U.S. SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

~~FORM~~Form 10-K

(Mark One)

x ANNUAL REPORT UNDER SECTION 13 OR 15(d)

OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, ~~2008~~2009

o TRANSITION REPORT UNDER SECTION 13 OR 15(d)

OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ______________ to ______________

Commission File Number 000-52087

_______________________________________________

SCOUT ACQUISITION, INC.

(Exact name of registrant as specified in its charter)

______________________________________________

Delaware		26-0133324
(State or other jurisdiction of		(I.R.S. Employer
incorporation or organization)		Identification No.)

c/o ~~Sands~~ Sands Brothers Venture Capital LLC, 9015 ~~Park~~Valley ~~Avenue~~Drive, ~~31st Floor~~Greenwich, ~~New~~CT ~~York, New York 10016~~06831

(Address of principal executive offices)

(~~212~~203) ~~953~~661-~~4983~~7500

(Registrant’s telephone number, including area code)

_____________________________________________

Securities registered under Section 12(b) of the Exchange Act:

None.

Securities registered under Section 12(g) of the Exchange Act:

Common Stock, $0.0001 par value per share

(Title of Class)

Check whether the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes o No x

Check whether the registrant is required to file reports pursuant to Section 13 or 15(d) of the Exchange Act.Yes o x No o x

Check whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No o

Check whether the registrant has submitted electronically and posted on its corporate website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes o No o

Check if there is no disclosure of delinquent filers in response to Item 405 of Regulation S-K (§229.405 of this chapter) contained herein, and no disclosure will be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. x

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

Large Accelerated Filer o		Accelerated Filer o

Non-accelerated Filer o		Smaller Reporting Company x
(Do not check if a smaller reporting company.)

Check whether the issuer is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes x No o

As of December 31, ~~2008~~2009, there were no non-affiliate holders of common stock of the Company.

APPLICABLE ONLY TO CORPORATE REGISTRANTS

As of March 3130, ~~2009~~2010, there were 1,500,000 shares of common stock, par value $.0001, outstanding.

FORWARD-LOOKING STATEMENTS

Certain statements made in this Annual Report on Form 10-K are “forward-looking statements” (within the meaning of the Private Securities Litigation Reform Act of 1995) regarding the plans and objectives of management for future operations. Such statements involve known and unknown risks, uncertainties and other factors that may cause actual results, performance or achievements of Scout Acquisition, Inc. (the “Company”) to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. The forward-looking statements included herein are based on current expectations that involve numerous risks and uncertainties. The Company's plans and objectives are based, in part, on assumptions involving the continued expansion of business. Assumptions relating to the foregoing involve judgments with respect to, among other things, future economic, competitive and market conditions and future business decisions, all of which are difficult or impossible to predict accurately and many of which are beyond the control of the Company. Although the Company believes its assumptions underlying the forward-looking statements are reasonable, any of the assumptions could prove inaccurate and, therefore, there can be no assurance the forward-looking statements included in this Report will prove to be accurate. In light of the significant uncertainties inherent in the forward-looking statements included herein, the inclusion of such information should not be regarded as a representation by the Company or any other person that the objectives and plans of the Company will be achieved.

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PART I

Item 1. Description of Business.

Scout Acquisition, Inc. (“we”, “us”, “our”, or the “Company”) was incorporated in the State of Delaware on January 3, 2006 and maintains its principal executive offices at c/o Sands Brothers Venture Capital LLC, 90 Park Avenue, 31st Floor, New York, New York 10016. Since inception, the Company has been engaged in organizational efforts and obtaining initial financing. The Company was formed as a vehicle to pursue a business combination. The Company filed a registration statement on Form 10-SB with the U.S. Securities and Exchange Commission (the “SEC”) on June 30, 2006, and since its effectiveness, the Company has begun efforts to identify a possible business combination. However, the Company has not entered into a letter of intent or any definitive agreement concerning any target business. The business purpose of the Company is to seek the acquisition of, or merger with, an existing company.

The Company, based on proposed business activities, is a “blank check” company. The SEC defines those companies as "any development stage company that is issuing a penny stock, within the meaning of Section 3(a)(51) of the Exchange Act, and that has no specific business plan or purpose, or has indicated that its business plan is to merge with an unidentified company or companies." Many states have enacted statutes, rules and regulations limiting the sale of securities of "blank check" companies in their respective jurisdictions. The Company is also a “shell company,” defined in Rule 12b-2 under the Exchange Act as a company with no or nominal assets (other than cash) and no or nominal operations. Management does not intend to undertake any efforts to cause a market to develop in our securities, either debt or equity, until we have successfully concluded a business combination. The Company intends to comply with the periodic reporting requirements of the Exchange Act for so long as we are subject to those requirements.

The Company was organized as a vehicle to investigate and, if such investigation warrants, acquire a target company or business seeking the perceived advantages of being a publicly held corporation. The Company’s principal business objective for the next 12 months and beyond such time will be to achieve long-term growth potential through a combination with an operating business. The Company will not restrict its potential candidate target companies to any specific business, industry or geographical location and, thus, may acquire any type of business.

The analysis of new business opportunities is undertaken by or under the supervision of the officers and directors of the Company. As of this date the Company has not entered into any definitive agreement with any party. The Company has unrestricted flexibility in seeking, analyzing and participating in potential business opportunities. In its efforts to analyze potential acquisition targets, the Company will consider the following kinds of factors:

(a) Potential for growth, indicated by new technology, anticipated market expansion or new products;

(b) Competitive position as compared to other firms of similar size and experience within the industry segment as well as within the industry as a whole;

(d) Capital requirements and anticipated availability of required funds, to be provided by the Company or from operations, through the sale of additional securities, through joint ventures or similar arrangements or from other sources;

(e) The cost of participation by the Company as compared to the perceived tangible and intangible values and potentials;

- 3 -

(f) The extent to which the business opportunity can be advanced;

(g) The accessibility of required management expertise, personnel, raw materials, services, professional assistance and other required items; and

(h) Other relevant factors.

In applying the foregoing criteria, no one of which will be controlling, management will attempt to analyze all factors and circumstances and make a determination based upon reasonable investigative measures and available data. Potentially available business opportunities may occur in many different industries, and at various stages of development, all of which will make the task of comparative investigation and analysis of such business opportunities extremely difficult and complex. Due to the Company's limited capital available for investigation, the Company may not discover or adequately evaluate adverse facts about the opportunity to be acquired.

COMPETITION

The Company faces vast competition from other shell companies with the same objectives. The Company is in a highly competitive market for a small number of business opportunities which could reduce the likelihood of consummating a successful business combination. A large number of established and well-financed entities, including small public companies and venture capital firms, are active in mergers and acquisitions of companies that may be desirable target candidates for us. Nearly all these entities have significantly greater financial resources, technical expertise and managerial capabilities than we do; consequently, we will be at a competitive disadvantage in identifying possible business opportunities and successfully completing a business combination. These competitive factors may reduce the likelihood of our identifying and consummating a successful business combination.

FORM OF ACQUISITION

The manner in which the Company participates in an opportunity will depend upon the nature of the opportunity, the respective needs and desires of the Company and the promoters of the opportunity, and the relative negotiating strength of the Company and such promoters.

It is likely that the Company will acquire its participation in a business opportunity through the issuance of common stock or other securities of the Company. Although the terms of any such transaction cannot be predicted, it should be noted that in certain circumstances the criteria for determining whether or not an acquisition is a so-called "tax free" reorganization under Section 368(a)(1) of the Internal Revenue Code of 1986, as amended (the "Code") depends upon whether the owners of the acquired business own 80% or more of the voting stock of the surviving entity. If a transaction were structured to take advantage of these provisions rather than other "tax free" provisions provided under the Code, all prior stockholders would in such circumstances retain 20% or less of the total issued and outstanding shares of the surviving entity. Under other circumstances, depending upon the relative negotiating strength of the parties, prior stockholders may retain substantially less than 20% of the total issued and outstanding shares of the surviving entity. This could result in substantial additional dilution to the equity of those who were stockholders of the Company prior to such reorganization.

The present stockholders of the Company will likely not have control of a majority of the voting securities of the Company following a reorganization transaction. As part of such a transaction, all or a majority of the Company's directors may resign and one or more new directors may be appointed without any vote by stockholders.

