after the date of this prospectus, and (ii) are not entitled to conversion rights in the event of a business combination.

        With certain limited exceptions, the founder shares are not transferable, assignable or salable until one calendar year after the completion of our initial business combination (except to our officers and directors and other persons or entities affiliated with the sponsor, each of whom will be subject to the same transfer restrictions).

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        In addition, our initial stockholders are entitled to registration rights with respect to the founders' common stock under a registration rights agreement to be signed on or before the date of this prospectus.

Preferred Stock

        Our amended and restated certificate of incorporation provides that shares of preferred stock may be issued from time to time in one or more series. Our board of directors will be authorized to fix the voting rights, if any, designations, powers, preferences, the relative, participating, optional or other special rights and any qualifications, limitations and restrictions thereof, applicable to the shares of each series. Our board of directors will be able to, without stockholder approval, issue preferred stock with voting and other rights that could adversely affect the voting power and other rights of the holders of the common stock and could have anti-takeover effects. The ability of our board of directors to issue preferred stock without stockholder approval could have the effect of delaying, deferring or preventing a change of control of us or the removal of existing management. We have no preferred stock outstanding at the date hereof. Although we do not currently intend to issue any shares of preferred stock, we cannot assure you that we will not do so in the future. No shares of preferred stock are being issued or registered in this offering. Notwithstanding the foregoing, our amended and restated certificate of incorporation prohibits us from issuing shares of preferred stock prior to our initial business combination, except in connection with the consummation of our initial business combination that has been approved by a majority of our stockholders.

Warrants

Public Stockholders' Warrants

        Each warrant entitles the registered holder to purchase one share of our common stock at a price of $7.50 per share, subject to adjustment as discussed below, at any time commencing on the later of 12 months from the date of this prospectus or the completion of our initial business combination.

        However, the warrants will be exercisable only if a registration statement relating to the common stock issuable upon exercise of the warrants is effective and current. The warrants will expire four years from the date of this prospectus at 5:00 p.m., New York time, or earlier upon redemption.

        Once the warrants become exercisable, we may call the warrants for redemption:

•

in whole and not in part;



•

at a price of $0.01 per warrant;



•

upon not less than 30 days' prior written notice of redemption to each warrant holder; and



•

if, and only if, the reported last sale price of the common stock on the American Stock Exchange equals or exceeds $13.50 per share for any 20 trading days within a 30 trading day period ending three business days before we send to the notice of redemption to the warrant holders.

        We have established the last of the redemption criterion discussed above to prevent a redemption call unless there is at the time of the call a significant premium to the warrant exercise price. If the foregoing conditions are satisfied and we issue a notice of redemption of the warrants, each warrant holder will be entitled to exercise his, her or its warrant prior to the scheduled redemption date. However, the price of the common stock may fall below the $13.50 redemption trigger price as well as the $7.50 warrant exercise price after the redemption notice is issued.

        If we call the warrants for redemption as described above, our management will have the option to require any holder that wishes to exercise his, her or its warrant to do so on a "cashless basis." If our management takes advantage of this option, all holders of warrants would pay the exercise price by surrendering his, her or its warrants for that number of shares of common stock equal to the quotient obtained by dividing (x) the product of the number of shares of common stock underlying the warrants,

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multiplied by the difference between the exercise price of the warrants and the "fair market value" (defined below) by (y) the fair market value. The "fair market value" shall mean the average reported last sale price of the common stock for the 10 trading days ending on the third trading day prior to the date on which the notice of redemption is sent to the holders of warrants. If our management takes advantage of this option, the notice of redemption will contain the information necessary to calculate the number of shares of common stock to be received upon exercise of the warrants, including the "fair market value" in such case. Requiring a cashless exercise in this manner will reduce the number of shares to be issued and thereby lessen the dilutive effect of a warrant redemption. We believe this feature is an attractive option to us if we do not need the cash from the exercise of the warrants after a business combination. If we call our warrants for redemption and our management does not take advantage of this option, our initial stockholders, Mr. Hicks and their respective transferees would still be entitled to exercise their sponsor warrants, for cash or on a cashless basis using the same formula described above that other warrant holders would have been required to use had all warrant holders been required to exercise their warrants on a cashless basis, as described in more detail below.

        The exercise price and number of shares of common stock issuable on exercise of the warrants may be adjusted in certain circumstances including in the event of a stock dividend, stock split, extraordinary dividend, or our recapitalization, reorganization, merger or consolidation. However, the exercise price and number of shares of common stock issuable on exercise of the warrants will not be adjusted for issuances of common stock at a price below the warrant exercise price.

        The warrants will be issued in registered form under a warrant agreement between Continental Stock Transfer & Trust Company, as warrant agent, and us. You should review a copy of the warrant agreement, which has been filed as an exhibit to the registration statement of which this prospectus is a part, for a complete description of the terms and conditions applicable to the warrants.

        The exercise price and number of shares of common stock issuable on exercise of the warrants may be adjusted in certain circumstances including in the event of a stock dividend, or our recapitalization, reorganization, merger or consolidation. However, the warrants will not be adjusted for issuances of common stock at a price below their respective exercise prices.

        The warrants may be exercised upon surrender of the warrant certificate on or prior to the expiration date at the offices of the warrant agent, with the exercise form on the reverse side of the warrant certificate completed and executed as indicated, accompanied by full payment of the exercise price (or on a cashless basis, if applicable), by certified or official bank check payable to us, for the number of warrants being exercised. The warrant holders do not have the rights or privileges of holders of common stock and any voting rights until they exercise their warrants and receive shares of common stock. After the issuance of shares of common stock upon exercise of the warrants, each holder will be entitled to one vote for each share held of record on all matters to be voted on by stockholders.

        No warrants will be exercisable unless at the time of exercise a prospectus relating to the common stock issuable upon exercise of the warrants is current and the common stock has been registered or qualified or deemed to be exempt under the securities laws of the state of residence of the holder of the warrants. We are not registering the shares of common stock issuable upon exercise of the warrants at this time. However, under the terms of the warrant agreement, we have agreed to meet these conditions and use our best efforts to file a registration statement covering such shares and maintain a current prospectus relating to common stock issuable upon exercise of the warrants until the expiration of the warrants. However, we cannot assure you that we will be able to do so, and if we do not maintain a current prospectus related to the common stock issuable upon exercise of the warrants, holders will be unable to exercise their warrants and we will not be required to settle any such warrant exercise. If the prospectus relating to the common stock issuable upon the exercise of the warrants is not current or if the common stock is not qualified or exempt from qualification in the jurisdictions in which the holders of the warrants reside, we will not be required to net cash settle or cash settle the

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warrant exercise, the warrants may have no value, the market for the warrants may be limited and the warrants may expire worthless.

        No fractional shares will be issued upon exercise of the warrants. If, upon exercise of the warrants, a holder would be entitled to receive a fractional interest in a share, we will, upon exercise, round up to the nearest whole number the number of shares of common stock to be issued to the warrant holder.

