**UNITED
      STATES**


**SECURITIES
      AND EXCHANGE COMMISSION**


**Washington,
      D.C. 20549**




**FORM
      10-KSB/A**


**Amendment
        No.** **2**




(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, 2005




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 000-51682




**HIGHBURY
      FINANCIAL INC.**


(Name
      of
      small business issuer in its charter)




Delaware
            
            20-3187008(State
                or other jurisdiction of incorporation or organization)
            
            (I.R.S.
                Employer Identification No.)999
                Eighteenth Street, Ste. 3000, Denver, CO
            
            80202(Address
                of principal executive offices)
            
            (Zip
                Code)





Issuer’s
      telephone number (303) 357-4802




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


None




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


Units
      consisting of one share of Common Stock, $.0001 par value per share, and two
      Warrants.


Common
      Stock, $.0001 par value per share


Warrants
      to purchase shares of Common Stock




Check
      whether the issuer is not required to file reports pursuant to Section 13 or
      15(d) of the Exchange Act. o




Check
      whether the issuer (1) filed all reports required to be filed by Section 13
      or
      15(d) of the Exchange Act during the past 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 o No x




Check
      if
      there is no disclosure of delinquent filers in response to Item 405 of
      Regulation S-B contained in this form, 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-KSB/A or any
      amendment to this Form 10-KSB/A. x




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




Yes x No o




Issuer’s
      revenues for the fiscal year ended December 31, 2005 were $0.




As
      of
      March 31, 2006, the aggregate market value of the common stock held by
      non-affiliates of the Issuer was approximately $37,097,758.





In
      determining the market value of the voting stock held by any non-affiliates,
      shares of Common Stock of the Issuer beneficially owned by directors, officers,
      initial stockholders, and holders of more than 10% of the outstanding shares
      of
      Common Stock of the Registrant have been excluded. This determination of
      affiliate status is not necessarily a conclusive determination for other
      purposes.




As
      of
      March 31, 2006, there were 9,635,000 shares of common stock, $.0001 per value
      per share, outstanding.




Transitional
      Small Business Disclosure Format (Check one): Yes o No x









**Explanatory
      Note**


This
          Annual Report on Form 10-KSB/A is being filed as Amendment Number 2 to our
          Annual Report on Form 10-KSB which was originally filed with the Securities
          and
          Exchange Commission (‘‘SEC’’) on April 10, 2006. We are filing this Form
          10-KSB/A to restate our financial statements for the period ended January
          31,
          2006. The
          Company, in consultation with its independent registered accounting firm,
          Goldstein Golub Kessler LLP (“GGK”), determined on December
          18 ,
          2006,
          that the Company needed to reclassify certain amounts in its financial
          statements to report as equity the
          warrants issued as part of the units sold in the Company’s initial public
          offering and the private placement immediately prior to the Company’s initial
          public offering and the unit purchase option (including
          the shares of common stock and warrants embedded in the unit purchase option) issued
          to
          the underwriters in the Company’s initial public offering (the “Purchase
          Option”). The
          Company had previously classified the value of these warrants to purchase
          common
          stock and the Purchase Option as liabilites .
          After
          further review, the Company has determined that these instruments should
          have
          been classified as equity.  Except
          as
          otherwise stated, all financial information contained in this Annual Report
          on
          Form 10-KSB/A gives effect to these restatements. For information concerning
          the
          background of the restatements, the specific adjustments made, and management’s
          discussion and analysis of the events giving effect to the restated information
          see “Restatement” at Part II. Item 6. “Management’s Discussion and Analysis or
          Plan of Operation” and Note 2 to our Financial Statements.


This
      Form
      10-KSB/A amends and restates only certain information in the following sections
      as a result of the current restatements described above:





Part
      I —
Item 1. Description of Business — Risk Factors


Part
      II —
Item 6. Management’s Discussion and Analysis or Plan of Operation


Financial
        Statements





In
      addition, we are also including currently-dated Sarbanes Oxley Act Section
      302
      and Section 906 certifications of the Chief Executive Officer and Chief
      Financial Officer that are attached to this Form 10-KSB/A as Exhibits 31.1,
      31.2, and 32.





For
      the
      convenience of the reader, this Form 10-KSB/A sets forth the entire Form 10-KSB
      which was prepared and relates to the Company as of December 31, 2005. However,
      this Form 10-KSB/A only amends and restates the Items described above to reflect
      the effects of the restatement and no attempt has been made to modify or update
      other disclosures presented in our December 31, 2005 Form 10-KSB. Accordingly,
      except for the foregoing amended information, this Form 10-KSB/A continues
      to
      speak as of April 10, 2006 (the original filing date of the December 31, 2005
      Form 10-KSB), and does not reflect events occurring after the filing of our
      December 31, 2005 Form 10-KSB and does not modify or update those disclosures
      affected by subsequent events. Forward looking statements made in the December
      31, 2005 Form 10-KSB have not been revised to reflect events, results or
      developments that have become known to us after the date of the original filing
      (other than the current restatements described above), and such forward looking
      statements should be read in their historical context. Unless otherwise stated,
      the information in this Form 10-KSB/A not affected by such current restatements
      is unchanged and reflects the disclosures made at the time of the original
      filing.





1




**TABLE
      OF CONTENTS**




**Page**PART
                IITEM
                1.
            DESCRIPTION
                OF BUSINESS
            4ITEM
                2.
            DESCRIPTION
                OF PROPERTY
            24ITEM
                3.
            LEGAL
                PROCEEDINGS
            24ITEM
                4.
            SUBMISSION
                OF MATTERS TO A VOTE OF SECURITY HOLDERS
            24PART
                IIITEM
                5.
            MARKET
                FOR COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND SMALL BUSINESS
                ISSUERS
                PURCHASES OF EQUITY SECURITIES
            25ITEM
                6.
            MANAGEMENT’S
                DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
            28ITEM
                7.
            FINANCIAL
                STATEMENTS
            31ITEM
                8.
            CHANGES
                IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL
                DISCLOSURE
            31ITEM
                8A.
            CONTROLS
                AND PROCEDURES
            31ITEM
                8B.
            OTHER
                INFORMATION
            31PART
                IIIITEM
                9.
            DIRECTORS,
                EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS; COMPLIANCE WITH
                SECTION
                16(a) OF THE EXCHANGE ACT
            32ITEM
                10.
            EXECUTIVE
                COMPENSATION
            34ITEM
                11.
            SECURITY
                OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED
                STOCKHOLDER MATTERS
            34ITEM
                12.
            CERTAIN
                RELATIONSHIPS AND RELATED TRANSACTIONS
            35ITEM
                13.
            EXHIBITS
            39ITEM
                14.
            PRINCIPAL
                ACCOUNTING FEES AND SERVICES
            40SIGNATURES
            41FINANCIAL
                STATEMENTS
            F-1




2




*SAFE
      HARBOR PROVISIONS*





*This
      Annual Report on Form 10-KSB/A and the documents incorporated by reference
      into
      this Annual Report on Form 10-KSB/A include forward-looking statements within
      the meaning of Section 27A of the Securities Act of 1933 and Section 21E of
      the
      Securities Exchange Act of 1934. These forward-looking statements can be
      identified by the use of forward-looking terminology, including the words
“believes,” “estimates,” “anticipates,” “expects,” “intends,” “may,” “will” or
“should,” or, in each case, their negative or other variations or comparable
      terminology. Such statements include, but are not limited to, any statements
      relating to our ability to consummate any acquisition or other business
      combination and any other statements that are not historical facts. These
      statements are based on management’s current expectations, but actual results
      may differ materially due to various factors, including, but not limited
      to:*




·
            our
                being a development stage company with no operating
                history;·
            our
                dependence on key personnel, some of whom may or may not join us
                following
                a business combination;·
            our
                personnel allocating their time to other businesses and potentially
                having
                conflicts of interest with our business;·
            our
                potentially being unable to complete a business combination in a
                timely
                manner;·
            our
                potentially being unable to obtain additional financing to complete
                a
                business combination;·
            the
                ownership of our securities being concentrated;·
            risks
                associated with the financial services industry; and·
            those
                other risks and uncertainties detailed in the Company’s filings with the
                Securities and Exchange Commission.





*By
      their nature, forward-looking statements involve risks and uncertainties because
      they relate to events and depend on circumstances that may or may not occur
      in
      the future. We caution you that forward-looking statements are not guarantees
      of
      future performance and that our actual results of operations, financial
      condition and liquidity, and developments in the industry in which we operate
      may differ materially from those made in or suggested by the forward-looking
      statements contained in this Annual Report on Form 10-KSB/A. In addition, even
      if our results of operations, financial condition and liquidity, and
      developments in the industry in which we operate, are consistent with the
      forward-looking statements contained in this Annual Report on Form 10-KSB/A,
      those results or developments may not be indicative of results or developments
      in subsequent periods.*




*These
      forward-looking statements are subject to numerous risks, uncertainties and
      assumptions about us. The forward-looking events we discuss in this Annual
      Report on Form 10-KSB/A speak only as of the date of such statements and might
      not occur in light of these risks, uncertainties and assumptions. We undertake
      no obligation and disclaim any obligation to publicly update or revise any
      forward-looking statements, whether as a result of new information, future
      events or otherwise.*




*Unless
      otherwise provided in this Annual Report on Form 10-KSB/A, references to the
      “Company,” the “Registrant,” the “Issuer,” “we,” “us,” and “our” refer to
      Highbury Financial Inc.*




3





**PART
      I**




**ITEM
                1.****DESCRIPTION
                OF BUSINESS**




**Introduction**




We
      are a
      recently organized Delaware special purpose acquisition company formed to serve
      as a vehicle for the acquisition or the acquisition of control of one or more
      operating businesses. We will limit our search to target businesses in the
      financial services industry that may provide significant opportunities for
      growth, with a particular focus on investment management and securities firms.
      Our efforts in identifying a prospective target business will not be limited
      to
      a particular geography.




On
      January 31, 2006, we closed our initial public offering of 6,733,333 units,
      with
      each unit consisting of one share of our common stock and two warrants (each
      warrant to purchase one share of our common stock at an exercise price of $5.00
      per share). The units were sold at an offering price of $6.00 per unit,
      generating gross proceeds of $40,399,998. On February 3, 2006, we sold an
      additional 1,010,000 units pursuant to the underwriters’ over-allotment option
      raising additional gross proceeds of $6,060,000. Immediately preceding the
      offering, all of our initial stockholders, including all of our officers and
      directors, purchased an aggregate of 166,667 units from us in a private
      placement at a price per unit of $6.00. (This private placement is referred
      to in this Annual Report on Form 10-KSB/A as the “private placement”.) After
      deducting underwriting discounts and commissions and the offering expenses,
      the
      total net proceeds to us from the offering and the private placement, prior
      to
      payment of the underwriters’ non-accountable offering expenses of $673,333
      payable only upon completion of an initial business combination, were
      approximately $44,439,134, of which $43,289,567 was deposited into a trust
      fund
      and the remaining proceeds $1,149,567 were made available to be used to provide
      for business, legal and accounting due diligence on prospective business
      combinations and continuing general and administrative expenses. The net
      proceeds deposited into the trust fund remain on deposit in the trust fund
      earning interest.




**Financial
      Services Industry**





According
      to the U.S. Bureau of Economic Analysis, the financial services industry has
      been the leading contributor to the U.S. gross domestic product, or GDP, for
      more than a decade; the industry’s contribution in 2004 was 20.7%. From 1994
      through 2004, corporate profits in the financial industry grew at a
      compound annual rate of 13.8%, as compared to 3.1% for non-financial industries.
      As the domestic financial services industry continues to expand internationally
      over the next decade, we believe it will continue to be an important contributor
      to global economic growth.





Our
      universe of potential acquisition targets in the financial services industry
      includes, but is not limited to:





·
            Asset
                management firms;·
            Banks;·
            Brokerage
                firms;·
            Financial
                information and technology companies and other vendors to the financial
                services industry;·
            Insurance
                underwriters and brokers;·
            Investment
                consultants;·
            Residential
                and commercial mortgage banking and servicing firms;
                and·
            Specialty
                finance and leasing companies.





Within
      the universe of potential targets set forth above, an important focus for us
      will be on certain industry subsectors including, but not limited to, those
      listed below.





·
            Financial
                planning firms - Financial planning firms work with clients to identify
                and achieve financial objectives, including asset allocation, investment
                management and tax, estate and retirement planning.·
            Hedge
                funds and hedge funds of funds - Hedge funds are aggressively managed
                portfolios on behalf of qualified individual and institutional investors
                that invest in both conservative and speculative opportunities. A
                hedge
                fund of funds is a portfolio of investments in selected hedge
                funds.·
            High
                net worth managers - High net worth managers provide investment management
                and related services to high net worth individuals and
                families.




4




·
            Institutional
                equity and fixed income managers - Institutional investment managers
                manage portfolios of equity, fixed income and other securities on
                behalf
                of institutional clients including, but not limited to, public and
                corporate pension plans, foundations and endowments.·
            Mutual
                fund managers - Mutual fund managers invest client assets in open-end
                and/or closed-end investment pools according to specific investment
                objectives and constraints outlined in each fund’s
                prospectus.·
            Private
                equity managers - Private equity funds are private partnerships that
                invest capital on behalf of qualified individuals and institutions
                in
                private and public companies.·
            Real
                estate investment managers, property managers and brokers - Real
                estate
                investment managers buy, manage and sell real estate properties on
                behalf
                of separate account clients andcommingled
                investment pools. Real estate property managers oversee the day to-day
                operations and business plans for real estate properties. Real estate
                brokers generate commissions for arranging sales and leases of real
                estate
                properties.·
            Retail
                and institutional brokerage firms - Brokerage firms provide investment
                advice, trade execution services, investment research and other services
                to individual and institutional clients, typically in return for
                commissions.·
            Specialty
                trading companies - Specialty trading companies execute trades on
                behalf
                of third parties and their own accounts and may focus on (i) financial
                instruments including stocks, bonds and currencies and (ii) physical
                commodities including industrial metals, chemicals, energy and timber
                and
                the derivative contracts related to these assets.·
            Turnkey
                asset management platforms - Turnkey asset management platforms provide
                financial advisors with investment allocation advice, investment
                manager
                recommendations, investment performance reporting and related advisory
                services for the benefit of the financial advisors’
                clients.





Over
      the
      past several years, the demand for asset management services has increased.
      According to the Federal Reserve Board’s Flow of Funds report, American
      households’ and non-profit organizations’ ownership of corporate equities and
      mutual fund shares has grown to represent nearly 16% of their total assets
      as of
      the fourth quarter of 2005, as compared to less than 8% two decades
      earlier. This trend toward increasing equity ownership is significant, because
      most of the firms in our target universe have operations related to the
      management of financial assets.





In
      addition, we believe technological advances will provide investment management
      firms with greater access to new markets and more robust information delivered
      on a real-time basis, both of which will improve operating efficiency. Over
      the
      last decade, the proliferation of media coverage worldwide via the internet,
      the
      development of electronic trading capabilities and the enhancement of back
      office software have significantly altered the economic fundamentals of the
      financial services industry.





Ten
      employees or equity holders of Berkshire Capital Securities LLC, or Berkshire
      Capital, (including R. Bruce Cameron, Berkshire Capital’s president, and Richard
      S. Foote, one of its managing directors) have invested in us through Broad
      Hollow LLC. Berkshire Capital, a registered broker-dealer, provides merger,
      acquisition, fairness opinion, valuation and strategic advisory services to
      the
      financial services industry, with a focus on investment management and
      securities firms. Over Berkshire Capital’s 23-year history, its partners have
      developed long-term relationships with a wide range of U.S. and foreign private
      and publicly held financial services organizations of all sizes. **** We
      believe these relationships will provide us with references to a broad
      population of potential acquisition targets.





We
      believe that potential acquisition targets may favor us over some other
      potential purchasers of their businesses, venture capital funds, leveraged
      buyout funds, operating businesses and other entities and individuals, both
      foreign and domestic, for the following reasons:





·
            We
                believe that potential acquisition targets may favor us over venture
                capital funds, leveraged buyout funds and other private equity funds
                because most of these funds have a finite life, which generally requires
                the fund to effect a liquidity event, such as a sale, refinancing
                or
                public offering, for portfolio companies in order to return capital
                to
                investors. Our capital structure does not require us to effect a
                liquidity
                event at any particular time.·
            We
                believe that potential acquisition targets may favor us over many
                large
                financial platforms, which may include, but are not limited to, banks,
                insurance companies or other holding companies, because we will not
                integrate the operations of our initial acquisition target into an
                existing environment and corporate culture with pre-existing methods
                of
                doing business, as is common with acquisitions by large financial
                platforms.





5


Our
      initial business combination must be with one or more operating businesses
      whose
      fair market value, collectively, is equal to at least 80% of our net assets
      at
      the time of such acquisition. This may be accomplished by identifying and
      acquiring a single business or multiple operating businesses
      contemporaneously.





Prior
      to
      completion of our initial business combination, we will seek to have all third
      parties, including any vendors, prospective target businesses and other entities
      with whom we engage in business, enter into agreements with us waiving any
      right, title, interest or claim of any kind in or to any monies held in the
      trust account for the benefit of our public stockholders. In the event that
      a
      third party were to refuse to enter into such a waiver, our decision to engage
      such third party would be based on our management’s determination that we would
      be unable to obtain, on a reasonable basis, substantially similar services
      or
      opportunities from another entity willing to enter into such a
      waiver.





**Effecting
      a Business Combination**





*General*





We
      are
      not presently engaged in, and we will not engage in, any substantive commercial
      business for an indefinite period of time following our initial offering. We
      intend to use cash derived from the proceeds of our initial public offering
      and
      the private placement, our capital stock, debt or any combination thereof to
      effect a business combination involving one or more financial services
      businesses. Although substantially all of the net proceeds of our initial public
      offering are intended to be generally applied toward effecting a business
      combination as described in this Item 1, the proceeds are not otherwise
      designated for any more specific purpose. A business combination may involve
      the
      acquisition of, or merger with, one or more financial services businesses that
      do not need substantial additional capital but desire to establish a public
      trading market for their shares, while avoiding what they may deem to be adverse
      consequences of undertaking a public offering themselves. We believe these
      include certain time delays, significant expense, loss of voting control and
      compliance with various federal and state securities laws. In addition, a
      business combination may involve one or more companies that may be financially
      unstable or in the early stages of development or growth.




*We
      have not agreed to acquire a target business*





Prior
      to
      the closing of our initial public offering on January 31, 2006, we did not
      identify any target businesses or conduct any discussions regarding a potential
      business combination. We are currently in the process of identifying and
      evaluating target businesses for a business combination. Although we are
      participating in acquisition processes, we have not entered into any binding
      acquisition agreements. Subject to the requirement that our initial business
      combination must be with one or more financial services businesses that,
      collectively, have a fair market value equal to at least 80% of our net assets
      at the time of the acquisition, as described below in more detail, we have
      virtually unrestricted flexibility in identifying and selecting prospective
      acquisition candidates in the financial services industry.





*Sources
      of target businesses*





Target
      business candidates have been and will continue to be brought to our attention
      from various unaffiliated sources that have included or may include professional
      service providers, including, but not limited to, investment bankers, attorneys,
      accountants, executive search firms and business brokers, public and private
      companies and private equity, venture capital and leveraged buyout funds. Our
      stockholders, officers and directors as well as their affiliates have brought
      and may continue to bring to our attention target business candidates. While
      we
      may be asked to pay finder’s fees or other compensation to sources providing
      proposals to us, we will not pay finder’s fees or other compensation to any
      source with respect to a proposal unless we have engaged that source to provide
      us with proposals on a compensated basis.





While
      we
      do not presently anticipate engaging the services of professional firms that
      specialize in sourcing business acquisitions on any formal basis, we may engage
      these firms in the future, in which event we may pay a finder’s fee or other
      compensation upon consummation of a business combination. Any such finder’s fee
      or compensation would be subject to arm’s-length negotiations between us and any
      such professional firms or other source of proposals and would likely be paid
      upon consummation of a business combination. Neither we nor any other person
      or
      entity will pay any of our existing officers, directors, stockholders, or any
      entity with which they are affiliated, any finder’s fee or other compensation
      for services rendered to us, including payments to related parties of the
      initial stockholders for performing due diligence prior to or in connection
      with
      the consummation of our initial business combination, other than the payment
      of
      $7,500 per month to Berkshire Capital in connection with the general and
      administrative services arrangement for services rendered to us and except
      that
      Broad Hollow LLC may grant bonuses in cash, shares of our common stock owned
      by
      Broad Hollow or Broad Hollow membership interests to such persons as described
      in Item 12, the section entitled “Certain Relationships and Related
      Transactions—Conflicts of Interest.” However, our initial stockholders will
      receive reimbursement for any out-of-pocket expenses incurred by them in
      connection with activities on our behalf, such as participating in the offering
      process, identifying potential target operating businesses and performing due
      diligence on suitable business combinations. We have not reserved any specific
      amount for such payments, which may have the effect of reducing the available
      proceeds not deposited in the trust account for payment of our ongoing expenses
      and reimbursement of out-of-pocket expenses incurred on our behalf. In addition,
      since the role of present management after our initial business combination
      is
      uncertain, we have no ability to determine what remuneration, if any, will
      be
      paid to those persons after a business combination.




6





*Selection
      of target businesses and structuring of a business combination*





Subject
      to the requirement that our initial business combination must be with one or
      more financial services businesses that, collectively, have a fair market value
      equal to at least 80% of our net assets at the time of such acquisition, our
      management has virtually unrestricted flexibility in identifying and selecting
      prospective target businesses. Our management diligently reviews all of the
      proposals we receive with respect to prospective target businesses. In
      evaluating prospective target businesses, our management team considers, among
      other things, the criteria listed below.