In the case of an acquisition, the transaction may be accomplished upon the sole determination of management without any vote or approval by stockholders. In the case of a statutory merger or consolidation4

-In 4the -case of an acquisition, the transaction may be accomplished upon the sole determination of management without any vote or approval by stockholders. In the case of a statutory merger or consolidation directly involving the Company, it will likely be necessary to call a stockholders' meeting and obtain the approval of the holders of a majority of the outstanding securities. The necessity to obtain such stockholder approval may result in delay and additional expense in the consummation of any proposed transaction and will also give rise to certain appraisal rights to dissenting stockholders. Most likely, management will seek to structure any such transaction so as not to require stockholder approval.

directly involving the Company, it will likely be necessary to call a stockholders' meeting and obtain the approval of the holders of a majority of the outstanding securities. The necessity to obtain such stockholder approval may result in delay and additional expense in the consummation of any proposed transaction and will also give rise to certain appraisal rights to dissenting stockholders. Most likely, management will seek to structure any such transaction so as not to require stockholder approval.

It is anticipated that the investigation of specific business opportunities and the negotiation, drafting and execution of relevant agreements, disclosure documents and other instruments will require substantial management time and attention and substantial cost for accountants, attorneys and others. If a decision is made not to participate in a specific business opportunity, the costs theretofore incurred in the related investigation might not be recoverable. Furthermore, even if an agreement is reached for the participation in a specific business opportunity, the failure to consummate that transaction may result in the loss to the Registrant of the related costs incurred.

We presently have no employees apart from our management. Our officers and directors are engaged in outside business activities and anticipate that they will devote to our business very limited time until the acquisition of a successful business opportunity has been identified. We expect no significant changes in the number of our employees other than such changes, if any, incident to a business combination.

Item 1A. Risk Factors

As a “smaller reporting company” as defined by Item 10 of Regulation S-K, the Company is not required to provide this information.

Item 1B. Unresolved Staff Comments

As a “smaller reporting company” as defined by Item 10 of Regulation S-K, the Company is not required to provide this information.

Item 2. Description of Property.

The Company neither rents nor owns any properties. The Company utilizes the office space and equipment of its management at no cost. Management estimates such amounts to be immaterial. The Company currently has no policy with respect to investments or interests in real estate, real estate mortgages or securities of, or interests in, persons primarily engaged in real estate activities.

Item 3. Legal Proceedings.

To the best knowledge of our officers and directors, the Company is not a party to any legal proceeding or litigation.

Item 4. Submission of Matters to a Vote of Security Holders.

None.

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PART II

Item 5. Market for Common Equity, Related Stockholder Matters and Small Business Issuer Purchases of Equity Securities.

Common Stock

Our Certificate of Incorporation authorizes the issuance of up to 75,000,000 shares of common stock, par value $.0001 per share (the “Common Stock”). The Common Stock is not listed on a publicly-traded market. As of March 2430, ~~2009~~2010, there were 4 holders of record of the Common Stock.

Preferred Stock

Our Certificate of Incorporation authorizes the issuance of up to 10,000,000 shares of preferred stock, par value $.0001 per share (the “Preferred Stock”). The Company has not yet issued any of its preferred stock.

Dividend Policy

The Company has not declared or paid any cash dividends on its common stock and does not intend to declare or pay any cash dividend in the foreseeable future. The payment of dividends, if any, is within the discretion of the Board of Directors and will depend on the Company’s earnings, if any, its capital requirements and financial condition and such other factors as the Board of Directors may consider.

Securities Authorized for Issuance under Equity Compensation Plans

The Company does not have any equity compensation plans or any individual compensation arrangements with respect to its common stock or preferred stock. The issuance of any of our common or preferred stock is within the discretion of our Board of Directors, which has the power to issue any or all of our authorized but unissued shares without stockholder approval.

Recent Sales of Unregistered Securities

The Company has not issued any unregistered securities during the fiscal quarter ended December 31, ~~2008~~2009.

On January 3, 2006, the Registrant sold an aggregate of 1,500,000 shares of Common Stock to Sands Brothers Venture Capital LLC (“SBV”), Sands Brothers Venture Capital II LLC (“SBV-II”), Sands Brothers Venture Capital III LLC (“SBV-III”), and Sands Brothers Venture Capital IV LLC (“SBV-IV”) for an aggregate investment of $25,000. The Registrant sold these shares of Common Stock under the exemption from registration provided by Section 4(2) of the Securities Act.

No securities have been issued for services. Neither the Registrant nor any person acting on its behalf offered or sold the securities by means of any form of general solicitation or general advertising. No services were performed by any purchaser as consideration for the shares issued.

Issuer Purchases of Equity Securities

None.

Item 6. Selected Financial Data

As a “smaller reporting company” as defined by Item 10 of Regulation S-K, the Company is not required to provide this information.

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Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operation

The Company was organized as a vehicle to investigate and, if such investigation warrants, acquire a target company or business seeking the perceived advantages of being a publicly held corporation. Our principal business objective for the next 12 months and beyond such time will be to achieve long-term growth potential through a combination with a business rather than immediate, short-term earnings. The Company will not restrict our potential candidate target companies to any specific business, industry or geographical location and, thus, may acquire any type of business.

The Company currently does not engage in any business activities that provide cash flow. During the next twelve months we anticipate incurring costs related to:

(i) filing Exchange Act reports, and

(ii) investigating, analyzing and consummating an acquisition.

We believe we will be able to meet these costs through use of funds in our treasury, through deferral of fees by certain service providers and additional amounts, as necessary, to be loaned to or invested in us by our stockholders, management or other investors.

The Company may consider acquiring a business which has recently commenced operations, is a developing company in need of additional funds for expansion into new products or markets, is seeking to develop a new product or service, or is an established business which may be experiencing financial or operating difficulties and is in need of additional capital. In the alternative, a business combination may involve the acquisition of, or merger with, a company which does not need substantial additional capital but which desires to establish a public trading market for its shares while avoiding, among other things, the time delays, significant expense, and loss of voting control which may occur in a public offering.

Any target business that is selected may be a financially unstable company or an entity in its early stages of development or growth, including entities without established records of sales or earnings. In that event, we will be subject to numerous risks inherent in the business and operations of financially unstable and early stage or potential emerging growth companies. In addition, we may effect a business combination with an entity in an industry characterized by a high level of risk, and, although our management will endeavor to evaluate the risks inherent in a particular target business, there can be no assurance that we will properly ascertain or assess all significant risks.

The Company anticipates that the selection of a business combination will be complex and extremely risky. Because of general economic conditions, rapid technological advances being made in some industries and shortages of available capital, our management believes that there are numerous firms seeking even the limited additional capital which we will have and/or the perceived benefits of becoming a publicly traded corporation. Such perceived benefits of becoming a publicly traded corporation include, among other things, facilitating or improving the terms on which additional equity financing may be obtained, providing liquidity for the principals of and investors in a business, creating a means for providing incentive stock options or similar benefits to key employees, and offering greater flexibility in structuring acquisitions, joint ventures and the like through the issuance of stock. Potentially available business combinations may occur in many different industries and at various stages of development, all of which will make the task of comparative investigation and analysis of such business opportunities extremely difficult and complex.

Liquidity and Capital Resources

As of December 31, ~~2008~~2009, the Company had assets equal to $512,~~438~~542, comprised exclusively of cash and prepaid assets. This compares with the Company’s assets equal to $85,~~954~~438, as of December 31, ~~2007~~2008. The Company’s current liabilities as of December 31, ~~2008~~2009 totaled $3109,~~861~~555, comprised exclusively of accounts payable ~~and~~ and accrued expenses, loans payable to stockholders, and accrued interest payable to stockholders. This compares with the Company’s current liabilities of $73,~~000~~861 as of December 31, 2008, comprised exclusively of accounts payable and accrued expenses. The Company can provide no assurance that it can continue to satisfy its cash requirements for at least the next twelve months.

- 7 -

~~31,~~The ~~2007, comprised~~following ~~exclusively~~is a summary of ~~accounts~~the Company's ~~payable~~cash ~~and~~flows ~~accrued~~provided ~~expenses. The~~by (used in) operating, investing, and financing ~~Company~~activities ~~can~~for ~~provide~~the noyears ~~assurance~~ended ~~that~~December it31, ~~can~~2009 ~~continue~~and toDecember ~~satisfy~~31, ~~its~~2008 ~~cash requirements~~and for the atcumulative ~~least~~period ~~the~~from ~~next~~January ~~twelve~~3, ~~months~~2006 (Inception) to December 31, 2009.

