**UNITED
      STATES**


**SECURITIES
      AND EXCHANGE COMMISSION**


**WASHINGTON,
      D.C. 20549**





**FORM
      10-QSB/A**


**Amendment
        No. 3**


(Mark
      One)




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





For
                the quarterly period ended June 30,
                2006





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





For
                the transition period from _____________ to
                _____________




Commission
                File Number 000-51682Highbury
                Financial Inc.(Exact
                Name of Small Business Issuer as Specified in Its Charter)




Delaware
            
            20-3187008(State
                or other Jurisdiction of
              Incorporation
                or Organization)
            
            (I.R.S.
                Employer
              Identification
                No.)




999
                  Eighteenth Street, Ste. 3000Denver,
                  Colorado 80202(Address
                    of Principal Executive Offices)(303)
                  357-4802(Issuer's
                  Telephone Number, Including Area Code)


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





Indicate
      by check mark whether the registrant is a shell company (as defined in Rule
      12b-2 of the Exchange Act). Yes x No o




As
      of
      August 11, 2006, 9,635,000 shares of common stock, par value $.0001 per share,
      were issued and outstanding.





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







**Explanatory
      Note**




This
        Quarterly Report on Form 10-QSB/A is being filed as Amendment Number 3 to
        our Quarterly Report on Form 10-QSB which was originally filed with the
        Securities and Exchange Commission (‘‘SEC’’) on August 14, 2006. We are filing
        this Form 10-QSB/A to restate our financial statements for the quarter ended
        June 30, 2006 to remove non-operating losses related to the classification
        of and accounting for: (1) the warrants to purchase common stock associated
        with
        the units sold at the initial public offering of the Company and the units
        sold
        in the Private Placement immediately prior to the initial public offering
        and
        (2) the option to purchase units consisting of one share and two warrants
        to purchase one additional share (including the shares of common stock and
        Warrants embedded in such option), issued to ThinkEquity Partners LLC and
        EarlyBirdCapital, Inc. in connection with the initial public offering. The
        Company had previously classified the value of these warrants to purchase
        common
        stock and the purchase option as liabilities. After further review, the Company
        has determined that these instruments should have been classified as equity.
        Except as otherwise stated, all financial information contained in this
        Quarterly Report on Form 10-QSB/A gives effect to these restatements. For
        information concerning the background of the restatements, the specific
        adjustments made, and management’s discussion and analysis of our results of
        operations for the second quarter of 2006 giving effect to the restated
        information see “Restatement” at Item 7. “Management’s Discussion and Analysis
        or Plan of Operation” and Note 3 to our Financial Statements.





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





Part
      I —
Item 1. Financial Statements





Part
      I —
Item 2. Management’s Discussion and Analysis or Plan of Operation




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





For
        the
        convenience of the reader, this Form 10-QSB/A sets forth the entire Form
        10-QSB
        which was prepared and relates to the Company as of June 30, 2006. However,
        this
        Form 10-QSB/A only amends and restates the Items described above to reflect
        the
        effects of the restatement and no attempt has been made to modify or update
        other disclosures presented in our June 30, 2006 Form 10-QSB. Accordingly,
        except for the foregoing amended information, this Form 10-QSB/A continues
        to
        speak as of August 14, 2006 (the original filing date of the June 30, 2006
        Form
        10-QSB), and does not reflect events occurring after the filing of our June
        30,
        2006 Form 10-QSB and does not modify or update those disclosures affected
        by
        subsequent events. Forward looking statements made in the June 30, 2006 Form
        10-QSB have not been revised to reflect events, results or developments that
        have become known to us after the date of the original filing (other than
        the
        current restatements described above), and such forward looking statements
        should be read in their historical context. Unless otherwise stated, the
        information in this Form 10-QSB/A not affected by such current restatements
        is
        unchanged and reflects the disclosures made at the time of the original
        filing.