·
            Experience
                and skill of the target’s management and availability of additional
                personnel - We intend to have discussions with the incumbent management
                and meet with selected additional personnel to evaluate the character,
                quality and depth of the employee base.·
            Financial
                condition and results of operations - We intend to review the financial
                statements of the target to determine its financial strength and
                profitability. We intend to investigate the capital structure, including
                the quality of the assets of the business and the nature and terms
                of any
                liabilities, the nature and reliability of the revenues as well as
                the
                composition and characteristics of the company’s expense base. It is not
                possible, however, to specify any particular quantitative metrics
                of
                financial strength or profitability in the absence of the consideration
                of
                all other factors, both quantitative and qualitative, related to
                a
                specific transaction.·
            Growth
                potential - We intend to seek targets with attractive growth prospects
                for
                our initial business combination. We intend to conduct discussions
                with
                incumbent management about their plans for growth and analyze both
                industry-specific and macroeconomic trends which may impact the target
                company’s operations.·
            Capital
                requirements - We intend to evaluate the target’s capital position to
                operate the business and support future growth.·
            Competitive
                position - We intend to evaluate the target relative to its peers
                with
                respect to a variety of factors including market share, performance
                track
                record, client base, location, operating results, management team
                and
                diversity of product lines.·
            Stage
                of development of the products, processes or services - The development
                stage of the target’s products, processes and services may have direct
                impact on both the short and long-term growth potential for the
                target.·
            Degree
                of current or potential market acceptance of the products, processes
                or
                services - The degree to which the target’s products, processes or
                services have been embraced by the market will contribute significantly
                to
                our valuation of the target. As market acceptance and penetration
                increase, the risk of the product’s failure decreases. Widely distributed
                products, however, may not have the growth potential of newer
                products.·
            Proprietary
                features and degree of intellectual property or other protection
                of the
                products, processes or services, including the client base and performance
                track record - We will evaluate the target’s business for unique sources
                of value which may contribute to the success of the
                business.·
            Costs
                associated with effecting the business combination - Relative to
                our
                ability to finance a transaction, we intend to evaluate not only
                the
                acquisition price but also additional costs including, but not limited
                to,
                legal fees, taxes, regulatory filings, customer and vendor approval
                processes and employee retention
                packages.





These
      criteria are not intended to be exhaustive. Any evaluation relating to the
      merits of a particular business combination with one or more operating
      businesses will be based, to the extent relevant, on the above factors as well
      as other considerations deemed relevant by our management team in effecting
      a
      business combination consistent with our business objective. At this time,
      we do
      not know what, if any, other considerations we may deem to be relevant to
      evaluating a proposed business combination.




7





In
      evaluating prospective target businesses, we intend to conduct an extensive
      due
      diligence review of the target businesses that will encompass, among other
      things, meetings with incumbent management and inspection of facilities, as
      well
      as review of financial and other information that will be made available to
      us.
      Our management team will lead this due diligence effort. In addition, we may
      retain industry experts for their assistance, perspective and recommendations
      in
      our evaluation of individual elements of the due diligence process, including,
      but not limited to, legal, tax, accounting, human resources and employee
      benefits issues. Our decision to enter into a business combination with an
      identified target will be guided by our management team’s comprehensive
      evaluation of the target with respect to all of the criteria listed above as
      well as the recommendations of any industry experts we may retain.





We
      will
      endeavor to structure a business combination so as to achieve the most favorable
      tax treatment to us, the target businesses and their stockholders, as well
      as
      our own stockholders. We cannot assure you, however, that the Internal Revenue
      Service or appropriate state tax authority will agree with our tax treatment
      of
      the business combination.





The
      time
      and costs required to select and evaluate target businesses and to structure
      and
      complete the business combination cannot presently be ascertained with any
      degree of certainty. Any costs incurred with respect to the identification
      and
      evaluation of prospective target businesses with which a business combination
      is
      not ultimately completed will result in a loss to us and reduce the amount
      of
      capital available to otherwise complete a business combination. We will not
      pay
      any finders or consulting fees to our existing directors, officers, stockholders
      or special advisors, or any of their respective affiliates including Berkshire
      Capital and The Praedium Group LLC, or Praedium, for services rendered prior
      to
      or in connection with our initial business combination, nor will we condition
      our initial business combination on the retention post-closing of Berkshire
      Capital or Praedium.




In
      addition, if our initial business combination entails the contemporaneous
      acquisition of several operating businesses with different sellers, we would
      need to convince such sellers to agree that the purchase of their businesses
      is
      contingent upon the simultaneous closings of the other
      acquisitions.





*Fair
      market value of target businesses*





The
      initial target business or businesses that we acquire must have a collective
      fair market value equal to at least 80% of our net assets at the time of such
      acquisition. The fair market value of such businesses will be determined by
      our
      board of directors based upon standards generally accepted by the financial
      community, such as actual and potential sales, earnings, cash flow and book
      value. If our board is not able to independently determine that the target
      businesses have a sufficient fair market value or if a conflict of interest
      exists, such as if management selects a company affiliated with one of our
      initial stockholders as a prospective target business, we will obtain an opinion
      from an unaffiliated, independent investment banking firm which is a member
      of
      the NASD with respect to the satisfaction of such criteria. We expect that
      any
      such opinion will be included in our proxy solicitation materials furnished
      to
      our stockholders in connection with a business combination. However, we will
      not
      be required to obtain an opinion from an investment banking firm as to the
      fair
      market value if our board of directors independently determines that the target
      businesses have sufficient fair market value and no conflict of interest
      exists.





*Possible
      lack of business diversification*





The
      net
      proceeds from our initial public offering and the private placement were
      approximately $43,765,801 which we may use to complete a business combination.
      While we may seek to effect a business combination with more than one target
      business, our initial business acquisition must be with one or more operating
      businesses whose fair market value, collectively, is equal to at least 80%
      of
      our net assets at the time of such acquisition. At the time of our initial
      business combination, we may not be able to acquire more than one target
      business because of various factors, including insufficient financing or the
      difficulties involved in consummating the contemporaneous acquisition of more
      than one operating company. These difficulties include the challenges associated
      with negotiating with more than one target company at the same time, including
      convincing multiple target companies to agree to have their respective
      acquisitions mutually conditioned. Also, we may not have sufficient management,
      financial and other resources to effectively investigate the business and
      affairs of multiple target companies simultaneously or to negotiate the terms
      of
      multiple acquisition agreements at the same time which could result in a failure
      to properly evaluate multiple acquisitions. Therefore, it is probable that
      we
      will have the ability to complete a business combination with only a single
      operating business, which may have only a limited number of products or
      services. The resulting lack of diversification may:





·
            result
                in our dependency upon the performance of a single operating
                business;·
            result
                in our dependency upon the development or market acceptance of a
                single or
                limited number of products, processes or services;
                and




8




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





In
      this
      case, we will not be able to diversify our operations or benefit from the
      possible spreading of risk or offsetting of losses, unlike other entities that
      may have the resources to complete several business combinations in different
      industries or different areas of a single industry so as to diversify risk
      and
      offset losses. Further, the prospects for our success may be entirely dependent
      upon the future performance of the initial target business or businesses we
      acquire.




*Limited
      ability to evaluate the target business’ management*





Although
      we intend to closely scrutinize the management of prospective target businesses
      when evaluating the desirability of effecting a business combination, we cannot
      assure you that our assessment of the target business’ management will prove to
      be correct. In addition, we cannot assure you that the target business’
management will have the necessary skills, qualifications or abilities to manage
      a public company. Furthermore, the future role, if any, of our officers and
      directors, in the target businesses cannot presently be stated with any
      certainty. Moreover, we cannot assure you that our officers and directors will
      have significant experience or knowledge relating to the operations of the
      particular target businesses acquired.





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





*Opportunity
      for stockholder approval of our initial business combination*





Prior
      to
      the completion of our initial business combination, we will submit the
      transaction to our stockholders for approval, even if the structure of the
      business combination is such that it would not ordinarily require stockholder
      approval under applicable state law. In connection with seeking stockholder
      approval of our initial business combination, we will furnish our stockholders
      with proxy solicitation materials prepared in accordance with the Securities
      Exchange Act of 1934, which, among other matters, will include a description
      of
      the operations of the target business or businesses and certain required
      financial information regarding the business or businesses.





In
      connection with the vote required for our initial business combination, all
      of
      our stockholders that owned shares of our common stock prior to our initial
      public offering (referred to in this Annual Report on Form 10-KSB/A as our
      “initial stockholders”), including all of our officers, have agreed to vote the
      shares of common stock owned by them, whether acquired in the private placement,
      the offering or the aftermarket, in the same manner as the majority of the
      shares of common stock voted by our public stockholders. As a result, our
      initial stockholders will not have any conversion rights attributable to their
      shares in the event that our initial business combination is approved by a
      majority of our public stockholders. We will proceed with the initial business
      combination only if both a majority of the shares of common stock voted by
      the
      public stockholders are voted in favor of the business combination and public
      stockholders owning less than 20% of the shares sold in our initial public
      offering exercise their conversion rights.





*Conversion
      rights*





At
      the
      time we seek stockholder approval of our initial business combination, we will
      offer each public stockholder the right to have such stockholder’s shares of
      common stock converted into cash if the stockholder votes against the business
      combination and the business combination is approved and completed. The actual
      per-share conversion price will be equal to the amount in the trust account
      inclusive of any interest (calculated as of two business days prior to the
      consummation of the proposed business combination), net of taxes payable, and
      divided by the number of shares sold in our initial public offering and subject
      to the over-allotment option, or 7,743,333 shares. Without taking into account
      any interest earned on the trust account, the initial per-share conversion
      price
      would be approximately $5.59 or $0.41 less than the price of $6.00 that we
      sold
      each unit for in our initial public offering. An eligible stockholder may
      request conversion at any time after the mailing to our stockholders of the
      proxy statement and prior to the vote taken with respect to a proposed business
      combination at a meeting held for that purpose, but the request will not be
      granted unless the stockholder votes against the business combination and the
      business combination is approved and completed. Any request for conversion,
      once
      made, may be withdrawn at any time up to the date of the meeting. It is
      anticipated that the funds to be distributed to eligible stockholders who elect
      conversion will be distributed promptly after completion of our initial business
      combination. Public stockholders who convert their stock into their share of
      the
      trust account still have the right to exercise the warrants that they received
      as part of the units. We will not complete any proposed business combination
      for
      which our public stockholders (other than our initial stockholders) owning
      20%
      or more of the shares sold in our initial public offering both vote against
      the
      business combination, and subsequently also exercise their conversion
      rights.




9




*Liquidation
      if no business combination*





If
      we do
      not complete our initial business combination within 18 months after the
      consummation of our initial public offering, or within 24 months if the
      extension criteria described below have been satisfied, we will dissolve and
      promptly distribute to only our public stockholders, in proportion to their
      respective equity interests, an aggregate sum equal to the amount in the trust
      account, inclusive of any interest, net of taxes payable, **** plus
      any
      remaining net assets. Our initial stockholders have agreed to waive their rights
      to participate in any liquidation distribution occurring upon our failure to
      consummate a business combination, but only with respect to those shares of
      common stock acquired by them prior to our initial public offering and the
      shares included in the 166,667 units our initial stockholders purchased in
      the
      private placement; they will participate in any liquidation distribution with
      respect to any additional shares of common stock acquired in connection with
      or
      following our initial public offering. In addition, the underwriters have agreed
      to waive their rights to the approximately $673,333 deposited in the trust
      account for their benefit. There will be no distribution from the trust account
      with respect to the warrants and all rights with respect to the warrants will
      effectively terminate upon our liquidation.





If
      we
      were to expend all of the proceeds of our initial public offering and the
      private placement, other than the proceeds deposited in the trust account,
      without taking into account interest, if any, earned on the trust account,
      the
      initial per-share liquidation price to the public stockholders would be $5.59,
      or $0.41 less than the price of $6.00 that we sold each unit for in our initial
      public offering. We could, however, become subject to the claims of our
      creditors that could be in preference to the claims of our public stockholders.
      We cannot assure you that the actual per-share liquidation price will not be
      less than $5.59, plus net interest, due to claims of creditors.
      Messrs. Foote and Cameron have each agreed pursuant to an agreement with
      us, EarlyBirdCapital, Inc. and ThinkEquity Partners LLC that, if we liquidate
      prior to the consummation of our initial business combination, they will be
      personally liable to ensure that the proceeds of the trust account are not
      reduced by the claims of vendors for services rendered or products sold to
      us as
      well as claims of prospective target businesses for fees and expenses of third
      parties that we agree in writing to pay in the event we do not complete a
      combination with such business. However, Messrs. Foote and Cameron may not
      be able to satisfy those obligations.





Prior
      to
      completion of our initial business combination, we will seek to have all third
      parties, including any vendors, prospective target businesses or other entities
      with whom we engage in business enter into agreements with us waiving any right,
      title, interest or claim of any kind in or to any monies held in the trust
      account for the benefit of our public stockholders. In the event that a third
      party were to refuse to enter into such a waiver, our decision to engage such
      third party or to enter into discussions with such target business would be
      based on our management’s determination that we would be unable to obtain, on a
      reasonable basis, substantially similar services or opportunities from another
      entity willing to enter into such a waiver.





If
      we
      enter into either a letter of intent, an agreement in principle or a definitive
      agreement to complete a business combination prior to the expiration of 18
      months after the consummation of our initial public offering, but are unable
      to
      complete the business combination within the 18-month period, then we will
      have
      an additional six months in which to complete the business combination
      contemplated by the letter of intent, agreement in principle or definitive
      agreement. If we are unable to do so by the expiration of the 24-month period
      from the consummation of our initial public offering, we will then liquidate.
      Upon notice from us, the trustee of the trust account will commence liquidating
      the investments constituting the trust account and will turn over the proceeds
      to our transfer agent for distribution to our public stockholders. We anticipate
      that our instruction to the trustee would be given promptly after the expiration
      of the applicable 18-month or 24-month period.





Our
      public stockholders shall be entitled to receive funds from the trust account
      only in the event of our liquidation or if a stockholder seeks to convert his
      shares into cash in connection with our initial business combination, which
      the
      stockholder voted against, that is actually completed by us. In no other
      circumstances shall a stockholder have any right or interest of any kind to
      or
      in the trust account.




10





**Competition**





We
      believe that potential acquisition targets may favor us over some other
      potential purchasers of their businesses, which may include venture capital
      funds, leveraged buyout funds, operating businesses and other entities and
      individuals, both foreign and domestic, for the following reasons:





·
            Because
                our capital structure does not require us to effect a liquidity event
                at
                any particular time, we believe that potential acquisition targets
                may
                favor us over certain other entities.  Such entities include venture
                capital funds, leveraged buyout funds and other private equity funds
                that
                have finite lives, which generally require the funds to effect a
                liquidity
                event, such as a sale, refinancing or public offering, for portfolio
                companies in order to return capital to investors.·
            We
                will not integrate the operations of our initial acquisition target
                into
                an existing environment and corporate culture with pre-existing methods
                of
                doing business, as is common with acquisitions by large financial
                platforms. Therefore, we believe that potential acquisition targets
                may
                favor us over many large financial platforms, which may include,
                but are
                not limited to, banks, insurance companies or other holding
                companies.





Nonetheless,
      in identifying, evaluating and pursuing target businesses, we may encounter
      intense competition from other entities having a business objective similar
      to
      ours. Many of these entities are well established and have extensive experience
      identifying and effecting business combinations directly or through affiliates.
      Many of these competitors possess greater financial, marketing, technical,
      human
      and other resources than we. Our ability to compete in acquiring a target
      business will be limited by our available resources. This inherent competitive
      limitation gives others an advantage in pursuing the acquisition of target
      businesses. Further:





·
            our
                obligation to seek stockholder approval of our initial business
                combination may impede or delay the completion of a
                transaction;·
            the
                requirement that the target business have audited financial statements
                at
                the time of acquisition in conformity with United States generally
                accepted accounting principles may limit the acquisition targets
                we may
                pursue;·
            our
                obligation to convert shares of common stock held by our stockholders
                into
                cash in certain instances may reduce the resources available to effect
                a
                business combination; and·
            our
                outstanding warrants and the purchase option granted to ThinkEquity
                Partners LLC and EarlyBirdCapital, Inc., and the future dilution
                they
                potentially represent, may not be viewed favorably by certain target
                businesses.





Any
      of
      these factors may place us at a competitive disadvantage in successfully
      negotiating our initial business combination, particularly against a competitor
      that does not need stockholder approval.





If
      we
      succeed in effecting our initial business combination, there will, in all
      likelihood, be intense competition from competitors of the target businesses.
      Subsequent to our initial business combination, we may not have the resources
      to
      compete effectively.





**Regulation**





Acquisitions
      of financial services companies are often subject to significant regulatory
      requirements and consents, and we will not be able to consummate a business
      combination with certain types of financial services companies without complying
      with applicable laws and regulations and obtaining required governmental or
      client consents. For example, if we were to attempt to acquire or acquire
      control of an investment management firm, we would have to obtain consents
      of
      the firm’s investment management clients or enter into new contracts with them,
      and there is no assurance that we would be able to obtain such consents or
      enter
      into new contracts. Similarly, if we were to attempt to acquire certain banks,
      we would be required to obtain the approvals of the Board of Governors of the
      Federal Reserve System, the Federal Deposit Insurance Corporation, the Office
      of
      the Comptroller of the Currency and/or state banking commissions. If our
      acquisition target were an insurance company, state insurance commissioners
      in
      the states where the insurance company does business would review an acquisition
      transaction and could prevent it by withholding their consent. The acquisition
      of a business in other sectors of the financial services industry may require
      similar approvals or consents.




We
      may
      not receive any such required approvals or we may not receive them in a timely
      manner, which may be a result of factors or matters beyond our control.
      Satisfying any requirements of regulatory agencies may delay the date of our
      completion of our initial business combination beyond the required time frame
      (18 months after the consummation of our initial public offering or 24 months
      after the consummation of our initial public offering if a letter of intent,
      agreement in principle or a definitive agreement has been executed within 18
      months after the consummation of our initial public offering and our initial
      business combination relating thereto has not yet been consummated within such
      18-month period). If we fail to consummate our initial business combination
      within the required time frame we will be forced to liquidate.




11





Because
      we intend to acquire, or acquire control of, one or more operating businesses
      in
      the financial services industry, following our initial business combination,
      we
      will become subject to the regulatory regimes that govern the business or
      businesses we acquire. The financial services industry is subject to extensive
      regulation. Many regulators, including U.S. and foreign government agencies
      and
      self-regulatory organizations, as well as state securities commissions and
      attorneys general, are empowered to conduct administrative proceedings and
      investigations that can result in, among other things, censure, fine, the
      issuance of cease-and-desist orders, prohibitions against engaging in some
      lines
      of business or the suspension or expulsion of a broker-dealer or investment
      adviser. The requirements imposed by regulators are designed to ensure the
      integrity of the financial markets and to protect customers and other third
      parties who deal with financial services firms and are not designed to protect
      our stockholders. Regulations and investigations may result in limitations
      on
      our activities such as the restrictions imposed on several leading securities
      firms as part of a settlement these firms reached with federal and state
      securities regulators and self-regulatory organizations in 2003 to resolve
      investigations into equity research analysts’ alleged conflicts of
      interest.





Governmental
      and self-regulatory organizations, including the SEC, the NASD and national
      securities exchanges such as the New York Stock Exchange, impose and enforce
      regulations on financial services companies. U.S. self-regulatory organizations
      adopt rules, subject to approval by the SEC, that govern aspects of the
      financial services industry and conduct periodic examinations of the operations
      of registered broker-dealers and investment advisers. For example, U.S.
      broker-dealers are subject to rules and regulations that cover all aspects
      of
      the securities business including sales methods and trade practices; use and
      safekeeping of customer funds and securities; capital structures; recordkeeping;
      the preparation of research; the extension of credit and the conduct of officers
      and employees. The types of regulations to which investment advisers are subject
      are also extensive and include: recordkeeping; fee arrangements; client
      disclosure; custody of customer assets; and the conduct of officers and
      employees.





The
      SEC,
      the NASD and various regulatory agencies also have stringent rules with respect
      to the maintenance of specific levels of net capital by securities brokerage
      firms. Failure to maintain the required net capital may subject a firm to
      suspension or revocation of registration by the SEC and suspension or expulsion
      from the NASD and other regulatory bodies, which ultimately could prevent any
      broker-dealers that we acquire or acquire control of from performing as a
      broker-dealer. In addition, a change in the net capital rules, the imposition
      of
      new rules or any unusually large charge against net capital could limit the
      operations of broker-dealers, which could harm our business if we were to
      consummate a business combination with a securities brokerage firm.





The
      regulatory environment in which we will operate is also subject to modifications
      and further regulations. New laws or regulations or changes in the enforcement
      of existing laws or regulations applicable to us also may adversely affect
      our
      business, and our ability to function in this environment will depend on our
      ability to constantly monitor and react to these changes. For example, recently
      the insurance industry has been subject to a significant level of scrutiny
      by
      various regulatory bodies, including state attorneys general and insurance
      departments, concerning certain practices within the insurance industry. These
      practices include, without limitation, the receipt of contingent commissions
      by
      insurance brokers and agents from insurance companies and the extent to which
      such compensation has been disclosed, bid rigging and related matters. As a
      result of these and related matters, including actions taken by the New York
      State Attorney General, there have been a number of proposals to modify various
      state laws and regulations regarding insurance agents and brokers, including
      proposals by the National Association of Insurance Commissioners, that could
      impose additional legal obligations, including disclosure obligations, on us
      if
      we were to offer insurance or other financial products.




**Employees**





We
      currently have three executive officers, two of whom are also members of our
      board of directors. We have no employees. These individuals are not obligated
      to
      devote any specific number of hours to our matters and intend to devote only
      as
      much time as they deem necessary to our affairs. We do not intend to have any
      full-time employees prior to the consummation of our initial business
      combination.





**Periodic
      Reporting and Audited Financial Statements**





We
      have
      registered our units, common stock and warrants, as well as the purchase option
      provided to ThinkEquity Partners LLC and EarlyBirdCapital, Inc., under the
      Securities Exchange Act of 1934, and have reporting obligations thereunder,
      including the requirement that we file annual and quarterly reports with the
      SEC. In accordance with the requirements of the Securities Exchange Act of
      1934,
      our annual reports will contain financial statements audited and reported on
      by
      our independent registered public accounting firm.




12





We
      will
      not acquire a target business if audited financial statements in conformity
      with
      United States generally accepted accounting principles cannot be obtained for
      the target business. Additionally, our management will provide stockholders
      with
      audited financial statements, prepared in accordance with generally accepted
      accounting principles, of the prospective businesses as part of the proxy
      solicitation materials sent to stockholders to assist them in assessing a
      business combination. The requirement of having available audited financial
      statements may limit the pool of potential target businesses available for
      acquisition.