The following is a summary of the Company's cash flows provided by (used in) operating, investing, and financing activities for the years ended December 31, 2008 and December 31, 2007 and for the cumulative period from January 3, 2006 (Inception) to December 31, 2008.

	The Year Ended December 31, 2009			The Year Ended December 31, 2008			For the Cumulative Period from January 3, 2006 (Inception) to December 31, 2009
Net Cash (Used in) Operating Activities	$	(34,146	)	$	(39,766	)	$	(146,208	)
Net Cash (Used in) Investing Activities		-			-			-
Net Cash Provided by Financing Activities	$	40,000		$	35,000		$	153,750
Net Increase (Decrease) in Cash	$	5,854		$	(4,766	)	$	7,542

	The Year Ended December 31, 2008			The Year Ended December 31, 2007			For the Cumulative Period from January 3, 2006 (Inception) to December 31, 2008
Net Cash (Used in) Operating Activities	$	(39,766	)	$	(28,817	)	$	(112,062	)
Net Cash (Used in) Investing Activities		—			—			—
Net Cash Provided by Financing Activities	$	35,000		$	35,000		$	113,750
Net Increase (Decrease) in Cash and Cash Equivalents	$	(4,766	)	$	6,183		$	1,688

The Company has nominal assets and has generated no revenues since inception. The Company is also dependent upon the receipt of capital investment or other financing to fund its ongoing operations and to execute its business plan of seeking a combination with a private operating company. In addition, the Company is dependent upon certain related parties to provide continued funding and capital resources. If continued funding and capital resources are unavailable at reasonable terms, the Company may not be able to implement its plan of operations.

Results of Operations

The Company has not conducted any active operations since inception, except for its efforts to locate suitable acquisition candidates. No revenue has been generated by the Company from January 3, 2006 (Inception) to December 31, ~~2008~~2009. It is unlikely the Company will have any revenues unless it is able to effect an acquisition or merger with an operating company, of which there can be no assurance. It is management's assertion that these circumstances may hinder the Company's ability to continue as a going concern. The Company’s plan of operation for the next twelve months shall be to continue its efforts to locate suitable acquisition candidates.

For the fiscal year ended December 31, ~~2008~~2009, the Company had a net loss of $4142,~~323~~072, consisting of legal, accounting, audit, and other professional service fees incurred in relation to the preparation and filing of the Company’s ~~Quarterly Report on Form~~periodic 10-Q for the period ended September 30, 2008 in November of 2008, Quarterly Report on Form 10-Q for the period ended June 30, 2008 in August of 2008, Quarterly Report on Form 10-Q for the period ended March 31, 2008 in May of 2008 and Annual Report on Form 10-KSB for the fiscal year ended December 31, 2007, in March of 2008reports.

For the fiscal year ended December 31, ~~2007~~2008, the Company had a net loss of $41,~~276 comprised~~323 comprised exclusively of legal, accounting, audit, and other professional service fees incurred in relation to the preparation and filing of the Company’s ~~Quarterly Report on Form~~ ~~10-Q~~periodic for the period ended September 30, 2007 in November of 2008, Quarterly Report on Form 10-Q for the period ended June 30, 2007 in August of 2007, Quarterly Report on Form 10-Q for the period ended March 31, 2007 in May of 2007 and Annual Report on Form 10-KSB for the fiscal year ended December 31, 2006, in April of 2007reports.

-For 8the -cumulative period from January 3, 2006 (Inception) to December 31, 2009, the Company had a net loss of $164,025 comprised exclusively of legal, accounting, audit, and other professional service fees incurred in relation to the formation of the Company, the preparation and filing of the Company’s Registration Statement on Form 10 in June of 2006, and the filing of the Company’s periodic reports.

For the period from January 3, 2006 (Inception) to December 31, 2008, the Company had a net loss of $121,953 comprised exclusively of legal, accounting, audit, and other professional service fees incurred in relation to the formation of the Company, the filing of the Company’s Registration Statement on Form 10 in June of 2006 and Quarterly Reports on Form 10-QSB, Form 10-Q and Form 10-K.8

Off-Balance Sheet Arrangements

The Company does not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on the Company’s financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to investors.

Contractual Obligations

As a “smaller reporting company” as defined by Item 10 of Regulation S-K, the Company is not required to provide this information.

Item 7A. Quantitative and Qualitative Disclosures about Market Risk.

As a “smaller reporting company” as defined by Item 10 of Regulation S-K, the Company is not required to provide this information.

Item 8. Financial Statements and Supplementary Data.

Audited financial statements begin on the following page of this report.

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SCOUT ACQUISITION, INC.

A Development Stage Company

DECEMBER 31, ~~2008~~2009

- TABLE OF CONTENTS -

	~~Page(s)~~	Page(s)
Financial Statements:
Report of Independent Registered Public Accounting Firm	~~F - 2~~	F - 2
Balance Sheets as of December 31, 2008 and 2007	F - 3
Balance Sheets		F - 3
Statements of Operations for the Years Ended December 31, 2008 and 2007, and for the Period from January 3, 2006 (Inception) to December 31, 2008	F - 4
Statements of Operations		F - 4
Statement of Stockholders’ Deficiency from January 3, 2006 (Inception) to December 31, 2008	F - 5
Statement of Stockholders’ Deficiency		F - 5
Statements of Cash Flows for the Years Ended December 31, 2008 and 2007, and for the Period from January 3, 2006 (Inception) to December 31, 2008	F - 6
Statements of Cash Flows		F - 6
Notes to Financial Statements	~~F - 7 – F - 11~~	F - 7 – F - 11

F-1

Report of Independent Registered Public Accounting Firm

To the Board of Directors and Stockholders of

Scout Acquisition, Inc.

New York, NY

We have audited the accompanying balance sheets of Scout Acquisition, Inc. (Aa ~~Development~~development ~~Stage~~stage ~~Company~~company) (the “Company”) as of December 31, ~~2008~~2009 and ~~2007~~2008, and the related statements of operations, stockholders’ deficiency, and cash flows for the years then ended, and the cumulative period January 3, 2006 (inception) through December 31, ~~2008~~2009. The Company’s management is responsible for these financial statements. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audits 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 audits 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 audits provide 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 Scout Acquisition, Inc. as of December 31, ~~2008~~2009 and ~~2007~~2008, and the results of its operations and its cash flows for the years then ended and the cumulative period January 3, 2006 (inception) through December 31, ~~2008~~2009, in conformity with accounting principles generally accepted in the United States of America.

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 1 to the financial statements, the Company is in the development stage and has ~~suffered~~incurred ~~recurring~~ net losses since inception. This raises substantial doubt about its ability to continue as a going concern. Management’s plans in regards to these matters are also described in Note 1. The accompanying financial statements do not include any ~~adjustments~~ adjustments that might result from the outcome of this uncertainty.

/s/ Raich Ende Malter & Co. LLP ~~Raich Ende Malter & Co. LLP New York, New York March 30, 2009~~

Raich Ende Malter & Co. LLP

New York, New York

March 30, 2010

F-2

SCOUT ACQUISITION, INC.

A Development Stage Company

BALANCE SHEETS

	December 31, 2009			December 31, 2008
ASSETS
	December 31, 2008			December 31, 2007
CURRENT ASSETS:
Cash	$	17,~~688~~542		$	61,~~454~~688
Prepaid expenses		35,~~750~~000			23,~~500~~750
TOTAL ASSETS	$	512,~~438~~542		$	85,~~954~~438
LIABILITIES AND STOCKHOLDERS’ DEFICIENCY
CURRENT LIABILITIES:
Accounts payable and accrued expenses	$	34,~~861~~000		$	73,~~000~~861
TOTAL CURRENT LIABILITIES		3,861			7,000
Loans payable to stockholders		88,750			-
Accrued interest payable to stockholders		16,305			-
TOTAL CURRENT LIABILITIES		109,555			3,861
LONG TERM LIABILITIES:
Loans payable to stockholders		9840,~~530~~000			5788,~~584~~750
TOTAL LIABILITIES		102,391			64,584
Accrued interest payable to stockholders		2,512			9,780
		42,512			98,530
TOTAL LIABILITIES		151,567			102,391
STOCKHOLDERS’ DEFICIENCY:
Preferred stock, $.0001 par value; 10,000,000 shares authorized; none issued and outstanding		—-			—-
Common stock, $.0001 par value; 75,000,000 shares authorized; 1,500,000 shares issued and outstanding		150			150
Additional paid-in capital		24,850			24,850
Deficit accumulated during the development stage		(~~121~~164,~~953~~025	)		(80121,~~630~~953	)
TOTAL STOCKHOLDERS’ DEFICIENCY		(96139,~~953~~025	)		(5596,~~630~~953	)
TOTAL LIABILITIES AND STOCKHOLDERS’ DEFICIENCY	$	512,~~438~~542		$	85,~~954~~438

~~SEE~~See ~~ACCOMPANYING~~accompanying ~~NOTES~~notes TOto ~~FINANCIAL~~financial ~~STATEMENTS~~statements.

