** UNITED      STATES**

**SECURITIES      AND EXCHANGE COMMISSION**

**WASHINGTON,      D.C. 20549**

**FORM      10-QSB/A**

**Amendment        No. 2**

| x | QUARTERLY                REPORT UNDER SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF                1934 |
|---|-----------------------------------------------------------------------------------------------------------------|

|   | For                the quarterly period ended March 31,                2006 |
|--------|-----------------------------------------------------------------------------|

| o | TRANSITION                REPORT UNDER SECTION 13 OR 15(D) OF THE EXCHANGE                ACT |
|---|-----------------------------------------------------------------------------------------------|

|   | For                the transition period from _____________ to                _____________ |
|--------|---------------------------------------------------------------------------------------------|

| Highbury                Financial Inc.                                                          |
|-------------------------------------------------------------------------------------------------|
| (Exact                Name of Small Business Issuer as Specified in Its                Charter) |
|                                                                                            |
| Delaware                                                                                        |   | 20-3187008 |
| (State                or other Jurisdiction ofIncorporation                or Organization)     |   | (I.R.S.                EmployerIdentification                No.) |
|                                                                                            |
| 999                Eighteenth Street, Ste. 3000                                                 |
| Denver,                Colorado 80202                                                           |
| (Address                of Principal Executive Offices)                                         |
|                                                                                            |
| (303)                357-4802                                                                   |
| (Issuer’s                Telephone                Number, Including Area Code)            |

----

**Explanatory      Note**

----

**PART      I. FINANCIAL INFORMATION**

**Page**

| Item                  1 – Financial Statements                                                                           | 1      |
|-------------------------------------------------------------------------------------------------------------------------------------|--------|
| Condensed                  Balance Sheets (as restated)                                                                             | 1      |
| Condensed                  Statement of Operations (as restated)                                                                    | 2      |
| Condensed                  Statement of Stockholders’ Equity (as restated)                                                    | 3      |
| Condensed                  Statements of Cash Flows (as restated)                                                                   | 4      |
| Notes                  to Unaudited Condensed Financial Statements (as restated)                                                    | 5      |
|                                                                                                                                |   |
| Item                  2 – Management’s Discussion and Analysis or Plan of Operation (as                  restated) | 13     |
|                                                                                                                                |   |
| Item                  3 – Controls and Procedures                                                                        | 17     |
|                                                                                                                                |   |
| **PART                  II. OTHER INFORMATION**                                                                                     | 18     |
|                                                                                                                                |   |
| Item                  2 – Unregistered Sales of Equity Securities and Use of                  Proceeds                   | 18     |
|                                                                                                                                |   |
| Item                  6 – Exhibits                                                                                       | 19     |
|                                                                                                                                |   |
| Signatures                                                                                                                          | 20     |

----

**ITEM      1 - FINANCIAL STATEMENTS**

| **Highbury                Financial Inc.**          |
|-----------------------------------------------------|
| (a                company in the development stage) |

| **Condensed                Balance Sheets** |
|---------------------------------------------|