Sponsor Warrants

        The sponsor warrants (including the common stock issuable upon exercise of the sponsor warrants) will not be transferable, assignable or salable until 30 days after the completion of our initial business combination (except, among other limited exceptions as described under "Principal Stockholders—Transfers of Common Stock and Warrants by our Initial Stockholders and our Sponsor," to our officers and directors and other persons or entities affiliated with the sponsor) and they will not be redeemable by us so long as they are held by the sponsor or its permitted transferees. Otherwise, the sponsor warrants have terms and provisions that are identical to those of the warrants being sold as part of the units in this offering, except that such warrants may be exercised by the holders on a cashless basis. If the sponsor warrants are held by holders other than the sponsor or its permitted transferees, the sponsor warrants will be redeemable by us and exercisable by the holders on the same basis as the warrants included in the units being sold in this offering.

        If holders of the sponsor warrants elect to exercise them on a cashless basis, they would pay the exercise price by surrendering his, her or its warrants for that number of shares of common stock equal to the quotient obtained by dividing (x) the product of the number of shares of common stock underlying the warrants, multiplied by the difference between the exercise price of the warrants and the "fair market value" (defined below) by (y) the fair market value. The "fair market value" shall mean the average reported last sale price of the common stock for the 10 trading days ending on the third trading day prior to the date on which the notice of redemption is sent to the holders of warrants. The reason that we have agreed that these warrants will be exercisable on a cashless basis so long as they are held by our initial stockholders, our sponsor or their affiliates and permitted transferees is because it is not known at this time whether they will be affiliated with us following a business combination. If they remain affiliated with us, their ability to sell our securities in the open market will be significantly limited. We expect to have policies in place that prohibit insiders from selling our securities except during specific periods of time. Even during such periods of time when insiders will be permitted to sell our securities, an insider cannot trade in our securities if he or she is in possession of material non-public information. Accordingly, unlike public stockholders who could exercise their warrants and sell the shares of common stock received upon such exercise freely in the open market in order to recoup the cost of such exercise, the insiders could be significantly restricted from selling such securities. As a result, we believe that allowing the holders to exercise such warrants on a cashless basis is appropriate.

        Our sponsor has agreed not to transfer, assign or sell any of the sponsor warrants (including the common stock issuable upon exercise of any of these warrants) until the date that is 30 days after the date we complete our initial business combination, except that, among other limited exceptions as described under "Principal Stockholders—Transfers of Common Stock and Warrants by our Initial Stockholders and our Sponsor" transfers can be made to our officers and directors and other persons or entities affiliated with the sponsor.

        In addition, our sponsor is entitled to registration rights with respect to the sponsor warrants under a registration rights agreement to be signed on or before the date of this prospectus. Management does not believe that the sale of the warrants to the sponsor will result in the recognition of stock-based compensation expense because the warrants are being sold at or below fair value. However, the actual

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fair value of the warrants and any stock-based compensation will be determined on the date of issuance.

Dividends

        We have not paid any dividends on our common stock to date and do not intend to pay dividends prior to completion of our initial business combination. The payment of dividends in the future will depend on our revenues and earnings, if any, capital requirements and general financial condition after a business combination is completed. The payment of any dividends subsequent to our initial business combination or the distribution in full of the trust account will be within the discretion of our then-board of directors. It is the present intention of our board of directors to retain any earnings for use in our business operations and, accordingly, we do not anticipate the board declaring any dividends in the foreseeable future. Further, any credit agreements we enter into in connection with a business combination may restrict or prohibit payment of dividends.

Our Transfer Agent and Warrant Agent

        The transfer agent for our common stock and warrant agent for our warrants is Continental Stock Transfer & Trust Company. We have agreed to indemnify Continental Stock Transfer & Trust Company in its roles as transfer agent and warrant agent, its agents and each of its stockholders, directors, officers and employees against all claims and losses that may arise out of acts performed or omitted for its activities in that capacity, except for any liability due to any gross negligence or intentional misconduct of the indemnified person or entity.

Certain Anti-Takeover Provisions of Delaware Law and our Amended and Restated Certificate of Incorporation and Bylaws

Staggered board of directors

        Our amended and restated certificate of incorporation provides that our board of directors will be classified into three classes of directors of approximately equal size. As a result, in most circumstances, a person can gain control of our board only by successfully engaging in a proxy contest at two or more annual meetings.

No action by stockholders without a meeting

        Our amended and restated certificate of incorporation and bylaws prohibit stockholders from taking action other than by a duly convened meeting of the stockholders after the consummation of this initial public offering.

Special meeting of stockholders

        Our amended and restated bylaws provide that special meetings of our stockholders may be called only by our chairman or president, or our board pursuant to a resolution adopted by a majority of the Whole Board. "Whole Board" shall mean the total number of directors our board would have if there were no vacancies on the board.

Advance notice requirements for stockholder proposals and director nominations

        Our amended and restated bylaws provide that stockholders seeking to bring business before our annual meeting of stockholders, or to nominate candidates for election as directors at our annual meeting of stockholders must provide timely notice of their intent in writing. To be timely, a stockholder's notice will need to be delivered to our principal executive offices not later than the close of business on the 90th day nor earlier than the close of business on the 120th day prior to the first anniversary of the preceding year's annual meeting of stockholders. For the first annual meeting of stockholders after the closing of this offering, a stockholder's notice shall be timely if delivered to our principal executive offices not later than the 90th day prior to the scheduled date of the annual

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meeting of stockholders or the 10th day following the day on which public announcement of the date of our annual meeting of stockholders is first made or sent by us. Our amended and restated bylaws also specify certain requirements as to the form and content of a stockholders' meeting. These provisions may preclude our stockholders from bringing matters before our annual meeting of stockholders or from making nominations for directors at our annual meeting of stockholders.

Authorized but unissued shares

        Our authorized but unissued shares of common stock and preferred stock are available for future issuances without stockholder approval and could be utilized for a variety of corporate purposes, including future offerings to raise additional capital, acquisitions and employee benefit plans. The existence of authorized but unissued and unreserved common stock and preferred stock could render more difficult or discourage an attempt to obtain control of us by means of a proxy contest, tender offer, merger or otherwise.

Securities Eligible for Future Sale

        Immediately after this offering (assuming no exercise of the underwriters' over-allotment option and the forfeiture of 750,000 shares held by our initial stockholders) we will have 25,000,000 shares of common stock outstanding. Of these shares, the 20,000,000 shares sold in this offering will be freely tradable without restriction or further registration under the Securities Act, except for any shares purchased by one of our affiliates within the meaning of Rule 144 under the Securities Act. All of the remaining 5,000,000 shares are restricted securities under Rule 144, in that they were issued in private transactions not involving a public offering.