F-3

SCOUT ACQUISITION, INC.

A Development Stage Company

STATEMENTS OF OPERATIONS

	For the Year Ended December 31,			For the Year Ended December 31,			For the Period from January 3, 2006 (Inception) to December 31,
	2008			2007			2008
	2009			2008			2009
REVENUE	$	—-		$	—-		$	—-
General and administrative expenses		3533,~~377~~035			3835,~~067~~377			~~112~~145,~~173~~208
LOSS BEFORE OTHER EXPENSES		(3533,~~377~~035	)		(3835,~~067~~377	)		(~~112~~145,~~173~~208	)
OTHER EXPENSES:
Interest expense		59,~~946~~037			35,~~209~~946			918,~~780~~817
NET (LOSS)	$	(4142,~~323~~072	)	$	(41,~~276~~323	)	$	(~~121~~164,~~953~~025	)
BASIC AND DILUTED NET (LOSS) PER SHARE	$	(.03	)	$	(.03	)
WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING		1,500,000			1,500,000

~~SEE~~See ~~ACCOMPANYING~~accompanying ~~NOTES~~notes TOto ~~FINANCIAL~~financial ~~STATEMENTS~~statements.

F-4

SCOUT ACQUISITION, INC.

A Development Stage Company

STATEMENT OF STOCKHOLDERS’ DEFICIENCY

	Preferred Stock				Common Stock				Additional Paid-in		(Deficit) Accumulated During the Development			Stockholders’
											(Deficit)
											Accumulated
									Additional		During the
	Preferred Stock				Common Stock				Paid-in		Development			Stockholders’
	Shares		Amount		Shares		Amount		Capital		Stage			Deficiency
BALANCE, JANUARY 3, 2006		—-	$	—-		—-	$	—-	$	—-	$	—-		$	—-
Issuance of common stock		—-		—-		1,500,000		150		24,850		—-			25,000
Net (loss)		—-		—-		—-		—-		—-		(39,354	)		(39,354	)
BALANCE, DECEMBER 31, 2006		—-		—-		1,500,000		150		24,850		(39,354	)		(14,354	)
Net (loss)		—-		—-		—-		—-		—-		(41,276	)		(41,276	)
BALANCE, DECEMBER 31, 2007		—-		—-		1,500,000		150		24,850		(80,630	)		(55,630	)
Net (loss)		—-		—-		—-		—-		—-		(41,323	)		(41,323	)
BALANCE, DECEMBER 31, 2008		—-	$	—-		1,500,000	$	150	$	24,850	$	(121,953	)	$	(96,953	)
Net (loss)		-		-		-		-		-		(42,072	)		(42,072	)
BALANCE, DECEMBER 31, 2009		-	$	-		1,500,000	$	150	$	24,850	$	(164,025	)	$	(139,025	)

~~SEE~~See ~~ACCOMPANYING~~accompanying ~~NOTES~~notes TOto ~~FINANCIAL~~financial ~~STATEMENTS~~statements.

F-5

SCOUT ACQUISITION, INC.

A Development Stage Company

STATEMENTS OF CASH FLOWS

	For the Year Ended December 31, 2008			For the Year Ended December 31, 2007			For the Period from January 3, 2006 (Inception) to December 31, 2008
	For the Year Ended December 31, 2009			For the Year Ended December 31, 2008			For the Period from January 3, 2006 (Inception) to December 31, 2009
CASH FLOWS FROM OPERATING ACTIVITIES:
Net (loss)	$	(4142,~~323~~072	)	$	(41,~~276~~323	)	$	(~~121~~164,~~953~~025	)
Adjustments to reconcile net (loss) to net cash used in operating activities:
Accrued interest payable to stockholders		5,946			3,209			9,780
Changes in operating assets and liabilities:
Decrease (increase) in prepaid expenses		(1,250	)		3,750			(3,750	)
(Increase) in prepaid expenses		(1,250	)		(1,250	)		(5,000	)
(Decrease) increase in accounts payable and accrued expenses		(3,139	)		5,500			3,861
Increase in accrued interest payable to stockholders		9,037			5,946			18,817
Net cash used in operating activities		(39,766	)		(28,817	)		(112,062	)
Increase (decrease) in accounts payable and accrued expenses		139			(3,139	)		4,000
Net cash used in operating activities		(34,146	)		(39,766	)		(146,208	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of common stock		—-			—-			25,000
Proceeds from stockholder loans		3540,000			35,000			88128,750
Net cash provided by financing activities		3540,000			35,000			~~113~~153,750
NET (DECREASE) INCREASE IN CASH		(45,~~766~~854	)		6(4,~~183~~766	)		17,~~688~~542
Cash, beginning of period		61,~~454~~688			~~271~~6,454			—-
CASH, END OF PERIOD	$	17,~~688~~542		$	61,~~454~~688		$	17,~~688~~542

~~SEE~~See ~~ACCOMPANYING~~accompanying ~~NOTES~~notes TOto ~~FINANCIAL~~financial ~~STATEMENTS~~statements.

F-6

SCOUT ACQUISITION, INC.

A Development Stage Company

NOTES TO FINANCIAL STATEMENTS

December 31, ~~2008~~2009

NOTE 1 -

ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:

(a)

Organization and Business:

Scout Acquisition, Inc. (the Company) was incorporated in the state of Delaware on January 3, 2006 for the purpose of raising capital that is intended to be used in connection with its business plans which may include a possible merger, acquisition or other business combination with an operating business.

The Company is currently in the development stage. All activities of the Company to date relate to its organization, initial funding, share issuances, and ~~share~~filing of ~~issuances~~the Company’s periodic reports.

(b)

Basis of Presentation:

The accompanying financial statements have been prepared assuming the Company will continue as a going concern, which contemplates the recoverability of assets and the satisfaction of liabilities in the normal course of business. The ~~Company~~ Company has had no revenue and has incurred accumulated net losses from January 3, 2006 (inception) through December 31, ~~2008~~2009 of $~~121~~164,~~953~~025. In addition, the Company’s development activities since inception have been financially sustained through stockholder loans. The ability of the company to continue as a going concern is dependent upon its ability to find a suitable acquisition/merger candidate, raise additional capital from the sale of common stock, receive additional loans from its shareholders and, ultimately, the achievement of significant operating revenues. The accompanying financial statements do not include any adjustments that might be required should the Company be unable to recover the value of its assets or satisfy its liabilities. Management plans to issue more shares of common stock in order to raise money and/or to continue to borrow from the Company’s existing stockholders until a business combination is effective.

(c)

Use of Estimates:

The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the balance sheet and reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

(d)

Cash Equivalents:

For purposes of the statement of cash flows, the Company considers highly liquid financial instruments purchased with a maturity of three months or less to be cash equivalents. There are no cash equivalents at the balance sheet date.

F-7

SCOUT ACQUISITION, INC.

A Development Stage Company

NOTES TO FINANCIAL STATEMENTS

December 31, 2008

NOTE 1 -

ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

(Continued):

(e)

Income Taxes:

OnThe ~~January~~Company 1,utilizes ~~2007~~ the ~~Company~~liability ~~adopted~~method ~~Financial~~of ~~Accounting~~accounting ~~Standards~~for ~~Board~~income ~~(FASB) Interpretation No~~taxes. 48Under the liability method, ~~“Accounting~~deferred ~~for~~tax ~~Uncertainty~~assets inand ~~Income~~liabilities ~~Taxes~~are –determined anbased on ~~interpretation~~the ofdifferences ~~FASB~~between ~~Statement~~financial ~~No.~~reporting ~~109”~~basis ~~(FIN~~and ~~48). The~~the ~~Company’s practice~~tax isbasis toof ~~recognize~~the assets ~~interest~~ and~~/or~~ ~~penalties~~liabilities ~~related~~and toare ~~income~~measured ~~tax~~using ~~matters in~~enacted ~~income~~ tax ~~expense. Since~~rates ~~the~~and ~~adoption~~laws ofthat will ~~FIN~~be 48in ~~at January 1~~effect, ~~2007,~~ when the ~~Company~~differences ~~has~~are ~~had~~expected noto ~~uncertain tax positions~~reverse. ~~The~~ ~~Company~~An allowance ~~currently~~against ~~has~~deferred ~~no federal or state~~ tax ~~examinations~~assets inis ~~progress~~recognized, ~~nor~~when ~~has~~ it ~~had any~~is ~~federal~~more orlikely ~~state~~than ~~tax~~not, ~~examinations since its inception. In the~~that ~~normal~~such ~~course~~tax ofbenefits ~~business~~will ~~the~~not ~~Company~~be ~~is subject to examination by taxing authorities~~realized.