**Risk
      Factors**




*In
      addition to other information included in this Annual Report on Form 10-KSB/A,
      the following factors should be considered in evaluating our business and future
      prospects.*





**Risks
      Related To Our Business**





***We
      are a development stage company with no operating history and, accordingly,
      you
      will have no basis upon which to evaluate our ability to achieve our business
      objective.***





We
      are a
      recently incorporated development stage company with no operating results to
      date. Because we do not have an operating history, you will have no basis upon
      which to evaluate our ability to achieve our business objective, which is to
      acquire one or more operating businesses. We will not generate any revenues
      until, at the earliest, after the consummation of our initial business
      combination. We cannot assure you as to when, or if, our initial business
      combination will occur.





***We
      may not be able to consummate our initial business combination within the
      required time frame, in which case, we will be forced to
      liquidate.***





We
      must
      complete our initial business combination with one or more operating businesses
      whose fair market value, collectively, is equal to at least 80% of our net
      assets at the time of the acquisition within 18 months after the consummation
      of
      our initial public offering (or within 24 months after the consummation of
      our
      initial public offering if a letter of intent, agreement in principle or a
      definitive agreement has been executed within 18 months after the consummation
      of our initial public offering and the initial business combination relating
      thereto has not yet been consummated within such 18-month period). If we fail
      to
      consummate our initial business combination within the required time frame,
      we
      will be forced to liquidate. We may not be able to find suitable target
      businesses within the required time frame. In addition, our negotiating position
      and our ability to conduct adequate due diligence on any potential target may
      be
      reduced as we approach the deadline for the consummation of our initial business
      combination.




***If
      we are forced to liquidate before our initial business combination, our public
      stockholders will receive less than $6.00 per share upon distribution of the
      funds held in the trust account and our warrants will expire with no
      value.***





If
      we are
      unable to complete our initial business combination and are forced to liquidate
      our assets, the per-share liquidation amount will be less than $6.00 (the price
      per unit sold in our initial public offering) because of the expenses of our
      initial public offering, our general and administrative expenses and the cost
      of
      seeking our initial business combination. Furthermore, there will be no
      distribution with respect to our outstanding warrants and, accordingly, the
      warrants will expire with no value if we liquidate before the completion of
      our
      initial business combination.





***Our
      stockholders will not be entitled to protections normally afforded to investors
      of blank check companies under federal securities
      laws.***





Because
      the net proceeds of our initial public offering are intended to be used to
      complete a business combination with one or more operating businesses that
      have
      not been identified, we may be deemed to be a blank check company under federal
      securities laws. However, since we have net tangible assets in excess of
      $5,000,000, we are exempt from the rules promulgated by the SEC to protect
      investors in blank check companies, such as Rule 419. Accordingly, investors
      will not be afforded the benefits or protections of those rules.




13





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





Between
      August 1, 2003 and March 31, 2006, based upon publicly available
      information, approximately 52 similarly structured blank check companies have
      completed initial public offerings. Of these companies, six companies have
      consummated a business combination, while ten other companies have announced
      they have entered into a letter of intent or a definitive agreement for a
      business combination, but have not consummated such business combination.
      Accordingly, as of March 31, 2006, there are approximately 36 “blank check”
companies with approximately $2.7 billion in trust that are seeking to carry
      out
      a business plan similar to our business plan. Furthermore, there are a number
      of
      blank check companies that have filed registration statements for initial public
      offerings that have not yet been completed, and there are likely to be more
      blank check companies filing registration statements for initial public
      offerings after the date of this report and prior to our completion of our
      initial business combination. While some of those companies must complete a
      business combination in specific industries, a number of them may consummate
      a
      business combination in any industry they choose or have very broad definitions
      of the industry they will target. Therefore, we may be subject to competition
      from these and other companies seeking to consummate a business plan similar
      to
      ours. Because of this competition, we may not be able to effect our initial
      business combination within the required time period. Further, because only
      16
      of such companies have either consummated a business combination or entered
      into
      a definitive agreement for a business combination, it may indicate that there
      are fewer attractive target businesses available to such entities or that many
      privately held target businesses are not inclined to enter into these types
      of
      transactions with publicly-held blank check companies like ours. If we are
      unable to consummate our initial business combination with a target business
      within the prescribed time periods, we will be forced to liquidate.





***If
      third parties bring claims against us, the proceeds held in the trust account
      could be reduced and the per-share liquidation price received by our public
      stockholders will be less than $5.59 per share.***





Placing
      the funds in a trust account may not protect those funds from third-party claims
      against us. Although we will seek to have all third parties, including any
      vendors, prospective target businesses and other entities with whom we engage
      in
      business, enter into agreements with us waiving any right, title, interest
      or
      claim of any kind in or to any monies held in the trust account for the benefit
      of our public stockholders, there is no guarantee that they will enter into
      such
      agreements. Nor is there any guarantee that such entities will agree to waive
      any claims they may have in the future as a result of, or arising out of, any
      negotiations, contracts or agreements with us and will not seek recourse against
      the trust account for any reason. Accordingly, the proceeds held in the trust
      account could be subject to claims that could take priority over the claims
      of
      our public stockholders and the per-share liquidation price could be less than
      $5.59, plus interest, due to claims of such creditors or other entities. If
      we
      are unable to complete our initial business combination and are forced to
      liquidate, Richard S. Foote, our president, chief executive officer and
      director, and R. Bruce Cameron, our chairman of the board, have each agreed
      to
      be personally liable for ensuring that the proceeds in the trust account are
      not
      reduced by the claims of vendors for services rendered or products sold to
      us,
      as well as claims of prospective target businesses for fees and expenses of
      third parties that we agree in writing to pay in the event we do not complete
      a
      combination with such business. However, Messrs. Foote and Cameron may not
      be able to satisfy those obligations. Moreover, under Delaware law, our
      stockholders may be held liable for claims by third parties to the extent that
      we have not paid such claims and our stockholders have received liquidating
      distributions from us.




***Because
      we have not selected any prospective target businesses, public stockholders
      will
      be unable to ascertain the merits or risks of any particular target business’
operations.***





Because
      we have not yet entered into a binding agreement with any prospective target
      businesses with respect to a business combination, there is no basis to evaluate
      the possible merits or risks of any particular target business’ operations,
      financial condition or prospects. To the extent we complete a business
      combination, we may be affected by numerous risks inherent in the business
      operations of those entities. Although our management will endeavor to evaluate
      the risks inherent in a particular target business, we may not properly
      ascertain or assess all of the significant risk factors, and because of the
      requirement that we complete our initial business combination within the
      required time frame (18 months after the consummation of our initial public
      offering or 24 months after the consummation of our initial public offering
      if a
      letter of intent, agreement in principle or a definitive agreement has been
      executed within 18 months after the consummation of our initial public offering
      and the initial business combination relating thereto has not yet been
      consummated within such 18-month period) we may not have adequate time to
      complete due diligence. We also cannot assure you that an investment in our
      units will not ultimately prove to be less favorable to investors in our initial
      public offering than a direct investment, if an opportunity were available,
      in
      any particular target business.





***A
      significant portion of working capital could be expended in pursuing
      acquisitions that are not consummated.***





The
      investigation of each specific target business and the negotiation, drafting,
      and execution of relevant agreements, disclosure documents, and other
      instruments requires substantial management time and attention and substantial
      costs for accountants, attorneys and others. In addition, we may opt to make
      down-payments or pay exclusivity or similar fees in connection with structuring
      and negotiating a business combination. If a decision is made not to complete
      a
      specific business combination, the costs incurred up to that point for the
      proposed transaction, potentially including down payments or exclusivity or
      similar fees, would not be recoverable. Furthermore, even if an agreement is
      reached relating to a specific target business, we may fail to consummate the
      transaction for any number of reasons, including those beyond our control such
      as that 20% or more of our public stockholders vote against the transaction
      and
      subsequently also exercise their conversion rights even though a majority of
      our
      public stockholders approve the transaction. Any such event will result in
      a
      loss to us of the related costs incurred, which could materially adversely
      affect subsequent attempts to locate and acquire or merge with another business.




14





***We
      may have insufficient resources to cover our operating expenses and the expenses
      of consummating a business combination.***





We
      have
      reserved approximately $1,149,567 from the proceeds of our initial public
      offering to cover our operating expenses for the next 24 months and to cover
      the
      expenses incurred in investigating and structuring our initial business
      combination. This amount is based on management’s estimates of the costs needed
      to fund our operations for the next 24 months and consummate our initial
      business combination. Those estimates may prove inaccurate, especially if a
      portion of the available proceeds is used to make a down payment or pay
      exclusivity or similar fees in connection with a business combination that
      is
      not consummated. If we do not have sufficient proceeds available to fund our
      expenses, we may be forced to obtain additional financing, either from our
      management or the initial stockholders or from third parties. We may not be
      able
      to obtain additional financing and our initial stockholders and management
      are
      not obligated to provide any additional financing. If we do not have sufficient
      proceeds and cannot find additional financing, we may be forced to liquidate
      prior to consummating our initial business combination.




***We
      may issue additional shares of our capital stock, including through convertible
      debt securities, to complete a business combination, which would reduce the
      equity interest of our stockholders and likely cause a change in control of
      our
      ownership.***





Our
      certificate of incorporation authorizes the issuance of up to 50,000,000 shares
      of common stock, par value $0.0001 per share, and 1,000,000 shares of preferred
      stock, par value $0.0001. There are 23,534,999 authorized but unissued shares
      of
      our common stock available for issuance (after appropriate reservation for
      the
      issuance of shares upon full exercise of our outstanding warrants and the
      purchase option granted to ThinkEquity Partners LLC and EarlyBirdCapital, Inc.)
      and all of the 1,000,000 shares of preferred stock available for issuance.
      Although we have no commitments as of the date of our initial public offering
      to
      issue any additional securities, we may issue a substantial number of additional
      shares of our common stock or preferred stock, or a combination of both,
      including through convertible debt securities, to complete a business
      combination. The issuance of additional shares of our common stock or any number
      of shares of preferred stock, including upon conversion of any debt
      securities:





·
            may
                significantly reduce the equity interest of investors in our initial
                public offering;·
            will
                likely cause a change in control if a substantial number of our shares
                of
                common stock or voting preferred stock are issued, which may affect,
                among
                other things, our ability to use our net operating loss carryforwards,
                if
                any, and most likely also result in the resignation or removal of
                our
                present officers and directors; and·
            may
                adversely affect prevailing market prices for our common
                stock.





***We
      may issue notes or other debt securities, or otherwise incur substantial debt,
      to complete a business combination, which may adversely affect our leverage
      and
      financial condition.***





We
      may
      choose to incur a substantial amount of debt to finance a business combination.
      The incurrence of debt:





·
            may
                lead to default and foreclosure on our assets if our operating revenues
                after a business combination are insufficient to pay our debt
                obligations;·
            may
                cause an acceleration of our obligation to repay the debt, even if
                we make
                all principal and interest payments when due, if we breach the covenants
                contained in the terms of any debt documents, such as covenants that
                require the maintenance of certain financial ratios or reserves,
                without a
                waiver or renegotiation of such covenants;·
            may
                create an obligation to immediately repay all principal and accrued
                interest, if any, upon demand to the extent any debt securities are
                payable on demand;·
            may
                hinder our ability to obtain additional financing, if necessary,
                to the
                extent any debt securities contain covenants restricting our ability
                to
                obtain additional financing while such security is outstanding, or
                to the
                extent our existing leverage discourages other potential
                investors;·
            may
                make it more difficult or impossible for us to pay dividends on our
                common
                stock;




15




·
            may
                require us to dedicate a substantial portion of our cash flow to
                pay
                principal and interest on our debt, which will reduce the funds available
                for dividends on our common stock, working capital, capital expenditures,
                acquisitions and other general corporate purposes;·
            may
                limit our flexibility in planning for and reacting to changes in
                our
                business and in the industry in which we operate;·
            may
                make us more vulnerable to adverse changes in general economic, industry
                and competitive conditions and adverse changes in government
                regulation;·
            may
                limit our ability to borrow additional amounts for working capital,
                capital expenditures, acquisitions, debt service requirements, execution
                of our strategy, or other purposes; and·
            may
                place us at a disadvantage compared to our competitors who have less
                debt.





Any
      of
      the above listed factors could materially and adversely affect our business
      and
      results of operations. Furthermore, if our debt bears interest at floating
      rates, our interest expense could increase if interest rates rise. If we do
      not
      have sufficient earnings to service any debt incurred, we would likely need
      to
      refinance all or part of that debt, sell assets, borrow more money or sell
      securities and we may be unable to do so on commercially reasonable terms or
      at
      all.




***Our
      ability to successfully effect our initial business combination and to be
      successful afterwards will be completely dependent upon the efforts of our
      key
      personnel, some of whom may join us following our initial business combination
      and may be unfamiliar with the requirements of operating a public company,
      which
      may adversely affect our operations.***





Our
      ability to successfully effect our initial business combination will be
      completely dependent upon the efforts of our key personnel. The future role
      of
      our key personnel following our initial business combination, however, cannot
      presently be fully ascertained. Specifically, although the members of our
      current management currently intend to continue to be associated with us, they
      are not obligated to remain with us subsequent to our initial business
      combination, and we cannot assure you that the resignation or retention of
      our
      current management will be included as a term or condition in any agreement
      with
      respect to our initial business combination. Although we expect one or more
      members of our management to serve on our board of directors following our
      initial business combination, subject to continued election by the stockholders,
      it is unlikely that they will operate the target company on a day-to-day basis.
      Accordingly, we anticipate employing other personnel following our initial
      business combination. While we intend to closely scrutinize any additional
      individuals we engage after our initial business combination, we cannot assure
      you that our assessment of these individuals will prove to be correct or that
      these individuals will remain with us. These individuals may be unfamiliar
      with
      the requirements of operating a public company as well as United States
      securities laws which could cause us to expend time and resources helping them
      become familiar with such laws. This could be expensive and time-consuming
      and
      could lead to various regulatory issues that may materially adversely affect
      our
      operations.





***The
      loss of key executives could adversely affect our ability to
      operate.***





Our
      operations are dependent upon the relatively small group of our key executives,
      R. Bruce Cameron, our chairman of the board, Richard S. Foote, our president
      and
      chief executive officer, and R. Bradley Forth, our executive vice president,
      chief financial officer and secretary. We believe that our success depends
      on
      the continued service of these individuals. Although Messrs. Cameron, Foote
      and Forth currently intend to continue to be associated with us following our
      initial business combination, we cannot assure you that they will remain with
      us
      for the foreseeable future. We do not have employment contracts with any of
      our
      current executives. The unexpected loss of the services of one or more of these
      executives could have a detrimental effect on us.





***Our
      directors may have a conflict of interest in identifying and selecting target
      businesses.***





Our
      board
      of directors may have a conflict of interest in determining whether a particular
      target business is appropriate for a business combination. The personal and
      financial interests of our directors and officers may influence them to
      condition an acquisition on their retention with us post-closing, and to view
      more favorably acquisition targets that offer any of our existing management
      or
      stockholders a continuing relationship, as an officer, director, consultant
      or
      other third-party service provider, after the business combination.





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





Our
      officers and directors are not required to commit their full time to our
      affairs, which may result in a conflict of interest in allocating their time
      between our operations and other businesses. We do not intend to have any
      full-time employees prior to the consummation of our initial business
      combination. Each of our officers and directors is engaged in other significant
      business endeavors and is not obligated to contribute any specific number of
      hours per week to our affairs. If our officers’ and directors’ other business
      affairs require them to devote substantial amounts of time to such affairs
      in
      excess of their current commitment levels, it could limit their ability to
      devote time to our affairs and could have a negative impact on our ability
      to
      consummate our initial business combination. For a more detailed discussion
      of
      the potential conflicts of interest of which you should be aware, see Item
      12
      entitled “Certain Relationships and Related Transactions.”




16




***Our
      officers and directors may have, or in the future may have, fiduciary
      obligations to other entities, which could cause additional conflicts of
      interest in determining to which entity a particular business opportunity should
      be presented.***





Our
      officers and directors may in the future become affiliated with entities,
      including other blank check companies, engaged in business activities similar
      to
      those intended to be conducted by us. Further, our officers and directors are
      affiliated with other entities which may be presented with business
      opportunities, either for themselves or for their clients, which may also be
      appropriate for presentation to us. Specifically, Messrs. Cameron, Foote
      and Forth are either employed by or equity owners of Berkshire Capital, a
      registered broker-dealer that provides financial advisory services to clients
      in
      connection with mergers and acquisitions in the financial services industry.
      Berkshire Capital’s clients may compete with us for acquisitions in the
      financial services industry and Berkshire Capital may have a duty to present
      certain acquisition opportunities to its clients before it presents them to
      us.
      Similarly, one of our directors , Russell L. Appel, is the president of
      Praedium, a real estate investment firm, and he may have a duty to present
      certain acquisition opportunities in the real estate investment management
      area
      to Praedium or affiliated entities before he presents them to us. We cannot
      assure you that these or other conflicts of interest arising out of our
      officers’ and directors’ affiliations with other entities would be resolved in
      our favor. For a more detailed discussion of our management’s business
      affiliations and the potential conflicts of interest of which you should be
      aware, see Item 9 entitled “ Directors,
      Executive Officers, Promoters and Control Persons; Compliance with Section
      16(A)
      of The Exchange Act” and Item
      12 entitled “Certain Relationships and Related Transactions.”





***We
      may engage in a business combination with one or more target businesses that
      have relationships with entities that may be affiliates of our initial
      stockholders, which may raise potential conflicts.***





Although
      we do not anticipate acquiring or acquiring control of businesses affiliated
      with our initial stockholders in connection with our initial business
      combination, we have agreed to obtain an opinion from an independent investment
      banking firm regarding the fairness to our stockholders from a financial point
      of view of a business combination with one or more businesses affiliated with
      our initial stockholders. Despite this agreement, potential conflicts of
      interest may still exist and, as a result, the terms of our initial business
      combination may not be as advantageous to our public stockholders as they would
      be absent any conflicts of interest.





In
      particular, Berkshire Capital, in its capacity as a financial advisor to
      its clients, may present us with acquisition opportunities on behalf of its
      clients. We will not pay Berkshire Capital any finder’s fee or other
      compensation for services rendered to us prior to or in connection with the
      consummation of our initial business combination, other than $7,500 per month
      in
      connection with the general and administrative services arrangement for services
      rendered to us. Also, the completion of a business combination between us and
      an
      entity owned by a client of Berkshire Capital or any other business in which
      our
      officers or directors may have an interest could enhance their prospects
      for future business from such client. Because certain of our officers and
      directors are employees and beneficial owners of Berkshire Capital and other
      businesses, they may have a conflict of interest in determining whether to
      recommend a business combination with a Berkshire Capital client or an entity
      affiliated with a client of Berkshire Capital or any other business in which
      our
      officers or directors may have an interest. For a more detailed discussion
      of
      our management’s business affiliations and the potential conflicts of interest
      of which you should be aware, see Item 9 entitled “ Directors,
      Executive Officers, Promoters and Control Persons; Compliance with Section
      16(A)
      of The Exchange Act” and Item
      12 entitled “Certain Relationships and Related Transactions.”





***Because
      certain of our directors and officers own shares of our common stock that will
      not participate in liquidation distributions, they may have a conflict of
      interest in determining whether a particular target business is appropriate
      for
      a business combination.***





All
      of
      our directors and officers who own stock in our company have, with respect
      to
      shares of our common stock acquired by them prior to our initial public offering
      and 166,667 shares of common stock included in the units our initial
      stockholders purchased in the private placement, waived their right to receive
      distributions upon our liquidation in the event we fail to complete our initial
      business combination. These shares and any warrants owned by our officers and
      directors and their affiliates will be worthless if we do not consummate a
      business combination. The personal and financial interests of our directors
      and
      officers may influence their motivation in identifying and selecting target
      businesses and completing our initial business combination in a timely manner.
      Consequently, our directors’ and officers’ discretion in identifying and
      selecting suitable target businesses may result in a conflict of interest when
      determining whether the terms, conditions and timing of a particular business
      combination are appropriate and in our stockholders’ best interest.




17




***Our
      directors’ and officers’ interests in obtaining reimbursement for any
      out-of-pocket expenses incurred by them may lead to a conflict of interest
      in
      determining whether a particular target business is appropriate for a business
      combination and in the public stockholders’ best
      interest.***





None
      of
      our officers, directors or initial stockholders will receive any compensation
      for their due diligence efforts, other than reimbursement of any out-of-pocket
      expenses they may incur on our behalf while performing due diligence of
      prospective target businesses. Any reimbursement of out-of-pocket expenses
      would
      occur at our discretion. To the extent such out-of-pocket expenses exceed the
      available proceeds not deposited in the trust account, such out-of-pocket
      expenses would not be reimbursed by us unless we consummate our initial business
      combination. The amount of available proceeds is based on management’s estimates
      of the funds needed to fund our operations for the next 24 months and consummate
      our initial business combination. Those estimates may prove to be inaccurate,
      especially if a portion of the available proceeds is used to make a down payment
      in connection with a business combination or pay exclusivity or similar fees
      or
      if we expend a significant portion in pursuit of an acquisition that is not
      consummated. The financial interest of our officers and directors could
      influence their motivation in selecting a target business and thus, there may
      be
      a conflict of interest when determining whether a particular business
      combination is in the public stockholders’ best interest.





***If
      our common stock becomes subject to the SEC’s penny stock rules, broker-dealers
      may experience difficulty in completing customer transactions and trading
      activity in our securities may be adversely affected.***





If
      at any
      time we have net tangible assets of $5,000,000 or less and our common stock
      has
      a market price per share of less than $5.00, transactions in our common stock
      may be subject to the “penny stock” rules promulgated under the Securities
      Exchange Act of 1934, as amended. Under these rules, broker-dealers who
      recommend such securities to persons other than institutional accredited
      investors must:





·
            make
                a special written suitability determination for the
                purchaser;·
            receive
                the purchaser’s written agreement to a transaction prior to
                sale;·
            provide
                the purchaser with risk disclosure documents that identify certain
                risks
                associated with investing in “penny stocks” and that describe the market
                for these “penny stocks,” as well as a purchaser’s legal remedies;
                and·
            obtain
                a signed and dated acknowledgment from the purchaser demonstrating
                that
                the purchaser has actually received the requiredrisk
                disclosure document before a transaction in “penny stock” can be
                completed.





If
      our
      common stock becomes subject to these rules, broker-dealers may find it
      difficult to effect customer transactions and trading activity in our securities
      may be adversely affected. As a result, the market price of our securities
      may
      be depressed, and you may find it more difficult to sell our
      securities.