**PART
      I. FINANCIAL INFORMATION**


**Page**


Item
                  1 - Financial StatementsCondensed
                  Consolidated Balance Sheets (as restated)
              1Condensed
                  Consolidated Statements of Operations (as restated)
              2Condensed
                  Consolidated Statement of Stockholders’ Equity (as
                  restated)
              3Condensed
                  Consolidated Statements of Cash Flows (as restated)
              4Notes
                  to Unaudited Condensed Consolidated Financial Statements (as
                  restated)
              5Item
                  2 - Management's Discussion and Analysis or Plan of Operation (as
                  restated)
              13Item
                  3 - Controls and Procedures
              19**PART
                  II. OTHER INFORMATION**Item
                  2 - Unregistered Sales of Equity Securities and Use of
                  Proceeds
              20Item
                  6 - Exhibits
              21Signatures
              22









**ITEM
      1 - FINANCIAL STATEMENTS**





**Highbury
      Financial Inc. and Subsidiary**


(a
      company in the development stage)





**Condensed
      Consolidated Balance Sheets**





**Restated**
                **June
                  30,**
                **2006**
              
              **December
                  31,**
                **2005**(unaudited)Current
                  assets:Cash
              
              $
              566,986
              
              $
              36,902Investments in
                  Trust Account (Notes 2, 4)
              
              
              43,890,907
              
              
              -Prepaid
                  expenses
              
              
              105,355
              
              
              -Total
                  current assets
              
              
              44,563,248
              
              
              36,902Deferred
                  registration costs (Note 2)
              
              
              —
              
              
              483,492Deferred
                  acquisition costs (Note 2)
              
              
              756,965
              
              
              —Deferred
                  income taxes (Notes 2, 8)
              
              
              128,175
              
              
              —Total
                  assets
              
              $
              45,448,388
              
              $
              520,394Current
                  liabilities:Accounts
                  payable and accrued expenses
              
              $
              496,608
              
              $
              427,846Income
                  taxes payable
              
              
              68,185
              
              
              —Deferred
                  underwriting fees (Note 6)
              
              
              673,333
              
              
              —Deferred
                  investment income (Note 2)
              
              
              112,795
              
              
              —Notes
                  payable, stockholders (Note 7)
              
              
              —
              
              
              70,000Total
                  current liabilities
              
              
              1,350,921
              
              
              497,846Common
                  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 1,548,666subject
                    to possible conversion)and 1,725,000,
                    respectively
              
              
              964
              
              
              173Additional
                  paid-in capital
              
              
              35,149,808
              
              
              24,827Ddeficit
                  accumulated during the development stage
              
              
              288,785
              
              
              (2,452
              )Total
                  stockholders' equity
              
              
              35,439,557
              
              
              22,548Total
                  liabilities and stockholders' equity
              
              $
              45,448,388
              
              $
              520,394





See
      Notes
      to unaudited condensed consolidated financial statements


1


**Highbury
      Financial Inc. and Subsidiary**


(a
      company in the development stage)





**Condensed
      Consolidated Statements of Operations**




**RestatedThree
                  MonthsEndedJune 30, 2006**
              
              **RestatedSix
                  MonthsEndedJune 30, 2006**
              
              **RestatedPeriod
                  fromJuly 13, 2005(inception) toJune 30,
                  2006**(unaudited)
              
              (unaudited)
              
              (unaudited)Operating
                  expenses:Professional
                  fees
              
              $
              (76,639
              )
              $
              (108,954
              )
              $
              (108,954
              )D&O
                  insurance
              
              
              (22,958
              )
              
              (39,745
              )
              
              (39,745
              )Administrative
                  fees
              
              
              (22,500
              )
              
              (38,952
              )
              
              (38,952
              )Franchise
                  taxes
              
              
              (15,063
              )
              
              (30,025
              )
              
              (32,021
              )Travel
                  and entertainment
              
              
              (18,435
              )
              
              (25,486
              )
              
              (25,486
              )Other
                  expenses
              
              
              (14,926
              )
              
              (17,512
              )
              
              (17,968
              )Total
                  expenses
              
              
              (170,521
              )
              
              (260,674
              )
              
              (263,126
              )Operating
                  loss
              
              
              (170,521
              )
              
              (260,674
              )
              
              (263,126
              )Non-operating
                  income:Interest
                  income
              
              
              3,376
              
              
              3,376
              
              
              3,376Investment
                  income
              
              
              474,042
              
              
              718,545
              
              
              718,545Total
                  non-operating income
              
              
              477,418
              
              
              721,921
              
              
              721,921Income
                  before provision for income taxes
              
              
              306,897
              
              
              461,247
              
              
              458,795Provision
                  for income taxes (Note 8):Current
              
              
              (188,687
              )
              
              (298,185
              )
              
              (298,185
              )Deferred
              
              
              75,872
              
              
              128,175
              
              
              128,175Net income
                  for the period
              
              $
              194,082
              
              $
              291,237
              
              $
              288,785Weighted
                  average shares outstanding, basic and diluted
              