The Company ~~utilizes~~recognizes the ~~liability~~financial ~~method~~statement benefit of ~~accounting~~an ~~for~~uncertain ~~income~~tax position ~~taxes. Under~~only after considering the ~~liability~~probability ~~method~~that ~~deferred~~a tax ~~assets~~authority ~~and~~would ~~liabilities~~sustain the ~~are~~position ~~determined~~in ~~based~~an onexamination. ~~the~~For ~~differences~~tax ~~between~~positions ~~financial~~meeting ~~reporting~~a ~~basis and~~"more-likely-than-not" threshold, the ~~tax~~amount ~~basis~~recognized ofin the ~~assets~~financial ~~and~~statements ~~liabilities~~is ~~and~~the ~~are~~benefit expected ~~measured~~to ~~using~~be ~~enacted~~realized ~~tax rates~~upon ~~and~~settlement ~~laws~~with ~~that~~the ~~will~~tax beauthority. inFor ~~effect,~~tax positions ~~when~~not meeting the ~~differences~~threshold, ~~are~~no ~~expected~~financial tostatement benefit is ~~reverse~~recognized. An ~~allowance~~The ~~against~~Company ~~deferred~~recognizes ~~tax~~interest ~~assets~~and ispenalties, ~~recognized~~if any, ~~when~~related to ituncertain istax ~~more~~positions ~~likely~~in ~~than~~income ~~not,~~tax ~~that~~expense. ~~such~~As ~~tax~~of ~~benefits~~December ~~will~~31, ~~not~~2009, bethe ~~realized~~Company is unaware of any uncertain tax positions.

(f)

Loss per Common Share:

Basic loss per share is calculated using the weighted-average number of common shares outstanding during each reporting period. Diluted loss per share includes potentially dilutive securities such as outstanding options and warrants, using various methods such as the treasury stock or modified treasury stock method in the determination of dilutive shares outstanding during each reporting period. The Company does not have any potentially dilutive instruments.

(g)

Fair Value of Financial Instruments:

The ~~carrying~~Company ~~value~~adopted ofthe ~~current~~Financial ~~assets~~Accounting ~~and~~Standards ~~liabilities~~Board ~~approximates~~Fair ~~fair value due to~~Value ~~the~~Measurements, ~~short~~as ~~period~~it ofapplies ~~time~~ to ~~maturity~~its financial statements. ~~The~~ ~~stockholder~~This ~~loans approximate~~standard defines fair value, ~~based~~outlines ona ~~market~~framework ~~rates~~for ~~available~~measuring tofair ~~the~~value, ~~Company~~and ~~for~~details the ~~financing~~required ~~with~~disclosures ~~similar~~about ~~terms~~fair value measurements.

OnFair ~~January~~value 1is defined as the price that would be received to sell an asset, ~~2008~~or paid to transfer a liability, in an orderly transaction between market participants at the ~~Company~~measurement ~~adopted~~date ~~Statement~~in the principal or most advantageous market. The standard establishes a hierarchy in determining the fair value of ~~Financial~~an ~~Accounting~~asset ~~Standards~~or Noliability. ~~157~~The fair value hierarchy has three levels of inputs, ~~“Fair~~both ~~Value~~observable and ~~Measurements”~~unobservable. ~~(“FAS~~The ~~157”)~~standard requires the utilization of the lowest possible level of input to determine fair value. ~~There~~ ~~was~~Level no1 ~~impact~~inputs include quoted market onprices ~~the~~in ~~Company’s~~an ~~financial~~active market for identical assets or liabilities. Level 2 inputs ~~position~~are market data, ~~results~~other ofthan ~~operations~~Level 1, that are observable either directly or indirectly. ~~cash~~Level ~~flows~~2 atinputs ~~December~~include 31quoted market prices for similar assets or liabilities, ~~2008~~quoted market prices in an inactive market, and ~~for~~other ~~the~~observable ~~year~~information ~~then~~that ~~ended~~can asbe acorroborated ~~result~~by ofmarket ~~the~~data. ~~adoption~~Level of3 ~~FAS~~inputs ~~157~~are unobservable and corroborated by little or no market data.

On January 1, 2008 the Company adopted Statement of Financial Accounting Standards No. 159, “The Fair Value Option for Financial Assets and Financial Liabilities” (“FAS 159”). There was no impact on the Company’s financial position, results of operations, or cash flows at December 31, 2008 and for the year then ended as a result of the adoption of FAS 159.

F-8

SCOUT ACQUISITION, INC.

A Development Stage Company

NOTES TO FINANCIAL STATEMENTS

December 31, 2008

NOTE 1 -

ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

(Continued):

(hg) ~~Reclassifications~~Fair Value of Financial Instruments (Continued):

~~Certain~~The ~~amounts~~carrying ~~for~~value ~~2007~~of ~~have~~current ~~been~~assets ~~reclassified~~and liabilities approximates fair value due to the ~~conform~~short ~~with~~period of time to maturity. The carrying amount of notes payable approximate their fair value, using level three inputs, as the current ~~year’s~~interest ~~presentation. Such~~rate ~~reclassifications~~on ~~had~~such noinstruments ~~impact~~approximates oncurrent ~~previously reported~~market ~~net~~rates ~~income~~on similar instruments.

NOTE 2 -

LOANS PAYABLE TO STOCKHOLDERS:

On January 3, 2006 and July 1, 2006, the Company entered into loan agreements with certain of its stockholders in the aggregate amount of $12,500 and $6,250, respectively. These loans accrue interest at 4.00%. These loans and all accrued interest shall be repaid in full upon the completion of a merger, and if not, the loans, including all accrued interest, will mature on December 31, 2010.

On February 22, 2007, the Company entered into loan agreements with certain of its stockholders in the aggregate amount of $35,000. These loans accrue interest at 8.25%. These loans and all accrued interest ~~were to~~ shall be repaid in full upon the completion of a merger, and if not, the loans, including all accrued interest, were to mature on February 22, 2009. On March 27, 2009, the Company entered into an Amended and Restated Promissory Note for each of these loan agreements, extending the maturity dates to December 31, 2010.

On March 13, 2008, the Company entered into loan agreements with certain of its stockholders in the aggregate amount of $35,000. These loans ~~accrue~~ accrued interest at 8.25%. These loans and all accrued interest shall be repaid in full upon the completion of a merger, and if not, the loans, including all accrued interest, were ~~will~~to mature on March 13, 2010. On March 12, 2010, the Company entered into an amended and restated promissory note for each of these loan agreements, extending the maturity dates to December 31, 2010 and increasing the interest rate to 12%.

AsOn March 27, 2009, the Company entered into loan agreements with certain of its ~~December~~stockholders 31in the aggregate amount of $40,000. ~~2008~~These loans accrue interest at 8.25%. These loans and ~~2007,~~all $9accrued interest shall be repaid in full upon the completion of a merger,~~780~~ and $3if not,~~834,~~ ~~respectively~~the loans, ofincluding all accrued interest, will ismature ~~included~~on inMarch ~~loans~~27, ~~payable to stockholders~~2011.

See Note 6

NOTE 3 -

CAPITAL STOCK:

The total number of shares of capital stock which the Company shall have authority to issue is eighty five million (85,000,000). These shares shall be divided into two classes with 75,000,000 shares designated as common stock at $.0001 par value (the “Common Stock”) and 10,000,000 shares designated as preferred stock at $.0001 par value (the “Preferred Stock”).

The Preferred stock of the Company shall be issued by the Board of Directors of the Company in one or more classes or one or more series within any class and such classes or series shall have such voting powers, full or limited, or no voting powers, and such designations, preferences, limitations or restrictions as the Board of Directors of the Company may determine, from time to time.