|                                                                                                                                                                                                                                                                                |   | **Restated****March                  31, 2006** |       |  **December                  31, 2005** |   |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-------------------------------------------------|------------|----------------------------------------------|--------|
|                                                                                                                                                                                                                                                                                |   |  (unaudited)                               |       |                                         |   |   |
| Current                  assets:                                                                                                                                                                                                                                                    |   |                                            |       |                                         |   |   |   |
| Cash                                                                                                                                                                                                                                                                                |   | $                                               | 1,023,035  |                                         | $      | 36,902 |   |
| Cash                  in Trust Account (Notes 2, 4)                                                                                                                                                                                                                                 |   |                                            | 43,600,025 |                                         |   | — |   |
| Prepaid                  expenses                                                                                                                                                                                                                                                   |   |                                            | 131,463    |                                         |   | — |   |
| Total                  current assets                                                                                                                                                                                                                                               |   |                                            | 44,754,523 |                                         |   | 36,902 |   |
|                                                                                                                                                                                                                                                                                |   |                                            |            |                                         |   |  |   |
| Deferred                  registration costs (Note 2)                                                                                                                                                                                                                               |   |                                            | —    |                                         |   | 483,492 |   |
| Deferred                  acquisition costs (Note 2)                                                                                                                                                                                                                                |   |                                            | 260,586    |                                         |   | — |   |
| Deferred                  income taxes (Notes 2, 8)                                                                                                                                                                                                                                 |   |                                            | 52,303     |                                         |   | — |   |
|                                                                                                                                                                                                                                                                                |   |                                            |       |                                         |   |   |   |
| Total                  assets                                                                                                                                                                                                                                                       |   | $                                               | 45,067,412 |                                         | $      | 520,394 |   |
|                                                                                                                                                                                                                                                                                |   |                                            |            |                                         |   |  |   |
| Current                  liabilities:                                                                                                                                                                                                                                               |   |                                            |            |                                         |   |  |   |
| Accounts                  payable and accrued expenses                                                                                                                                                                                                                              |   | $                                               | 315,241    |                                         | $      | 427,846 |   |
| Income                  taxes payable                                                                                                                                                                                                                                               |   |                                            | 109,498    |                                         |   | — |   |
| Deferred                  underwriting fees (Note 6)                                                                                                                                                                                                                                |   |                                            | 673,333    |                                         |   | — |   |
| Deferred                  investment income (Note 2)                                                                                                                                                                                                                                |   |                                            | 65,955     |                                         |   | — |   |
| Notes                  payable, stockholders (Note 7)                                                                                                                                                                                                                               |   |                                            | —    |                                         |   | 70,000 |   |
| Total                  current liabilities                                                                                                                                                                                                                                          |   |                                            | 1,164,027  |                                         |   | 497,846 |   |
|                                                                                                                                                                                                                                                                                |   |                                            |            |                                         |   |  |   |
| Common                    stock, subject to possible conversion, 1,548,666                    shares at conversion value (Note 2)                                                                                                                                                   |   |                                            | 8,657,910  |                                         |   | — |   |
|                                                                                                                                                                                                                                                                                |   |                                            |            |                                         |   |  |   |
| Stockholders’                  equity                  (Notes 2, 3, 4, 5, 6, 9):                                                                                                                                                                                              |   |                                            |            |                                         |   |  |   |
| Preferred                    stock, $.0001 par value, authorized 1,000,000 shares;                      none issued                                                                                                                                                                 |   |                                            | —    |                                         |   | — |   |
| Common                    stock, $.0001 par value, authorized 50,000,000 shares;                      issued and outstanding 9,635,000 shares (which                        includes 1,548,666 subject to possible conversion) and                          1,725,000, respectively |   |                                            | 964        |                                         |   | 173 |   |
| Additional                  paid-in capital                                                                                                                                                                                                                                         |   |                                            | 35,149,808 |                                         |   | 24,827 |   |
| Income                  (deficit) accumulated during the development stage                                                                                                                                                                                                          |   |                                            | 94,703     |                                         |   | (2,452 | ) |
| Total                  stockholders’ equity                                                                                                                                                                                                                                   |   |                                            | 35,245,475 |                                         |   | 22,548 |   |
|                                                                                                                                                                                                                                                                                |   |                                            |       |                                         |   |   |   |
| Total                  liabilities and stockholders’ equity                                                                                                                                                                                                                   |   | $                                               | 45,067,412 |                                         | $      | 520,394 |   |

| See                Notes to unaudited condensed financial                statements |
|-------------------------------------------------------------------------------------|

----

| **Highbury                Financial Inc.**                  |
|-------------------------------------------------------------|
| (a                company in the development stage)         |
|  **Condensed                Statements of Operations** |