              
              9,635,000
              
              
              8,502,722
              
              
              5,190,881Net income
                  per share, basic and diluted
              
              $
              0.02
              
              $
              0.03
              
              $
              0.06





See
      Notes
      to unaudited condensed consolidated financial statements


2


**Highbury
      Financial Inc. and Subsidiary**


(a
      company in the development stage)





**Condensed
      Consolidated Statement of Stockholders' Equity**


**(as
      restated)**





**Deficit**
                **Accumulated****Additional**
              
              **During
                  the****Common
                  Stock**
              
              **Paid-In**
              
              **Development****Shares**
              
              **Amount**
              
              **Capital**
              
              **Stage**
              
              **Total**Sale
                    of 1,725,000 shares of common stock toinitial stockholders on
                    August 1, 2005 at $0.0145 per share (Note 5)
              
              
              1,725,000
              
              $
              173
              
              $
              24,827
              
              $
              -
              
              $
              25,000Net
                  loss for the period
              
              
              —
              
              
              —
              
              
              —
              
              
              (2,452
              )
              
              (2,452
              )Balance
                  at December 31, 2005
              
              
              1,725,000
              
              $
              173
              
              $
              24,827
              
              $
              (2,452
              )
              $
              22,548Unaudited:Sale
                  of 166,667 units in a private placement
              
              
              166,667
              
              
              17
              
              
              999,985
              
              
              —
              
              
              1,000,002Sale
                    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
              
              
              —
              
              
              42,783,580Proceeds
                    subject to possible conversion of1,548,666
                    shares
              
              
              —
              
              
              —
              
              
              (8,657,910
              )
              
              —
              
              
              (8,657,910
              )Proceeds
                  from issuance of option
              
              
              —
              
              
              —
              
              
              100
              
              
              —
              
              
              100Net income
                  for the period
              
              
              —
              
              
              —
              
              
              —
              
              
              291,237
              
              
              291,237Balance
                  at June 30, 2006
              
              
              9,635,000
              
              $
              964
              
              $
              35,149,808
              
              $
              288,785
              
              $
              35,439,557







See
      Notes
      to unaudited condensed consolidated financial statements


3


**Highbury
      Financial Inc. and Subsidiary**


(a
      company in the development stage)





**Condensed
      Consolidated Statements of Cash Flows**





**Restated**
              
              **Restated**
                **Period
                  from****Six
                  Months**
              
              **July
                  13, 2005****Ended**
              
              **(inception)
                  to****June
                  30, 2006**
              
              **June
                  30, 2006**(unaudited)
              
              (unaudited)Cash
                  flows from operating activities:Net income
                  for the period
              
              $
              291,237
              
              $
              288,785Adjustments
                  to reconcile net loss to net cash used in operating
                  activities:(Increase)
                  / decrease in deferred taxes
              
              
              (128,175
              )
              
              (128,175
              )Changes
                  in operating assets and liabilities:(Increase)
                  / decrease in trust account
              
              
              (601,340
              )
              
              (601,340
              )(Increase)
                  / decrease in prepaid expenses
              
              
              (105,355
              )
              
              (105,355
              )Increase
                  / (decrease) in accounts payable and accrued expenses
              
              
              (262,809
              )
              
              (260,357
              )Increase
                  / (decrease) in deferred investment income
              
              
              112,795
              
              
              112,795Increase
                  / (decrease) in income taxes payable
              
              
              68,185
              
              
              68,185Net
                  cash used in operating activities
              
              
              (625,462
              )
              
              (625,462
              )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
              
              
              47,460,000
              
              
              47,485,000Proceeds
                  from issuance of option
              
              
              100
              
              
              100Proceeds
                  from notes payable, stockholders
              
              
              —
              
              
              70,000Payments
                  of notes payable, stockholders
              
              
              (70,000
              )
              
              (70,000
              )Payment
                  of costs of public offering
              
              
              (2,944,987
              )
              
              (3,003,085
              )Net
                  cash provided by financing activities
              
              
              44,445,113
              
              
              44,482,015Net
                  increase in cash
              
              
              530,084
              
              
              566,986Cash
                  at beginning of period
              
              
              36,902
              
              
              —Cash
                  at end of period
              
              $
              566,986
              
              $
              566,986Supplemental
                  schedule of non-cash financing activities:Accrual
                  of costs of acquisition
              