Holders of shares of Common stock shall be entitled to cast one vote for each share held at all stockholders' meetings for all purposes, including the election of directors. The Common Stock does not have cumulative voting rights.

F-9

SCOUT ACQUISITION, INC.

A Development Stage Company

NOTES TO FINANCIAL STATEMENTS

December 31, 2008

NOTE 3 - CAPITAL STOCK (Continued):

On January 3, 2006, the Company issued 1,500,000 shares of common stock at a purchase price of $0.01667 per share, for an aggregate purchase price of $25,000.

F-9

NOTE 4 -

INCOME TAXES:

As of December 31, ~~2008~~2009, the Company has net operating loss carryforwards of approximately $~~120~~165,000 to reduce future federal and state taxable income through ~~2028~~2029.

The ~~provision~~Company ~~for~~currently ~~(benefit~~has ~~from)~~no ~~income~~federal ~~taxes~~or ~~consists~~state oftax ~~the~~examinations ~~following~~in ~~for~~progress ~~the~~nor has ~~Period~~it ~~January 3,~~had ~~2006~~any (federal or state examinations since its inception). All of the Company’s tax years are subject to ~~December~~federal ~~31,~~and ~~2008~~state tax examination.

	For The Year Ended December 31, 2008			For The Year Ended December 31, 2007			For The Cumulative Period from January 3 2006 (Inception) to December 31, 2008
Current:
Federal	$	—		$	—		$	—
Deferred tax asset:
Federal		15,400			9,700			31,000
Valuation allowance		(15,400	)		(9,700	)		(31,000	)
	$	—		$	—		$	—

The provision for (benefit from) income taxes consists of the following for the Period January 3, 2006 (inception) to December 31, 2009.

	For The Year Ended December 31, 2009			For The Year Ended December 31, 2008			For The Cumulative Period from January 3 2006 (Inception) to December 31, 2009
Current:
Federal	$	-		$	-		$	-
Deferred tax asset:
Federal		16,200			15,400			47,200
Valuation allowance		(16,200	)		(15,400	)		(47,200	)
	$	-		$	-		$	-

The difference between the tax provision at the statutory federal income tax rate and the tax provision attributable to loss before income taxes is as follows:

	For The Year Ended December 31, 2008			For The Year Ended December 31, 2007			For The Cumulative Period from January 3, 2006 (Inception) to December 31, 2008
	For The Year Ended December 31, 2009			For The Year Ended December 31, 2008			For The Cumulative Period from January 3, 2006 (Inception) to December 31, 2009
Statutory federal income tax rate		(34	)%		(34	)%		(34	)%
Surtax exemption		(35	)%		10(3	)%		95	%
Valuation allowance		3739	%		2437	%		2529	%
Income tax rate		0	%		0	%		0	%

NOTE 5 -

RECENT ACCOUNTING PRONOUNCEMENTS:

In December 2007, the Financial Accounting Standards Board (“FASB”) issued Statement of Financial Accounting Standards (“SFAS”) No. 141 (revised 2007), Business Combinations, which replaces SFAS No 141. The statement retains the purchase method of accounting forCodification

In July 2009, the Financial Accounting Standards Board’s (FASB) Accounting Standards Codification (ASC) became the single official source of authoritative, nongovernmental generally accepted accounting principles (“US-GAAP” or “GAAP”) in the United States. This guidance is contained in ASC Topic 105 “Generally Accepted Accounting Principles.” The historical GAAP hierarchy was eliminated and the ASC became the only level of authoritative GAAP, other than guidance issued by the Securities and Exchange Commission. This guidance is effective for interim and annual periods ending after September 15, 2009. The Company adopted the provisions of this guidance as of September 30, 2009. The Company’s accounting policies were not affected by the conversion to the ASC. However, references to specific accounting standards have been changed to refer to the appropriate section of the ASC.

F-10

SCOUT ACQUISITION, INC.

A Development Stage Company

NOTES TO FINANCIAL STATEMENTS

December 31, 2008

NOTE 5 -

RECENT ACCOUNTING PRONOUNCEMENTS (Continued):

~~acquisitions,~~Fair ~~but~~Value requires a number of changes, including changes in the way assets and liabilities are recognized in the purchase accounting. It also changes the recognition of assets acquired and liabilities assumed arising from contingencies, requires the capitalization of in-process research and development at fair value, and requires the expensing of acquisition-related costs as incurred. SFAS No. 141R is effective for business combinations for which the acquisition date is on or after the beginning of the first annual reporting period beginning on or after December 15, 2008. The adoption of SFAS No. 141(R) before December 15, 2008 is prohibited. The Company does not expect the adoption of SFAS No. 141(R) to have a material effect on its financial statements.Measurements

In ~~December~~September ~~2007~~2006, the FASB issued ~~SFAS~~guidance ~~No. 160,~~that ~~Noncontrolling~~defines ~~Interests~~fair ~~in Consolidated Financial Statements~~value, anestablishes ~~amendment~~a framework offor ~~ARB~~measuring ~~51,~~fair ~~which~~value ~~changes the accounting~~ and ~~reporting~~expands ~~for~~disclosures ~~minority~~about ~~interests~~fair value measurements. ~~Minority~~This ~~interests~~guidance ~~will~~is ~~be recharacterized~~contained asin ~~noncontrolling~~ASC ~~interests~~Topic ~~and~~820 ~~will~~“Fair beValue Measurements ~~reported~~and asDisclosures.” aThis ~~component of~~guidance ~~equity~~does ~~separate~~not ~~from~~require ~~the~~any ~~parent’s~~new ~~equity~~fair value measurements, ~~and~~but ~~purchases~~applies orunder ~~sales~~other ofaccounting ~~equity interests~~pronouncements that dorequire ~~not~~or permit ~~result~~fair invalue ameasurements. ~~change~~The ineffective ~~control~~date ~~will~~of bethis ~~accounted~~guidance for as ~~equity~~financial ~~transactions.~~assets Inand ~~addition,~~liabilities ~~net~~that ~~income~~are ~~attributable~~recognized toor ~~the~~disclosed ~~noncontrolling~~at fair value ~~interest~~on ~~will~~a berecurring ~~included~~basis inwas ~~consolidated~~January ~~net~~1, ~~income~~2008, onand the ~~face~~Company ofdid ~~the~~adopt ~~income~~the ~~statement~~provisions ~~and,~~of ~~upon~~this aguidance ~~loss~~at ofthat ~~control,~~time ~~the~~as ~~interest~~it ~~sold,~~related asto ~~well~~financial asassets ~~any~~and ~~interest~~liabilities ~~retained,~~recognized ~~will~~or bedisclosed ~~recorded~~ at fair value ~~with~~on ~~any~~a ~~gain~~recurring ~~or loss~~basis. ~~recognized~~Effective inJanuary ~~earnings.~~1, ~~SFAS~~2009, ~~No. 160~~pursuant isto ~~effective~~this ~~for~~guidance, ~~annual~~the ~~periods~~Company adopted the ~~beginning~~provisions ~~after~~of ~~December~~this ~~15,~~guidance ~~2008.~~as Weit ~~are~~relates ~~currently~~to ~~assessing~~non ~~the~~financial ~~potential~~assets and ~~impact~~liabilities that are not recognized or disclosed at fair value on a recurring basis. The adoption of ~~SFAS~~this ~~No. 160~~guidance ~~would~~had ~~have~~no impact on ~~our~~the Company’s financial statements.

In ~~March~~April ~~2008~~2009, the FASB issued ~~FAS.~~guidance ~~No.~~that ~~161,~~extends ~~“Disclosures about Derivative Instruments and Hedging Activities – an amendment of FASB Statement No. 133” (“FAS 161”). FAS No. 161 changes~~ the disclosure requirements ~~for derivative~~ ~~instruments~~regarding ~~and~~the ~~hedging~~fair ~~activities.~~value ~~Entities~~of ~~are~~financial ~~required~~instruments to ~~provide~~interim ~~enhanced~~financial ~~disclosures~~statements ~~about~~of ~~(a)~~publicly ~~how~~traded ~~and~~companies. ~~why~~This anguidance ~~entity~~is ~~uses~~primarily ~~derivative~~contained ~~instruments, (b) how~~in ~~derivative~~ASC ~~instruments~~Topic ~~and~~825 ~~related~~“Financial ~~hedged~~Instruments” ~~items are accounted for under Statement 133~~ and ~~its~~ASC ~~related~~Topic ~~interpretations,~~270 ~~and~~“Interim ~~(c) how derivative~~Reporting.” ~~instruments~~This ~~and~~guidance ~~related hedged items affect an entity’s financial position, financial performance, and cash flows. FAS No. 161~~ is effective for ~~fiscal years and~~ interim periods ~~beginning~~ending after ~~November~~June 15, ~~2008~~2009. The adoption ~~Company~~of isthis ~~currently assessing~~guidance ~~the~~had ~~potential~~no impact ~~that~~on the ~~adoption~~Company’s ~~of FAS 161 could have on its~~ financial statements.