Rule 144

        The availability of Rule 144 will vary depending on whether restricted shares are held by an affiliate or a non-affiliate. Under Rule 144 as in effect on the date of this prospectus, once we have been a reporting company subject to the reporting requirements of Section 13 or Section 15(d) of the Exchange Act for 90 days, an affiliate who has beneficially owned restricted shares of our common stock for at least six months would be entitled to sell within any three-month period a number of shares that does not exceed the greater of either of the following:

•

1% of the number of shares of common stock then outstanding, which will equal 250,000 shares immediately after this offering (or 287,500 if the underwriters' over-allotment option is exercised in full); and



•

the average weekly trading volume of the common stock during the four calendar weeks preceding the filing of a notice on Form 144 with respect to the sale.

        However, the six month holding period increases to one year in the event we have not been a reporting company for at least 90 days. In addition, any sales by affiliates under Rule 144 are also limited by manner of sale provisions and notice requirements and the availability of current public information about us.

        The volume limitation, manner of sale and notice provisions described above will not apply to sales by non-affiliates. For purposes of Rule 144, a non-affiliate is any person or entity who is not our affiliate at the time of sale and has not been our affiliate during the preceding three months. Once we have been a reporting company for 90 days, a non-affiliate who has beneficially owned restricted shares of our common stock for six months may rely on Rule 144 provided that certain public information regarding us is available. The six month holding period increases to one year in the event we have not been a reporting company for at least 90 days. However, a non-affiliate who has beneficially owned the restricted shares proposed to be sold for at least one year will not be subject to any restrictions under Rule 144 regardless of how long we have been a reporting company.

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Securities and Exchange Commission position on Rule 144 sales

        The Securities and Exchange Commission has taken the position that promoters or affiliates of a blank check company and their transferees, both before and after an initial business combination, would act as "underwriters" under the Securities Act when reselling the securities of a blank check company. Based on that position, Rule 144 would not be available for resale transactions despite technical compliance with the requirements of Rule 144, and such securities can be resold only through a registered offering. However, Rule 144 as in effect on the date of this prospectus is available to stockholders of blank check companies and their transferees one year after the consummation of a business combination by the blank check company and the blank check company's filing of information required by Form 10 with the SEC, provided that the blank check company has filed certain reports required by the Exchange Act in the last year. The prohibition on use of Rule 144 by blank check companies does not apply to blank check companies that are business combination related shell companies, as defined under Rule 405 of the Securities Act. However, we will not be considered a business combination related shell company and, as a result, Rule 144 will not be available to our stockholders until one year after we have completed our initial business combination and filed Form 10 information with the SEC, assuming we have filed certain reports required by the Exchange Act with the SEC for the past year.

Registration rights

        The holders of the founders' common stock and sponsor warrants (and any shares of common stock issuable upon the exercise of any of the foregoing) will be entitled to registration rights pursuant to a registration rights agreement to be signed prior to or on the effective date of this offering. The holders of the majority of these securities are entitled to make up to three demands that we register such securities. The holders of a majority of these securities can elect to exercise these registration rights at any time after we consummate an initial business combination. In addition, the holders have certain "piggy-back" registration rights with respect to registration statements filed subsequent to our consummation of an initial business combination. We will bear the expenses incurred in connection with the filing of any such registration statements.

Listing

        We have applied to have our units listed on the American Stock Exchange under the symbol "CRB.U" and, once the common stock and warrants begin separate trading, to have our common stock and warrants listed on the American Stock Exchange under the symbols "CRB" and "CRB.WS," respectively.

        Based upon the proposed terms of this offering, after giving effect to this offering we expect to meet the minimum initial listing standards set forth in Section 101(c) of the American Stock Exchange Company Guide, which consist of the following:

•

Stockholders equity of at least $4.0 million;



•

Total market capitalization of at least $50.0 million;



•

Aggregate market value of publicly held shares of at least $15.0 million;



•

Minimum public distribution of at least 1,000,000 units with a minimum of 400 public holders; and



•

a minimum market price of $2.00 per unit.

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MATERIAL U.S. FEDERAL TAX CONSIDERATIONS

        This is a general summary of the material U.S. federal tax consequences of the acquisition, ownership and disposition of our units, common stock and warrants, which we refer to collectively as our securities, purchased pursuant to this offering. This discussion assumes that public stockholders will hold our securities as capital assets within the meaning of Section 1221 of the Internal Revenue Code of 1986, as amended (the "Code"). This discussion does not address all aspects of U.S. federal taxation that may be relevant to a public stockholder in light of such public stockholder's particular circumstances. In addition, this discussion does not address (i) U.S. gift or estate tax laws except to the limited extent set forth below, (ii) state, local or foreign tax consequences, (iii) the special tax rules that may apply to certain public stockholders, including without limitation banks, insurance companies, financial institutions, broker-dealers, taxpayers that have elected mark-to-market accounting, taxpayers subject to the alternative minimum tax provisions of the Code, tax-exempt entities, regulated investment companies, real estate investment trusts, taxpayers whose functional currency is not the U.S. dollar, or U.S. expatriates or former long-term residents of the United States, or (iv) the special tax rules that may apply to a public stockholder that acquires, holds, or disposes of our securities as part of a straddle, hedge, wash sale (except to the limited extent described below), constructive sale or conversion transaction or other integrated investment. Additionally, this discussion does not consider the tax treatment of partnerships (including entities treated as partnerships for U.S. federal tax purposes) or other pass-through entities or persons who hold our securities through such entities. The tax treatment of a partnership and each partner thereof will generally depend upon the status and activities of the partnership and such partner. Thus, partnerships, other pass-through entities and persons holding our securities through such entities should consult their own tax advisors.

        This discussion is based on current provisions of the Code, U.S. Treasury regulations promulgated under the Code, judicial opinions, and published rulings and procedures of the United States Internal Revenue Service ("IRS"), all as in effect on the date of this prospectus and all of which are subject to change, possibly with retroactive effect. We have not sought, and will not seek, any ruling from the IRS or any opinion of counsel with respect to the tax consequences discussed below, and there can be no assurance that the IRS will not take a position contrary to the tax consequences discussed below or that any position taken by the IRS would not be sustained.

        As used in this "Material U.S. Federal Tax Considerations" section only, the term "U.S. Person" means a person that is, for U.S. federal income tax purposes (i) an individual citizen or resident of the United States, (ii) a corporation (or other entity treated as a corporation for U.S. federal income tax purposes) created or organized in or under the laws of the United States or of any State thereof or the District of Columbia, (iii) an estate the income of which is subject to U.S. federal income taxation regardless of its source, or (iv) a trust if (A) a court within the United States is able to exercise primary supervision over the administration of the trust and one or more U.S. Persons have the authority to control all substantial decisions of the trust, or (B) it has in effect a valid election to be treated as a U.S. Person. As used in this discussion, the term "U.S. holder" means a beneficial owner of our securities that is a U.S. Person and the term "non-U.S. holder" means a beneficial owner of our securities (other than an entity that is treated as a partnership or as a disregarded entity for U.S. federal income tax purposes) that is not a U.S. Person.

