The following discussion should be read in conjunction with our Condensed Financial Statements and notes 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 the Form 10-Q and our other 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

We were formed on July 9, 2007, to serve as a vehicle to effect a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or other similar business combination with one or more operating business in the financial services industry. Our initial business combination must be with a business or businesses whose collective fair market value is in excess of 80% of the balance in the trust account (excluding the amount held in the trust account representing a portion of the underwriters' discount) at the time of the initial business combination. We intend to utilize cash derived from the proceeds of our initial public offering, our capital stock, debt or a combination of cash, capital stock and debt, in effecting a business combination.

Business Combination with Kennedy-Wilson, Inc.

On September 8, 2009, the Company entered into an Agreement and Plan of Merger, by and among the Company, KW Merger Sub Corp., a newly formed, wholly-owned subsidiary of the Company ("Merger Sub") and Kennedy-Wilson, Inc. ("Kennedy-Wilson"), pursuant to which Merger Sub will merge (the "Merger") with and into Kennedy-Wilson, with Kennedy-Wilson continuing as the surviving corporation and a wholly-owned subsidiary of the Company, as amended by Amendment No. 1, dated as of October 22, 2009 and Amendment No. 2, dated as of October 26, 2009 (the "Merger Agreement").

Pursuant to the Merger Agreement, common stockholders of Kennedy-Wilson will receive as consideration 3.8031 shares of the Company's common stock for each share of Kennedy-Wilson common stock outstanding and preferred stockholders of Kennedy-Wilson will receive as consideration 105.6412 shares of the Company's common stock for each share of preferred outstanding, for an aggregate consideration of 26 million shares of the Company's common stock. In addition, up to 2.475 million restricted shares of the Company's common stock will be issued to management of Kennedy-Wilson pursuant to an equity compensation plan (the "2009 Plan") adopted by the Company and submitted to the Company's stockholders for approval.

Upon consummation of the Merger, the Company's founders will forfeit 4,750,000 of their founders' shares. Following the transaction, assuming 29.99% of the Company's stockholders exercise their conversion rights, the Company's current stockholders will own 39.9% of the Company's outstanding common stock, current common and preferred stockholders of Kennedy-Wilson will own approximately 54.6%, and the other new stockholders of the Company (including recipients of awards under the 2009 Plan) will own approximately 5.5% of the Company's outstanding common stock.

As a condition to the closing of the Merger, holders of the Company's warrants must approve an amendment (the "Warrant Amendment") to the current warrant agreement that governs all of the Company's warrants (the "Prospect Warrants"), each of which is exercisable for one share of the Company's common stock. The Warrant Amendment will provide that, at the closing of the Merger, each holder of warrants issued in the Company's initial public offering (the "Public Warrants") must elect either: (i) to have the Public Warrant cashed out by the Company for $0.55 in cash per Public Warrant, or (ii) to continue to hold his, her or its Public Warrant, which will be amended to extend the warrant termination date to 2013 from 2012, increase the exercise price to $12.50 from $7.50 and increase the redemption price to $19.50 from $14.50. At least 12.5 million Public Warrants must be redeemed for cash. In the event that holders in excess of 50% or 12,500,000 (the

"Warrant Limit") of the Public Warrants elect to receive an amended warrant, a pro rata portion of the Public Warrants and the Sponsors' Warrants, totaling such excess over the Warrant Limit, will automatically be converted into the right to receive a cash amount of $0.55 per warrant. In addition, the Warrant Amendment will amend the terms of the Sponsors' Warrants to extend the warrant termination date to 2013 from 2012, increase the exercise price to $12.50 from $7.50 and increase the redemption price to $19.50 from $14.50. If the Merger is consummated, any holder of Public Warrants who votes against the approval of the Warrant Amendment or who makes no election will receive $0.55 for each of its Public Warrants.

The Merger Agreement contains customary representations and warranties made by Kennedy-Wilson on the one hand, and the Company and Merger Sub, as applicable on the other. Such representations relate to, among other things, (a) proper corporate organization and similar corporate matters, (b) capital structure,
(c) the absence of undisclosed liabilities, (d) assets, properties and intellectual property, (e) contracts, (f) compliance with laws, (g) litigation,
(h) related party transactions, (i) taxes, (j) financial statements and
(k) employee benefits. In addition, the Company represents and warrants that its board of directors has determined that the fair market value of Kennedy-Wilson equals at least 80% of the balance held in the Company's trust account, less the portion of the underwriters' deferred compensation.