~~Management~~Subsequent ~~does not believe that any other recently issued, but not yet effective account pronouncements, if adopted, would have a material effect on the accompanying financial statements.~~Events

In February 2010, the FASB issued an update to ASC Topic 855 “Subsequent Events.” The update does not require significant changes regarding recognition or disclosure of subsequent events, but does require evaluation of subsequent events through the date the financial statements are issued. The update was effective upon issuance.

NOTE 6 -

SUBSEQUENT EVENTS:

~~On March~~Subsequent ~~27,~~events ~~2009,~~have ~~the~~been ~~Company~~evaluated ~~entered~~through ~~into Amended and Restated Promissory Notes for each of~~ the ~~February~~time ~~22, 2007 loan agreements (see note 2), and new loan agreements with certain~~ of ~~its stockholders in~~ the ~~aggregate~~filing ~~amount~~ of ~~$40,000. These~~ ~~loans~~our ~~accrue~~annual ~~interest at 8.25%. These loans~~report ~~and all accrued interest shall be repaid in full upon the completion of a merger, and if not, the loans, including all accrued interest, will mature~~ on ~~March~~ ~~27,~~Form ~~2011.~~10-K

F-11

Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.

There are not and have not been any disagreements between the Company and its accountants on any matter of accounting principles, practices or financial statement disclosure.

Item 9A(T). Controls and Procedures.

Evaluation of Disclosure Controls and Procedures

The Company’s management is responsible for establishing and maintaining a system of disclosure controls and procedures (as defined in Rule 13a-15(e) and 15d-15(e) under the Exchange Act) that is designed to ensure that information required to be disclosed by the Company in the reports that the Company files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the Commission’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by an issuer in the reports that it files or submits under the Exchange Act is accumulated and communicated to the issuer’s management, including its principal executive officer or officers and principal financial officer or officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.

In accordance with Exchange Act Rules 13a-15 and 15d-15, an evaluation was completed under the supervision and with the participation of the Company’s management, including the Company’s President, Principal Financial Officer and Secretary, of the effectiveness of the design and operation of the Company’s disclosure controls and procedures as of the end of the period covered by this Annual Report. Based on that evaluation, the Company’s management including the President, Principal Financial Officer and Secretary, concluded that the Company’s disclosure controls and procedures were effective in providing reasonable assurance that information required to be disclosed in the Company’s reports filed or submitted under the Exchange Act was recorded, processed, summarized, and reported within the time periods specified in the Commission’s rules and forms.

Evaluation of Internal Controls and Procedures

Our management is also responsible for establishing and maintaining adequate internal control over financial reporting. The Company’s internal control over financial reporting is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles.

Our internal control over financial reporting includes those policies and procedures that:

Pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the Company;

Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that our receipts and expenditures are being made only in accordance with authorizations of the Company’s management and directors; and

Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on the financial statements.

As of December 31, ~~2008~~2009, we carried out an evaluation of the effectiveness of our internal control over financial reporting based on the framework in “Internal Control-Integrated Framework” issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on our evaluation, our management concluded that our internal control over financial reporting was effective as of December 31, ~~2008~~2009.

- 10 -

This annual report does not include an attestation report of our registered public accounting firm regarding internal control over financial reporting. Management’s report was not subject to attestation by our registered public accounting firm pursuant to temporary rules of the Securities and Exchange Commission that permit us to provide only management’s report in this annual report.

Changes in Internal Controls over Financial Reporting

There have been no significant changes to the Company’s internal controls over financial reporting that occurred during our last fiscal quarter of the year ended December 31, ~~2008~~2009, that materially affected, or were reasonably likely to materially affect, our internal controls over financial reporting.

Item 9B. Other Information.

None.

PART III

Item 10. Directors, Executive Officers, Promoters and Control Persons; Compliance With Section 16(a) of the Exchange Act.

(a) Identification of Directors and Executive Officers. The following table sets forth certain information regarding the Company’s directors and executive officers:

Name	~~Age~~	~~Position~~Age	~~Term~~	Position		Term
Scott Baily	50	~~President, Secretary and Director~~52	~~January 3, 2006 thru Present~~	President, Secretary and Director		January 3, 2006 thru Present

Scott Baily, President, Secretary and Director. Scott Baily has served as President, Secretary and director of the Company since its inception. Mr. Baily is also the sole officer and director of Lynx Acquisition, Inc., which is a publicly-reporting, non-trading, blank check shell company. Mr. Baily is Chief Operating Officer (COO) and a director of Sands Brothers Venture Capital LLC Funds I-IV. Mr. Baily is involved in all aspects of the management and operation of the venture capital funds. Mr. Baily’s Wall Street career spans nearly 25 years in a variety of senior executive positions at established investment firms. Most recently, he was Senior Partner and Senior Analyst at JPS Fund Group LLC, a hedge fund (2004-2005). From 2001-2004, Mr. Baily was CEO and President of GrandView Partners, a financial advisory firm focused on the small cap and emerging growth sectors. Previously, at BlueStone Capital Partners, from 1996-2001, Mr. Baily was a Senior Vice President, Director of Research, and Senior Equity Analyst. In 2000, while at BlueStone Mr. Baily was named by the Wall Street Journal as an All Star Analyst for his stock-picking ability in the healthcare sector. Earlier in his career, Mr. Baily worked at Barrow Street Research 1988-1996, Smith Barney, Harris Upham, Inc. 1984-1988, and Paine Webber, Jackson & Curtis (1982-1984) in a variety of senior research positions and investment banking. Mr. Baily was educated at Alma College, where he earned a double B.A. degree in Business Administration and Corporate Relations in 1981. Mr. Baily did his graduate work in Business Administration at Central Michigan University (1981-1982) and the University of Detroit (1983).

The Company’s officers and directors are elected annually for a one year term or until their respective successors are duly elected and qualified or until their earlier resignation or removal.

(b) Significant Employees.

As of the date hereof, the Company has no significant employees.

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There are no family relationships among directors, executive officers, or persons nominated or chosen by the issuer to become directors or executive officers.

(d) Involvement in Certain Legal Proceedings.

There have been no events under any bankruptcy act, no criminal proceedings and no judgments, injunctions, orders or decrees material to the evaluation of the ability and integrity of any director, executive officer, promoter or control person of Registrant during the past five years.

Compliance with Section 16(a) of the Exchange Act

Section 16(a) of the Exchange Act requires the Company’s directors and officers, and persons who beneficially own more than 10% of a registered class of the Company’s equity securities, to file reports of beneficial ownership and changes in beneficial ownership of the Company’s securities with the SEC on Forms 3, 4 and 5. Officers, directors and greater than 10% stockholders are required by SEC regulation to furnish the Company with copies of all Section 16(a) forms they file.

Based solely on the Company’s review of the copies of the forms received by it during the fiscal year ended December 31, ~~2008~~2009 and written representations that no other reports were required, the Company believes that no person who, at any time during such fiscal year, was a director, officer or beneficial owner of more than 10% of the Company’s common stock failed to comply with all Section 16(a) filing requirements during such fiscal years.

Code of Ethics

We have not adopted a Code of Business Conduct and Ethics that applies to our principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions in that our officers and directors serve in these capacities.

Nominating Committee

We have not adopted any procedures by which security holders may recommend nominees to our Board of Directors.

Audit Committee

The Board of Directors acts as the audit committee. The Company does not have a qualified financial expert at this time because it has not been able to hire a qualified candidate. Further, the Company believes that it has inadequate financial resources at this time to hire such an expert. The Company intends to continue to search for a qualified individual for hire.

Item 11. Executive Compensation.

The following table sets forth the cash and other compensation paid by the Company to its President and all other executive officers who earned annual compensation exceeding $100,000 for services rendered during the fiscal year ended December 31, ~~2008~~2009 and December 31, ~~2007~~2008.