***It
      is probable that we will be able to complete only one business combination,
      which may cause us to be solely dependent on a single business and a limited
      number of services.***





The
      net
      proceeds from our initial public offering and the private placement provided
      us
      with approximately $43,765,801 of which we will seek to use a portion to
      complete our initial business combination. Although we may seek to effect a
      business combination with more than one target business, our initial
      business combination must be with one or more operating businesses whose
      fair market value, collectively, is at least equal to 80% of our net assets
      at
      the time of the acquisition. At the time of our initial business combination,
      we
      may not be able to acquire or acquire control of more than one target business
      because of various factors, including insufficient financing or the difficulties
      involved in consummating the contemporaneous acquisition of more than one
      operating company. Therefore, it is probable that following our initial business
      combination we will have only a single operating business, which may have only
      a
      limited number of services. The resulting lack of diversification
      may:




·
            result
                in our dependence upon the performance of a single or small number
                of
                operating businesses;




18




·
            result
                in our dependence upon the development or market acceptance of a
                single or
                limited number of processes or services; and·
            subject
                us to numerous economic, competitive and regulatory developments,
                any or
                all of which may have a substantial adverse impact upon the particular
                industry in which we may operate subsequent to our initial business
                combination.




In
      this
      case, we will not be able to diversify our operations or benefit from the
      possible spreading of risks or offsetting of losses, unlike other entities
      that
      may have the resources to complete several business combinations in different
      industries or different areas of a single industry so as to diversify risks
      and
      offset losses. Further, the prospects for our success may be entirely dependent
      upon the future performance of the initial target business or businesses we
      acquire.





***Because
      of our limited resources and the significant competition for business
      combination opportunities, we may not be able to consummate an attractive
      business combination.***





We
      expect
      to encounter intense competition from other entities having a business objective
      similar to ours, including venture capital funds, leveraged buyout funds,
      operating businesses and other entities and individuals, both foreign and
      domestic, competing for acquisitions. In addition, we will compete with numerous
      integrated financial services organizations, insurance brokers, insurance
      companies, banks and other entities to acquire high quality independent
      financial services firms. Many of these entities are well established and have
      extensive experience in identifying and effecting business combinations directly
      or through affiliates. Many of these competitors possess greater technical,
      human and other resources than we do and our financial resources will be
      relatively limited when contrasted with those of many of these competitors.
      Our
      ability to compete in acquiring certain sizable target businesses will be
      limited by our available financial resources. This inherent competitive
      limitation gives others an advantage in pursuing the acquisition of certain
      target businesses. Further:





·
            our
                obligation to seek stockholder approval of our initial business
                combination may delay the consummation of a
                transaction;·
            the
                requirement that the target business have audited financial statements
                at
                the time of acquisition in conformity with United Statesgenerally
                accepted accounting principles may limit the acquisition targets
                we may
                pursue;·
            our
                obligation to convert into cash up to 20% of the shares of our common
                stock held by our public stockholders in certain instances may reduce
                the
                resources available for a business combination; and·
            our
                outstanding warrants and the purchase option granted to ThinkEquity
                Partners LLC and EarlyBirdCapital, Inc., and the potential future
                dilution
                they represent, may not be viewed favorably by certain target
                businesses.





Any
      of
      these obligations may place us at a competitive disadvantage in successfully
      negotiating a business combination, particularly against a competitor that
      does
      not need stockholder approval.





In
      addition, because our initial business combination may entail the
      contemporaneous acquisition of several operating businesses and may be with
      different sellers, we may be unable to convince such sellers to agree that
      the
      purchase of their businesses is contingent upon the simultaneous closings of
      the
      other acquisitions.





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





Although
      we believe that the net proceeds of our initial public offering and the private
      placement will be sufficient to allow us to consummate our initial business
      combination, we have not yet entered into a binding agreement with any
      prospective target business and we cannot ascertain the capital requirements
      for
      any particular business combination. If we require further funds, either because
      of the size of the business combination or the depletion of the available net
      proceeds in search of target businesses, or because we become obligated to
      convert into cash a significant number of shares from dissenting stockholders,
      we will be required to seek additional financing through the issuance of equity
      or debt securities or other financing arrangements. We may not be able to obtain
      such financing on acceptable terms, or at all. To the extent that additional
      financing proves to be unavailable when needed to consummate a particular
      business combination, we would be compelled to restructure or abandon that
      particular business combination and seek alternative target business candidates.
      In addition, if we consummate a business combination, we may require additional
      financing to fund the operations or growth of the target business or businesses.
      The failure to secure additional financing could have a material adverse effect
      on the continued development or growth of the target business or businesses.
      None of our officers, directors or stockholders is required to provide any
      financing to us in connection with or after the consummation of a business
      combination.




19





***Our
      initial stockholders, including officers and directors, control a substantial
      interest in us and thus may influence certain actions requiring stockholder
      vote.***





Immediately
      following the consummation of our initial public offering and the private
      placement, our initial stockholders collectively owned approximately 19.6%
      of
      our issued and outstanding shares of common stock which could permit them to
      effectively influence the outcome of all matters requiring approval by our
      stockholders at such time, including the election of directors and approval
      of
      significant corporate transactions, following the consummation of our initial
      business combination. In connection with the vote required for our initial
      business combination, all of our initial stockholders have agree to vote the
      shares of common stock owned by them, including any shares offered by this
      prospectus or acquired following our initial public offering, in accordance
      with
      the majority of the shares of common stock voted by the public stockholders
      (other than our initial stockholders).





Our
      board
      of directors will be divided into three classes, each of which will generally
      serve for a term of three years with only one class of directors being elected
      in each year. It is unlikely that there will be an annual meeting of
      stockholders to elect new directors prior to the consummation of our initial
      business combination, in which case all of the current directors will continue
      in office at least until the consummation of the business combination. If there
      is an annual meeting, as a consequence of our “staggered” board of directors,
      only a minority of the board of directors will be considered for election and
      our initial stockholders, because of their ownership position, will have
      considerable influence regarding the outcome. Accordingly, our initial
      stockholders will continue to exert control at least until the consummation
      of
      our initial business combination and may continue to exercise substantial
      control after our initial business combination due to their significant
      ownership. In addition, the affiliates and relatives of our initial stockholders
      are not prohibited from purchasing units in our initial public offering or
      shares in the aftermarket, and they will have full voting rights with respect
      to
      any shares of common stock they may acquire, either through our initial public
      offering or in subsequent market transactions. If they do, our initial
      stockholders, through their affiliates and relatives, may have considerable
      influence upon the vote in connection with our initial business
      combination.





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





In
      connection with our initial public offering and the private placement, as part
      of the units, we issued warrants to purchase 15,820,000 shares of common stock.
      We also issued an option to ThinkEquity Partners LLC and EarlyBirdCapital,
      Inc.
      which, if exercised, will result in the issuance of 336,667 shares of
      common stock and warrants to purchase 673,334 shares of common stock. To
      the extent we issue shares of common stock to effect a business combination,
      the
      potential for the issuance of substantial numbers of additional shares upon
      exercise of these warrants could make us a less attractive acquisition vehicle
      in the eyes of a target business as such securities, when exercised, will
      increase the number of issued and outstanding shares of our common stock and
      reduce the value of the shares issued to complete the business combination.
      Accordingly, our warrants may make it more difficult to effectuate a business
      combination or increase the acquisition cost o f a target business.
      Additionally, the sale, or even the possibility of sale, of the shares
      underlying the warrants could have an adverse effect on the market price for
      our
      securities or on our ability to obtain future public financing. If and to the
      extent these warrants are exercised, our stockholders may experience dilution
      to
      their holdings.




***If
      our initial stockholders exercise their registration rights, it may have an
      adverse effect on the market price of our common stock and the existence of
      these rights may make it more difficult to effect a business
      combination.***





Our
      initial stockholders are entitled to demand that we register the resale of
      their
      shares of common stock owned prior to our initial public offering in certain
      circumstances. The holders of the majority of these shares may elect to exercise
      these registration rights at any time after the date on which their shares
      of
      common stock are released from escrow. Our initial stockholders are also
      entitled to demand that we register the resale of the common stock and warrants
      underlying the units purchased by them in the private placement at any time
      after consummation of our initial business combination. If they do so, there
      will be an additional 1,891,667 shares of common stock eligible for trading
      in
      the public market (and potentially another 333,334 shares of common stock
      issuable to our initial stockholders upon exercise of warrants included as
      part
      of the units they purchased in the private placement). The presence of this
      additional number of shares of common stock eligible for trading in the public
      market may have an adverse effect on the market price of our common stock.
      In
      addition, the existence of these rights may make it more difficult to effect
      a
      business combination or increase the acquisition cost of a target business,
      as
      the stockholders of a particular target business may be discouraged from
      entering into a business combination with us or will request a higher price
      for
      their securities as a result of these registration rights and the potential
      future effect their exercise may have on the trading market for our common
      stock.




20





***Our
      securities are quoted on the OTC Bulletin Board, which limits the liquidity
      and
      price of our securities more than if our securities were quoted or listed on
      the
      Nasdaq Stock Market or a national exchange.***




Our
      securities are quoted on the OTC Bulletin Board, a NASD-sponsored and operated
      inter-dealer automated quotation system for equity securities not included
      in
      the Nasdaq Stock Market. Quotation of our securities on the OTC Bulletin Board
      limits the liquidity and price of our securities more than if our securities
      were quoted or listed on The Nasdaq Stock Market or a national exchange. Lack
      of
      liquidity may limit the price at which you may be able to sell our securities
      or
      your ability to sell our securities at all. We cannot assure you, however,
      that
      such securities will continue to be authorized for quotation on the OTC Bulletin
      Board or any other market in the future.





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





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





·
            restrictions
                on the nature of our investments; and·
            restrictions
                on the issuance of securities, each of which may make it difficult
                for us
                to complete a business combination.





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





·
            registration
                as an investment company;·
            adoption
                of a specific form of corporate structure; and·
            reporting,
                record keeping, voting, proxy and disclosure requirements and other
                rules
                and regulations.





We
      do not
      believe that our anticipated principal activities will subject us to the
      Investment Company Act of 1940. To this end, the proceeds held in the trust
      account may only be invested by the trust agent in money market funds meeting
      conditions of the Investment Company Act of 1940 or securities issued or
      guaranteed by the United States. By restricting the investment of the proceeds
      to these instruments, we intend to meet the requirements for the exemption
      provided in Rule 3a-1 promulgated under the Investment Company Act of 1940.
      If
      we were deemed to be subject to the act, compliance with these additional
      regulatory burdens would require additional expense for which we have not
      allotted.




***Our
      directors may not be considered “independent” under the policies of the North
      American Securities Administrators Association, Inc. and, therefore, may take
      actions or incur expenses that are not deemed to be independently approved
      or
      independently determined to be in our best interest.***





Under
      the
      policies of the North American Securities Administrators Association, Inc.,
      an
      international organization devoted to investor protection, because certain
      of
      our directors owns shares of our securities and all our directors may receive
      reimbursement for out-of-pocket expenses incurred by them in connection with
      activities on our behalf such as identifying potential target businesses and
      performing due diligence on suitable business combinations, state securities
      administrators could take the position that such individuals are not
“independent.” If this were the case, they would take the position that we would
      not have the benefit of independent directors examining the propriety of
      expenses incurred on our behalf and subject to reimbursement. Additionally,
      there is no limit on the amount of out-of-pocket expenses that could be incurred
      and there will be no review of the reasonableness of the expenses by anyone
      other than our board of directors, which would include persons who may seek
      reimbursement, or a court of competent jurisdiction if such reimbursement is
      challenged. To the extent such out-of-pocket expenses exceed the available
      proceeds not deposited in the trust account, such out-of-pocket expenses would
      not be reimbursed by us unless we consummate a business combination. Although
      we
      believe that all actions taken by our directors on our behalf will be in our
      best interests, whether or not they are deemed to be “independent,” we cannot
      assure you that this will actually be the case. If actions are taken, or
      expenses are incurred that are actually not in our best interests, it could
      have
      a material adverse effect on our business and operations and the price of our
      stock held by the public stockholders.




21





***If
      the private placement was not conducted in compliance with applicable law,
      our
      initial stockholders may have the right to rescind their unit purchases.
 Their rescission rights, if any, may require us to refund an aggregate
      $1,000,002 to them, thereby reducing the amount in the trust account available
      to us to consummate a business combination, or, in the event we do not complete
      a business combination within the period prescribed by our initial public
      offering, the amount available to our public stockholders upon our
      liquidation.***





Although
      we believe that we have conducted the private placement in accordance with
      applicable law, there is a risk that the units, and shares and warrants
      underlying the units, should have been registered under the Securities Act
      of
      1933, as amended, and applicable blue sky laws. Although the initial
      stockholders have waived their rights, if any, to rescind their unit purchases
      as a remedy for our failure to register these securities, their waivers may
      not
      be enforceable in light of the public policy underlying Federal and state
      securities laws. If our initial stockholders bring a claim against us and
      successfully assert rescission rights, we may be required to refund an aggregate
      $1,000,002, with interest thereon, to them, thereby reducing the amount in
      the
      trust account available to us to consummate a business combination, or, in
      the
      event we do not complete a business combination within the period prescribed
      by
      our initial public offering, the amount available to our public stockholders
      upon our liquidation.




**Risks
      Related to the Financial Services Industry**





***We
      may be subject to significant regulatory requirements in connection with our
      efforts to consummate a business combination with a financial services firm,
      which may result in our failure to consummate our initial business combination
      within the required time frame and may force us to
      liquidate.***





Acquisitions
      of financial services companies are often subject to significant regulatory
      requirements and consents, and we will not be able to consummate a business
      combination with certain types of financial services companies without complying
      with applicable laws and regulations and obtaining required governmental or
      client consents. For example, if we were to attempt to acquire or acquire
      control of an investment management firm, we would have to obtain consents
      of
      the firm’s investment management clients or enter into new contracts with them,
      and there is no assurance that we would be able to obtain such consents or
      enter
      into new contracts. Similarly, if we were to attempt to acquire certain banks,
      we would be required to obtain the approvals of the Board of Governors of the
      Federal Reserve Systems, the Federal Deposit Insurance Corporation, the Office
      of the Comptroller of the Currency and/or state banking commissions. If our
      acquisition target were an insurance company, state insurance commissioners
      in
      the states where the insurance company does business would review an acquisition
      transaction and could prevent it by withholding their consent. The acquisition
      of a business in other sectors of the financial services industry may require
      similar approvals or consents.




We
      may
      not receive any such required approvals or we may not receive them in a timely
      manner, including as a result of factors or matters beyond our control.
      Satisfying any requirements of regulatory agencies may delay the date of our
      completion of our initial business combination beyond the required time frame
      (18 months after the consummation of our initial public offering or 24 months
      after the consummation of our initial public offering if a letter of intent,
      agreement in principle or a definitive agreement has been executed within 18
      months after the consummation of our initial public offering and the initial
      business combination relating thereto has not yet been consummated within such
      18-month period). If we fail to consummate our initial business combination
      within the required time frame we may be forced to liquidate.





***The
      financial services industry faces substantial regulatory and litigation risks
      and conflicts of interest, and, after the consummation of a business combination
      with a company in the financial services industry, we may face legal liability
      and reduced revenues and profitability if our services are not regarded as
      compliant or for other reasons.***





The
      financial services industry is subject to extensive regulation. Many regulators,
      including U.S. and foreign government agencies and self-regulatory
      organizations, as well as state securities commissions and attorneys general,
      are empowered to conduct administrative proceedings and investigations that
      can
      result in, among other things, censure, fine, the issuance of cease-and-desist
      orders, prohibitions against engaging in some lines of business or the
      suspension or expulsion of a broker-dealer or investment adviser. The
      requirements imposed by regulators are designed to ensure the integrity of
      the
      financial markets and to protect customers and other third parties who deal
      with
      financial services firms and are not designed to protect our stockholders.
      Regulations and investigations may result in limitations on our activities
      such
      as the restrictions imposed on several leading securities firms as part of
      a
      settlement these firms reached with federal and state securities regulators
      and
      self-regulatory organizations in 2003 to resolve investigations into equity
      research analysts’ alleged conflicts of interest.





Governmental
      and self-regulatory organizations, including the SEC, the NASD and national
      securities exchanges such as the New York Stock Exchange, impose and enforce
      regulations on financial services companies. U.S. self-regulatory organizations
      adopt rules, subject to approval by the SEC, that govern aspects of the
      financial services industry and conduct periodic examinations of the operations
      of registered broker-dealers and investment advisers. For example, U.S.
      broker-dealers are subject to rules and regulations that cover all aspects
      of
      the securities business including: sales methods and trade practices; use and
      safekeeping of customer funds and securities; capital structures; recordkeeping;
      the preparation of research; the extension of credit; and the conduct of
      officers and employees. The types of regulations to which investment advisers
      are subject are also extensive and include: recordkeeping; fee arrangements;
      client disclosure; custody of customer assets; and the conduct of officers
      and
      employees.




22





The
      SEC,
      the NASD and various regulatory agencies also have stringent rules with respect
      to the maintenance of specific levels of net capital by securities brokerage
      firms. Failure to maintain the required net capital may subject a firm to
      suspension or revocation of registration by the SEC and suspension or expulsion
      from the NASD and other regulatory bodies, which ultimately could prevent any
      broker-dealers that we acquire or acquire control of from performing as a
      broker-dealer. In addition, a change in the net capital rules, the imposition
      of
      new rules or any unusually large charge against net capital could limit the
      operations of broker-dealers, which could harm our business if we were to
      consummate a business combination with a securities brokerage firm.





The
      regulatory environment in which we will operate is also subject to modifications
      and further regulations. New laws or regulations or changes in the enforcement
      of existing laws or regulations applicable to us also may adversely affect
      our
      business, and our ability to function in this environment will depend on our
      ability to constantly monitor and react to these changes. For example, recently
      the insurance industry has been subject to a significant level of scrutiny
      by
      various regulatory bodies, including state attorneys general and insurance
      departments, concerning certain practices within the insurance industry. These
      practices include, without limitation, the receipt of contingent commissions
      by
      insurance brokers and agents from insurance companies and the extent to which
      such compensation has been disclosed, bid rigging and related matters. As a
      result of these and related matters, including actions taken by the New York
      State Attorney General, there have been a number of proposals to modify various
      state laws and regulations regarding insurance agents and brokers, including
      proposals by the National Association of Insurance Commissioners, that could
      impose additional legal obligations, including disclosure obligations, on us
      if
      we were to offer insurance or other financial products.




In
      recent
      years, the volume of claims and amount of damages claimed in litigation and
      regulatory proceedings against financial services firms has been increasing.
      After our initial business combination, our engagement agreements or
      arrangements may include provisions designed to limit our exposure to legal
      claims relating to our services, but these provisions may not protect us or
      may
      not be adhered to in all cases. We may also be subject to claims arising from
      disputes with employees for alleged discrimination or harassment, among other
      things. The risk of significant legal liability is often difficult to assess
      or
      quantify and its existence and magnitude often remain unknown for substantial
      periods of time. As a result, we may incur significant legal expenses in
      defending against litigation. Substantial legal liability or significant
      regulatory action against us could materially adversely affect our business,
      financial condition or results o f operations or cause significant reputational
      harm to us, which could seriously harm our business.





Financial
      services firms are subject to numerous conflicts of interest or perceived
      conflicts of interest. We will need to adopt various policies, controls and
      procedures to address or limit actual or perceived conflicts and regularly
      seek
      to review and update our policies, controls and procedures. However, these
      policies, controls and procedures may result in increased costs, additional
      operational personnel and increased regulatory risk. Failure to adhere to these
      policies and procedures may result in regulatory sanctions or client litigation.
      There have been a number of highly publicized cases involving fraud or other
      misconduct by employees in the financial services industry in recent years,
      and
      we run the risk that employee misconduct could occur. It is not always possible
      to deter or prevent employee misconduct and the precautions we take to prevent
      and detect this activity may not be effective in all cases.





***After
      the consummation of our initial business combination, we will face strong
      competition from financial services firms, many of whom have the ability to
      offer clients a wider range of products and services than we may be able to
      offer, which could lead to pricing pressures that could materially adversely
      affect our revenue and profitability.***





After
      consummation of our initial business combination in the financial services
      industry, we will compete with other firms - both domestic and foreign - on
      a
      number of factors, including the quality of our employees, transaction
      execution, our products and services, innovation, reputation and price. We
      may
      fail to attract new business and we may lose clients if, among other reasons,
      we
      are not able to compete effectively. We will also face significant competition
      as result of a recent trend toward consolidation in this industry. In the past
      several years, there has been substantial consolidation and convergence among
      companies in the financial services industry. In particular, a number of large
      commercial banks, insurance companies and other broad-based financial services
      firms have established or acquired broker-dealers or have merged with other
      financial institutions. Many of these firms have the ability to offer a wide
      range of products such as loans, deposit-taking and insurance, brokerage,
      investment management and investment banking services, which may enhance their
      competitive position. They also have the ability to support investment banking
      with commercial banking, insurance and other financial services revenue in
      an
      effort to gain market share, which could result in pricing pressure on other
      businesses. The passage of the Gramm-Leach-Bliley Act in 1999 reduced barriers
      to large institutions providing a wide range of financial services products
      and
      services. We believe, in light of increasing industry consolidation and the
      regulatory overhaul of the financial services industry, that competition will
      continue to increase from providers of financial services products.




23





***The
      financial services industry has inherent risks, which may affect our net income
      and revenues.***





The
      financial services business is, by its nature, subject to numerous and
      substantial risks, including volatile trading markets and fluctuations in the
      volume of market activity. Consequently, our net income and revenues are likely
      to be subject to wide fluctuations, reflecting the effect of many factors,
      including: general economic conditions; securities market conditions; the level
      and volatility of interest rates and equity prices; competitive conditions;
      liquidity of global markets; international and regional political conditions;
      regulatory and legislative developments; monetary and fiscal policy; investor
      sentiment; availability and cost of capital; technological changes and events;
      outcome of legal proceedings; changes in currency values; inflation; credit
      ratings; and the size, volume and timing of transactions. These and other
      factors could affect the stability and liquidity of securities and future
      markets, and the ability of issuers, other securities firms and counterparties
      to perform their obligations.