              $
              756,965
              
              $
              756,965Accrual
                  of deferred underwriting fees
              
              
              673,333
              
              
              673,333Supplemental
                  disclosure of cash flow information:Cash
                  paid for taxes
              
              $
              232,146
              
              $
              232,146







See
      Notes
      to unaudited condensed consolidated financial statements


4
 **Highbury
        Financial Inc. and Subsidiary**


(a
      corporation in the development stage)





**Notes
      to Unaudited Condensed Consolidated Financial Statements**




**Note
      1. Basis of Presentation**





The
      financial statements at June 30, 2006, for the three months and six months
      ended
      June 30, 2006 and for the period from July 13, 2005 (inception) to June 30,
      2006
      are unaudited and include the accounts of Highbury Financial Inc. (a corporation
      in the development stage) (“the Company”) and its 65%-owned subsidiary, Aston
      Asset Management LLC (“Aston”). To date, Aston’s efforts have been limited to
      organizational activities.





In
      the
      opinion of management, all adjustments (consisting of normal accruals) have
      been
      made that are necessary to present fairly the financial position of the Company
      as of June 30, 2006 and the results of its operations and its cash flows for
      the
      six months ended June 30, 2006 and the period from July 13, 2005 (inception)
      to
      June 30, 2006. Operating results for the interim periods presented are not
      necessarily indicative of the results to be expected for a full year. The
      accompanying December 31, 2005 balance sheet has been derived from the audited
      financial statements. The Company has selected December 31 as its fiscal year
      end.





The
      statements and related notes have been prepared pursuant to the rules and
      regulations of the U.S. Securities and Exchange Commission. Accordingly, certain
      information and footnote disclosures normally included in financial statements
      prepared in accordance with generally accepted accounting principles have been
      omitted pursuant to such rules and regulations.





**Note
      2. Organization and Business Operations**





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





The
      registration statement for the Company's initial public offering ("Offering")
      was declared effective January 25, 2006. The Company consummated the Offering,
      including full exercise of the over-allotment option, on January 31, 2006 and
      February 3, 2006, respectively. Immediately preceding the Offering, all of
      the
      Company's stockholders prior to the Offering (the “Initial Stockholders”),
      including all of the officers and directors of the Company, purchased an
      aggregate of 166,667 units from the Company in a private placement (the “Private
      Placement”). The units sold in the Private Placement were identical to the units
      sold in the Offering, but the purchasers in the Private Placement have waived
      their rights to conversion and their rights to receipt of distribution on
      liquidation in the event the Company does not complete a business combination
      (as described below). The Company received proceeds from the Private Placement
      and the Offering, net of the underwriters’ discount and commissions and offering
      expenses, of approximately $43,783,582 (Note 3).





The
      Company's management has broad discretion with respect to the specific
      application of the net proceeds of this Offering and the Private Placement,
      although substantially all of the net proceeds are intended to be generally
      applied toward consummating a business combination, or series of business
      combinations, with an operating business or businesses in the financial services
      industry ("Business Combination"). Furthermore, there is no assurance that
      the
      Company will be able to successfully affect a Business Combination. An amount
      of
      $42,616,234 of the net proceeds of the Offering and the Private Placement and
      approximately $673,333 which will be paid to the underwriters of the Offering
      if
      a business combination is consummated (net of approximately $0.11 for each
      share
      of common stock converted in connection with the Business Combination as
      described below) but which will be forfeited if a business combination is not
      consummated, is being held in an interest-bearing trust account ("Trust
      Account") until the earlier of (i) the consummation of a Business Combination
      or
      (ii) liquidation of the Company. Under the agreement governing the Trust
      Account, funds will only be invested in United States "government securities"
      within the meaning of Section 2(a)(16) of the Investment Company Act of 1940
      with a maturity of 180 days or less. The remaining net proceeds (not held in
      the
      Trust Account) may be used to pay for business, legal and accounting due
      diligence on prospective acquisitions and continuing general and administrative
      expenses.





5


**Highbury
      Financial Inc. and Subsidiary** (a
        corporation in the development stage)
 
 **Notes
        to Unaudited Condensed Consolidated Financial
        Statements**






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





The
      Initial Stockholders have agreed to vote their 1,725,000 founding shares of
      common stock (Note 5), as well as the 166,667 shares of common stock included
      in
      the units they purchased in the Private Placement, in accordance with the vote
      of the majority in interest of all other stockholders of the Company ("Public
      Stockholders") with respect to any Business Combination. After consummation
      of a
      Business Combination, these voting safeguards will no longer be applicable.