Each party to the Merger Agreement has agreed to perform or comply with certain customary covenants, including but not limited to, covenants related to the parties' conduct between signing and closing, restrictions on the parties' ability to solicit, negotiate or enter into a transaction with another party, covenants related to the parties' cooperation and efforts to file a proxy statement and registration statement and related effectiveness of the registration statement, covenants related to requirement to call stockholder meetings and obtain the requisite stockholders' and other approvals, make appropriate regulatory and other filings, enter into employment agreements with certain executive officer, and provide each other with access to their respective materials, advisors and information.

The consummation of the Merger is conditioned upon, among other things, (i) the performance by each of the Company and Kennedy-Wilson in all material respects of their respective obligations under the Merger Agreement, (ii) the accuracy of the representations and warranties of the parties to the Merger Agreement,
(iii) the receipt of all required regulatory approvals and consents, (iv) the approval of the Merger by the stockholders of the Company and Kennedy-Wilson,
(v) the approval by the preferred stockholders of Kennedy-Wilson of an amendment to the preferred stock certificate of designation, (vi) the effectiveness of the Company's registration statement, (vii) a requirement that holders of less than 30% of the Company's common stock demand that the Company convert such shares into cash, (viii) a requirement that the holders of no more than 10% of Kennedy-Wilson preferred stock and no more than 10% of Kennedy-Wilson common stock shall have validly exercised their dissenters' rights and (ix) the requirement that the Company have available at closing for use by the surviving combined company, a specified minimum amount of cash as calculated pursuant to the Merger Agreement. The merger is also subject to customary regulatory approvals, including approval under the Hart-Scott Rodino Antitrust Improvements Act, and other customary closing conditions, including no material adverse effect (as defined in the Merger Agreement) on either Kennedy-Wilson or the Company.

The Merger Agreement also provides that the agreement may be terminated (i) by mutual consent of the Company and Kennedy-Wilson, (ii) by the Company if Kennedy-Wilson notifies the Company that it will be unable to obtain one or more required consents by October 15, 2009 or (iii) by either of the Company or Kennedy-Wilson, if (a) the Merger is not consummated on or before November 14, 2009; (b) a governmental authority shall enter an order which prohibits the Merger; (c) it is not in material breach of the Merger Agreement and the other party is in breach of the Merger Agreement in a manner which prevents satisfaction of the closing conditions in the Merger Agreement, which breach is not cured with 10 business days' notice; (d) if the board of directors of the other party fails to recommend, or withdraws or modifies its recommendations to the Merger Agreement; (e) if the Company's common stockholders fail to approve the Merger, or if 30% or more of the Company's common stockholders exercise their redemption rights; or (f) if the Kennedy-Wilson stockholders do not approve the Merger on or prior to November 13, 2009.

If the Merger Agreement is terminated as a result of clause (iii)(f) above, Kennedy-Wilson will pay to the Company $10,000,000 as liquidated damages.

On October 30, 2009, the Company commenced its mailing of the definitive proxy statements to its stockholders and warrant holders, and will hold each of the special meeting of stockholders and the special meeting of warrant holders on November 13, 2009, to vote upon the proposed business combination and the matters associated therewith.

A more complete description of the Merger Agreement and the transaction described above is set forth in the Company's Registration Statement on Form S-4, which includes the Company's definitive proxy statement relating to the

business combination, declared effective by the SEC on October 28, 2009. Investors are urged to read the definitive proxy statement in its entirety.

Investors are cautioned that the representations, warranties and covenants included in the Merger Agreement were made only for the purposes of such agreement and as of the specific dates set forth therein, were solely for the benefits of the parties to the Merger Agreement, and may be subject to limitations agreed upon by the contracting parties including being qualified by confidential disclosures exchanged between the parties in connection with the execution of the Merger Agreement. The representations, warranties and covenants included in the Merger Agreement were made for the purpose of allocating contractual risk between the parties to the Merger Agreement, instead of establishing such matters as facts, and may be subject to standards of materiality applicable to the contracting parties that differ from those applicable to investors. Investors and security holders are not third party beneficiaries under the Merger Agreement, and should not rely on the representations, warranties and covenants as characterizations of the actual state of facts or conditions of the Company or Kennedy-Wilson.

Results of Operations

For the three months ended September 30, 2009, we had a net loss of $765,480 as compared to net income of $278,211 for the three months ended September 30, 2008. The decrease in net income was primarily due to the decrease in interest rates, resulting in a decrease in net interest income of $932,737, combined with an increase in professional fees of $1,011,613 and an increase in formation, operating, rent and office expenses of $18,564, partially offset by a decrease in state and federal taxes of $919,223.