|                                                                    |   |  **Restated** **Period                  from** **July                  13, 2005** **(inception)                  to March 31, 2006**  |      |  **Restated                  Period from January 1, 2006 to March 31,                  2006**  |   |
|-------------------------------------------------------------------------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------|-----------|----------------------------------------------------------------------------------------------------------|--------|
|                                                                    |   |   (unaudited)                                                                                                                                        |      |  (unaudited)                                                                                        |   |
| Operating                  expenses:                                    |   |                                                                                                                                                           |      |                                                                                                     |   |   |   |
| Professional                  fees                                      |   | $                                                                                                                                                              | (32,315   | )                                                                                                        | $      | (32,315 | ) |
| D&O                  insurance                                      |   |                                                                                                                                                           | (16,787   | )                                                                                                        |   | (16,787 | ) |
| Administrative                  fees                                    |   |                                                                                                                                                           | (16,452   | )                                                                                                        |   | (16,452 | ) |
| Franchise                  taxes                                        |   |                                                                                                                                                           | (16,958   | )                                                                                                        |   | (14,962 | ) |
| Travel                  and entertainment                               |   |                                                                                                                                                           | (7,051    | )                                                                                                        |   | (7,051 | ) |
| Other                  expenses                                         |   |                                                                                                                                                           | (3,042    | )                                                                                                        |   | (2,586 | ) |
| Total                  expenses                                         |   |                                                                                                                                                           | (92,605   | )                                                                                                        |   | (90,153 | ) |
| Operating                  loss                                         |   |                                                                                                                                                           | (92,605   | )                                                                                                        |   | (90,153 | ) |
|                                                                    |   |                                                                                                                                                           |      |                                                                                                     |   |   |   |
| Non-operating                  income:                                  |   |                                                                                                                                                           |      |                                                                                                     |   |   |   |
| Investment                  income                                      |   |                                                                                                                                                           | 244,503   |                                                                                                     |   | 244,503 |   |
| Total                  non-operating income                             |   |                                                                                                                                                           | 244,503   |                                                                                                     |   | 244,503 |   |
|                                                                    |   |                                                                                                                                                           |      |                                                                                                     |   |   |   |
| Income                  before provision for income taxes               |   |                                                                                                                                                           | 151,898   |                                                                                                     |   | 154,350 |   |
|                                                                    |   |                                                                                                                                                           |      |                                                                                                     |   |   |   |
| Provision                  for income taxes (Note 8):                   |   |                                                                                                                                                           |      |                                                                                                     |   |   |   |
| Current                                                                 |   |                                                                                                                                                           | (109,498  | )                                                                                                        |   | (109,498 | ) |
| Deferred                                                                |   |                                                                                                                                                           | 52,303    |                                                                                                     |   | 52,303 |   |
| Net                  income for the period                              |   | $                                                                                                                                                              | 94,703    |                                                                                                     | $      | 97,155 |   |
|                                                                    |   |                                                                                                                                                           |      |                                                                                                     |   |   |   |
|                                                                    |   |                                                                                                                                                           |      |                                                                                                     |   |   |   |
| Weighted                  average shares outstanding, basic and diluted |   |                                                                                                                                                           | 3,641,398 |                                                                                                     |   | 7,345,000 |   |
|                                                                    |   |                                                                                                                                                           |      |                                                                                                     |   |   |   |
| Net income                  per share, basic and diluted           |   | $                                                                                                                                                              | 0.03      |                                                                                                     | $      | 0.01 |   |

| See                Notes to unaudited condensed financial                statements |
|-------------------------------------------------------------------------------------|

----

| **Highbury                Financial Inc.**          |
|-----------------------------------------------------|
| (a                company in the development stage) |

| **Condensed                Statement of Stockholders’                Equity****(as                restated)** |
|---------------------------------------------------------------------------------------------------------------------|

|                                                                                                                                                                                                         |   | **Common                  Stock** |      | ****Additional**Paid-In** |   | ******Deficit**Accumulated**During                  the 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 5)                              |   |                              | 1,725,000 |                      | $      | 173                                                                   |   | $               | 24,827     |   | $ | — |   | $ | 25,000 |   |
|                                                                                                                                                                                                         |   |                              |           |                      |   |                                                                       |   |            |            |   |   |  |   |   |  |   |
| Net                  loss for the period                                                                                                                                                                     |   |                              | —   |                      |   | —                                                               |   |            | —    |   |   | (2,452 | ) |   | (2,452 | ) |
|                                                                                                                                                                                                         |   |                              |      |                      |   |                                                                  |   |            |       |   |   |   |   |   |   |   |
| Balance                  at December 31, 2005                                                                                                                                                                |   |                              | 1,725,000 |                      | $      | 173                                                                   |   | $               | 24,827     |   | $ | (2,452 | ) | $ | 22,548 |   |
|                                                                                                                                                                                                         |   |                              |           |                      |   |                                                                       |   |            |            |   |   |  |   |   |  |   |
| Unaudited:                                                                                                                                                                                                   |   |                              |           |                      |   |                                                                       |   |            |            |   |   |  |   |   |  |   |
|                                                                                                                                                                                                         |   |                              |           |                      |   |                                                                       |   |            |            |   |   |  |   |   |  |   |
| Sale                  of 166,667 units in a private placement                                                                                                                                                |   |                              | 166,667   |                      |   | 17                                                                    |   |            | 999,985    |   |   | — |   |   | 1,000,002 |   |
|                                                                                                                                                                                                         |   |                              |           |                      |   |                                                                       |   |            |            |   |   |  |   |   |  |   |
| Sale                    of 7,743,333 units, net of underwriters’ discount                      and offering expenses (includes 1,548,666                        shares subject to possible conversion) |   |                              | 7,743,333 |                      |   | 774                                                                   |   |            | 42,782,806 |   |   | — |   |   | 42,783,580 |   |
|                                                                                                                                                                                                         |   |                              |           |                      |   |                                                                       |   |            |            |   |   |  |   |   |  |   |
| Proceeds                    subject to possible conversion of 1,548,666                      shares                                                                                                          |   |                              | —   |                      |   | —                                                               |   |            | (8,657,910 | ) |   | — |   |   | (8,657,910 | ) |
|                                                                                                                                                                                                         |   |                              |           |                      |   |                                                                       |   |            |            |   |   |  |   |   |  |   |
| Proceeds                  from issuance of option                                                                                                                                                            |   |                              | —   |                      |   | —                                                               |   |            | 100        |   |   | — |   |   | 100 |   |
|                                                                                                                                                                                                         |   |                              |           |                      |   |                                                                       |   |            |            |   |   |  |   |   |  |   |
| Net                  income for the period                                                                                                                                                                   |   |                              | —   |                      |   | —                                                               |   |            | —    |   |   | 97,155 |   |   | 97,155 |   |
|                                                                                                                                                                                                         |   |                              |      |                      |   |                                                                  |   |            |       |   |   |   |   |   |   |   |
| Balance                  at March 31, 2006                                                                                                                                                                   |   |                              | 9,635,000 |                      | $      | 964                                                                   |   | $               | 35,149,808 |   | $ | 94,703 |   | $ | 35,245,475 |   |