A
      reduced
      volume of securities and future transactions and reduced market liquidity
      generally results in lower revenues from principal transactions and commissions.
      Lower price levels for securities may result in a reduced volume of transactions
      and may also result in losses from declines in the market value of securities
      held in proprietary trading and underwriting accounts, particularly in volatile
      or illiquid markets, or in markets influenced by sustained periods of low or
      negative economic growth, including the risk of losses resulting from the
      ownership of securities, trading and the failure of counterparties to meet
      commitments. In particular, if we consummate a business combination with an
      investment management firm, our business could be expected to generate lower
      revenue in a market or general economic downturn. Under a typical arrangement
      for an investment management business, the investment advisory fees we could
      receive would be based on the market value of the assets under management.
      Accordingly, a decline in the prices of securities would be expected to cause
      our revenue and income to decline by:





·
            causing
                the value of the assets under management to decrease, which would
                result
                in lower investment advisory fees;·
            causing
                negative absolute performance returns for some accounts which have
                performance-based incentive fees, resulting in a reduction of revenue
                from
                such fees; or·
            causing
                some of our clients to withdraw funds from our investment management
                business in favor of investments they perceive as offering greater
                opportunity and lower risk, which also would result in lower investment
                advisory fees.





***Many
      financial services firms face credit risks which, if not properly managed,
      could
      cause revenues and net income to decrease.***





Many
      types of financial services firms, including banks and broker-dealers, lend
      funds to their customers. Among the risks all lenders face is the risk that
      some
      of their borrowers will not repay their loans. The ability of borrowers to
      repay
      their obligations may be adversely affected by factors beyond our control,
      including local and general economic and market conditions. A substantial
      portion of the loans may be secured by liens on real estate or securities.
      These
      same factors may adversely affect the value of real estate and securities as
      collateral. If we enter into a business combination with a firm that makes
      loans, we would maintain an allowance for loan losses to reflect the level
      of
      losses determined by management to be inherent in the loan portfolio. However,
      the level of the allowance and the amount of the provisions would only be
      estimates based on management’s judgment, and actual losses incurred could
      materially exceed the amount of the allowance or require substantial additional
      provisions to the allowance, either of which would likely have a material
      adverse effect on our revenues and net income.




**ITEM
                2.****DESCRIPTION
                OF PROPERTY**





We
      do not
      own any real estate or other physical properties. Our headquarters are located
      at 999 Eighteenth Street, Suite 3000, Denver, Colorado 80202. The cost of this
      space is included in the $7,500 per month fee Berkshire Capital charges us
      for
      general and administrative service pursuant to a letter agreement between us
      and
      Berkshire Capital. We believe that our office facilities are suitable and
      adequate for our business as it is presently conducted.




**ITEM
                3.****LEGAL
                PROCEEDINGS**




None.




**ITEM
                4.****SUBMISSION
                OF MATTERS TO A VOTE OF SECURITY
                HOLDERS**




None.




24


**PART
      II**






**ITEM 5.**
            **MARKET
                FOR COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND SMALL BUSINESS
                ISSUERS
                PURCHASES OF EQUITY
                SECURITIES**





Our
      units, common stock and warrants are traded on the Over-the-Counter Bulletin
      Board under the symbols HBRFU, HBRF and HBRFW, respectively. Each of our units
      consists of one share of our common stock and two warrants. The following table
      sets for the range of high and low closing bid prices for the units, common
      stock and warrants for the period indicated since such units, common stock
      and
      warrants commenced trading. The units commenced public trading on January 26,
      2006 and the common stock and warrants commenced public trading on February
      21,
      2006. The over-the-counter market quotations reflect inter-dealer prices,
      without retail mark-up, mark-down or commission and may not necessarily reflect
      actual transactions. Prior to January 26, 2006, there was no established public
      trading market for our units. Prior to February 21, 2006, there was no
      established public trading market for our common stock or warrants.




**Units**
            
            **Common
                Stock**
            
            **Warrants****High**
            
            **Low**
            
            **High**
            
            **Low**
            
            **High**
            
            **Low****Quarter
                ended****March
                31, 2006**
            
            $
            6.75
            
            $
            6.00
            
            $
            5.50
            
            $
            5.32
            
            $
            0.66
            
            $
            0.53





**Holders
      of Common Equity**




On
      March 31, 2006, there was one holder of record of our units, seven
      holders of record of our common stock and one holder of record of our warrants,
      which does not include beneficial owners of our securities.




**Dividends**




We
      have
      not paid any cash dividends on our units or our common stock to date and do
      not
      intend to pay cash dividends prior to the completion of a business combination.
      The payment of dividends in the future will be contingent upon our revenues
      and
      earnings, if any, capital requirements and general financial condition
      subsequent to completion of a business combination. The payment of any dividends
      subsequent to a business combination will be within the discretion of our then
      board of directors. It is the present intention of our board of directors to
      retain all earnings, if any, for use in our business operations and,
      accordingly, our board does not anticipate declaring any dividends in the
      foreseeable future.




**Recent
      Sales of Unregistered Securities**




On
      August 1, 2005, we issued 1,500,000 shares of our common stock to the
      persons set forth below for an aggregate of $25,000 in cash, at an average
      purchase price of approximately $0.0167 per share. These shares were allocated
      as follows:


**Stockholders**
            
            **Number
                of Shares**R.
                Bruce Cameron
            
            
            150,000Richard
                S. Foote
            
            
            450,000R.
                Bradley Forth
            
            
            75,000The
                Hillary Appel Trust
            
            
            75,000The
                Catey Lauren Appel Trust
            
            
            75,000Broad
                Hollow LLC
            
            
            675,000




Such
      shares were issued in connection with our organization pursuant to the exemption
      from registration contained in Section 4(2) of the Securities Act of 1933,
      as
      they were sold to individuals and entities who were each accredited investors,
      as defined in Rule 501(a) of the Securities Act of 1933. No underwriting
      discounts or commissions were paid with respect to such sales.




25





Subsequent
      to the issuance of the 1,500,000 shares, we authorized a stock dividend of
      0.15
      shares of common stock for each outstanding share of common stock as of January
      13, 2006, effectively lowering the purchase price to approximately $0.0145
      per
      share and increasing the number of shares held, in the aggregate to
      1,725,000.





**Use
      of Proceeds from our Initial Public Offering and Private
      Placement**




The
      effective date of our registration statement, which was filed on Form S-1 under
      the Securities Act of 1933 (File No. 333-127272), and which relates to the
      initial public offering of our units, was January 25, 2006. Each unit consists
      of one share of common stock, $.0001 par value per share, and two warrants,
      each
      to purchase one share of common stock. Pursuant to our registration statement,
      we also registered common stock and warrants. Each warrant is exercisable for
      one share of common stock. A total of 8,080,000 units, including 1,010,000
      units
      to cover any over-allotments and 336,667 units to cover an option granted to
      ThinkEquity Partners LLC and EarlyBirdCapital, Inc., representatives of our
      underwriters, were registered at a proposed maximum aggregate offering price
      of
      $48,480,000.





The
      offering was closed on January 31, 2006. The co-lead managing underwriters
      for
      the offering were ThinkEquity Partners LLC and EarlyBirdCapital, Inc. A total
      of
      6,733,333 units were sold in the offering, generating gross proceeds of
      $40,399,998. On February 3, 2006, ThinkEquity Partners LLC and EarlyBirdCapital,
      Inc. acquired an additional 1,010,000 units pursuant to an over-allotment
      option, generating gross proceeds of $6,060,000. Each of our units became
      separable into its constituent parts of common stock and warrants on February
      21, 2006.




Immediately
      preceding our initial public offering, all of our initial stockholders,
      including all of our officers and directors, purchased an aggregate of 166,667
      units from us in the private placement at a price per unit of $6.00. The units
      sold in the private placement were identical to the units sold in the offering,
      but the purchasers in the private placement have waived their rights to
      conversion and receipt of distribution on liquidation in the event we do not
      complete a business combination





We
      paid a
      total of $2,400,433 in underwriting discounts and commissions, which does not
      include $673,333 for the underwriters’ non-accountable expense allowance which
      will be paid upon the consummation of our initial business combination, and
      incurred approximately $620,433 for other costs and expenses related to the
      offering. No
      expenses of our initial public offering were paid to any of our directors or
      officers or any of their respective affiliates. We did, however, repay $70,000
      to R. Bruce Cameron, Richard S. Foote, the Hillary Appel Trust, the Catey Lauren
      Appel Trust, R. Bradley Forth and Broad Hollow LLC who had advanced us such
      amount to pay certain expenses related to our initial public offering. This
      amount was reflected in the offering expenses and did not reduce our available
      funds of approximately $1,149,567. After
      deducting the underwriting discounts and commissions and the offering expenses,
      the total net proceeds to us from our initial public offering and the private
      placement were approximately $43,765,801. We
      intend
      to use the proceeds from the sale of the units to acquire one or more operating
      businesses in the financial services industry.





Of
      the
      proceeds of the private placement and the offering, $43,289,567 were placed
      in a
      trust account at Lehman Brothers, Inc., maintained by Continental Stock Transfer
      & Trust Company acting as trustee. These amounts include the non-accountable
      expense allowance of approximately $673,333 ThinkEquity Partners LLC and
      EarlyBirdCapital, Inc. have agreed to defer until the consummation of our
      initial business combination. Upon completion of our initial business
      combination, we will pay the underwriters approximately $673,333, plus accrued
      interest on such amount, net of taxes payable, less approximately $0.12 for
      each
      share of our common stock that our public stockholders elect to convert in
      connection with our initial business combination. The proceeds will not be
      released from the trust account until the earlier of the completion of our
      initial business combination or our liquidation. The proceeds held in the trust
      account may be used as consideration to pay the sellers of one or more target
      businesses with which we ultimately complete our initial business combination.
      We may not use all of the proceeds in the trust account in connection with
      our
      initial business combination, either because the consideration for the business
      combination is less than the proceeds in the trust account or because we finance
      a portion of the consideration with our capital stock or debt securities. In
      that event, 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
      businesses, which may include subsequent acquisitions.




On
      January 26, 2006, we began paying Berkshire Capital, with whom our executive
      officers are affiliated, a monthly fee of $7,500 for general and administrative
      services, including office space, utilities and secretarial support. We believe
      that, based on rents and fees for similar services in the Denver, Colorado
      metropolitan area, the fee charged by Berkshire Capital is at least as favorable
      as we could have obtained from an unaffiliated third party.




26





We
      intend
      to use the proceeds not held in the trust account (approximately $1,149,567)
      for
      expenses incurred in investigating, structuring and negotiating our initial
      business combination (approximately $360,000), legal and accounting fees
      relating to SEC reporting obligations (approximately $150,000), administrative
      fees for office space ($180,000), and working capital (approximately $459,567)
      including premiums for director and officer liability insurance (approximately
      $200,000), with the balance of approximately $259,567 of working capital being
      held in reserve for other expenses of acquiring a target business as well as
      for
      reimbursement of any out-of-pocket expenses incurred by our initial stockholders
      in connection with activities on our behalf as described below (including
      reimbursement of out-of-pocket expenses incurred while performing due
      diligence). All of these approximate dollar amounts are estimates. We expect
      that due diligence of prospective target businesses will be performed by some
      or
      all of our officers, directors and initial stockholders and may include engaging
      market research and valuation firms, as well as other third party consultants.
      None of our officers, directors or initial stockholders will receive any
      compensation for their due diligence efforts, other than reimbursement of any
      out-of-pocket expenses they may incur on our behalf while performing due
      diligence of prospective target businesses. Any reimbursement of out-of-pocket
      expenses would occur at our discretion. In addition, we may elect to use some
      of
      the working capital to make a down payment or pay exclusivity or similar fees
      in
      connection with structuring and negotiating a business combination. Any such
      down payment or fees will in no case exceed the amount of our working capital.
      We have not reserved any specific amounts for such payments or fees, which
      may
      have the effect of reducing the available proceeds not deposited in the trust
      account for payment of our ongoing expenses and reimbursement of out-of-pocket
      expenses incurred on our behalf.





The
      estimated use of available funds is based on management’s estimates of the costs
      needed to fund our operations for the 24 month-period following the consummation
      of our initial public offering and consummate our initial business combination.
      Those estimates may prove inaccurate, especially if a portion of the available
      proceeds is used to make a down payment or pay exclusivity or similar fees
      in
      connection with our initial business combination or if we expend a significant
      portion of the available proceeds in pursuit of our initial business combination
      that is not consummated. If we do not have sufficient proceeds available to
      fund
      our expenses, we may be forced to obtain additional financing, either from
      our
      management or the initial stockholders or from third parties. We may not be
      able
      to obtain additional financing and our initial stockholders and management
      are
      not obligated to provide any additional financing. If we do not have sufficient
      proceeds and cannot find additional financing, we may be forced to liquidate
      prior to consummating our initial business combination.





The
      net
      proceeds of our initial public offering that were not immediately required
      for
      the purposes set forth above will be invested only in money market funds meeting
      conditions of the Investment Company Act of 1940 or securities issued or
      guaranteed by the United States so that we are not deemed to be an investment
      company under the Investment Company Act of 1940. The interest income derived
      from investment of the net proceeds not held in the trust account during this
      period will be used to defray our general and administrative expenses, as well
      as costs relating to compliance with securities laws and regulations, including
      associated professional fees, until our initial business combination is
      completed.





We
      will
      not pay any compensation of any kind, including finder’s and consulting fees, to
      any of our initial stockholders or any of their affiliates, including payments
      to related parties of the initial stockholders for performing due diligence,
      prior to or in connection with our initial business combination, other than
      the
      payment of $7,500 per month to Berkshire Capital in connection with the general
      and administrative services arrangement for services rendered to us. However,
      our initial stockholders, officers and directors may receive reimbursement
      for
      any out-of-pocket expenses incurred by them in connection with activities on
      our
      behalf, such as participating in the offering process, identifying potential
      target businesses and performing due diligence on suitable business
      combinations. In the event that these expenses exceed the amount of
      non-trust-account proceeds and we liquidate, Messrs. Cameron and Foote have
      each
      agreed to be personally liable for ensuring that the proceeds of the trust
      account are not reduced by certain claims of third parties, including our
      existing officers, directors or stockholders who have claims against us for
      out-of-pocket expenses incurred in connection with the due diligence and
      structuring of our initial business combination. If we consummate a business
      combination, the liability for reimbursement may be subject to negotiation
      in
      connection with our initial business combination and consequently may or may
      not
      be required to be paid by the resulting entity after our initial business
      combination. Since the role of present management after our initial business
      combination is uncertain, we have no ability to determine what remuneration,
      if
      any, will be paid to those persons after our initial business
      combination.




A
      public
      stockholder will be entitled to receive funds from the trust account (including
      interest earned on his, her or its portion of the trust account, net of taxes
      payable) only in the event of our liquidation upon our failure to complete
      our
      initial business combination or if that public stockholder were to seek to
      convert such shares into cash in connection with our initial business
      combination which the public stockholder previously voted against and which
      we
      actually consummate. In no other circumstances will a public stockholder have
      any right or interest of any kind to or in the trust account.




27





**ITEM
                6.****MANAGEMENT’S
                DISCUSSION AND ANALYSIS OR PLAN OF
                OPERATION**




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




We
      were
      formed on July 13, 2005, as a blank check company for the purpose of
      acquiring, through a merger, capital stock exchange, asset acquisition, stock
      purchase or other similar business combination, one or more financial services
      businesses. We intend to use cash derived from the proceeds of our recently
      completed public offering and private placement, our capital stock, debt or
      a
      combination of cash, capital stock and debt, to effect a business
      combination.





The
      issuance of additional capital stock, including upon conversion of any
      convertible debt securities we may issue, or the incurrence of debt could have
      material consequences on our business and financial condition. The issuance
      of
      additional shares of our capital stock (including upon conversion of convertible
      debt securities):





·
            may
                significantly reduce the equity interest of our
                stockholders;·
            will
                likely cause a change in control if a substantial number of our shares
                of
                common stock or voting preferred stock are issued, which may affect,
                among
                other things, our ability to use our net operating loss carry forwards,
                if
                any, and may also result in the resignation or removal of one or
                more of
                our present officers and directors; and·
            may
                adversely affect prevailing market prices for our common
                stock.





Similarly,
      the incurrence of debt:





·
            may
                lead to default and foreclosure on our assets if our operating revenues
                after a business combination are insufficient to pay our debt
                obligations;·
            may
                cause an acceleration of our obligations to repay the debt even if
                we make
                all principal and interest payments when due if we breach the covenants
                contained in the terms of the debt documents, such as covenants that
                require the maintenance of certain financial ratios or reserves,
                without a
                waiver or renegotiation of such covenants;·
            may
                create an obligation to immediately repay all principal and accrued
                interest, if any, upon demand to the extent any debt securities are
                payable on demand;·
            may
                hinder our ability to obtain additional financing, if necessary,
                to the
                extent any debt securities contain covenants restricting our ability
                to
                obtain additional financing while such security is outstanding, or
                to the
                extent our existing leverage discourages other potential investors;·
            may
                make it more difficult or impossible for us to pay dividends on our
                common
                stock;·
            may
                require us to dedicate a substantial portion of our cash flow to
                pay
                principal and interest on our debt, which will reduce the funds available
                for dividends on our common stock, working capital, capital expenditures,
                acquisitions and other general corporate purposes;·
            may
                limit on our flexibility in planning for and reacting to changes
                in our
                business and in the industry in which we operate;·
            may
                make us more vulnerable to adverse changes in general economic, industry
                and competitive conditions and adverse changes in government
                regulation;·
            may
                limit our ability to borrow additional amounts for working capital,
                capital expenditures, acquisitions, debt service requirements, execution
                of our strategy, or other purposes; and·
            may
                place us at a disadvantage compared to our competitors who have less
                debt.




For
      the
      period from July 13, 2005 to December 31, 2005, we had a net loss of $2,452.
      Total expenses for this period were $2,452, consisting of $456 in formation
      and
      operating expenses and $1,996 in franchise tax expense. Additionally, deferred
      offering costs of approximately $483,492 were incurred in 2005. We had no income
      in 2005. Until we enter into a business combination, we will not have
      revenues, other than interest income, and are likely to continue to
      incur losses due to management’s expenses relating to identifying a target
      business to acquire.




We
      closed
      our initial public offering on January 31, 2006. Gross proceeds from our initial
      public offering were $40,399,998. On February 3, 2006, we sold an additional
      1,010,000 units pursuant to the underwriters’ over-allotment option raising
      additional gross proceeds of $6,060,000. Immediately preceding the offering,
      all
      of our initial stockholders, including all of our officers and directors,
      purchased an aggregate of 166,667 units from us in a private placement at a
      price per unit of $6.00. After deducting the underwriting discounts and
      commissions and the offering expenses, the total net proceeds to us from the
      offering and the private placement were approximately $43,765,801. We
      deposited **** $43,289,567
      into the trust fund, which includes the non-accountable expense allowance of
      $673,333 the underwriters have agreed to defer until consummation of our initial
      business combination. The remaining proceeds, $1,149,567, were made available
      to
      be used by us to provide for business, legal and accounting due diligence on
      prospective acquisitions and continuing general and administrative expenses.
      As
      of December 31, 2005, we had no amount held in the trust account and as of
      March
      31, 2006 there was approximately $43,600,025 held in the trust account, which
      includes the deferred underwriters’ non-accountable expense allowance of
      $673,333. Additionally, as of March 31, 2006, we had approximately
      $1,023,035 outside the trust account to fund our working capital
      needs.




28





We
      may
      use substantially all of the net proceeds of the offering and the private
      placement to acquire one or more operating businesses, including identifying
      and
      evaluating prospective acquisition candidates, selecting one or more operating
      businesses, and structuring, negotiating and consummating the business
      combination. However, we may not use all of the proceeds in the trust account
      in
      connection with our initial business combination, either because the
      consideration for our initial business combination is less than the proceeds
      in
      the trust account or because we finance a portion of the consideration with
      our
      capital stock or debt securities. In that event, 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 or businesses.





Based
      on
      our management team’s past experience managing and advising businesses, we
      believe that the funds available to us outside of the trust account will be
      sufficient to allow us to operate for at least the 24 month-period following
      the
      consummation of our initial public offering, assuming that our initial business
      combination is not consummated during that time. Over this time period, we
      anticipate making the following expenditures:





·
            approximately
                $180,000 of expenses for legal, accounting and other expenses attendant
                to
                the structuring and negotiating of a business
                combination;·
            approximately
                $180,000 of expenses for the due diligence and investigation of a
                target
                business;·
            approximately
                $150,000 of expenses in legal and accounting fees relating to our
                SEC
                reporting obligations;·
            approximately
                $180,000 of expenses in fees relating to our office space and certain
                general and administrative services; and·
            approximately
                $459,567 for general working capital that will be used for miscellaneous
                expenses and reserves, including approximately $200,000 for director
                and
                officer liability and other insurance
                premiums.




We
      may
      need to obtain additional financing to the extent such financing is required
      to
      consummate our initial business combination, in which case we may issue
      additional securities or incur debt in connection with such business
      combination.





We
      have
      also sold ThinkEquity Partners LLC and EarlyBirdCapital, Inc., for $100, an
      option to purchase up to a total of 336,667 units, consisting of one share
      of
      common stock and two warrants, at $7.50 per unit, commencing on the later of
      the
      consummation of the business combination and one year after the date of the
      prospectus for our initial public offering and expiring four years after the
      date of the prospectus. The warrants underlying such units have terms that
      are
      identical to those issued in our public offering, with the exception of the
      exercise price, which is set at $6.25 per warrant. The sale of the option will
      be accounted for as a cost attributable to our offering. Accordingly, there
      will
      be no net impact on our financial position or results of operations, except
      for
      the recording of the $100 proceeds from the sale.





We
      have
      estimated, based upon a Black-Scholes model, that the fair value of the option
      on the date of sale was approximately $423,000, using an expected life of four
      years, volatility of 29.0% and a risk-free rate of 4.34%. However, because
      the
      units did not have a trading history at the time of the estimate, the volatility
      assumption was based on information then available to management. The volatility
      assumption is derived from the median 360-day stock price volatility of 76
      financial services firms with market capitalizations between $30.0 million
      and
      $150.0 million for which volatility data was available. Though we could effect
      our initial business combination with any company whose fair market value is
      at
      least 80% of its net assets at the time of such acquisition, we used a range
      of
      market capitalizations between $30.0 million and $150.0 million because we
      believed, based on our past experience in effecting transactions in the
      financial services industry, that many of our potential acquisition targets
      will
      fall within this range. We believe these estimates provide a reasonable
      benchmark to use in estimating the expected volatility of the units after the
      consummation of our initial business combination. Although an expected life
      of
      four years was used in the calculation, if we do not consummate our initial
      business combination within the prescribed time period and we liquidate, the
      option will become worthless.