Name and Position	Year	Total Compensation
Scott Baily, President, Secretary and Director	2008	None
	2007	None

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Name and Position	Year	Total Compensation

Scott Baily, President, Secretary and Director	2009	None
	2008	None

Director Compensation

We do not currently pay any cash fees to our directors, nor do we pay directors’ expenses in attending board meetings.

Employment Agreements

The Company is not a party to any employment agreements.

Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.

(a) The following tables set forth certain information as of March 3130, ~~2009~~2010, regarding (i) each person known by the Company to be the beneficial owner of more than 5% of the outstanding shares of Common Stock, (ii) each director, nominee and executive officer of the Company and (iii) all officers and directors as a group.

Name and Address	Amount and Nature of Beneficial Ownership		Percentage of Class
	Amount and Nature of		Percentage
Name and Address	Beneficial Ownership		of Class
Sands Brothers Venture Capital LLC (1) 90 Park Avenue, 31st Floor New York, New York 10016		187,500		12.5	%
Sands Brothers Venture Capital II LLC (1) 90 Park Avenue, 31st Floor New York, New York 10016		375,000		25	%
Sands Brothers Venture Capital III LLC (1) 90 Park Avenue, 31st Floor New York, New York 10016		750,000		50	%
Sands Brothers Venture Capital IV LLC (1) 90 Park Avenue, 31st Floor New York, New York 10016		187,500		12.5	%
Scott Baily (2) c/o Sands Brothers Venture Capital LLC 90 Park Avenue, 31st Floor New York, New York 10016		0		0	%
All Directors and Officers as a Group (1 individual)		0		0	%

(1)

Mr. Steven B. Sands and Mr. Martin S. Sands, who are brothers, are the member-managers of SBV, SBV-II, SBV-III, and SBV-IV. Each of SBV, SBV-II, SBV-III, and SBV-IV is owned by trusts for the benefit of members of the families of Steven B. Sands and Martin S. Sands. Messrs. Steven B. Sands and Martin S. Sands serve as trustees of the trusts, and therefore have voting and investment control over the shares of Common Stock.

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(2)

Scott Baily is the President, Secretary and sole director of the Company.

(b)	The Company currently has not authorized any compensation plans or individual compensation arrangements.

Item 13. Certain Relationships and Related Transactions.

On February 22, 2007, the Company issued four promissory notes, bearing eight and one quarter percent (8.25%) interest annually, in the principal amounts of $4,375, $8,750, $17,500, and $4,375 to SBV, SBV-II, SBV-III, and SBV-IV, respectively (the “February 2007 Notes”). The February 2007 Notes and all accrued interest mature upon completion of a merger, and if no merger is consummated, then the February 2007 Notes were to reach maturity on February 22, 2009. On March 27, 2009, the Company entered into an Amended and Restated Promissory Note for each of the February 2007 Notes, extending the maturity date of the February 2007 Notes to December 31, 2010.

On March 13, 2008, the Company issued four additional promissory notes, bearing eight and one quarter percent (8.25%) interest annually, in the principal amounts of $4,375, $8,750, $17,500, and $4,375 to SBV, SBV-II, SBV-III, and SBV-IV, respectively (the “March 2008 Notes”). The March 2008 Notes and all accrued interest mature upon completion of a merger, and if no merger is consummated, then the 2008 Notes ~~will~~were to reach maturity on March 13, 2010. On March 12, 2010, pursuant to the terms and conditions of the March 2008 Notes, the Company amended and restated the March 2008 Notes to extend the maturity date from March 13, 2010 to December 31, 2010 in the event the Company does not complete a merger transaction or similar transaction and to increase the interest rate to twelve percent (12%) annually. The noteholders, principal amounts and other terms and conditions of the A&R Notes remain identical to the terms and condition of the March 2008 Notes.

On March 27, 2009, the Company issued four additional promissory notes, bearing eight and one quarter percent (8.25%) interest annually, in the principal amounts of $5,000, $10,000, $20,000, and $5,000 to SBV, SBV-II, SBV-III, and SBV-IV, respectively (the “March 2009 Notes”). The March 2009 Notes and all accrued interest mature upon completion of a merger, and if no merger is consummated, then the 2008 Notes will reach maturity on March 27, 2011.

~~Except as~~Director ~~otherwise indicated herein, there have been no related party transactions, or any other transactions or relationships required to be disclosed pursuant to Item 404 of Regulation S-B.~~Independence

The Company is not a listed issuer whose securities are listed on a national securities exchange, or an inter-dealer quotation system which has requirements that a majority of the board of directors be independent. Under NASDAQ Rule 5605(a)(2)(A), a director is not considered to be independent if he or she also is an executive officer or employee of the corporation. Under such definition, Scott Baily, our sole director, would not be considered independent as he also serves as our sole officer of the Company.

Except as otherwise indicated herein, there have been no related party transactions, or any other transactions or relationships required to be disclosed pursuant to Item 404 or 407(a) of Regulation S-K.

Item 14. Principal Accounting Fees and Services

Raich Ende Malter & Co. LLP (“Raich Ende”) is the Company's independent registered public accounting firm.

Audit Fees

The aggregate fees billed by Raich Ende for professional services rendered for the audit of our annual financial statements and review of financial statements included in our quarterly reports on Form 10-Q or services that are normally provided in connection with statutory and regulatory filings were approximately $1714,~~500~~000 for the fiscal year ended December 31, ~~2008~~2009 and $17, 500 for the fiscal year ended December 31, ~~2007~~2008.

Audit-Related Fees

There were no fees billed by Raich Ende for assurance and related services that are reasonably related to the performance of the audit or review of the Company’s financial statements for the fiscal years ended December 31, ~~2008~~2009 and December 31, ~~2007~~2008.

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Tax Fees

There were no fees billed by Raich Ende for professional services for tax compliance, tax advice, and tax planning for the fiscal years ended December 31, ~~2008~~2009 and December 31, ~~2007~~2008.

All Other Fees

There were no fees billed by Raich Ende for other products and services for the fiscal years ended December 31, ~~2008~~2009 and December 31, ~~2007~~2008.

Audit Committee’s Pre-Approval Process

The Board of Directors acts as the audit committee of the Company, and accordingly, all services are approved by all the members of the Board of Directors.

~~PART~~Part IV

Item 15. Exhibits, Financial Statement Schedules

(a) We set forth below a list of our audited financial statements included in Item 8 of this annual report on Form 10-K.

Statement		Page*

Index to Financial Statements		F-1

Report of Independent Registered Public Accounting Firm		F-2

Balance Sheets		F-3

Statement of Operations		F-4

Statement of Changes in Stockholder’s Equity (Deficit)		F-5

Statement of Cash Flows		F-6

Notes to Financial Statements		F-7

*Page F-1 follows page 10 to this annual report on Form 10-K.

(b) Index to Exhibits required by Item 601 of Regulation S-K.

Exhibit	~~Description~~	Description
*3.1	~~Certificate of Incorporation~~	Certificate of Incorporation
*3.2		By-laws
31.1		Certification of the Company’s Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, with respect to the registrant’s Annual Report on Form 10-K for the year ended December 31, 2009
31.2		Certification of the Company’s Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, with respect to the registrant’s Annual Report on Form 10-K for the year ended December 31, 2009
32.1		Certification of the Company’s Principal Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes Oxley Act of 2002
32.2		Certification of the Company’s Principal Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes Oxley Act of 2002

*3.2 By-laws

31.1 Certification of the Company’s Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, with respect to the registrant’s Annual Report on Form 10-K for the year ended December 31, 2008

31.2 Certification of the Company’s Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, with respect to the registrant’s Annual Report on Form 10-K for the year ended December 31, 2008

32.1 Certification of the Company’s Principal Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes Oxley Act of 2002

32.2 Certification of the Company’s Principal Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes Oxley Act of 2002

*	Filed as an exhibit to the Company's registration statement on Form 10-SB, as filed with the SEC on June 30, 2006, and incorporated herein by this reference.

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SIGNATURES

In accordance with Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

SCOUT ACQUISITION, INC.

	SCOUT ACQUISITION, INC.

Dated: March 30, 2010	By:	/s/ Scott Baily
		Scott Baily
		President, Secretary and Director
		Principal Accounting Officer
		Principal Executive Officer
		Principal Financial Officer

Dated: March 31, 2009

Scott Baily

President, Secretary and Director

Principal Accounting Officer

Principal Executive Officer

Principal Financial Officer

In accordance with Section 13 or 15(d) of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

	Title	Date
/s/ Scott Baily	President, Secretary	March 3130, ~~2009~~2010
Scott Baily	and Director

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