| See                Notes to unaudited condensed financial                statements |
|-------------------------------------------------------------------------------------|

----

| **Highbury                Financial Inc.**          |
|-----------------------------------------------------|
| (a                company in the development stage) |

| **Condensed                Statements of Cash Flows****(as                restated)** |
|---------------------------------------------------------------------------------------|

|                                                                                                                |   | **Restated****Period                  from** **July                  13, 2005** **(inception)                  to March 31, 2006** |        | **Restated****Period                  from January 1, 2006 to March 31, 2006** |   |
|---------------------------------------------------------------------------------------------------------------------|--------|----------------------------------------------------------------------------------------------------------------------------------------------|-------------|--------------------------------------------------------------------------------|--------|
|                                                                                                                |   |  (unaudited)                                                                                                                            |        |  (unaudited)                                                              |   |
| Cash                  flows from operating activities:                                                              |   |                                                                                                                                         |        |                                                                           |   |   |   |
| Net                  income for the period                                                                          |   | $                                                                                                                                            | 94,703      |                                                                           | $      | 97,155 |   |
|                                                                                                                |   |                                                                                                                                         |        |                                                                           |   |   |   |
| Adjustments                    to reconcile net income to net cash used in operating                    activities: |   |                                                                                                                                         |        |                                                                           |   |   |   |
| Deferred                  taxes                                                                                     |   |                                                                                                                                         | (52,303     | )                                                                              |   | (52,303 | ) |
|                                                                                                                |   |                                                                                                                                         |        |                                                                           |   |   |   |
| Changes                  in operating assets and liabilities:                                                       |   |                                                                                                                                         |        |                                                                           |   |   |   |
| Increase                  in trust account                                                                          |   |                                                                                                                                         | (310,458    | )                                                                              |   | (310,458 | ) |
| Increase                  in prepaid expenses                                                                       |   |                                                                                                                                         | (131,463    | )                                                                              |   | (131,463 | ) |
| Increase                  in accrued expenses                                                                       |   |                                                                                                                                         | 54,655      |                                                                           |   | 52,203 |   |
| Increase                  in deferred interest                                                                      |   |                                                                                                                                         | 65,955      |                                                                           |   | 65,955 |   |
| Increase                  in income taxes payable                                                                   |   |                                                                                                                                         | 109,498     |                                                                           |   | 109,498 |   |
| Net                  cash used in operating activities                                                              |   |                                                                                                                                         | (169,413    | )                                                                              |   | (169,413 | ) |
|                                                                                                                |   |                                                                                                                                         |        |                                                                           |   |   |   |
| Cash                  flows from investing activities:                                                              |   |                                                                                                                                         |        |                                                                           |   |   |   |
| Cash                  held in trust fund                                                                            |   |                                                                                                                                         | (43,289,567 | )                                                                              |   | (43,289,567 | ) |
| Net                  cash used in investing activities                                                              |   |                                                                                                                                         | (43,289,567 | )                                                                              |   | (43,289,567 | ) |
|                                                                                                                |   |                                                                                                                                         |        |                                                                           |   |   |   |
| Cash                  flows from financing activities:                                                              |   |                                                                                                                                         |        |                                                                           |   |   |   |
| Proceeds                  from sale of shares of common stock and warrants                                          |   |                                                                                                                                         | 47,485,000  |                                                                           |   | 47,460,000 |   |
| Proceeds                  from issuance of option                                                                   |   |                                                                                                                                         | 100         |                                                                           |   | 100 |   |
| Proceeds                  from notes payable, stockholders                                                          |   |                                                                                                                                         | 70,000      |                                                                           |   | — |   |
| Payments                  of notes payable, stockholders                                                            |   |                                                                                                                                         | (70,000     | )                                                                              |   | (70,000 | ) |
| Payment                  of costs of public offering                                                                |   |                                                                                                                                         | (3,003,085  | )                                                                              |   | (2,944,987 | ) |
| Net                  cash provided by financing activities                                                          |   |                                                                                                                                         | 44,482,015  |                                                                           |   | 44,445,113 |   |
|                                                                                                                |   |                                                                                                                                         |        |                                                                           |   |   |   |
|                                                                                                                |   |                                                                                                                                         |        |                                                                           |   |   |   |
| Net                  increase in cash                                                                               |   |                                                                                                                                         | 1,023,035   |                                                                           |   | 986,133 |   |
| Cash                  at beginning of period                                                                        |   |                                                                                                                                         | —     |                                                                           |   | 36,902 |   |
| Cash                  at end of period                                                                              |   | $                                                                                                                                            | 1,023,035   |                                                                           | $      | 1,023,035 |   |
|                                                                                                                |   |                                                                                                                                         |        |                                                                           |   |   |   |
| Supplemental                  schedule of non-cash financing activities:                                            |   |                                                                                                                                         |        |                                                                           |   |   |   |
| Accrual                  of costs of acquisition                                                                    |   | $                                                                                                                                            | 260,586     |                                                                           | $      | 260,586 |   |
| Accrual                  of deferred underwriting fees                                                              |   | $                                                                                                                                            | 673,333     |                                                                           | $      | 673,333 |   |
|                                                                                                                |   |                                                                                                                                         |        |                                                                           |   |   |   |
| Supplemental                  disclosure of cash flow information:                                                  |   |                                                                                                                                         |        |                                                                           |   |   |   |
| Cash                  paid for taxes                                                                                |   | $                                                                                                                                            | 2,146       |                                                                           | $      | 2,146 |   |