With
      respect to a Business Combination which is approved and consummated, any Public
      Stockholder who voted against the Business Combination may demand that the
      Company convert his shares. The per share conversion price will equal the amount
      in the Trust Account, net of taxes payable, calculated as of two business days
      prior to the consummation of the proposed Business Combination, divided by
      the
      number of shares of common stock held by Public Stockholders at the consummation
      of the Offering. Accordingly, Public Stockholders holding up to 20% of the
      aggregate number of shares owned by all Public Stockholders may seek conversion
      of their shares in the event of a Business Combination. Such Public Stockholders
      are entitled to receive their per-share interest, net of taxes payable, in
      the
      Trust Account computed without regard to the shares held by Initial
      Stockholders. Accordingly, a portion of the net proceeds from the offering
      (20%
      of the amount originally placed in the Trust Account, excluding the portion
      relating to the deferred underwriting fees) has been classified as common stock
      subject to possible conversion in the accompanying June 30, 2006 balance sheet
      and approximately 20% of the interest earned on the Trust Account, net of
      related income taxes, has been recorded as deferred investment
      income.





The
      Company’s Certificate of Incorporation, as amended, provides for mandatory
      liquidation of the Company in the event that the Company does not consummate
      a
      Business Combination within 18 months from the date of the consummation of
      the
      Offering (July 31, 2007), or 24 months from the consummation of the Offering
      (January 31, 2008) if certain extension criteria have been satisfied. In the
      event of liquidation, it is likely that the per share value of the residual
      assets remaining available for distribution (including Trust Account assets)
      will be less than the initial public offering price per share in the Offering
      due to costs related to the Offering, and general and administrative expenses
      incurred prior to the liquidation event and since no value would be attributed
      to the Warrants contained in the Units sold (see Note 3).





*Deferred
      Income Taxes*





Deferred
      income taxes are provided for the differences between the bases of assets and
      liabilities for financial reporting and income tax purposes. Because the Company
      is currently in the development stage, many of its expenses are not currently
      deductible for income tax purposes. A valuation allowance may be established
      when necessary to reduce deferred tax assets to the amount expected to be
      realized.




*Income
          Per Common Share*
 
 Income
          per share is computed by dividing net income by the weighted-average number
          of
          shares of common stock outstanding during the period. The effect of the
          15,486,666 outstanding warrants issued in connection with the Offering
          and the
          333,334 outstanding warrants issued in connection with the Private Placement
          has
          not been considered in diluted income per share calculations since the
          warrants
          cannot be exercised until the later of the completion of the Company’s initial
          Business Combination and January 25, 2007. Furthermore, the effect of the
          336,667 units included in the underwriters purchase option has not been
          considered in diluted income per share calculations since the option is
          out-of-the money based on the Company’s weighted average common stock price for
          the period.





6


**Highbury
      Financial Inc. and Subsidiary** *(a
        corporation in the development stage)*
 
 ***Notes
        to Unaudited Condensed Consolidated Financial
        Statements***




*Deferred
      Registration Costs*





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





*Deferred
      Acquisition Costs*





Deferred
      acquisition costs consist of legal, accounting and other fees incurred through
      the balance sheet date that are related to the potential acquisition of the
      U.S.
      mutual fund business of ABN AMRO Asset Management Holdings, Inc. (see Note
      9).
      These costs will be included in the cost of the acquisition if the business
      combination is consummated or expensed if it is not. There is no assurance
      that
      this business combination will be consummated.





*Recent
      Accounting Pronouncements*





In
      December 2004, the Financial Accounting Standards Board issued Statement of
      Financial Accounting Standards No. 123 (revised 2004) (“SFAS 123(R)”), “Share
      Based Payment”. SFAS 123(R) requires all share-based payments to employees,
      including grants of employee stock options, to be recognized in the financial
      statements based on their fair values. The Company adopted SFAS 123(R) effective
      January 1, 2006. The adoption of SFAS No. 123(R) did not have a significant
      impact on the Company’s financial condition or results of
      operations.