For the nine months ended September 30, 2009, we had a net loss of $1,022,864 as compared to net income of $1,546,396 for the nine months ended September 30, 2008. The decrease in net income was primarily due to the decrease in interest rates, resulting in a decrease in net interest income of $3,420,173, combined with an increase in professional fees of $1,092,983 and an increase in formation, operating, rent and office expenses of $3,766, partially offset by a decrease in state and federal taxes of $1,947,662.

For the three months ended September 30, 2009, our net loss of $765,480 consisted of net interest income of $18,279 less costs attributable to organization, formation and general and administrative expenses, primarily professional fees, of $1,164,849 and a net benefit from federal income taxes of $381,090. For the three months ended September 30, 2008, our net income of $278,211 consisted of interest income of $951,016 less costs attributable to organization, formation and general and administrative expenses of $134,672, state taxes of $384,143 and a net provision for federal income taxes of $153,990.

For the period from July 9, 2007 (date of inception) through September 30, 2009, we had a net income of $1,103,549, consisting of net interest income of $4,948,658 less costs attributable to organization, formation and general and administrative expenses of $2,367,062, state taxes of $816,301 and a net provision for federal income taxes of $661,746.

Through September 30, 2009 we did not engage in any significant operations. Our activities from inception through September 30, 2009 were to prepare for and consummate our initial public offering and begin the identification of a suitable business combination candidate.

Financial Condition and Liquidity

We consummated our initial public offering of 25,000,000 units on November 20, 2007. Gross proceeds from our initial public offering were $250,000,000. We paid a total of $7,500,000 in underwriting discounts and commissions and $705,004 for other costs and expenses related to the offering. After deducting the underwriting discounts and commissions and the offering expenses, the total net proceeds including $5,250,000 from the sale of the sponsor warrants to us from the offering were $247,044,996, and an amount of $247,000,000, including $10,000,000 of deferred underwriting commissions, was deposited into a trust account at JP Morgan Chase Bank, NA, maintained by Continental Stock Transfer & Trust Company, as trustee. We intend to use substantially all of the net proceeds of this offering to acquire a target business, including identifying and evaluating prospective acquisition candidates, selecting the target business, and structuring, negotiating and consummating the business combination. To the extent that our capital stock is 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 net proceeds not expended will be used to finance the operations of the target business. We believe we will have sufficient available funds outside of the trust account to operate through November 14, 2009, assuming that a business combination is not consummated during that time.

The following table reconciles the amount of net proceeds from our initial public offering and private placement to the amount held in the trust account at September 30, 2009:

Amounts placed in Trust Account                          $ 247,000,000
Interest income received                                     5,022,632
Amounts withdrawn for payment of federal & state taxes      (2,387,057 )
Amounts withdrawn for working capital                       (1,933,699 )
Total held in Trust Account                              $ 247,701,876

We intend to use substantially all of the funds held in the trust account, less the payment due the underwriter for the deferred underwriting discount, to acquire a target business. However, as long as we consummate our initial business combination with one or more target businesses with a fair market value in excess of 80% of the balance in the trust account (excluding the amount held in the trust account representing the underwriters' deferred discount), we may use the assets in the trust account for any purpose we may choose. To the extent that our capital stock or debt is used in whole or in part as consideration to consummate our initial business combination, the remaining proceeds held in the trust account will be used as working capital, including director and officer compensation, change-in-control payments or payments to affiliates, or to finance the operations of the target business, make other acquisitions and pursue our growth strategies.

We believe that the funds that were available to us outside of the trust account of $50,000 and up to $2,750,000 of the interest earned on the trust account will be sufficient to allow us to operate through November 14, 2009, assuming that our initial business combination is not consummated during that time. During this period, although we are not required to, we intend to use these funds to identify and evaluate prospective acquisition candidates, to perform business due diligence on prospective target businesses, to travel to and from offices or similar locations of prospective target businesses, to select the target business to acquire and to structure, negotiate, and consummate our initial business combination.

We anticipate that we will incur approximately $1,300,000 of expenses for legal, accounting and other expenses attendant to the due diligence investigation, structuring and negotiating of our initial business combination, $180,000 in the aggregate for the administrative fee payable to Teleos Management, L.L.C. and LLM Capital Partners LLC (currently $4,083.15 and $2,722.10, respectively, per month) and office rent, $100,000 of expenses in legal and accounting fees relating to our SEC reporting obligations, and $1,220,000 for general working capital that can be used in connection with our acquisition plans. We do not believe that we will need to raise additional funds in order to meet the expenditures required for operating our business. However, we may need to raise additional funds through an offering of debt or equity securities if funds are required to consummate a business combination that is presented to us, although we have not entered into any such arrangements and have no current intention of doing so.