| See                Notes to unaudited condensed financial                statements |
|-------------------------------------------------------------------------------------|

----

**HIGHBURY        FINANCIAL INC.**

**Notes        to Unaudited Condensed Financial Statements**

**Note        1. Basis of Presentation**

**Note      2. Organization and Business Operations**

----

**HIGHBURY          FINANCIAL INC.**

**Notes          to Unaudited Condensed Financial Statements**

*Deferred      Income Taxes*

*Income          Per Common Share*

----

**HIGHBURY          FINANCIAL INC.**

**Notes          to Unaudited Condensed Financial Statements**

*Deferred      Registration Costs*

*Deferred      Acquisition Costs*

*Recent      Accounting Pronouncements*

**Note      3. Initial Public Offering**

----

**HIGHBURY          FINANCIAL INC.**

**Notes          to Unaudited Condensed Financial Statements**

|                                                |   | March                  31, 2006         |       |
|-----------------------------------------------------|--------|-----------------------------------------|------------|
|                                                |   | As                  Previously Reported |       | As                  Restated |   |
|                                                |   |                                    |       |   |   |
| Assets                                              |   | $                                       | 45,067,412 |   | $ | 45,067,412 |   |
| Liabilities                                         |   | $                                       | 11,862,627 |   | $ | 1,164,027 |   |
| Common                  stock subject to conversion |   | $                                       | 8,657,910  |   | $ | 8,657,910 |   |
| Stockholders’                  equity         |   | $                                       | 24,546,875 |   | $ | 35,245,475 |   |
|                                                |   |                                    |       |   |   |   |   |

----

**HIGHBURY          FINANCIAL INC.**

**Notes          to Unaudited Condensed Financial Statements**

|                                               |   | Period                  from July 13, 2005(inception)                  to March 31, 2006 |       | Three                  Months EndedMarch                  31, 2006 |   |
|----------------------------------------------------|--------|------------------------------------------------------------------------------------------|------------|--------------------------------------------------------------------|--------|
|                                               |   | As                  Previously Reported                                                  |       | As                  Restated                                       |   | As                  Previously Reported |   | As                  Restated |   |
|                                               |   |                                                                                     |       |                                                               |   |   |   |   |   |
| Loss                  from derivative liabilities: |   |                                                                                     |       |                                                               |   |   |   |   |   |
| Warrants                                           |   | $                                                                                        | (1,265,600 | )                                                                  |   | — |   | $ | (1,265,600 | ) |   | — |   |
| UPO                                                |   | $                                                                                        | (118,000   | )                                                                  |   | — |   | $ | (118,000 | ) |   | — |   |
| Pre-tax                  income (loss)             |   | $                                                                                        | (1,231,702 | )                                                                  | $      | 151,898 |   | $ | (1,229,250 | ) | $ | 154,350 |   |
| Provision                  for income taxes        |   | $                                                                                        | (57,195    | )                                                                  | $      | (57,195 | ) | $ | (57,195 | ) | $ | (57,195 | ) |
| Net                  income (loss)                 |   | $                                                                                        | (1,288,897 | )                                                                  | $      | 94,703 |   | $ | (1,286,445 | ) | $ | 97,155 |   |
|                                               |   |                                                                                     |       |                                                               |   |   |   |   |   |   |   |   |   |
| Weighted                  average shares           |   |                                                                                     |       |                                                               |   |   |   |   |   |   |   |   |   |
| Basic                                              |   |                                                                                     | 3,641,398  |                                                               |   | 3,641,398 |   |   | 7,345,000 |   |   | 7,345,000 |   |
|                                               |   |                                                                                     |       |                                                               |   |   |   |   |   |   |   |   |   |
| Earnings                  (loss) per share         |   |                                                                                     |       |                                                               |   |   |   |   |   |   |   |   |   |
| Basic                                              |   | $                                                                                        | (0.35      |                  )                                            | $      | 0.03 |   | $ | (0.18 | ) | $ | 0.01 |   |