        This discussion is only a summary of material U.S. federal income and estate tax consequences of the acquisition, ownership and disposition of our securities. Each prospective investor is urged to consult its own tax advisors with respect to the U.S. federal, state, local and foreign tax consequences to such investor of the acquisition, ownership and disposition of our securities.

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General

        There is no authority addressing the treatment, for U.S. federal income tax purposes, of securities with terms substantially the same as the units, and, therefore, that treatment is not entirely clear. Each unit should be treated for U.S. federal income tax purposes as an investment unit consisting of one share of our common stock and a warrant to acquire one share of our common stock. Each holder of a unit must allocate the purchase price paid by such holder for such unit between the share of common stock and the warrant based on their respective relative fair market values. A holder's initial tax basis in the common stock and the warrant included in each unit should equal the portion of the purchase price of the unit allocated thereto.

        The foregoing treatment of the common stock and warrants and a holder's purchase price allocation are not binding on the IRS or the courts. Because there are no authorities that directly address instruments that are similar to the units, no assurance can be given that the IRS or the courts will agree with the characterization described above or the discussion below. Accordingly, each prospective investor is urged to consult its own tax advisors regarding the U.S. federal, state, local and any foreign tax consequences of an investment in a unit (including alternative characterizations of a unit). Unless otherwise stated, the following discussions are based on the assumption that the characterization of the common stock and warrants and the allocation described above are accepted for U.S. federal tax purposes.

U.S. Holders

Taxation of Distributions

        If we pay cash distributions to U.S. holders of our common stock, such distributions generally will constitute dividends for U.S. federal income tax purposes to the extent paid from our current or accumulated earnings and profits, as determined under U.S. federal income tax principles. Distributions in excess of current and accumulated earnings and profits will constitute a return of capital that will be applied against and reduce (but not below zero) the U.S. holder's adjusted tax basis in our common stock. Any remaining excess will be treated as gain realized on the sale or other disposition of the common stock and will be treated as described under "U.S. Holders—Gain or Loss on Sale, Exchange or Other Taxable Disposition of Common Stock" below.

        Dividends paid to a U.S. holder that is a taxable corporation generally will qualify for the dividends received deduction if the requisite holding period is satisfied. With certain exceptions (including, but not limited to, dividends treated as investment income for purposes of investment interest deduction limitations), and provided certain holding period requirements are met, dividends paid to a non-corporate U.S. holder generally will constitute "qualified dividends" that will be subject to tax at the maximum tax rate accorded to capital gains for tax years beginning before January 1, 2011, after which the rate applicable to dividends is currently scheduled to return to the tax rate generally applicable to ordinary income. It is unclear whether the conversion rights with respect to the common stock, described above under "Proposed Business—Effecting a Business Combination—Conversion rights", may prevent a U.S. holder from satisfying the applicable holding period requirements with respect to the dividends received deduction or the preferential tax rate on qualified dividend income, as the case may be.

Gain or Loss on Sale, Exchange or Other Taxable Disposition of Common Stock

        In general, a U.S. holder must treat any gain or loss recognized upon a sale, exchange or other taxable disposition of our common stock (which would include a dissolution and liquidation in the event we do not consummate an initial business combination within the required timeframe) as capital gain or loss. Any such capital gain or loss will be long-term capital gain or loss if the U.S. holder's holding period for the disposed of common stock exceeds one year. There is substantial uncertainty,

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however, as to whether the conversion rights with respect to the common stock, described above under "Proposed Business—Effecting a Business Combination—Conversion rights", may suspend the running of the applicable holding period for this purpose. In general, a U.S. holder will recognize gain or loss in an amount equal to the difference between (i) the sum of the amount of cash and the fair market value of any property received in such disposition (or, if the common stock is held as part of a unit at the time of the disposition, the portion of the amount realized on such disposition that is allocated to the common stock based upon the then fair market values of the common stock and the warrant included in the unit) and (ii) the U.S. holder's adjusted tax basis in the disposed of common stock. A U.S. holder's adjusted tax basis in its common stock generally will equal the U.S. holder's acquisition cost (that is, as discussed above, the portion of the purchase price of a unit allocated to a share of common stock) less any prior return of capital. Long-term capital gain realized by a non-corporate U.S. holder generally will be subject to a maximum rate of 15 percent for tax years beginning before January 1, 2011, after which the maximum long-term capital gains rate is scheduled to increase to 20 percent. The deduction of capital losses is subject to limitations, as is the deduction for losses realized upon a taxable disposition by a U.S. holder of our common stock (whether or not held as part of a unit) if, within a period beginning 30 days before the date of such disposition and ending 30 days after such date, such U.S. holder has acquired (by purchase or by an exchange on which the entire amount of gain or loss was recognized by law), or has entered into a contract or option so to acquire, substantially identical stock or securities.

Conversion of Common Stock

        In the event that a U.S. holder converts our common stock into a right to receive cash pursuant to the exercise of a conversion right, the transaction will be treated for U.S. federal income tax purposes as a redemption of the common stock. If that redemption qualifies as a sale of common stock by the U.S. holder under Section 302 of the Code, the U.S. holder will be treated as described under "U.S. Holders—Gain or Loss on Sale, Exchange or Other Taxable Disposition of Common Stock" above. Whether that redemption qualifies for sale treatment will depend largely on the total number of shares of our stock treated as held by the U.S. holder (including any stock constructively owned by the U.S. holder as a result of, among other things, owning warrants). The conversion of common stock generally will be treated as a sale or exchange of the common stock (rather than as a corporate distribution) if the receipt of cash upon the conversion (i) is "substantially disproportionate" with respect to the U.S. holder, (ii) results in a "complete termination" of the U.S. holder's interest in us, or (iii) is "not essentially equivalent to a dividend" with respect to the U.S. holder.

        In determining whether any of the foregoing tests are satisfied, a U.S. holder takes into account not only stock it actually owns, but also shares of our stock that it constructively owns. A U.S. holder may constructively own, in addition to stock owned directly, stock owned by certain related individuals and entities in which the U.S. holder has an interest or that have an interest in such U.S. holder, as well as any stock the U.S. holder has a right to acquire by exercise of an option, which would generally include common stock which could be acquired pursuant to the exercise of the warrants. In order to meet the substantially disproportionate test, the percentage of our outstanding voting stock actually and constructively owned by the U.S. holder immediately following the conversion of common stock must, among other requirements, be less than 80 percent of the percentage of our outstanding voting stock actually and constructively owned by the U.S. holder immediately before the conversion. There will be a complete termination of a U.S. holder's interest if either (i) all of the shares of our stock actually and constructively owned by the U.S. holder are converted or (ii) all of the shares of our stock actually owned by the U.S. holder are converted and the U.S. holder is eligible to waive, and effectively waives in accordance with specific rules, the attribution of stock owned by certain family members and the U.S. holder does not constructively own any other stock. The conversion of the common stock will not be essentially equivalent to a dividend if a U.S. holder's conversion results in a "meaningful reduction" of the U.S. holder's proportionate interest in us. Whether the conversion will result in a meaningful

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reduction in a U.S. holder's proportionate interest in us will depend on the particular facts and circumstances. However, the IRS has indicated in a published ruling that even a small reduction in the proportionate interest of a small minority stockholder in a publicly held corporation who exercises no control over corporate affairs may constitute such a "meaningful reduction." A U.S. holder should consult with its own tax advisors as to the tax consequences of an exercise of the conversion right.