The
      purchase option will provide for registration rights that will permit the holder
      or holders of the purchase option to demand that a registration statement be
      filed with respect to all or any part of the securities underlying the purchase
      option within five years of the completion of our initial public offering.
      Further, the holder or holders of the purchase option will be entitled to
      piggy-back registration rights in the event we undertake a subsequent registered
      offering within seven years of the completion of the offering.




29





Commencing
      on January 26, 2006, we began incurring a fee of $7,500 per month from Berkshire
      Capital, an entity affiliated with our executive officers, for general and
      administrative services, including office space, utilities and secretarial
      support.




**Restatement** ****




I n
          consultation with  our independent registered accounting firm, Goldstein Golub Kessler LLP, we determined
          on December
          18 ,
          2006,
          that we needed to reclassify certain amounts in our financial
          statements to report as equity the
          warrants issued as part of the units in our initial public offering and
          the
          private placement immediately prior to our initial public offering and
          the unit
          purchase option
          (including the shares of common stock and warrants embedded in the unit
          purchase
          option) issued
          to
          the underwriters in our initial public offering (the “Purchase
          Option”). We
          had
          previously accounted for these instruments as liabilities. We arrived at
          our
          conclusions that the Warrants and Purchase Option should be accounted for
          as
          equity, rather than as liabilities as had been our prior practice, after
          further
          consideration of the accounting for warrants and other derivative securities
          under Emerging Issues Task Force No. 00-19, “ *Accounting
          for Derivative Financial Instruments Indexed to, and Potentially Settled
          in, a
          Company’s Own Stock* ”
(“EITF
          No. 00-19”) and
          after
          entering into the Amended and Restated Clarification Agreement and amendments
          to
          the Purchase Option agreements described below.
  The
            Warrant agreement provided for us to register the shares underlying the
            warrants
            and was silent as to whether a penalty is to be incurred in the absence of
            our ability to deliver registered shares to the Warrant holders upon
            warrant
            exercise. Under EITF No. 00-19, in such circumstances, registration of
            the
            common stock underlying the warrants is not deemed to be within our control.
            As
            a result, we previously assumed that we could be required to settle the
            Warrants
            on a net-cash basis, thereby necessitating the treatment of the potential
            settlement obligation as a liability. We
            entered into an Amended and Restated Clarification Agreement on December
            15,
            2006, which clarified thatwhile we are required to use our best efforts
            to maintain the effectiveness of the registration statement covering
            the
            Warrants, we are not obligated to deliver securities, and there are no
            contractual penalties for failure to deliver securities, if a registration
            statement is not effective at the time of exercise. Additionally, in
            the event
            that a registration statement is not effective at the time of exercise,
            the
            holder of such Warrant is not entitled to exercise such Warrant and in
            no event
            (whether in the case of a registration statement not being effective
            or
            otherwise) are we required to net cash settle the warrant exercise.
            Consequently, the Warrants will expire unexercised and unredeemed if
            there is no
            effective registration statement covering the shares of our common stock
            issuable upon exercise of the Warrants. Therefore, we have determined
            that the
            Warrants should not be classified as a liability, but rather should be
            accounted
            for as equity.
 
 The
            Purchase Option agreements provide for us to register the shares underlying
            the
            option and the Warrants included therein, and included a provision for
            the
            payment of damages to the underwriters in the event we are unable to
            deliver the
            securities underlying the Units to the underwriters. Under EITF No. 00-19,
            we
            assumed that the Purchase Option could give rise to our ultimately having
            to
            net-cash settle the options, thereby necessitating the treatment of the
            Purchase
            Option as a liability. On
            December 15, 2006, we amended the Purchase Option agreements to clarify
            the
            original intent of the Purchase Option agreements. The amendments clarify
            that
            while we are required to use our best efforts to maintain the effectiveness
            of a
            registration statement covering the securities issuable upon exercise,
            the
            holder of the Purchase Option is not entitled to receive a net-cash settlement
            or damages in the event there is no effective registration statement
            covering
            the securities issuable upon exercise. Furthermore,the holder of the
            Purchase Option is not entitled to exercise the Purchase Option or the
            Warrants
            underlying the Purchase Option unless a registration statement covering
            the
            securities underlying the Purchase Option is effective or an exemption
            from
            registration is available. Accordingly, the Purchase Option and underlying
            Warrants will expire unexercised and unredeemed if there is no effective
            registration statement covering the securities issuable upon exercise.
            Therefore, we have determined that the Purchase Option should not be
            classified
            as a liability, but rather should be accounted for as
            equity.





The
        previously issued financial statements as of January 31, 2006 in
        our
        Annual Report on Form 10-KSB/A filed on November 2, 2006 present ed the fair
        value of the warrants and the Purchase Option as liabilities and
        should no longer be relied upon. The accompanying audited financial statements
        as of January 31, 2006 have been restated to a ccount
        for the warrants and the Purchase Option as equity .
        The
        impact of the restatement
        of previously
        reported balance sheets and statements of stockholders’ equity is as
        follows:





January
                  31, 2006As
                  Previously Reported
              
              As
                  RestatedAssets
              
              $
              38,991,645
              
              $
              38,991,645Liabilities
              
              $
              9,138,970
              
              $
              934,970Common
                  stock subject to conversion
              
              $
              7,508,530
              
              $
              7,508,530Stockholders’
                  equity
              
              $
              22,344,145
              
              $
              30,548,145




30




**Off-balance
      Sheet Arrangements**





There
        were no off-balance sheet arrangements during the period from July 13, 2005
        (inception) through December 31, 2005, that have or are reasonably likely
        to have a current or future effect on our financial condition, changes in
        financial condition, revenues or expenses, results of operations, liquidity,
        capital expenditures, or capital resources that is material to our investors.




**ITEM
                7.****FINANCIAL
                STATEMENTS**




This
      information appears following Item 14 of this Report and is incorporated herein
      by reference.




**ITEM
                8.**
              **CHANGES
                  IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL
                  DISCLOSURE**


None.




**ITEM
                8A.****CONTROLS
                AND PROCEDURES**




We
      carried out an evaluation, under the supervision and with the participation
      of
      our management, including our chief executive officer and our principal
      financial officer, of the effectiveness of our disclosure controls and
      procedures as of December 31, 2005. Based on that evaluation, our chief
      executive officer and our principal financial officer concluded that our
      disclosure controls and procedures are effective as of the end of the period
      covered by this report to ensure that information required to be disclosed
      by us
      in reports that we file or submit under the Securities Exchange Act of 1934,
      as
      amended, is recorded, processed, summarized and reported within the time periods
      specified in Securities and Exchange Commission rules and forms. Since our
      inception through December 31, 2005, there has been no change in our internal
      control over financial reporting that has materially affected, or is reasonably
      likely to materially affect, our internal control over financial
      reporting.




**ITEM
                8B.****OTHER
                INFORMATION**




None.




31


**PART
      III**




**ITEM
                9.**
              **DIRECTORS,
                  EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS; COMPLIANCE WITH
                  SECTION
                  16(a) OF THE EXCHANGE
                  ACT**




**Directors
      and Executive Officers**




Our
      current directors and executive officers are as follows:




**Name**
            ****
            **Age**
            ****
            **Position**R.
                Bruce Cameron
            
            49
            
            Chairman
                of the BoardRichard
                S. Foote
            
            42
            
            President,
                Chief Executive Officer and DirectorR.
                Bradley Forth
            
            26
            
            Executive
                Vice President, Chief Financial Officer and SecretaryRussell
                L. Appel
            
            44
            
            Director





***R.
      Bruce Cameron, CFA*** has
      been
      our chairman of the board since our inception. Mr. Cameron has been the
      president and chief executive officer of Berkshire Capital Securities LLC,
      a New
      York-based investment banking firm, since its formation in May 2004.
      Mr. Cameron co-founded Berkshire Capital Corporation, the predecessor firm
      to Berkshire Capital Securities LLC, in 1983 as the first independent investment
      bank covering the financial services industry, with a focus on investment
      management and capital markets firms. Mr. Cameron is responsible for the
      overall development and direction of the firm and is actively involved in
      working with the firm’s major clients. Mr. Cameron heads the firm’s
      management committee and is a frequent speaker at industry conferences and
      events. Mr. Cameron and his partners have advised on approximately 200
      mergers and acquisitions of financial services companies, including high net
      worth managers, institutional investment managers, mutual fund managers, real
      estate managers, brokerage firms, investment banks and capital markets firms
      with aggregate client assets under management of more than $368 billion and
      aggregate transaction value in excess of $8.7 billion. Mr. Cameron is the
      managing member of Broad Hollow LLC, which owns 776,250 shares of our common
      stock and 75,000 of our units. Prior to forming Berkshire Capital Corporation,
      Mr. Cameron was an associate director of Paine Webber Group Inc.’s
      Strategic Planning Group from 1981 through 1983. At Paine Webber,
      Mr. Cameron executed several internal acquisitions for the company.
      Mr. Cameron began his career at Prudential Insurance Company from 1978
      through 1980, working first in the Comptroller’s Department and then in the
      Planning & Coordination Group. Mr. Cameron was graduated from Trinity
      College, where he received a B.A. in Economics, and from Harvard Business
      School, where he received an M.B.A. Mr.  Cameron also attended the London
      School of Economics. Mr. Cameron is a CFA charterholder and is on the
      membership committee of the New York Society of Security Analysts.
      Mr. Cameron is a director of Capital Counsel LLC in New York City, a high
      net worth investment management firm he advised when it was established.
      Mr. Cameron is a Fellow of the Life Management Institute. He is also a past
      trustee of the Securities Industry Institute.




***Richard
      S. Foote, CFA*** has
      been
      our president and chief executive officer and a member of our board of directors
      since our inception. Mr. Foote has been a managing director of Berkshire
      Capital Securities LLC since its formation in May 2004 and a managing
      director, principal and vice president of Berkshire Capital Corporation, the
      predecessor firm to Berkshire Capital Securities LLC, since 1994. Throughout
      his
      career, Mr. Foote has specialized in providing investment banking services
      to the financial services industry, including mergers and acquisitions, public
      offerings and private placements of debt and equity securities, and negotiation
      and implementation of private equity capital coinvestment commitments. At
      Berkshire Capital Securities LLC and its predecessor, Mr. Foote has advised
      owners of institutional equity and fixed income managers, high net worth
      managers, mutual fund managers and capital markets firms in mergers and
      acquisitions. Mr. Foote has developed the firm’s alternative investment
      management industry practice, with the dominant market share in mergers and
      acquisitions of real estate investment management and services firms and
      operating companies. Since 1994, Mr. Foote has advised on 25 completed
      mergers and acquisitions of financial services companies, including high net
      worth managers, institutional investment managers, mutual fund managers, real
      estate managers, brokerage firms, investment banks and capital markets firms
      with aggregate client assets under management of approximately $96 billion
      and aggregate transaction value of $1.9 billion. Mr. Foote is a
      director of Berkshire Capital and serves on its compensation committee,
      commitment committee and technology committee. From 1991 through 1994,
      Mr. Foote was a co-founder and partner of Knightsbridge Capital Partners, a
      partnership engaged in investment banking and merchant banking activities.
      From
      1985 to 1991, Mr. Foote was a vice president, an associate, and an analyst
      in the investment banking division of PaineWebber Incorporated, primarily
      working on mergers, acquisitions and the issuance of equity and debt securities.
      Mr. Foote was graduated from Harvard College, *cum
      laude* ,
      in 1985
      with an A.B. in Economics. Mr. Foote is a CFA charterholder and a member of
      the CFA Institute, the New York Society of Security Analysts, the Pension Real
      Estate Association and the National Council of Real Estate Investment
      Fiduciaries.




32





***R.
      Bradley Forth, CFA*** has
      been
      our executive vice president, chief financial officer and secretary since our
      inception. Mr. Forth has been an associate at Berkshire Capital Securities
      LLC since its formation in May 2004 and an associate and analyst at
      Berkshire Capital Corporation, the predecessor firm to Berkshire Capital
      Securities LLC, since 2001. Mr. Forth has specialized in merger,
      acquisition and valuation advisory activities for institutional investment
      managers, high net worth managers, multi-family offices, mutual fund managers,
      hedge fund of funds managers, retail brokerage firms and real estate investment
      management and services firms. Mr. Forth has advised on 13 mergers and
      acquisitions of financial services companies with aggregate transaction value
      of
      $1.2 billion. He was graduated from Duke University in 2001 with a B.S. in
      Economics and a B.A. in Chemistry. Mr. Forth is a CFA charterholder and a
      member of the CFA Institute and the New York Society of Security
      Analysts.





***Russell
      L. Appel*** has
      been
      a member of our board of directors since our inception. Mr. Appel is a
      founder and the president of The Praedium Group LLC, a private equity real
      estate investment firm focusing on underperforming and undervalued assets
      throughout North America that began operations as a part of Credit Suisse First
      Boston, or CSFB. In 1991 Mr. Appel established a team at CSFB to acquire
      distressed real estate assets for CSFB’s proprietary account. As a result of
      this group’s achievements, Praedium was formed in 1994 as a third-party
      investment management group affiliated with CSFB. Since 1991 Praedium has raised
      over $2 billion of equity capital in a series of private equity vehicles.
      The firm’s clients include public and corporate pension plan sponsors,
      foundations, endowments, and other institutional and high net worth individual
      investors. In 1999 Praedium separated from CSFB and presently operates as an
      independent investment firm. In addition to his responsibilities with Praedium,
      Mr. Appel ran CSFB’s Commercial Mortgage Finance business from 1991 to
      1994, where he became a managing director. At CSFB, Mr. Appel supervised
      the execution of numerous commercial and multi-family asset securitization
      and
      sale advisory assignments. Prior to joining CSFB in 1991 and his association
      with Praedium, Mr. Appel was a vice president in the Real Estate Department
      of Goldman Sachs & Co. from 1986 to 1991. At Goldman Sachs, he was involved
      in real estate-related sales, financings, mergers and acquisitions and capital
      markets transactions. Mr. Appel holds a B.S. in Economics, *magna
      cum laude* ,
      and an
      M.B.A. with distinction from the Wharton School of the University of
      Pennsylvania. Mr. Appel is the treasurer of the Pension Real Estate
      Association and serves on its board of directors.




**Number
      and Terms of Directors**





Our
      board
      of directors has three directors and is divided into three classes with only
      one
      class of directors being elected in each year and each class serving a
      three-year term. The term of office of the first class of directors, consisting
      of Russell L. Appel, will expire at our first annual meeting of stockholders.
      The term of office of the second class of directors, consisting of R. Bruce
      Cameron, will expire at the second annual meeting. The term of office of the
      third class of directors, consisting of Richard S. Foote, will expire at the
      third annual meeting. Each of our current directors has served on our board
      since our inception on July 13, 2005.




**Audit
      Committee**




We
      are
      not currently an operating company and, therefore, have not established an
      audit
      committee. At the time of a business combination, we intend to establish an
      audit committee that is composed of independent members of our board of
      directors and, in connection therewith, intend to seek an audit committee
      financial expert. Currently, our full Board of Directors carries out the
      functions customarily undertaken by an audit committee.




**Code
      of Ethics**




Our
      Board
      of Directors has adopted a Code of Ethics for our officers and directors, which
      was filed as an exhibit to our Annual Report on Form 10-KSB.




**Section
      16(a) Beneficial Ownership Reporting Compliance**




Section
      16(a) of the Securities Exchange Act of 1934 requires our officers and
      directors, and persons who own more than 10% of our common stock, to file
      reports of ownership and changes in ownership of our common stock with the
      Securities and Exchange Commission. Because we did not consummate our initial
      public offering until after December 31, 2005, no reports were required to
      be
      filed during the year ended December 31, 2005.





33




**ITEM
                10.****EXECUTIVE
                COMPENSATION**




No
      executive officer has received any cash compensation for services rendered.
      No
      compensation of any kind, including finder’s and consulting fees, will be paid
      by us to any of our initial stockholders, including our officers and directors,
      or any of their respective affiliates, for services rendered prior to or in
      connection with a business combination. However, these individuals will be
      reimbursed for any out-of-pocket expenses incurred in connection with activities
      on our behalf such as identifying potential target businesses and performing
      due
      diligence on suitable business combinations and Berkshire Capital will receive
      $7,500 per month for office space and general and administrative services.
      There
      is no limit on the amount of out-of-pocket expenses and there will be no review
      of the reasonableness of the expenses by anyone other than our board of
      directors, which includes persons who may seek reimbursement, or a court of
      competent jurisdiction if such reimbursement is challenged. If all of our
      directors are not deemed “independent,” we will not have the benefit of
      independent directors examining the propriety of expenses incurred on our behalf
      and subject to reimbursement. Our
      entire board of directors made decisions relating to the compensation of our
      executive officers described above.




During
      the fiscal year ended December 31, 2005, the directors did not receive any
      cash
      compensation for their service as members of the board of
      directors.




**ITEM
                11.**
              **SECURITY
                  OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED
                  STOCKHOLDER MATTERS**




The
      following table sets forth information as of March 31, 2006 in respect of
      beneficial ownership of our common stock by each director, by each named
      executive officer and by all directors and executive officers as a group, and
      each person known by us, as a result of such person’s public filings with the
      SEC and the information contained therein, to be the beneficial owner of more
      than 5% of our outstanding shares of common stock.




Unless
      otherwise indicated, we believe that all persons named in the table have sole
      voting and investment power with respect to all shares of common stock
      beneficially owned by them.




**Name
                and Address of Beneficial Owner****(1)**
            
            **Amount
                and**
              **Nature
                of Beneficial Ownership**
            
            **Approximate
                Percentage of Outstanding Common Stock**R. Bruce Cameron(2)(6)
            
            
            1,040,417
            
            
            10.8
            %Richard
                S. Foote(6)
            
            
            567,500
            
            
            5.9
            %R.
                Bradley Forth(3)(6)
            
            
            94,583
            
            
            1.0
            %Russell
                L. Appel(4)(5)(6)
            
            
            189,167
            
            
            2.0
            %Broad
                Hollow LLC(2)(6)
            
            
            851,250
            
            
            8.8
            %All
                executive officers and directors as a group (four
                individuals)
            
            
            1,891,667
            
            
            19.6
            %Wellington
                Management Company, LLP(7)
            
            
            986,000
            
            
            10.2
            %Sapling,
                LLC/Fir Tree Recovery Master Fund, L.P.(8)
            
            
            925,125
            
            
            9.6
            %Context
                Capital Management, LLC(9)
            
            
            813,500
            
            
            8.4
            %Amaranth
                LLC(10)
            
            
            562,000
            
            
            5.8
            %







(1)
            Unless
                otherwise noted, the business address of each of the following is
                c/o
                Berkshire Capital Securities LLC, 535 Madison Avenue, 19thFloor,
                New York, New York 10022.





(2)
            Including
                the 16,667 units that Mr. Cameron purchased in the private placement,
                he
                beneficially owns 1,040,417 shares. This number includes 776,250
                shares
                acquired by Broad Hollow LLC prior to the consummation of our initial
                public offering and 75,000 shares Broad Hollow LLC purchased in the
                private placement that are attributed to Mr. Cameron, according to
                Section
                13(d) of the Securities Exchange Act of 1934, due to his position
                as the
                managing member of Broad Hollow LLC.  These share numbers do not
                include 86,250 shares held by Mr. Forth, which are subject to a call
                in
                favor of Broad Hollow LLC, exercisable if Mr. Forth’s employment by
                Berkshire Capital is terminated for certain reasons before the second
                anniversary of our initial business combination. These numbers also
                exclude shares held by our initial stockholders that Broad Hollow
                has the
                right to call during the 30-day period following the closing of our
                initial business combination described in greater detail under Item
                12
                entitled “Certain Relationships and Related
                Transactions.”




34




(3)
            The
                business address of Mr. Forth is c/o Berkshire Capital Securities
                LLC, 999 Eighteenth Street, Suite 3000, Denver, CO
                80202.





(4)
            This
                number includes an aggregate of 172,500 shares owned and an aggregate
                of
                16,667 shares purchased in the private placement by the Hillary Appel
                Trust and the Catey Lauren Appel Trust, of which Mr. Appel’s wife is
                the trustee. Mr. Appel disclaims beneficial ownership of all such
                shares.




(5)
            The
                business address of Mr. Appel is c/o The Praedium Group LLC, 825
                Third Avenue, 36thFloor, New York, NY 10022.





(6)
            These
                numbers exclude 333,334 shares of common stock issuable to the initial
                stockholders upon exercise of warrants included as part of the units
                they
                purchased in the private placement, which warrants are not currently
                exercisable and will not become exercisable within 60 days.





(7)
            As
                reported in a Schedule 13G dated January 31, 2006 and filed with
                the
                Securities and Exchange Commission on February 21, 2006. The business
                address of Wellington Management, LLP is 75 State Street, Boston,
                MA
                02109.





(8)
            As
                reported in a Schedule 13G dated March 9, 2006 and filed with the
                SEC on
                March 29, 2006. The business address of Sapling, LLC and Fir Tree
                Recovery
                Master Fund, L.P. is 535 Fifth Avenue, 31st Floor, New York, New
                York
                10017. Sapling, LLC may direct the voting and disposition of 634,054
                shares of our common stock and Fir Tree Recovery Master Fund, L.P.
                may
                direct the voting and disposition of 291,071 shares of our common
                stock.
                The manager of both entities is Fir Tree,
                Inc.





(9)
            As
                reported in a Schedule 13G dated January 26, 2006 and filed with
                the SEC
                on February 6, 2006. The business address of Context Capital Management,
                LLC is 12626 High Bluff Drive, Suite 440, San Diego, CA
                92130.





(10)
            As
                reported in a Schedule 13G dated January 26, 2006 and filed with
                the SEC
                on February 6, 2006. The business address of Amaranth LLC is One
                American
                Lane, Greenwich, CT 06831.