**Note      4. Investments Held in Trust**

**Note      5. Stockholders’ Equity**

----

**HIGHBURY            FINANCIAL INC.**

**Notes            to Unaudited Condensed Financial            Statements**

**Note      6. Commitments**

----

**HIGHBURY            FINANCIAL INC.**

**Notes            to Unaudited Condensed Financial            Statements**

**Note      7. Notes Payable, Stockholders**

**Note      8. Income Taxes**

| Current                                         |   |    |    |
|-------------------------------------------------|--------|--------------|---------|
|                     Federal |   | $            | 95,817  |   |
|                     State   |   |         | 13,681  |   |
| Deferred                                        |   |         |    |   |
|                     Federal |   |         | (45,768 | ) |
|                     State   |   |         | (6,535  | ) |
|                                            |   | $            | 57,195  |   |

| Statutory                  federal income tax rate |   |   | 34.0 | %      |
|----------------------------------------------------|--------|--------|------|--------|
| State                  tax net of federal benefit  |   |   | 3.1  |   |
| Effective                  income tax rate         |   |   | 37.1 | %      |

|                                                           |   | **March                31, 2006** |   | **December                31, 2005** |   |
|----------------------------------------------------------------|--------|-----------------------------------|--------|--------------------------------------|--------|
| Interest                income deferred for reporting purposes |   | $                                 | 24,440 |                                 | $      | — |   |
| Expenses                deferred for income tax purposes       |   |                              | 28,772 |                                 |   | 909 |   |
| Valuation                allowance                             |   |                              | (909   | )                                    |   | (909 | ) |
| Net                deferred tax asset                          |   | $                                 | 52,303 |                                 | $      | — |   |

**Note      9. Recent Developments**

----

**HIGHBURY            FINANCIAL INC.**

**Notes            to Unaudited Condensed Financial            Statements**

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**ITEM      2 – MANAGEMENT’S DISCUSSION      AND      ANALYSIS OR PLAN OF OPERATION**

**Forward      Looking Statements**

**Restatement**

*“Accounting          for Derivative Financial Instruments Indexed to, and Potentially Settled          in, a          Company’s Own Stock”*

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|                                                |   | March                  31, 2006         |       |
|-----------------------------------------------------|--------|-----------------------------------------|------------|
|                                                |   | As                  Previously Reported |       | As                  Restated |   |
|                                                |   |                                    |       |   |   |
| Assets                                              |   | $                                       | 45,067,412 |   | $ | 45,067,412 |   |
| Liabilities                                         |   | $                                       | 11,862,627 |   | $ | 1,164,027 |   |
| Common                  stock subject to conversion |   | $                                       | 8,657,910  |   | $ | 8,657,910 |   |
| Stockholders’                  equity         |   | $                                       | 24,546,875 |   | $ | 35,245,475 |   |
|                                                |   |                                    |       |   |   |   |   |