        If the redemption does not qualify as a sale under Section 302 of the Code by satisfying one of the tests described above, then the conversion will be treated as a corporate distribution and the tax effects will be as described under "U.S. Holders—Taxation of Distributions" above. After the application of those rules, any remaining tax basis of the U.S. holder in the converted common stock will be added to the U.S. holder's adjusted tax basis in its remaining common stock, or, if it has no remaining common stock, to the U.S. holder's adjusted tax basis in its warrants or possibly in other common stock constructively owned by it.

        U.S. holders who actually or constructively own 5 percent or more of our stock (by vote or value) may be subject to special reporting requirements with respect to a conversion of common stock, and such U.S. holders should consult with their own tax advisors in that regard.

Exercise of a Warrant

        Except as discussed below with respect to the cashless exercise of a warrant, a U.S. holder will not be required to recognize taxable gain or loss upon exercise of a warrant. The U.S. holder's tax basis in the share of our common stock received upon exercise of the warrant generally will be an amount equal to the sum of the U.S. holder's initial investment in the warrant (i.e., the portion of the U.S. holder's purchase price for a unit that is allocated to the warrant, as described above under "—General") and the exercise price (i.e., $7.50 per share of our common stock, subject to adjustment as described in this prospectus). The U.S. holder's holding period in our common stock received upon exercise of the warrant will begin on the date following the date of exercise (or possibly the date of exercise) and will not include the period during which the U.S. holder held the warrant.

        The tax consequences of a cashless exercise of a warrant are not clear under current tax law. A cashless exercise may be tax-free, either because the exercise is a non-recognition event or because the exercise is treated as a recapitalization for U.S. federal income tax purposes. In either tax-free situation, a U.S. holder's basis in the common stock received would equal the holder's basis in the warrant. If the cashless exercise were treated as a non-recognition event, a U.S. holder's holding period in the common stock would begin on the date following the date of exercise. In contrast, if the cashless exercise were treated as a recapitalization, the holding period of the common stock would include the holding period of the warrant.

        It is also possible that a cashless exercise could be treated as a taxable exchange in which a U.S. holder would recognize gain or loss. In such event, a U.S. holder could be deemed to have surrendered warrants equal to the number of common shares having a value equal to the exercise price for the total number of warrants to be exercised. The U.S. holder would recognize capital gain or loss in an amount equal to the difference between the fair market value of the common stock represented by the warrants deemed surrendered and the U.S. holder's tax basis in the warrants deemed surrendered. In this case, a U.S. holder's tax basis in the common stock received would equal the sum of the fair market value of the common stock represented by the warrants deemed surrendered and the U.S. holder's tax basis in the warrants exercised. A U.S. holder's holding period for the common stock would begin on the date following the date of exercise.

        Due to the absence of authority on the U.S. federal income tax treatment of a cashless exercise, there can be no assurance which, if any, of the alternative tax consequences and holding periods described above would be adopted by the IRS or a court of law. Accordingly, U.S. holders should consult their tax advisors regarding the tax consequences of a cashless exercise.

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Sale, Exchange, Redemption or Expiration of a Warrant

        Upon a sale, exchange (other than by exercise), redemption, or expiration of a warrant, a U.S. holder will be required to recognize gain or loss in an amount equal to the difference between (i) the amount realized upon such disposition or expiration (or, if the warrant is held as part of a unit at the time of the disposition of the unit, the portion of the amount realized on such disposition that is allocated to the warrant based on the then fair market values of the warrant and the common stock included in the unit) and (ii) the U.S. holder's tax basis in the warrant (that is, as discussed above, the portion of the U.S. holder's purchase price for a unit that is allocated to the warrant, as described above under "—General"). Such gain or loss would generally be treated as long-term capital gain or loss if the warrant was held by the U.S. holder for more than one year at the time of such disposition or expiration. As discussed above, the deductibility of capital losses is subject to certain limitations, as is the deduction for losses upon a taxable disposition by a U.S. holder of a warrant (whether or not held as part of a unit) if, within a period beginning 30 days before the date of such disposition and ending 30 days after such date, such U.S. holder has acquired (by purchase or by an exchange on which the entire amount of gain or loss was recognized by law), or has entered into a contract or option so to acquire, substantially identical stock or securities.

Non-U.S. Holders

Taxation of Distributions

        In general, any distributions we make to a non-U.S. holder of our common stock, to the extent paid out of our current or accumulated earnings and profits (as determined under U.S. federal income tax principles), generally will constitute dividends for U.S. federal income tax purposes and, provided such dividends are not effectively connected with the non-U.S. holder's conduct of a trade or business within the United States, we generally will be required to withhold tax from the gross amount of the dividend at a rate of 30 percent, unless such non-U.S. holder is eligible for a reduced rate of withholding tax under an applicable income tax treaty and provides proper certification of its eligibility for such reduced rate (usually on an IRS Form W-8BEN). Any distribution not constituting a dividend will be treated first as reducing (but not below zero) the non-U.S. holder's adjusted tax basis in our common stock and, to the extent such distribution exceeds the non-U.S. holder's adjusted tax basis, as gain realized from the sale or other disposition of the common stock, which will be treated as described under "Non-U.S. Holders—Gain on Sale, Exchange or Other Taxable Disposition of Common Stock and Warrants" below. In addition, if we determine that we are likely to be classified as a "U.S. real property holding corporation" (see "Non-U.S. Holders—Gain on Sale, Exchange or Other Taxable Disposition of Common Stock and Warrants" below), we will withhold 10 percent of any distribution that exceeds our current and accumulated earnings and profits.

        Dividends we pay to a non-U.S. holder that are effectively connected with such non-U.S. holder's conduct of a trade or business within the United States (and, if certain income tax treaties apply, are attributable to a United States permanent establishment or fixed base maintained by the non-U.S. holder) generally will not be subject to U.S. withholding tax, provided such non-U.S. holder complies with certain certification and disclosure requirements (usually by providing an IRS Form W-8ECI). Instead, such dividends generally will be subject to U.S. federal income tax, net of certain deductions, at the same graduated individual or corporate rates applicable to U.S. Persons. If the non-U.S. holder is a corporation, dividends that are effectively connected income may also be subject to a "branch profits tax" at a rate of 30 percent (or such lower rate as may be specified by an applicable income tax treaty).