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





**Note
      3. Initial Public Offering**





The
      Company sold 7,910,000 units ("Units") in the Private Placement and the
      Offering, which included all of the 1,010,000 Units subject to the underwriters’
over-allotment option. Each Unit consists of one share of the Company's common
      stock, $.0001 par value, and two redeemable common stock purchase warrants
      ("Warrants"). Each Warrant entitles the holder to purchase from the Company
      one
      share of common stock at an exercise price of $5.00 commencing the later of
      the
      completion of a Business Combination or one year from the effective date of
      the
      Offering (January 25, 2007) and expiring four years from the effective date
      of
      the Offering (January 25, 2010). The Warrants will be redeemable, at the
      Company's option, at a price of $.01 per Warrant upon 30 days' notice after
      the
      Warrants become exercisable, only in the event that the last sale price of
      the
      common stock is at least $8.50 per share for any 20 trading days within a 30
      trading day period ending on the third day prior to the date on which notice
      of
      redemption is given. Separate trading of the Common Stock and Warrants
      underlying the Company’s Units commenced on February 21, 2006.




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





7


**Highbury
      Financial Inc. and Subsidiary** (a
        corporation in the development stage)
 
 **Notes
        to Unaudited Condensed Consolidated Financial
        Statements**




In
          connection with this Offering, the Company issued an option, for $100,
          to the
          underwriters to purchase 336,667 Units at an exercise price of $7.50 per
          Unit.
          The Company has accounted for the fair value of the option, inclusive of
          the
          receipt of the $100 cash payment, as an expense of the public offering
          resulting
          in a charge directly to stockholders' equity. The Company estimates that
          the
          fair value of this option is approximately $423,000 ($1.26 per Unit) using
          a
          Black-Scholes option pricing model. The fair value of the option granted
          to the
          underwriters is estimated as of the date of grant using the following
          assumptions: (1) expected volatility of 29.0%, (2) risk-free interest rate
          of
          4.34% and (3) expected life of four years. The option may be exercised
          for cash
          or on a "cashless" basis, at the holder's option, such that the holder
          may use
          the appreciated value of the option (the difference between the exercise
          prices
          of the option and the underlying Warrants and the market price of the units
          and
          underlying securities) to exercise the option without the payment of any
          cash.
          In addition, the Warrants underlying such Units are exercisable at $6.25
          per
          share.
 
 The
          holder of the unit purchase option is not entitled to exercise the unit
          purchase
          option or the Warrants underlying the unit purchase option unless a registration
          statement covering the securities underlying the unit purchase option is
          effective or an exemption from registration is available. On December 15,
          2006,
          the Company entered into Amended Unit Purchase Options which clarified
          that the
          option and underlying Warrants will expire unexercised and unredeemed if
          there
          is no effective registration statement covering the securities issuable
          upon
          exercise. In addition, there are no circumstances under which the Company
          is
          required to net cash settle the purchase option or the underlying
          Warrants.





The
        previously issued unaudited June 30, 2006 financial statements presented
        the
        fair value of the warrants and the unit purchase option as liabilities
        and the related changes in valuations were included in operations. The
        financial statements as of June 30, 2006 have been restated to account for
        the Warrants and the unit purchase option as equity. The changes to the June
        30,
        2006 financial statements were as follows:




June
                  30, 2006As
                  Previously Reported
              
              
              As
                  RestatedAssets
              
              $
              45,448,388
              
              $
              45,448,388Liabilities
              
              $
              16,376,921
              
              $
              1,350,921Common
                  stock subject to conversion
              
              $
              8,657,910
              
              $
              8,657,910Stockholders’
                  equity
              
              $
              20,413,557
              
              $
              35,439,557




8




Highbury
      Financial Inc. and
      Subsidiary (a
        corporation in the development stage)
 
 **Notes
        to Unaudited Condensed Consolidated Financial Statements**


Three
                  Months Ended
                June
                  30, 2006
              
              
              Six
                  Months Ended
                June
                  30, 2006
              
              
              Period
                  from July 13, 2005
                (inception)
                  to June 30, 2006As
                  Previously Reported
              
              
              As
                  Restated
              
              
              As
                  Previously Reported
              
              
              As
                  Restated
              
              
              As
                  Previously Reported
              
              
              As
                  RestatedLoss
                  from derivative liabilities:Warrants
              
              $
              (4,271,400
              )
              
              
              -
              
              
              $
              (5,537,000
              )
              
              
              -
              
              
              $
              (5,537,000
              )
              
              
              -Underwriters’
                  purchase option
              
              $
              (56,000
              )
              
