Summary of MEDIA & ENTERTAINMENT HOLDINGS, INC.

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIALCONDITION AND
RESULTS OF OPERATIONS

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

Forward Looking Statements

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

Overview

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

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

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Overview (continued)

The aggregate net proceeds of the initial public offering, the exercise of the over-allotment option, and the sale of warrants on a private basis to the Company's existing stockholders of $96,618,800 were placed in a trust account (the "trust account").

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

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

Business Combination with Potential Target

On July 8, 2008, we executed a letter of intent for a business combination with a potential target.

Results of Operations

For the three months ended June 30, 2008, we had a net income of $83,264 after provision for income taxes of $39,502, as compared to the prior year's period net income of $540,556, after provision for income taxes of $474,409. The difference is primarily due to the Federal Reserve dropping the interest rate, which was 5.5% as of June 30, 2007, to 2.0% as of June 30, 2008. For the three months June 30, 2007, the Company's net income of $540,556 consisted of $1,163,963 of interest income on the trust account offset by $20,844 of stock based compensation, $94,805 of expenses related to filing requirements as a public entity, $9,810 of costs of searching for an acquisition target, and $23,539 of general and administrative expenses, aggregating $148,998, and $474,409 of income taxes. During the three months ending June 30, 2008, we incurred expenses related to the Company's filing requirements as a public entity of $106,138, costs of searching for an acquisition target of $28,383, stock based compensation of $20,844, as well as general and administrative expenses of $42,285, aggregating $197,650, and income taxes of $39,502.

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Results of Operations (continued)

Net income from July 8, 2005 (inception) through June 30, 2008 was $1,974,326, after a provision for income taxes of $1,137,689. This was due to the interest earned of $4,369,641 on the proceeds from the initial public offering offset by the stock based compensation of $236,233, expenses related to the filing requirements as a public entity of $591,941, costs of searching for an acquisition target of $162,769, as well as general and administrative expenses of $266,683, aggregating, $1,257,626.

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

Off-Balance Sheet Arrangements

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

Contractual Obligations

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

Critical Accounting Policies

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

Liquidity and Capital Resources

$96,618,800 of the net proceeds of our initial public offering, over-allotment exercise, private sale of warrants, and a portion of the underwriters' discounts and expense allowance were deposited in the trust account, with the remaining net proceeds being placed in our operating account. We plan to use the interest income earned on the trust proceeds (up to a maximum of $1,800,000 which we have received as of June 30, 2008) to identify, evaluate and negotiate with prospective acquisition candidates

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Liquidity and Capital Resources (continued)

as well as cover our ongoing operating expenses until a transaction is approved by our shareholders or the trust accounts are returned to them.

We intend to utilize our cash, including the funds held in the trust account, capital stock, debt or a combination of the foregoing to effect a business combination. To the extent that our capital stock or debt securities are used in whole or in part as consideration to effect a business combination, the proceeds held in the trust account as well as any other available cash will be used to finance the operations of the target business. At June 30, 2008, we had cash outside of the trust account of $1,018,145, other current assets of $19,916 and total liabilities of $206,964 which includes taxes payable of $44,255 which can be funded from interest earned on the trust account in addition to the $1,800,000 available for working capital. Our working capital (excluding investments held in the trust account - restricted and including investments held in the trust account available for income taxes and working capital) amounted to $880,528. The Company has $49,431 of interest available for the payment of income taxes which has been classified as cash held in trust account, interest available for working capital and income taxes on the unaudited interim condensed balance sheet.

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

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

As of June 30, 2008, we had total cash of $98,620,254, of which $97,552,678 is restricted cash held in the trust account. Until the initial public offering, our only source of liquidity was loans made by our four members of management. Those loans were all repaid out of the proceeds of the initial public offering. Our other liabilities relate to costs associated with our initial public offering, income taxes due, and other administrative items.

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