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Exercise of a Warrant

        The U.S. federal income tax treatment of a non-U.S. holder's exercise of a warrant generally will correspond to the U.S. federal income tax treatment of the exercise of a warrant by a U.S. holder, as described under "U.S. Holders—Exercise of a Warrant" above.

Gain on Sale, Exchange or Other Taxable Disposition of Common Stock and Warrants

        A non-U.S. holder generally will not be subject to U.S. federal income or withholding tax in respect of gain recognized on a sale, exchange or other disposition of our common stock (which would include a dissolution and liquidation in the event we do not consummate an initial business combination within the required timeframe) or warrants (including an expiration or redemption of our warrants), in each case without regard to whether those securities were held as part of a unit, unless:

•

the gain is effectively connected with the conduct of a trade or business by the non-U.S. holder within the United States (and, under certain income tax treaties, is attributable to a United States permanent establishment or fixed base maintained by the non-U.S. holder);



•

the non-U.S. holder is an individual who is present in the United States for 183 days or more in the taxable year of disposition and certain other conditions are met; or



•

we are or have been a "U.S. real property holding corporation" for U.S. federal income tax purposes at any time during the shorter of the five-year period ending on the date of disposition or the period that the non-U.S. holder held our common stock, and, in the case where shares of our common stock are regularly traded on an established securities market, the non-U.S. holder has owned, directly or indirectly, more than 5 percent of our common stock at any time within the shorter of the five-year period preceding the disposition or such non-U.S. holder's holding period for the shares of our common stock. There can be no assurance that our common stock will be treated as regularly traded on an established securities market for this purpose.

        Unless an applicable treaty provides otherwise, gain described in the first bullet point above will be subject to tax at generally applicable U.S. federal income tax rates. Any gains described in the first bullet point above of a non-U.S. holder that is a foreign corporation may also be subject to an additional 30 percent "branch profits tax". Gain described in the second bullet point above (which may be offset by U.S. source capital losses) will be subject to a flat 30 percent U.S. federal income tax. Non-U.S. holders should consult any income tax treaties applicable to them, as those treaties that may provide for different rules.

        Although we currently are not a U.S. real property holding corporation, we cannot determine whether we will be a U.S. real property holding corporation in the future until we consummate an initial business combination. We will be classified as a U.S. real property holding corporation if the fair market value of our "U.S. real property interests" equals or exceeds 50 percent of the sum of the fair market value of our worldwide real property interests plus our other assets used or held for use in a trade or business, as determined for U.S. federal income tax purposes. Each non-U.S. holder should consult its own tax advisors as to whether the warrants will be treated as "U.S. real property interests" and the tax consequences resulting from such treatment.

Conversion of Common Stock

        The characterization for U.S. federal income tax purposes of a non-U.S. holder's conversion of our common stock into a right to receive cash pursuant to an exercise of a conversion right generally will correspond to the U.S. federal income tax characterization of the exercise of such a conversion right by a U.S. holder, as described under "U.S. Holders—Conversion of Common Stock" above, and the consequences of the conversion to the non-U.S. holder will be as described above under

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"Non-U.S. Holders—Taxation of Distributions" and "Non-U.S. Holders—Gain on Sale, Exchange or Other Taxable Disposition of Common Stock and Warrants", as applicable.

Information Reporting and Backup Withholding

        We must report annually to the IRS and to each holder the amount of dividends or other distributions we pay to such holder on our common stock and the amount of tax withheld with respect to those distributions, regardless of whether withholding is required. In the case of a non-U.S. holder, the IRS may make copies of the information returns reporting those dividends and amounts withheld available to the tax authorities in the country in which the non-U.S. holder resides pursuant to the provisions of an applicable income tax treaty or exchange of information treaty.

        The gross amount of dividends and proceeds from the disposition of our common stock or warrants paid to a holder that fails to provide the appropriate certification in accordance with applicable U.S. Treasury regulations generally will be subject to backup withholding at the applicable rate (currently 28 percent).

        Information reporting and backup withholding generally are not required with respect to the amount of any proceeds from the sale by a non-U.S. holder of common stock or warrants outside the United States through a foreign office of a foreign broker that does not have certain specified connections to the United States. However, if a non-U.S. holder sells common stock or warrants through a U.S. broker or the U.S. office of a foreign broker, the broker will be required to report to the IRS the amount of proceeds paid to such holder, unless the non-U.S. holder provides appropriate certification (usually on an IRS Form W-8BEN) to the broker of its status as a non-U.S. holder or such non-U.S. holder is an exempt recipient. Information reporting (but not backup withholding) also would apply if a non-U.S. holder sells common stock or warrants through a foreign broker deriving more than a specified percentage of its income from U.S. sources or having certain other connections to the United States, unless in any such case the broker has documentary evidence that the beneficial owner is a non-U.S. holder and specified conditions are met or an exemption is otherwise established.

        Backup withholding is not an additional tax. Any amounts we withhold under the backup withholding rules may be refunded or credited against the holder's U.S federal income tax liability, if any, by the IRS if the required information is furnished to the IRS in a timely manner.

Federal Estate Tax

        Shares of our common stock or warrants owned or treated as owned by an individual who is not a U.S. citizen or resident (as specifically defined for U.S. federal estate tax purposes) at the time of his or her death will be included in the individual's gross estate for U.S. federal estate tax purposes, unless an applicable estate tax treaty provides otherwise, and therefore may be subject to U.S. federal estate tax.

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UNDERWRITING

        Lazard Capital Markets is acting as the sole bookrunning manager of the offering and as representative of the underwriters named below. Subject to the terms and conditions stated in the underwriting agreement dated the date of this prospectus, each underwriter named below has agreed to purchase and we have agreed to sell to that underwriter, the number of units set forth opposite the underwriter's name.

        The underwriting agreement provides that the obligations of the underwriters to purchase the units included in this offering are subject to approval of legal matters by counsel and to other conditions. The underwriters are obligated to purchase all of the units (other than those covered by the over-allotment option described below) if they purchase any of the units.

        The underwriters propose to offer some of the units directly to the public at the public offering price set forth on the cover page of this prospectus and some of the units to dealers at the public offering price less a concession not to exceed $[      ] per unit. If all of the units are not sold at the initial offering price, the representative may change the public offering price and the other selling terms. Lazard Capital Markets has advised us that the underwriters do not intend sales to discretionary accounts to exceed five percent of the total number of units offered by them.

        We have granted to the underwriters an option, exercisable for 30 days from the date of this prospectus, to purchase up to 3,000,000 additional units at the public offering price less the underwriting discount. The underwriters may exercise this option solely for the purpose of covering over-allotments, if any, in connection with this offering. To the extent the option is exercised, each underwriter must purchase a number of additional units approximately proportionate to that underwriter's initial purchase commitment. The "restricted period" under Regulation M will end upon the completion of this distribution. Under Regulation M, the restricted period will terminate when all of the securities have been distributed and any stabilization arrangements have been terminated. Further, if the underwriters were to exercise the over-allotment option to purchase securities in excess of its syndicate short position at the time the over-allotment option is exercised, the restricted period could be extended. In such event, the restricted period would not end until the excess securities were distributed by the underwriters or placed in their investment account. However, the underwriters have agreed that they may only exercise their over-allotment option to cover their actual short positions, if any.