**ITEM
                12.****CERTAIN
                RELATIONSHIPS AND RELATED
                TRANSACTIONS**




**Prior
      Share Issuances**





On
      August 1, 2005, we issued 1,500,000 shares of our common stock to the
      persons set forth below for an aggregate of $25,000 in cash, at an average
      purchase price of approximately $0.0167 per share. These shares were allocated
      as follows:





**Name**
            ****
            **Number
                of Shares**
            ****
            **Relationship
                to Us**R.
                Bruce Cameron
            
            150,000
            
            Chairman
                of the BoardRichard
                S. Foote
            
            450,000
            
            President,
                Chief Executive Officer and DirectorR.
                Bradley Forth
            
            75,000
            
            Executive
                Vice President, Chief Financial Officer and SecretaryThe
                Hillary Appel Trust
            
            75,000
            
            StockholderThe
                Catey Lauren Appel Trust
            
            75,000
            
            StockholderBroad
                Hollow LLC
            
            675,000
            
            Stockholder





Subsequent
      to the issuance of the 1,500,000 shares, we authorized a stock dividend of
      0.15
      shares of common stock for each outstanding share of common stock as of January
      13, 2006.




35





We
      consider Messrs. Appel, Cameron, Foote and Forth to be our promoters, as such
      term is defined within the rules promulgated by the SEC under the Securities
      Act
      of 1933.





The
      holders of the majority of these shares are entitled to make up to two demands
      that we register these shares and any warrants they may own, pursuant to an
      agreement signed on January 31, 2006. The holders of the majority of these
      shares can elect to exercise these registration rights at any time after the
      date on which their shares of common stock are released from escrow. In
      addition, these stockholders have certain “piggy-back” registration rights on
      registration statements filed subsequent to such date. We will bear the expenses
      incurred in connection with the filing of any such registration
      statements.




All
      of
      the shares of our common stock outstanding prior to the date of the prospectus
      for our initial public offering (January 25, 2006) were placed in escrow with
      Continental Stock Transfer & Trust Company as escrow agent, until the
      earliest of:





·
            three
                years following the date of the closing of our initial public offering
                (January 31, 2006);·
            our
                liquidation; and·
            the
                consummation of a liquidation, merger, stock exchange, stock purchase
                or
                other similar transaction which results in all of our stockholders
                having
                the right to exchange their shares of common stock for cash, securities
                or
                other property subsequent to our consummating a business combination
                with
                a target business.





During
      the escrow period, the holders of these shares will not be able to sell or
      transfer their securities except among our initial stockholders (including
      upon
      exercise by Broad Hollow of its call options), to their spouses and children
      or
      trusts established for their benefit, by virtue of the laws of decent and
      distribution, upon the death of any initial stockholder or pursuant to a
      qualified domestic relations order but will retain all other rights as our
      stockholders, including, without limitation, the right to vote their shares
      of
      common stock and the right to receive cash dividends, if declared. If dividends
      are declared and payable in shares of common stock, such dividends will also
      be
      placed in escrow. If we are unable to effect a business combination and
      liquidate, none of our initial stockholders will receive any portion of the
      liquidation proceeds with respect to common stock owned by them prior to the
      date of this prospectus.





If
      we are
      unable to complete a business combination and are forced to liquidate, Richard
      Foote, our president and chief executive officer and director, and R. Bruce
      Cameron, our chairman of the board, have each agreed to be personally liable
      for
      ensuring that the proceeds in the trust account are not reduced by the claims
      of
      vendors for services rendered or products sold to us as well as claims of
      prospective target businesses for fees and expenses of third parties that we
      agree in writing to pay in the event we do not complete a combination with
      such
      business. However, Messrs. Foote and Cameron may not be able to satisfy
      those obligations.





In
      connection with any vote required for our initial business combination, all
      of
      our initial stockholders, including all of our officers, have agreed to vote
      the
      shares of common stock owned by them, whether acquired in the private placement,
      the offering or the aftermarket, in same manner as the majority of the shares
      of
      common stock voted by our public stockholders.





In
      August
      of 2005, we issued an aggregate of $70,000 interest-free promissory notes to
      our
      initial stockholders as follows:




**Name**
            
            **Principal**
              **Amount**R.
                Bruce Cameron
            
            $
            7,000Richard
                S. Foote
            
            
            21,000R.
                Bradley Forth
            
            
            3,500The
                Hillary Appel Trust
            
            
            3,500The
                Catey Lauren Appel Trust
            
            
            3,500Broad
                Hollow LLC
            
            
            31,500





These
      notes were repaid on January 31, 2006.





Our
      initial stockholders purchased an aggregate of 166,667 units in the private
      placement. The shares and warrants comprising such units may not be sold,
      assigned or transferred by them until after we consummate a business
      combination. Our initial stockholders have agreed to waive their right to
      conversion or any liquidation distributions with respect to such shares in
      the
      event we fail to consummate a business combination.




36




**Conflicts
      of Interest**





Our
      public stockholders should be aware of the following potential conflicts of
      interest:





·
            Our
                officers and directors are not required to commit their full time
                to our
                affairs and, accordingly, they may have conflicts of interest in
                allocating management time among various business
                activities.·
            R.
                Bruce Cameron, our chairman of the board, Richard S. Foote, our president,
                chief executive officer and director, and R. Bradley Forth, our executive
                vice president, chief financial officer and secretary are employees
                or
                equity owners of Berkshire Capital Securities LLC, a registered
                broker-dealer that provides financial advisory services to clients
                in
                connection with mergers and acquisitions in the financial services
                industry. Berkshire Capital’s clients may compete with us for acquisitions
                in the financial services industry, and Berkshire Capital may have
                a duty
                to present certain acquisition opportunities to its clients before
                it
                presents them to us.·
            Russell
                L. Appel, one of our directors, is the president of The Praedium
                Group
                LLC, a real estate investment firm, and he may have a duty to present
                certain acquisition opportunities in the real estate investment management
                area to Praedium or affiliated entities before he presents them to
                us.·
            In
                light of our initial stockholders’ involvement with other financial
                services companies, including Berkshire Capital and Praedium, and
                our
                purpose to consummate a business combination with one or more operating
                businesses in the financial services industry, we may decide to acquire
                one or more businesses affiliated with our initial stockholders or
                with
                clients of Berkshire Capital or Praedium. Potential conflicts of
                interest
                may exist, and as a result, the terms of the business combination
                may not
                be advantageous to our public stockholders as it would be absent
                any
                conflicts of interest.·
            Our
                officers and directors may in the future become affiliated with entities,
                including other blank check companies, engaged in business activities
                similar to those intended to be conducted by us.·
            Because
                our directors own shares of our common stock that will be released
                from
                escrow only if a business combination is completed and purchased
                shares in
                the private placement, which will be subject to a lock-up agreement
                until
                after the consummation of our initial business combination, and as
                to
                which they are waiving their conversion and liquidation distribution
                rights, our board may have a conflict of interest in determining
                whether a
                particular target business is appropriate for a business combination.
                The
                personal and financial interests of our directors and officers may
                influence their motivation in identifying and selecting a target
                business,
                completing a business combination in a timely manner and securing
                the
                release of their stock.·
            None
                of our officers, directors or initial stockholders will receive any
                compensation for their due diligence efforts, other than reimbursement
                of
                any out-of-pocket expenses they may incur on our behalf while performing
                due diligence of prospective target businesses. Any reimbursement
                of
                out-of-pocket expenses would occur at our discretion. To the extent
                such
                out-of-pocket expenses exceed the available proceeds not deposited
                in the
                trust account, such out-of-pocket expenses would not be reimbursed
                by us
                unless we consummate a business combination in which it is agreed
                that the
                resulting company would assume the liability for such reimbursement.
                Consequently, the financial interest of our officers and directors
                could
                influence their motivation in selecting a target business and determining
                whether a particular business combination is in the public stockholders’
                best interest.·
            Our
                board of directors may condition a business combination on the retention
                by us of our existing officers and directors post closing, which
                may
                personally benefit such officers and directors. In addition, the
                board may
                view target companies that offer any of our initial stockholders
                or
                management a continuing relationship, as an officer, director, consultant
                or other third-party service provider, after the business combination
                in a
                more favorable light.·
            Berkshire
                Capital has agreed that, commencing on January 25, 2006 through the
                completion of our initial business combination, it will make available
                to
                us such office space and certain general and administrative services
                as we
                may require from time to time. We have agreed to pay Berkshire Capital
                $7,500 per month for these services. Messrs. Cameron, Foote and
                Forth, our key executives, are affiliated with Berkshire Capital.
                As a
                result of these affiliations, these individuals will benefit from
                the
                transaction to the extent of their interest in Berkshire Capital.
                However,
                this arrangement is solely for our benefit and is not intended to
                provide
                any of our executive officers compensation in lieu of a salary. We
                believe, based on rents and fees for similar services in the Denver,
                Colorado metropolitan area, that the fee charged by Berkshire Capital
                is
                at least as favorable as we could have obtained from an unaffiliated
                third
                party. However, as our directors may not be deemed “independent,” we did
                not have the benefit of disinterested directors approving this
                transaction.




37




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





·
            the
                corporation could financially undertake the
                opportunity;·
            the
                opportunity is within the corporation’s line of business;
                and·
            it
                would not be fair to the corporation and its stockholders for the
                opportunity not to be brought to the attention of the
                corporation.





Accordingly,
      as a result of certain business affiliations, our officers and directors may
      have similar legal obligations relating to presenting business opportunities
      meeting the above-listed criteria to multiple entities. For example,
      Messrs. Cameron and Foote, our chairman of the board, and president,
      chief executive officer and director, respectively, and Russell L.
      Appel, our director, may have preexisting fiduciary or contractual obligations
      that arise as a result of their affiliations with Berkshire Capital and
      Praedium, respectively. In addition, certain of our directors serve on the
      boards of various companies in the financial services industry. Conflicts of
      interest may arise when an officer or member of our board evaluates a particular
      business opportunity which, under the above-listed Delaware criteria, should
      be
      presented to us. We cannot assure you that any of these conflicts will be
      resolved in our favor.





In
      order
      to minimize potential conflicts of interest that may arise from multiple
      corporate affiliations, each of our officers and directors has agreed in
      principle, until the earliest of a business combination, our liquidation or
      such
      time as he ceases to be an officer or director, to present to us for our
      consideration, prior to presentation to any other entity, any business
      opportunity which may reasonably be required to be presented to us under
      Delaware law, subject to any other fiduciary or contractual obligations he
      may
      have.





The
      initial stockholders have agreed to waive their rights to participate in any
      liquidation distribution occurring upon our failure to consummate a business
      combination, with respect to those shares of common stock acquired by them
      prior
      to our initial public offering and with respect to the shares included in the
      166,667 units our initial stockholders have purchased in the private placement.
      The shares and warrants included in these units will be subject to a lock-up
      on
      transferability until after consummation of our initial business combination.
      Our initial stockholders will participate in any liquidation distribution with
      respect to any shares of common stock they acquire in connection with or
      following our initial public offering. In connection with the vote required
      for
      our initial business combination, all of our initial stockholders, including
      all
      of our officers, have agreed to vote the shares of common stock owned by them,
      whether acquired in the private placement, the offering or the aftermarket,
      in
      the same manner as the majority of the shares of common stock voted by our
      public stockholders.





We
      will
      reimburse our officers and directors for any out-of-pocket business expenses
      incurred by them in connection with certain activities on our behalf such as
      identifying and investigating possible target businesses and business
      combinations. There is no limit on the amount of accountable out-of-pocket
      expenses reimbursable by us, which will be reviewed only by our board or a
      court
      of competent jurisdiction if such reimbursement is challenged. To the extent
      such out-of-pocket expenses exceed the available proceeds not deposited in
      the
      trust account, such out-of-pocket expenses would not be reimbursed by us unless
      we consummate a business combination.




No
      compensation or fees of any kind, including finders and consulting fees, will
      be
      paid to any of our initial stockholders, officers or directors, or any of their
      affiliates, including Berkshire Capital and Praedium, who owned our common
      stock
      prior to our initial public offering other than under the general and
      administrative services arrangement with Berkshire Capital, for services
      rendered to us prior to or with respect to our initial business combination,
      any
      reimbursable out-of-pocket expenses payable to our officers and directors and
      as
      described in the following paragraph.





Broad
      Hollow LLC, which is the record owner of 776,250 shares of our common stock,
      has
      the right to call, on a ratable basis, up to 5% of the shares of our common
      stock held prior to the offering by Messrs. Cameron, Foote and Forth and the
      Appel trusts at a price per share of $0.61, exercisable during the 30-day period
      following the closing of our initial business combination. If the call option
      is
      exercised, Broad Hollow, in the discretion of its managing member, may grant
      bonuses in cash, Broad Hollow membership interests or shares of our common
      stock
      owned by Broad Hollow to any party in connection with our initial business
      combination or any other acquisition made by us. This arrangement is intended
      to
      compensate those parties, if any, who participate in the due diligence,
      structuring and negotiation of a business combination. Broad Hollow will use
      its
      own funds to exercise the call option and grant cash bonuses, if any. We will
      make no payments or issue any of our shares in connection with this arrangement.
      Messrs. Foote and Cameron and eight other equity owners and employees of
      Berkshire Capital are the members of Broad Hollow. Broad Hollow is an affiliate
      of ours due to its ownership interest in us.




38





All
      ongoing and future transactions between us and any of our officers and directors
      or their respective affiliates, including loans by our officers and directors,
      will be on terms believed by us to be no less favorable than are available
      from
      unaffiliated third parties and such transactions or loans, including any
      forgiveness of loans, will require prior approval in each instance by a majority
      of our uninterested “independent” directors (to the extent we have any) or the
      members of our board who do not have an interest in the transaction, in either
      case who had access, at our expense, to our attorneys or independent legal
      counsel. We will base our determination as to whether a transaction is no less
      favorable to us that would be available from any affiliated third parties on
      proposals we solicit from third parties, taking into account in addition to
      price the quality of the third parties and scope of the transactions described
      in such proposals, and our knowledge of the financial services
      industry.




**ITEM
      13.****EXHIBITS**




(a)
            The
                following Exhibits are filed as part of this
                report:





**Exhibit
                No.**
            
            **Description**3.1
            
            Restated
                certificate of incorporation.*3.2
            
            By-laws.*4.1
            
            Specimen
                Unit Certificate.*4.2
            
            Specimen
                Common Stock Certificate.*4.3
            
            Specimen
                Warrant Certificate.*4.4
            
            Warrant
                Agreement between Continental Stock Transfer & Trust Company and
                the Company.*4.5
            
            Unit
                Purchase Option.*10.1
            
            Subscription
                Agreement between the Registrant and R. Bruce Cameron.*10.2
            
            Subscription
                Agreement between the Registrant and Richard S. Foote.*10.3
            
            Subscription
                Agreement between the Registrant and R. Bradley Forth.*10.4
            
            Subscription
                Agreement between the Registrant and The Hillary Appel
                Trust.*10.5
            
            Subscription
                Agreement between the Registrant and The Catey Lauren Appel
                Trust.*10.6
            
            Subscription
                Agreement between the Registrant and Broad Hollow LLC.*10.7
            
            Form
                of Letter Agreement between the Registrant and each of the initial
                stockholders.*10.8
            
            [Intentionally
                omitted]10.9
            
            Form
                of Stock Escrow Agreement between the Registrant and Continental
                Stock
                Transfer and Trust Company.*10.10
            
            Form
                of Investment Management Trust Agreement between the Registrant and
                Continental Stock Transfer & Trust Company.*10.11
            
            Office
                Service Agreement between the Registrant and Berkshire Capital Securities
                LLC.*10.12
            
            Promissory
                Note issued by the Registrant to R. Bruce Cameron.*10.13
            
            Promissory
                Note issued by the Registrant to Richard S. Foote.*10.14
            
            Promissory
                Note issued by the Registrant to R. Bradley Forth.*10.15
            
            Promissory
                Note issued by the Registrant to The Hillary Appel
                Trust.*10.16
            
            Promissory
                Note issued by the Registrant to The Catey Lauren Appel
                Trust.*10.17
            
            Promissory
                Note issued by the Registrant to Broad Hollow LLC.*10.18
            
            Registration
                Rights Agreement between the Registrant and the initial
                stockholders.*10.19
            
            Form
                of Placement Unit Purchase Agreement among the Registrant,
                ThinkEquityPartners LLC, and the initial stockholders.*14
            
            Code
                of Ethics.**31.1
            
            Certification
                by Principal Executive Officer pursuant to Section 302 of the
                Sarbanes-Oxley Act of 2002.***31.2
            
            Certification
                by Principal Financial Officer pursuant to Section 302 of the
                Sarbanes-Oxley Act of 2002.***32
            
            Certification
                of Principal Executive and Financial Officers 18 U.S.C.
                1350.***





*
            Incorporated
                by reference to the Registrant’s Registration Statement on Form S-1 (SEC
                File No. 333-127272).**
            Previously
                filed with our Annual Report on Form 10-KSB filed with the SEC on
                April
                10, 2006.***
            Filed
                herewith.




39




(b)
            Reports
                on Form 8-K





None
      during period ended December 31, 2005.




**ITEM
                14.****PRINCIPAL
                ACCOUNTING FEES AND
                SERVICES**




The
      firm
      of Goldstein, Golub, Kessler LLP (“GGK”) acts as our principal accountant.
      Through September 30, 2005 GGK had a continuing relationship with American
      Express Tax and Business Services Inc. (“TBS”), from which it leased auditing
      staff who were full time, permanent employees of TBS and through which its
      partners provide non-audit services. Subsequent to September 30, 2005, this
      relationship ceased and the firm established a similar relationship with RSM
      McGladrey, Inc. (“RSM”). GGK has no full time employees and therefore, none of
      the audit services performed were provided by permanent full-time employees
      of
      GGK. GGK manages and supervises the audit and audit staff, and is exclusively
      responsible for the opinion rendered in connection with its examination. We
      did
      not pay any fees to GGK or RSM for services that fall under the categories
      “Audit Related Fees,” “Tax Fees” or “All Other Fees,” as such categories are
      defined in the rules promulgated by the Securities and Exchange Commission.
      The
      following is a summary of fees paid or to be paid to GGK and RSM for services
      rendered.




**Audit
      Fees**




Fees
      incurred in connection with our initial public offering including related audits
      amounted to $42,500. In addition, we expect to incur approximately $2,000 in
      fees for services provided in connection with our Report on Form
      10-KSB.




**Pre-Approval
      of Fees**




Our
      full
      Board of Directors is responsible for appointing, setting compensation, and
      overseeing the work of the independent auditor. In recognition of this
      responsibility, the Board of Directors has established a policy to pre-approve
      all audit and permissible non-audit services provided by the independent
      auditor.




40


**SIGNATURES**




Pursuant
      to the requirements of 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.




**HIGHBURY
                FINANCIAL INC.**By:
            /s/
                Richard S. Foote
              
              Richard
                S. FootePresident
                and Chief Executive Officer




Date: December
        22 ,
        2006





Pursuant
      to the requirement 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.





**SIGNATURE**
              
              **TITLE**
              
              **DATE**/s/
                  R. Bruce Cameron
              
              Chairman
                  of the Board
              
              December
                  22,
                  2006R.
                  Bruce Cameron/s/
                  Richard S. Foote
              
              President
                  and Chief Executive Officer and
              
              December
                  22,
                  2006Richard
                  S. Foote
              
              Director
                  (principal executive officer)/s/
                  R. Bradley Forth
              
              Executive
                  Vice President, Chief Financial
              
              December
                  22,
                  2006R.
                  Bradley Forth
              
              Officer
                  and Secretary (principal financial and accounting officer)/s/
                  Russell L. Appel
              
              Director
              
              December
                  22,
                  2006Russell
                  L. Appel




41




**Highbury
      Financial Inc.**


(a
      company in the development stage)





**Financial
      Statements**





For
      the
      Periods from July 13, 2005 (inception) to January 31, 2006


and
      from
      January 1, 2006 to January 31, 2006


and
      from
      July 13, 2005 (inception) to December 31, 2005





F-1


**Highbury
      Financial Inc.**


(a
      company in the development stage)





Report
                of Independent Registered Public Accounting Firm
            F-3Financial
                StatementsBalance
                Sheets (as restated)
            F-4Statements
                of Operations
            F-5Statements
                of Stockholders' Equity (as restated)
            F-6Statements
                of Cash Flows
            F-7Notes
                to Financial Statements
            F-8





F-2





Report
      of
      Independent Registered Public Accounting Firm





To
      the
      Board of Directors


Highbury
      Financial Inc.





We
      have
      audited the accompanying balance sheet of Highbury Financial Inc. (a company
      in
      the development stage) as of January 31, 2006 and December 31, 2005, and the
      related statements of operations, stockholders’ equity and cash flows for the
      periods from July 13, 2005 (inception) to January 31, 2006, January 1, 2006
      to
      January 31, 2006 and July 13, 2005 (inception) to December 31, 2005. These
      financial statements are the responsibility of the Company’s management. Our
      responsibility is to express an opinion on these financial statements based
      on
      our 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 audit to obtain reasonable assurance about whether the financial
      statements are free of material misstatement. An audit includes examining,
      on a
      test basis, evidence supporting the amounts and disclosures in the financial
      statements. An audit also includes 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 Highbury Financial Inc. as of
      January 31, 2006 and December 31, 2005, and the results of its operations and
      its cash flows for the periods from July 13, 2005 (inception) to January 31,
      2006, January 1, 2006 to January 31, 2006 and July 13, 2005 (inception) to
      December 31, 2005, in conformity with United States generally accepted
      accounting principles.


As
          discussed in Note 2, the accompanying balance sheet at January 31, 2006
          and
          statements of stockholders’ equity for the periods then ended have been restated
          to reflect the warrants and the unit purchase option issued in connection
          with
          Highbury Financial Inc.’s initial public offering and the warrants issued in the
          private placement immediately preceding the initial public offering as
          equity.