              
              -
              
              
              $
              (174,000
              )
              
              
              -
              
              
              $
              (174,000
              )
              
              
              -Pre-tax
                  income (loss)
              
              $
              (4,020,503
              )
              
              $
              306,897
              
              
              $
              (5,249,753
              )
              
              $
              461,247
              
              
              $
              (5,252,205
              )
              
              $
              458,795Provision
                  for income taxes
              
              $
              (112,815
              )
              
              $
              (112,815
              )
              
              $
              (170,010
              )
              
              $
              (170,010
              )
              
              $
              (170,010
              )
              
              $
              (170,010
              )Net
                  income (loss)
              
              $
              (4,133,318
              )
              
              $
              194,082
              
              
              $
              (5,419,763
              )
              
              $
              291,237
              
              
              $
              (5,422,215
              )
              
              $
              288,785Weighted
                  average sharesBasic
              
              
              9,635,000
              
              
              
              9,635,000
              
              
              
              8,502,722
              
              
              
              8,502,722
              
              
              
              5,190,881
              
              
              
              5,190,881Earnings
                  (loss) per shareBasic
              
              $
              (0.43
              )
              
              $
              0.02
              
              
              $
              (0.64
              )
              
              $
              0.03
              )
              
              $
              (1.04
              )
              
              $
              0.06





**Note
      4. Investments Held in Trust**





Investments
      held in trust at June 30, 2006 consist of: (i) a United States Treasury Bill
      with a face value of $6,448,000 purchased at a discount of 97.837% due August
      3,
      2006 and carried on the Company’s financial statements at $6,422,788; (ii) a
      United States Treasury Bill with a face value of $30,973,000 purchased at a
      discount of 98.910% due August 3, 2006 and carried on the Company’s financial
      statements at $30,851,896; (iii) a United States Treasury Bill with a face
      value
      of $6,642,000 purchased at a discount of 98.906% due August 3, 2006 and carried
      on the Company’s financial statements at $6,616,030; and (iv) money market
      obligations in the aggregate of $193.





There
      were no investments held in trust at December 31, 2005.





**Note
      5. Stockholders’ Equity**





*Common
      Stock*





The
      Company’s initial stockholders purchased 1,500,000 common shares for $25,000 on
      August 1, 2005. On January 13, 2006, the Board of Directors authorized a stock
      dividend of 0.15 shares of common stock for each share of common stock
      outstanding, bringing the initial outstanding shares to 1,725,000. All
      references in the accompanying financial statements to the number of shares
      of
      stock outstanding have been retroactively restated to reflect the stock
      dividend.




9


Highbury
      Financial Inc. and
      Subsidiary (a
        corporation in the development stage)
 
 **Notes
        to Unaudited Condensed Consolidated Financial Statements**


*Preferred
      Stock*





The
      Company is authorized to issue 1,000,000 shares of preferred stock, par value
      $.0001 per share, with such designations, voting and other rights and
      preferences as may be determined from time to time by the Board of Directors.
      As
      of June 30, 2006, no shares of preferred stock have been issued.





*Common
      Stock Commitments*





At
      June
      30, 2006, 15,820,000 shares of common stock were reserved for issuance upon
      exercise of redeemable Warrants and 1,010,001 shares of common stock were
      reserved for issuance upon exercise of the underwriters' unit purchase
      option.





**Note
      6. Commitments**





The
      Company presently occupies office space provided by an affiliate of several
      of
      our Initial Stockholders. Such affiliate has agreed that, until the acquisition
      of a target business by the Company, it will make such office space, as well
      as
      certain office and secretarial services, available to the Company, as may be
      required by the Company from time to time. The Company has agreed to pay such
      affiliate $7,500 per month for such services commencing on January 26, 2006.
      The
      statements of operations for the three-month and six-month periods ended June
      30, 2006 include $22,500 and $38,952 related to this agreement, respectively.
      The Company and such affiliate intend to amend this agreement upon consummation
      of the acquisition to extend the agreement upon the same terms. If extended,
      the
      agreement will be terminable by either party upon six months’ prior
      notice.





In
      connection with the Offering, the Company has agreed to pay the underwriters
      upon completion of its initial Business Combination approximately $673,333,
      plus
      accrued interest on such amount, net of taxes payable, less approximately $0.11
      for each share of common stock that the Public Stockholders elect to convert
      in
      connection with the Company’s initial Business Combination. The Company has
      recorded the deferred underwriting fees payable to the underwriters as an
      expense of the public offering resulting in a charge directly to stockholders'
      equity. The interest earned on the deferred underwriting fees held in the Trust
      Account, gross of taxes payable, has been recorded as deferred investment
      income.