        We and our officers and directors have agreed that, subject to certain limited exceptions, for a period of 180 days from the date of this prospectus, we and they will not, without the prior written consent of Lazard Capital Markets, sell, offer to sell, contract or agree to sell, hypothecate, pledge, grant any option to purchase or otherwise dispose of or agree to dispose of, directly or indirectly, or establish or increase a put equivalent position or liquidate or decrease a call equivalent position within the meaning of Section 16 of the Securities Exchange Act of 1934, as amended, and the rules and regulations of the SEC promulgated thereunder, any of our units, warrants, common stock or other securities convertible into or exchangeable for our common stock. Lazard Capital Markets in its sole discretion may release any of the securities subject to these lock-up agreements at any time without notice.

        In addition, our initial stockholders have agreed, subject to certain limited exceptions, not to sell, offer to sell, contract or agree to sell, hypothecate, pledge, grant any option to purchase or otherwise

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dispose of or agree to dispose of, directly or indirectly, or establish or increase a put equivalent position or liquidate or decrease a call equivalent position within the meaning of Section 16 of the Securities Exchange Act of 1934, as amended, and the rules and regulations of the SEC promulgated thereunder, any of the founders' common stock (including the common stock issuable upon exercise of the sponsor warrants) until one year after the date on which we complete our initial business combination and our sponsor has agreed, subject to certain limited exceptions, not to sell, offer to sell, contract or agree to sell, hypothecate, pledge, grant any option to purchase or otherwise dispose of or agree to dispose of, directly or indirectly, or establish or increase a put equivalent position or liquidate or decrease a call equivalent position within the meaning of Section 16 of the Securities Exchange Act of 1934, as amended, and the rules and regulations of the SEC promulgated thereunder, any of the sponsor's warrants until 30 days after the date on which we complete our initial business combination.

        In relation to each member state of the European Economic Area that has implemented the Prospectus Directive (each, a "relevant member state"), with effect from and including the date on which the Prospectus Directive is implemented in that relevant member state (the "relevant implementation date"), an offer of our units described in this prospectus may not be made to the public in that relevant member state prior to the publication of a prospectus in relation to our units which has been approved by the competent authority in that relevant member state or, where appropriate, approved in another relevant member state and notified to the competent authority in that relevant member state, all in accordance with the Prospectus Directive, except that, with effect from and including the relevant implementation date, an offer of our units may be made to the public in that relevant member state at any time:

•

to any legal entity that is authorized or regulated to operate in the financial markets or, if not so authorized or regulated, whose corporate purpose is solely to invest in securities; or



•

to any legal entity that has two or more of (1) an average of at least 250 employees during the last financial year; (2) a total balance sheet of more than €43,000,000 and (3) an annual net turnover of more than €50,000,000 as shown in its last annual or consolidated accounts; or



•

in any other circumstances that do not require the publication of a prospectus pursuant to Article 3 of the Prospectus Directive.

        Each purchaser of our units described in this prospectus located within a relevant member state will be deemed to have represented, acknowledged and agreed that it is a "qualified investor" within the meaning of Article 2(1)(e) of the Prospectus Directive.

        For the purpose of this provision, the expression an "offer of units to the public" in relation to any units in any relevant member state means the communication in any form and by any means of sufficient information on the terms of the offer and the units to be offered so as to enable an investor to decide to purchase or subscribe for the units, as the expression may be varied in that relevant member state by any measure implementing the Prospectus Directive in that relevant member state, and the expression "Prospectus Directive" means Directive 2003/71/EC and includes any relevant implementing measure in each relevant member state.

        The sellers of the units have not authorized and do not authorize the making of any offer of units through any financial intermediary on their behalf, other than offers made by the underwriters with a view to the final placement of the units as contemplated in this prospectus. Accordingly, no purchaser of the units, other than the underwriters, is authorized to make any further offer of the units on behalf of the sellers or the underwriters.

        This prospectus is only being distributed to, and is only directed at, persons in the United Kingdom that are qualified investors within the meaning of Article 2(1)(e) of the Prospectus Directive ("Qualified Investors") that are also (i) investment professionals falling within Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (the "Order") or (ii) high

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net worth entities, and other persons to whom it may lawfully be communicated, falling within Article 49(2)(a) to (d) of the Order (all such persons together being referred to as "relevant persons"). This prospectus and its contents are confidential and should not be distributed, published or reproduced (in whole or in part) or disclosed by recipients to any other persons in the United Kingdom. Any person in the United Kingdom that is not a relevant persons should not act or rely on this document or any of its contents.

        Neither this prospectus nor any other offering material relating to the units described in this prospectus has been submitted to the clearance procedures of the Autorité des Marchés Financiers or by the competent authority of another member state of the European Economic Area and notified to the Autorité des Marchés Financiers. The units have not been offered or sold and will not be offered or sold, directly or indirectly, to the public in France. Neither this prospectus nor any other offering material relating to the units has been or will be

•

released, issued, distributed or caused to be released, issued or distributed to the public in France or



•

used in connection with any offer for subscription or sale of the units to the public in France.

        Such offers, sales and distributions will be made in France only

•

to qualified investors (investisseurs qualifiés) and/or to a restricted circle of investors (cercle restreint d'investisseurs), in each case investing for their own account, all as defined in, and in accordance with, Article L.411-2, D.411-1, D.411-2, D.734-1, D.744-1, D.754-1 and D.764-1 of the French Code monétaire et financier or



•

to investment services providers authorized to engage in portfolio management on behalf of third parties or



•

in a transaction that, in accordance with article L.411-2-II-1°-or-2°-or 3° of the French Code monétaire et financier and article 211-2 of the General Regulations (Règlement Général) of the Autorité des Marchés Financiers, does not constitute a public offer (appel public à l'épargne).

        The units may be resold directly or indirectly, only in compliance with Articles L.411-1, L.411-2, L.412-1 and L.621-8 through L.621-8-3 of the French Code monétaire et financier.

        Prior to this offering, there has been no public market for our securities. Consequently, the initial public offering price for the units was determined by negotiations among us and the underwriters. The determination of our per unit offering price was more arbitrary than would typically be the case if we were an operating company. We cannot assure you that the prices at which the units will trade in the public market after this offering will not be lower than the initial public offering price or that an active trading market in our units, common stock or warrants will develop and continue after this offering.

        We have applied to have the units listed on the American Stock Exchange under the symbol "CRB.U" and, once the common stock and warrants begin separate trading, to have our common stock and warrants listed on the American Stock Exchange under the symbols "CRB" and "CRB.WS," respectively.