|                                               |   | Period                  from July 13, 2005(inception)                  to March 31, 2006  | Three                  Months EndedMarch                  31, 2006 |
|----------------------------------------------------|--------|------------------------------------------------------------------------------------------------|--------------------------------------------------------------------|
|                                               |   |                                                                                           | As                  Previously Reported                       |   |   | As                  Restated |   |   | As                  Previously Reported |   |   | As                  Restated |   |
| Loss                  from derivative liabilities: |   |                                                                                           |                                                               |   |   |   |   |   |   |   |   |   |   |
| Warrants                                           |   | $                                                                                              | (1,265,600                                                         | ) |   | — |   | $ | (1,265,600 | ) |   | — |   |
| UPO                                                |   | $                                                                                              | (118,000                                                           | ) |   | — |   | $ | (118,000 | ) |   | — |   |
| Pre-tax                  income (loss)             |   | $                                                                                              | (1,231,702                                                         | ) | $ | 151,898 |   | $ | (1,229,250 | ) | $ | 154,350 |   |
| Provision                  for income taxes        |   | $                                                                                              | (57,195                                                            | ) | $ | (57,195 | ) | $ | (57,195 | ) | $ | (57,195 | ) |
| Net                  income (loss)                 |   | $                                                                                              | (1,288,897                                                         | ) | $ | 94,703 |   | $ | (1,286,445 | ) | $ | 97,155 |   |
|                                               |   |                                                                                           |                                                               |   |   |   |   |   |   |   |   |   |   |
| Weighted                  average shares           |   |                                                                                           |                                                               |   |   |   |   |   |   |   |   |   |   |
| Basic                                              |   |                                                                                           | 3,641,398                                                          |   |   | 3,641,398 |   |   | 7,345,000 |   |   | 7,345,000 |   |
|                                               |   |                                                                                           |                                                               |   |   |   |   |   |   |   |   |   |   |
| Earnings                  (loss) per share         |   |                                                                                           |                                                               |   |   |   |   |   |   |   |   |   |   |
| Basic                                              |   | $                                                                                              | (0.35                                                              | ) | $ | 0.03 |   | $ | (0.18 | ) | $ | 0.01 |   |

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**Recent      Developments **

**Plan      of Operation**

** **

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|   | · | approximately                $600,000 of expenses for legal, accounting, due diligence and other                expenses attendant to the investigating of a target business and                structuring and negotiating of a business combination;                                                                                                                                                                                                                                                                                |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | · | approximately                $100,000 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                $287,348 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. 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. |

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**Off          Balance Sheet Arrangements**

**ITEM      3. CONTROLS AND PROCEDURES.**

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**PART      II.**

**OTHER      INFORMATION**

**ITEM      2: UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF      PROCEEDS**

**Recent      Sales of Unregistered Securities**

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

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**ITEM      6: EXHIBITS **

| (a)  | Exhibits:                           |                              |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
|-----------|-------------------------------------|-----------------------------------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|      |                                |                              |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
|      |                                | **Exhibit                Number** |   | **Description                of Document**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
|      |                                | 4.4                               |   | Form                of Warrant Agreement between Continental Stock Transfer & Trust                Company and Registrant (incorporated by reference to Exhibit 4.4                to                Amendment No. 5 to Registrant’s Registration Statement on Form S-1 (File                No. 333-127272) filed with the SEC on December 16, 2005).                **                                                                                                                                                                     |
|      |                                | 4.5                               |   | Form                of Unit Purchase Option granted to each of ThinkEquity Partners,                LLC and                EarlyBird Capital, Inc. (incorporated by reference to Exhibit 4.5                to                Amendment No. 7 to Registrant’s Registration Statement on Form S-1 (File                No. 333-127272) filed with the SEC on January 23, 2006).                **                                                                                                                                                      |
|      |                                | 10.1                              |   | Form                of Letter Agreement between the Registrant and each of R. Bruce Cameron,                Richard S. Foote, R. Bradley Forth, The Hillary Appel Trust, The                Catey                Lauren Appel Trust, Broad Hollow LLC (the initial stockholders) and                Russell L. Appel (incorporated by reference to Exhibit 10.1 to Amendment                No. 6 to Registrant’s Registration Statement on Form S-1 (File No.                333-127272) filed with the SEC on December 20, 2005).                ** |
|      |                                |  10.2                        |   | Form                of Stock Escrow Agreement between the Registrant and Continental                Stock                Transfer and Trust Company (incorporated by reference to Exhibit                10.2 to                Amendment No. 5 to Registrant’s Registration Statement on Form S-1 (File                No. 333-127272) filed with the SEC on December 16, 2005).                **                                                                                                                                                   |
|      |                                | 10.3                              |   | Form                of Investment Management Trust Agreement between the Registrant and                Continental Stock Transfer & Trust Company (incorporated by reference                to Exhibit 10.3 to Amendment No. 5 to Registrant’s Registration Statement                on Form S-1 (File No. 333-127272) filed with the SEC on December                16,                2005). **                                                                                                                                                 |
|      |                                | 10.4                              |   | Form                of Registration Rights Agreement between the Registrant and the initial                stockholders (incorporated by reference to Exhibit 10.4 to Amendment                No. 5                to Registrant’s Registration Statement on Form S-1 (File No. 333-127272)                filed with the SEC on December 16, 2005). **                                                                                                                                                                                              |
|      |                                | 31.1                              |   | Section                302 Certification by CEO. *                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
|      |                                | 31.2                              |   | Section                302 Certification by CFO. *                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
|      |                                | 32                                |   | Section                906 Certification by CEO and CFO. *                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
|      |                                |                              |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
|      |                                |                              |   | **                Previously filed.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
|      |                                |                              |   | *                Filed herewith.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
|      |                                |                              |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
| (b)       | Reports                on Form 8-K: |                              |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |

|   |   | **Date**                         |   | **Items**                 |   | **Financial                Statements**                                                                                                                                                                                                          |
|--------|--------|----------------------------------|--------|---------------------------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |   | February                1, 2006  |   | 8.01,                9.01 |   | Audited                Financial Statements 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 |
|   |   | February                3, 2006  |   | 8.01,                9.01 |   | Unaudited                Balance Sheet as of February 3, 2006                                                                                                                                                                                    |
|   |   | February                21, 2006 |   | 8.01,                9.01 |   |                                                                                                                                                                                                                                             |

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**SIGNATURES**

|                                        |                                                                                                                    |                                                 |
|---------------------------------------------|-------------------------------------------------------------------------------------------------------------------------|------------------------------------------------------|
|                                        | **HIGHBURY                  FINANCIAL INC.**                                                                            |
|                                   |                                                                                                               |                                            |
| Date: December                22, 2006 | By:                                                                                                           | /s/ Richard                S. Foote   |
|                                        | Richard                S. Foote                                                                                         |
|                                        | President                  and                  Chief Executive Officer(Principal                    Executive Officer) |

|                                          |                                                                                                                                                                       |                                                         |
|-----------------------------------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------------------------------------------------------------|
| Date: December                  22, 2006 | By:                                                                                                                                                              | /s/ R.                  Bradley Forth    |
|                                          | R.                  Bradley Forth                                                                                                                                |
|                                          | Executive                      Vice President, Chief Financial Officer and Secretary(Principal                      Financial and Accounting                      Officer) |

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**EXHIBIT      INDEX**

| **Exhibit                Number** |   | **Description                of Document**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
|-----------------------------------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 4.4                               |   | Form                of Warrant Agreement between Continental Stock Transfer & Trust                Company and Registrant (incorporated by reference to Exhibit 4.4                to                Amendment No. 5 to Registrant’s Registration Statement on Form S-1 (File                No. 333-127272) filed with the SEC on December 16, 2005).                **                                                                                                                                                                     |
| 4.5                               |   | Form                of Unit Purchase Option granted to each of ThinkEquity Partners,                LLC and                EarlyBird Capital, Inc. (incorporated by reference to Exhibit 4.5                to                Amendment No. 7 to Registrant’s Registration Statement on Form S-1 (File                No. 333-127272) filed with the SEC on January 23, 2006).                **                                                                                                                                                      |
| 10.1                              |   | Form                of Letter Agreement between the Registrant and each of R. Bruce Cameron,                Richard S. Foote, R. Bradley Forth, The Hillary Appel Trust, The                Catey                Lauren Appel Trust, Broad Hollow LLC (the initial stockholders) and                Russell L. Appel (incorporated by reference to Exhibit 10.1 to Amendment                No. 6 to Registrant’s Registration Statement on Form S-1 (File No.                333-127272) filed with the SEC on December 20, 2005).                ** |
| 10.2                              |   | Form                of Stock Escrow Agreement between the Registrant and Continental                Stock                Transfer and Trust Company (incorporated by reference to Exhibit                10.2 to                Amendment No. 5 to Registrant’s Registration Statement on Form S-1 (File                No. 333-127272) filed with the SEC on December 16, 2005).                **                                                                                                                                                   |
| 10.3                              |   | Form                of Investment Management Trust Agreement between the Registrant and                Continental Stock Transfer & Trust Company (incorporated by reference                to Exhibit 10.3 to Amendment No. 5 to Registrant’s Registration Statement                on Form S-1 (File No. 333-127272) filed with the SEC on December                16,                2005). **                                                                                                                                                 |
| 10.4                              |   | Form                of Registration Rights Agreement between the Registrant and the initial                stockholders (incorporated by reference to Exhibit 10.4 to Amendment                No. 5                to Registrant’s Registration Statement on Form S-1 (File No. 333-127272)                filed with the SEC on December 16, 2005). **                                                                                                                                                                                              |
| 31.1                              |   | Section                302 Certification by CEO. *                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
| 31.2                              |   | Section                302 Certification by CFO. *                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
| 32                                |   | Section                906 Certification by CEO and CFO. *                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
|                              |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
|                              |   | **                Previously filed.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
|                              |   | *                Filed herewith.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |

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