/s/
      Goldstein Golub Kessler LLP





GOLDSTEIN
      GOLUB KESSLER LLP


New
      York,
      New York





January
      31, 2006, except for Note 2,


as
        to
        which the date is December 18, 2006


F-3


**Highbury
      Financial Inc.**


(a
      company in the development stage)





**Balance
      Sheets**


**Restated**
                  **January
                    31, 2006**
                
                **December
                    31, 2005**Current
                    assetsCash
                
                $
                1,300,109
                
                $
                36,902Cash
                    in Trust Fund (Note 1)
                
                
                37,542,667
                
                
                —Prepaid
                    expenses
                
                
                148,869
                
                
                —Total
                    current assets
                
                
                38,991,645
                
                
                36,902Deferred
                    registration costs
                
                
                —
                
                
                483,492Total
                    assets
                
                $
                38,991,645
                
                $
                520,394Current
                    liabilitiesAccounts
                    payable and accrued expenses
                
                $
                261,637
                
                $
                427,846Notes
                    payable, stockholders (Note 3)
                
                
                —
                
                
                70,000Deferred
                    underwriting fees
                
                
                673,333
                
                
                —Total
                    current liabilities
                
                
                934,970
                
                
                497,846Common
                    stock, subject to possible conversion,1,346,666
                    shares at conversion value (Note 1)
                
                
                7,508,530
                
                
                —Stockholders'
                    equity (Notes 1, 2, 4, 5, 6, 7)Preferred
                    stock, $.0001 par value, authorized 1,000,000shares;
                    none issued
                
                
                —
                
                
                —Common
                    stock, $.0001 par value, authorized 50,000,000shares;
                    issued and outstanding 8,625,000 shares(which
                    includes 1,346,666 subject to possible conversion)and
                    1,725,000, respectively
                
                
                863
                
                
                173Additional
                    paid-in capital
                
                
                30,552,667
                
                
                24,827Deficit
                    accumulated during the development stage
                
                
                (5,385
                )
                
                (2,452
                )Total
                    stockholders' equity
                
                
                30,548,145
                
                
                22,548Total
                    liabilities and stockholders' equity
                
                $
                38,991,645
                
                $
                520,394





See
      notes
      to financial statements




F-4


**Highbury
      Financial Inc.**


(a
      company in the development stage)





**Statements
      of Operations**


**Period
                  from**
              
              **Period
                  from**
              
              **Period
                  from****July
                  13, 2005**
              
              **January
                  1, 2006**
              
              **July
                  13, 2005****(inception)
                  to**
              
              **to**
              
              **(inception)
                  to****January
                  31, 2006**
              
              **January
                  31, 2006**
              
              **December
                  31, 2005**ExpensesFormation
                  costs
              
              $
              (456
              )
              $
              —
              
              $
              (456
              )Franchise
                  taxes
              
              
              (1,996
              )
              
              —
              
              
              (1,996
              )D&O
                  insurance
              
              
              (1,481
              )
              
              (1,481
              )
              
              —Administrative
                  fees
              
              
              (1,452
              )
              
              (1,452
              )
              
              —Net
                  loss for the period
              
              $
              (5,385
              )
              $
              (2,933
              )
              $
              (2,452
              )Weighted
                  average shares outstanding, basic and diluted
              
              
              1,928,941
              
              
              3,060,484
              
              
              1,725,000Net
                  loss per share, basic and diluted
              
              $
              (0.00
              )
              $
              (0.00
              )
              $
              (0.00
              )





See
      notes
      to financial statements


F-5


**Highbury
      Financial Inc.**


(a
      company in the development stage)





**Statements
      of Stockholders' Equity**


**(as
      restated)**


**Additional**
                
                **Deficit
                    Accumulated During the****Common
                    Stock**
                
                **Paid-In**
                
                **Development****Shares**
                
                **Amount**
                
                **Capital**
                
                **Phase**
                
                **Total**Sale
                    of 1,725,000 shares of common stock to initial stockholders on
                    August 1,
                    2005 at $0.0145 per share (Note 7)
                
                
                1,725,000
                
                $
                173
                
                $
                24,827
                
                $
                —
                
                $
                25,000Net
                    loss for the period
                
                
                
                
                
                
                
                
                
                
                
                (2,452
                )
                
                (2,452
                )Balance
                    at December 31, 2005
                
                
                1,725,000
                
                $
                173
                
                $
                24,827
                
                $
                (2,452
                )
                $
                22,548Sale
                    of 166,667 units in a private placement
                
                
                166,667
                
                
                17
                
                
                999,985
                
                
                —
                
                
                1,000,002Sale
                    of 6,733,333 units, net of underwriters' discount and offering
                    expenses
                    (includes 1,346,666 shares subject to possible conversion)
                
                
                6,733,333
                
                
                673
                
                
                37,036,285
                
                
                —
                
                
                37,036,958Proceeds
                      subject to possible conversion of1,346,666
                      shares
                
                
                —
                
                
                —
                
                
                (7,508,530
                )
                
                —
                
                
                (7,508,530
                )Proceeds
                    from issuance of underwriters’ purchase option
                
                
                —
                
                
                —
                
                
                100
                
                
                —
                
                
                100Net
                    loss for the period
                
                
                —
                
                
                —
                
                
                —
                
                
                (2,933
                )
                
                (2,933
                )Balance
                    at January 31, 2006
                
                
                8,625,000
                
                $
                863
                
                $
                30,552,667
                
                $
                (5,385
                )
                $
                30,548,145





See
      notes
      to financial statements


F-6


**Highbury
      Financial Inc.**


(a
      company in the development stage)





**Statements
      of Cash Flows**


**Period
                  from**
              
              **Period
                  from**
              
              **Period
                  from****July
                  13, 2005**
              
              **January
                  1, 2006**
              
              **July
                  13, 2005****(inception)
                  to**
              
              **to**
              
              **(inception)
                  to****January
                  31, 2006**
              
              **January
                  31, 2006**
              
              **December
                  31, 2005**Cash
                  flows from operating activitiesNet
                  loss for the period
              
              $
              (5,385
              )
              $
              (2,933
              )
              $
              (2,452
              )Increase
                  in prepaid expenses
              
              
              (12,600
              )
              
              (12,600
              )
              
              —Increase
                  in accrued expenses
              
              
              5,385
              
              
              2,933
              
              
              2,452Net
                  cash used in operating activities
              
              
              (12,600
              )
              
              (12,600
              )
              
              —Cash
                  flows from investing activitiesCash
                  held in trust fund
              
              
              (37,542,667
              )
              
              (37,542,667
              )
              
              —Net
                  cash used in investing activities
              
              
              (37,542,667
              )
              
              (37,542,667
              )
              
              —Cash
                  flows from financing activitiesProceeds
                  from sale of shares of common stock and warrants
              
              
              41,425,000
              
              
              41,400,000
              
              
              25,000Proceeds
                  from issuance of option
              
              
              100
              
              
              100
              
              
              —Proceeds
                  from notes payable, stockholders
              
              
              70,000
              
              
              —
              
              
              70,000Payments
                  of notes payable, stockholders
              
              
              (70,000
              )
              
              (70,000
              )
              
              —Payment
                  of costs of public offering
              
              
              (2,569,724
              )
              
              (2,511,626
              )
              
              (58,098
              )Net
                  cash from financing activities
              
              
              38,855,375
              
              
              38,818,474
              
              
              36,902Net
                  increase in cash
              
              
              1,300,109
              
              
              1,263,207
              
              
              36,902Cash
                  at beginning of period
              
              
              —
              
              
              36,902
              
              
              —Cash
                  at end of period
              
              $
              1,300,109
              
              $
              1,300,109
              
              $
              36,902Supplemental
                  schedule of non-cash financing activities:Accrual
                  of costs of public offering
              
              $
              119,983
              
              $
              46,707
              
              $
              425,394Accrual
                  of deferred underwriting fees
              
              $
              673,333
              
              $
              673,333
              
              $
              —





See
      notes
      to financial statements


F-7


**Highbury
      Financial Inc.**


(a
      company in the development stage)





**Notes
      to Financial Statements**


**1.
      Summary of Significant Accounting Policies**





*Organization
      and Business Operations*





Highbury
      Financial Inc. (the "Company") was incorporated in Delaware on July 13, 2005
      as
      a blank check company whose objective is to acquire, or acquire control of,
      one
      or more operating businesses in the financial services industry that may provide
      significant opportunities for growth, with a particular focus on investment
      management and securities firms.





All
      activity from July 13, 2005 (inception) through January 31, 2006 relates to
      the
      Company's formation and initial public offering described below. The Company
      has
      selected December 31 as its fiscal year-end.





The
      registration statement for the Company's initial public offering ("Offering")
      was declared effective January 25, 2006. The Company consummated the Offering
      on
      January 31, 2006. Immediately preceding the Offering, all of the Company's
      stockholders prior to the Offering, including all of the officers and directors
      of the Company (the “Initial Stockholders”) purchased an aggregate of 166,667
      units from the Company in a private placement (the “Private Placement”). The
      units sold in the Private Placement were identical to the units sold in the
      Offering, but the purchasers in the Private Placement have waived their rights
      to conversion and receipt of distribution on liquidation in the event the
      Company does not complete a business combination (as described below). The
      Company received proceeds from the Private Placement and the Offering, net
      of
      the underwriters’ discount, of approximately $38,037,000 (Note 2).





The
      Company's management has broad discretion with respect to the specific
      application of the net proceeds of this Offering and the Private Placement,
      although substantially all of the net proceeds are intended to be generally
      applied toward consummating a business combination, or series of business
      combinations, with an operating business in the financial services industry
      ("Business Combination"). Furthermore, there is no assurance that the Company
      will be able to successfully affect a Business Combination. An amount of
      $37,542,667 of the net proceeds of the Offering and the Private Placement,
      including approximately $673,333 which will be paid to the underwriters of
      the
      Offering if a business combination is consummated (net of approximately $0.12
      for each share of common stock converted in connection with the Business
      Combination as described below) but which will be forfeited if a business
      combination is not consummated, is being held in an interest-bearing trust
      account ("Trust Account") until the earlier of (i) the consummation of a
      Business Combination or (ii) liquidation of the Company. Under the agreement
      governing the Trust Account, funds will only be invested in United States
      "government securities" within the meaning of Section 2(a)(16) of the Investment
      Company Act of 1940 with a maturity of 180 days or less. The remaining net
      proceeds (not held in the Trust Account) may be used to pay for business, legal
      and accounting due diligence on prospective acquisitions and continuing general
      and administrative expenses.





The
      Company, after signing a definitive agreement for the acquisition of a target
      business, will submit such transaction for stockholder approval. In the event
      that stockholders owning 20% or more of the shares sold in the Offering vote
      against the Business Combination and exercise their conversion rights described
      below, the Business Combination will not be consummated.





The
      Initial Stockholders, have agreed to vote their 1,725,000 founding shares of
      common stock (Note 7) as well as the 166,667 shares of common stock included
      in
      the units they purchased in the Private Placement in accordance with the vote
      of
      the majority in interest of all other stockholders of the Company ("Public
      Stockholders") with respect to any Business Combination. After consummation
      of a
      Business Combination, these voting safeguards will no longer be
      applicable.





With
      respect to a Business Combination which is approved and consummated, any Public
      Stockholder who voted against the Business Combination may demand that the
      Company convert his shares. The per share conversion price will equal the amount
      in the Trust Account, calculated as of two business days prior to the
      consummation of the proposed Business Combination, divided by the number of
      shares of common stock held by Public Stockholders at the consummation of the
      Offering. Accordingly, Public Stockholders holding 19.99% of the aggregate
      number of shares owned by all Public Stockholders may seek conversion of their
      shares in the event of a Business Combination. Such Public Stockholders are
      entitled to receive their per-share interest in the Trust Account computed
      without regard to the shares held by Initial Stockholders. Accordingly, a
      portion of the net proceeds from the offering (19.99% of the amount held in
      the
      Trust Account) has been classified as common stock subject to possible
      conversion in the accompanying January 31, 2006 balance sheet.




F-8


**Highbury
        Financial Inc.**
 (a
        company in the development stage)
 
 **Notes
        to Financial Statements**


The
      Company's Certificate of Incorporation, as amended, provides for mandatory
      liquidation of the Company in the event that the Company does not consummate
      a
      Business Combination within 18 months from the date of the consummation of
      the
      Offering, or 24 months from the consummation of the Offering if certain
      extension criteria have been satisfied. In the event of liquidation, it is
      likely that the per share value of the residual assets remaining available
      for
      distribution (including Trust Account assets) will be less than the initial
      public offering price per share in the Offering due to costs related to the
      Offering and since no value would be attributed to the Warrants contained in
      the
      Units sold (Note 2).





*Use
      of Estimates*





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





*Cash
      and Cash Equivalents*





For
      financial statement purposes, the Company considers all highly liquid debt
      instruments with a maturity of three months or less when purchased to be cash
      equivalents. The Company maintains its cash in bank deposit accounts in the
      United States of America which, at times, may exceed applicable insurance
      limits. The Company has not experienced any losses in such accounts. The Company
      believes it is not exposed to any significant credit risk on cash and cash
      equivalents.





*Deferred
      Income Taxes*





Deferred
      income taxes are provided for the differences between the bases of assets and
      liabilities for financial reporting and income tax purposes. A valuation
      allowance is established when necessary to reduce deferred tax assets to the
      amount expected to be realized.





The
      Company recorded a deferred income tax asset aggregating approximately $834
      and
      $1,831 at December 31, 2005 and January 31, 2006, respectively, for the tax
      effect of net operating loss carryforwards and temporary differences. In
      recognition of the uncertainty regarding the ultimate amount of income tax
      benefits to be derived, the Company has recorded a full valuation allowance
      at
      December 31, 2005 and January 31, 2006. The net operating loss carryforward
      at
      January 31, 2006 amounts to approximately $5,385 and expires in
      2026.





The
      effective tax rate differs from the statutory rate of 34% due to the increase
      in
      the valuation allowance.





*Income
      (Loss) Per Common Share*





Loss
        per
        share is computed by dividing net loss by the weighted-average number of
        shares
        of common stock outstanding during the period. The
        effect of the 13,466,666 outstanding warrants issued in connection with the
        initial public offering, the 333,334 outstanding warrants issued in connection
        with the private placement and the 336,667 units included in the underwriters
        purchase option has not been considered in diluted loss per share calculations
        since the effect of such warrants and options would be
        antidilutive.




*Deferred
      Registration Costs*





Deferred
      registration costs consist of legal, accounting and other fees incurred through
      the balance sheet data that are related to the Offering and that have been
      charged to capital upon the consummation of the Offering.





*Recent
      Accounting Pronouncements*




Management
      does not believe that any recently issued, but not yet effective, accounting
      standards if currently adopted would have a material effect on the accompanying
      financial statements.




F-9


**Highbury
        Financial Inc.**
 (a
        company in the development stage)
 
 **Notes
        to Financial Statements**


**2.
      Initial Public Offering**





On
      January 26, 2006, the Company sold 6,733,333 units ("Units") in the Offering.
      Each Unit consists of one share of the Company's common stock, $.0001 par value,
      and two redeemable common stock purchase warrants ("Warrants"). Each Warrant
      entitles the holder to purchase from the Company one share of common stock
      at an
      exercise price of $5.00 commencing the later of the completion of a Business
      Combination or one year from the effective date of the Offering and expiring
      four years from the effective date of the Offering. The Warrants will be
      redeemable, at the Company's option, at a price of $.01 per Warrant upon 30
      days' notice after the Warrants become exercisable, only in the event that
      the
      last sale price of the common stock is at least $8.50 per share for any 20
      trading days within a 30 trading day period ending on the third day prior to
      the
      date on which notice of redemption is given. In connection with the Offering,
      the Company paid the underwriters an underwriting discount of approximately
      5.2%
      of the gross proceeds of the Offering. Immediately preceding the Offering,
      all
      of the Company's stockholders prior to the Offering, including all of the
      officers and directors of the Company (the “Initial Stockholders”) purchased an
      aggregate of 166,667 units from the Company in a private placement (the “Private
      Placement”). The units sold in the Private Placement were identical to the units
      sold in the Offering, but the purchasers in the Private Placement have waived
      their rights to conversion and receipt of distribution on liquidation in the
      event the Company does not complete a business combination.




In
          connection with this Offering, the Company issued an option, pursuant to
          the
          underwriting agreement, to the underwriters to purchase up to an additional
          1,010,000 units from the Company for $6.00 with an underwriting discount
          of
          $0.31 per unit. On January 30, 2006, the underwriters notified the Company
          that
          they intended to exercise the option in its entirety. The closing of this
          sale
          occurred on February 3, 2006.




Under
        the
        terms of the Warrants, the Company is required to use its best efforts to
        maintain the effectiveness of the registration statement covering the Warrants.
        However, the Company is not obligated to deliver securities, and there are
        no
        contractual penalties for failure to deliver securities, if a registration
        statement is not effective at the time of exercise. Additionally, in the
        event
        that a registration statement is not effective at the time of exercise, the
        holder of such Warrant shall not be entitled to exercise such Warrant and
        the
        Company entered into the Amended and Restated Clarification Agreement on
        December 15, 2006 which clarifies that in no event (whether in the case of
        a registration statement not being effective or otherwise) is the Company
        required to net cash settle the warrant exercise. Consequently, the Warrants
        will expire unexercised and unredeemed if there is no effective registration
        statement covering the shares of the Company’s common stock issuable upon
        exercise of the Warrants.




In
            connection with this Offering, the Company issued an option, for $100,
            to the
            underwriters to purchase 336,667 Units at an exercise price of $7.50
            per Unit.
The
            Company has accounted for the fair value of the option, inclusive of
            the receipt
            of the $100 cash payment, as an expense of the public offering resulting
            in a
            charge directly to stockholders' equity. The Company estimates that the
            fair
            value of this option is approximately $423,000 ($1.26 per Unit) using
            a
            Black-Scholes option pricing model. The fair value of the option granted
            to the
            underwriters is estimated as of the date of grant using the following
            assumptions: (1) expected volatility of 29.0%, (2) risk-free interest
            rate of
            4.34% and (3) expected life of four years. The
            option may be exercised for cash or on a "cashless" basis, at the holder's
            option, such that the holder may use the appreciated value of the option
            (the
            difference between the exercise prices of the option and the underlying
            Warrants
            and the market price of the units and underlying securities) to exercise
            the
            option without the payment of any cash. In addition, the
            Warrants underlying such Units are exercisable at $6.25 per
            share.




The
          holder of the unit purchase option is not entitled to exercise the unit
          purchase
          option or the Warrants underlying the unit purchase option unless a registration
          statement covering the securities underlying the unit purchase option is
          effective or an exemption from registration is available. On December 15,
          2006, the Company entered into Amended Unit Purchase Options which clarify
          that the option and underlying Warrants will expire unexercised and
          unredeemed if there is no effective registration statement covering the
          securities issuable upon exercise. In addition, there are no circumstances
          under
          which the Company is required to net cash settle the purchase option or
          the
          underlying Warrants.





F-10


**Highbury
        Financial Inc.**
 (a
        company in the development stage)
 
 **Notes
        to Financial Statements**


Based
          on
          its interpretation of Emerging Issues Task Force No. 00-19, *“Accounting
          for Derivative Financial Instruments Indexed to, and Potentially Settled
          in, a
          Company’s Own Stock”* (“EITF
          No. 00-19”), the Company had previously issued financial statements which
          presented the fair value of the Warrants and the unit purchase option as
          liabilities. Upon further review and after entering into the Amended and
          Restated Clarification Agreement and the amendments to the unit purchase
          options, the Company has determined that the Warrants and the unit purchase
          option should be categorized as equity rather than liabilities. The
          accompanying audited financial statements as of January 31, 2006 have been
          restated to account
          for the warrants and the unit purchase option as equity .
          The
          impact of the restatement
          on previously
          reported balance sheets and statements of stockholders’ equity is as
          follows:





January
                  31, 2006AsPreviously
                    Reported
              
              As
                  RestatedAssets
              
              $
              38,991,645
              
              $
              38,991,645Liabilities
              
              $
              9,138,970
              
              $
              934,970Common
                  stock subject to conversion
              
              $
              7,508,530
              
              $
              7,508,530Stockholders’
                  equity
              
              $
              22,344,145
              
              $
              30,548,145


**3.
      Notes Payable, Stockholders**





The
      Company issued unsecured promissory notes in the aggregate amount of $70,000
      to
      all of its Initial Stockholders. The notes were non-interest-bearing and were
      repaid immediately following the consummation of the Offering from the net
      proceeds of such Offering.





**4.
      Commitments**





The
      Company presently occupies office space provided by an affiliate of four Initial
      Stockholders. Such affiliate has agreed that, until the acquisition of a target
      business by the Company, it will make such office space, as well as certain
      office and secretarial services, available to the Company, as may be required
      by
      the Company from time to time. The Company has agreed to pay such affiliate
      $7,500 per month for such services commencing on January 26, 2006. The statement
      of operations for the period ended January 31, 2006 includes $1,452 related
      to
      this agreement.





In
      connection with the Offering, the Company has agreed to pay the underwriters
      upon completion of its initial business combination approximately $673,333,
      plus
      accrued interest on such amount, net of taxes payable, less approximately $0.12
      for each share of common stock that the Public Stockholders elect to convert
      in
      connection with the Company’s initial business combination. The Company has
      recorded the deferred underwriting fees payable to the underwriters as an
      expense of the public offering resulting in a charge directly to stockholders'
      equity.





Pursuant
      to letter agreements dated January 25, 2006 with the Company and the
      underwriters, the Initial Stockholders have waived their rights to participate
      in any liquidation distribution occurring upon our failure to complete a
      business combination, with respect to those shares of common stock acquired
      by
      them prior to the Offering and with respect to the shares included in the
      166,667 units they purchased in the Private Placement.





The
      Initial Stockholders will be entitled to registration rights with respect to
      their founding shares and the shares they purchased in the private placement
      pursuant to an agreement signed on January 25, 2006. The holders of the majority
      of these shares are entitled to make up to two demands that the Company register
      these shares at any time commencing three months prior to the third anniversary
      of the effective date of the Offering. In addition, the Initial Stockholders
      have certain "piggy-back" registration rights on registration statements filed
      subsequent to the third anniversary of the effective date of the
      Offering.





The
      Company has also agreed to pay the fees and issue the securities to the
      underwriters in the Offering as described above in Note 2.





**5.
      Preferred Stock**





The
      Company is authorized to issue 1,000,000 shares of preferred stock with such
      designations, voting and other rights and preferences as may be determined
      from
      time to time by the Board of Directors.




F-11


**Highbury
        Financial Inc.**
 (a
        company in the development stage)
 
 **Notes
        to Financial Statements**


**6.
      Common Stock**





At
      January 31, 2006, 14,810,001 shares of common stock were reserved for issuance
      upon exercise of redeemable warrants and underwriters' unit purchase
      option.





**7.
      Stock Dividend**





Effective
      January 13, 2006, the Company's Board of Directors authorized a stock dividend
      of 0.15 shares of common stock for each outstanding share of common stock.
      All
      references in the accompanying financial statements to the number of shares
      of
      common stock have been retroactively restated to reflect this
      transaction.




F-12