        The following table shows the underwriting discounts and commissions that we are to pay to the underwriters in connection with this offering. These amounts are shown assuming both no exercise and full exercise of the underwriters' option to purchase additional units.

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        The amounts paid by us in the table above include $6.0 million in deferred underwriting discounts and commissions (or approximately $6.9 million if the over-allotment option is exercised in full), an amount equal to 3.0% of the gross proceeds of this offering, which will be placed in trust until our completion of an initial business combination as described in this prospectus. At that time, the deferred underwriting discounts and commissions will be released to the underwriters out of the balance held in the trust account. If we do not complete an initial business combination and the trustee must distribute the balance of the trust account, the underwriters have agreed that (i) on our liquidation they will forfeit any rights or claims to their deferred underwriting discounts and commissions, including any accrued interest thereon, then in the trust account, and (ii) the deferred underwriters' discounts and commission will be distributed on a pro rata basis, together with any accrued interest thereon and net of income taxes payable on such interest, to the public stockholders.

        In connection with the offering, Lazard Capital Markets, on behalf of the underwriters, may purchase and sell units in the open market. These transactions may include short sales, syndicate covering transactions and stabilizing transactions. Short sales involve syndicate sales of units in excess of the number of units to be purchased by the underwriters in the offering, which creates a syndicate short position. "Covered" short sales are sales of units made in an amount up to the number of units represented by the underwriters' over-allotment option. In determining the source of units to close out the covered syndicate short position, the underwriters will consider, among other things, the price of units available for purchase in the open market as compared to the price at which they may purchase units through the over-allotment option. Transactions to close out the covered syndicate short position involve either purchases of the units in the open market after the distribution has been completed or the exercise of the over-allotment option. The underwriters may also make "naked" short sales of units in excess of the over-allotment option. The underwriters must close out any naked short position by purchasing units in the open market. A naked short position is more likely to be created if the underwriters are concerned that there may be downward pressure on the price of the units in the open market after pricing that could adversely affect investors who purchase in the offering. Stabilizing transactions consist of bids for or purchases of units in the open market while the offering is in progress.

        The underwriters may also impose a penalty bid. Penalty bids permit the underwriters to reclaim a selling concession from a syndicate member when Lazard Capital Markets repurchases units originally sold by that syndicate member in order to cover syndicate short positions or make stabilizing purchases.

        Any of these activities may have the effect of preventing or retarding a decline in the market price of the units. They may also cause the price of the units to be higher than the price that would otherwise exist in the open market in the absence of these transactions. The underwriters may conduct these transactions on the American Stock Exchange or in the over-the-counter market, or otherwise. If the underwriters commence any of these transactions, they may discontinue them at any time.

        We estimate that the portion of the total expenses of this offering payable by us will be $605,000, exclusive of underwriting discounts and commissions.

        The underwriters may, from time to time, engage in transactions with and perform services for us in the ordinary course of their business.

        Lazard Frères & Co. LLC referred this transaction to Lazard Capital Markets LLC and will receive a referral fee from Lazard Capital Markets LLC in connection therewith.

        A prospectus in electronic format may be made available by one or more of the underwriters on a website maintained by one or more of the underwriters. Lazard Capital Markets may agree to allocate a number of units to underwriters for sale to their online brokerage account holders. Lazard Capital Markets will allocate units to underwriters that may make Internet distributions on the same basis as

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other allocations. In addition, units may be sold by the underwriters to securities dealers who resell units to online brokerage account holders.

        We have agreed to indemnify the underwriters against certain liabilities, including liabilities under the Securities Act, or to contribute to payments the underwriters may be required to make because of any of those liabilities.

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LEGAL MATTERS

        Akin Gump Strauss Hauer & Feld LLP, New York, New York is acting as counsel in connection with the registration of our securities under the Securities Act, and as such, will pass upon the validity of the securities offered in this prospectus. In connection with this offering Kramer Levin Naftalis & Frankel LLP, New York, New York is acting as counsel to the underwriters.

EXPERTS

        The financial statements of Capstar Acquisition Corp. (a development stage company) as of October 26, 2007 and for the period September 28, 2007 (date of inception) to October 26, 2007 have been included herein in reliance upon the report of Rothstein Kass & Company, P.C., independent registered public accounting firm, appearing elsewhere herein, and upon the authority of Rothstein Kass & Company, P.C. as experts in accounting and auditing.

WHERE YOU CAN FIND ADDITIONAL INFORMATION

        We have filed with the Securities and Exchange Commission a registration statement on Form S-1 under the Securities Act with respect to the securities we are offering by this prospectus. This prospectus does not contain all of the information included in the registration statement. For further information about us and our securities, you should refer to the registration statement and the exhibits and schedules filed with the registration statement. Whenever we make reference in this prospectus to any of our contracts, agreements or other documents, the references are materially complete but may not include a description of all aspects of such contracts, agreements or other documents, and you should refer to the exhibits attached to the registration statement for copies of the actual contract, agreement or other document.

        Upon completion of this offering, we will be subject to the information requirements of the Exchange Act and will file annual, quarterly and current event reports, proxy statements and other information with the Securities and Exchange Commission. You can read our Securities and Exchange Commission filings, including the registration statement, over the Internet at the Securities and Exchange Commission's website at www.sec.gov. You may also read and copy any document we file with the Securities and Exchange Commission at its public reference facility at 100 F Street, N.E., Washington, D.C. 20549.

        You may also obtain copies of the documents at prescribed rates by writing to the Public Reference Section of the Securities and Exchange Commission at 100 F Street, N.E., Washington, D.C. 20549. Please call the Securities and Exchange Commission at 1-800-SEC-0330 for further information on the operation of the public reference facilities.

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INDEX TO FINANCIAL STATEMENTS

Capstar Acquisition Corp.

(a development stage company)

F-1

Report of Independent Registered Public Accounting Firm

To the Board of Directors and Stockholders of
Capstar Acquisition Corp.

        We have audited the accompanying balance sheet of Capstar Acquisition Corp. (a development stage company) (the "Company") as of October 26, 2007, and the related statements of operations, stockholders' equity, and cash flows for the period September 28, 2007 (date of inception) to October 26, 2007. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audit.

        We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

        In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Capstar Acquisition Corp. (a development stage company) as of October 26, 2007, and the results of its operations and its cash flows for the period September 28, 2007 (date of inception) to October 26, 2007, in conformity with U.S. generally accepted accounting principles.

/s/ Rothstein Kass & Company, P.C.

Roseland, New Jersey
December 7, 2007

F-2

CAPSTAR ACQUISITION CORP.
(a development stage company)

BALANCE SHEET

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

F-3

CAPSTAR ACQUISITION CORP.
(a development stage company)

STATEMENT OF OPERATIONS

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

F-4

CAPSTAR ACQUISITION CORP.
(a development stage company)

STATEMENT OF STOCKHOLDERS' EQUITY

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

F-5

CAPSTAR ACQUISITION CORP.
(a development stage company)

STATEMENT OF CASH FLOWS