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





The
      Initial Stockholders are entitled to registration rights with respect to the
      shares of common stock and warrants of the Company owned by them. The holders
      of
      the majority of the founding shares are entitled to make up to two demands
      that
      the Company register these shares and any other warrants or shares of the
      Company owned by them (excluding the shares purchased in the Private Placement)
      at any time commencing on the date the founding shares are released from escrow.
      In addition, the Initial Stockholders have certain "piggy-back" registration
      rights with respect to such securities on registration statements filed
      subsequent to the date the founding shares are released from escrow. The holders
      of a majority of the units purchased in the Private Placement are entitled
      to
      make up to two demands that the Company register the shares, warrants and shares
      underlying the warrants comprising such units at any time commencing on the
      date
      the Company consummates a Business Combination. In addition, the Initial
      Stockholders have certain "piggy-back" registration rights with respect to
      such
      securities on registration statements filed subsequent to the date the Company
      consummates a Business Combination. The Company will bear the expenses incurred
      in connection with the filing of any of the foregoing registration
      statements.




10




Highbury
      Financial Inc. and
      Subsidiary (a
        corporation in the development stage)
 
 **Notes
        to Unaudited Condensed Consolidated Financial Statements**


The
      founding shares have been placed in escrow until the earliest of: (1) January
      25, 2009; (2) the Company's liquidation; and (3) the consummation of a
      liquidation, merger or stock exchange, stock purchase or other similar
      transaction which results in all of the Company's stockholders having the right
      to exchange their shares of common stock for cash, securities or other property
      subsequent to our consummating a Business Combination with a target business.
      During the escrow period, the Initial Stockholders may not sell or transfer
      their founding shares except among the Initial Stockholders (including upon
      exercise by Broad Hollow of its call options), to their spouses and children
      or
      trusts established for their benefit, by virtue of the laws of decent and
      distribution, upon the death of any Initial Stockholder or pursuant to a
      qualified domestic relations order but retain all other rights as stockholders,
      including, without limitation, the right to vote their shares and receive cash
      dividends, if declared.  In addition, the units purchased by the Initial
      Stockholders in the Private Placement and the shares and warrants comprising
      such units may not be sold, assigned or transferred by the Initial Stockholders
      until after the consummation of a Business Combination.





The
      Company also paid fees and issued securities to the underwriters in the Offering
      as described above in Note 3.





**Note
      7. Notes Payable, Stockholders**





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





**Note
      8. Income Taxes**





The
      provisions for income taxes for the three month and six month periods ended
      June
      30, 2006 consist of the following:




**Three
                    Months Ended June 30, 2006**
            
            **Six
                    Months Ended June 30, 2006**CurrentFederal
            
            $
            165,111
            
            $
            260,928State
            
            
            23,576
            
            
            37,257DeferredFederal
            
            
            (65,597
            )
            
            (111,365
            )State
            
            
            (9,366
            )
            
            (15,901
            )Reversal
                of Valuation Allowance
            
            
            (909
            )
            
            (909
            )$
            112,815
            
            $
            170,010




The
        total
        provision for income taxes differs from that amount which would be computed
        by
        applying the U.S. Federal income tax rate to income before provision for
        income
        taxes for the six months ended June 30, 2006 is as
        follows:





Statutory
                  federal income tax rate
              
              
              34.0
              %State
                  tax net of federal benefit
              
              
              3.1Reversal
                of valuation allowance
              
              
              (.2
              )Effective
                  income tax rate
              
              
              36.9
              %




11




Highbury
      Financial Inc. and
      Subsidiary (a
        corporation in the development stage)
 
 **Notes
        to Unaudited Condensed Consolidated Financial Statements**


The
      tax
      effect of temporary differences that give rise to the net deferred tax asset
      is
      as follows:





**June
                30,**
              **2006**
            
            **December
                31,**
              **2005**Interest
                income deferred for reporting purposes
            
            $
            41,797
            
            $
            —Expenses
                deferred for income tax purposes
            
            
            86,378
            
            
            909Valuation
                allowance
            
            
            —
            
            
            (909
            )Net
                deferred tax asset
            
            $
            128,175
            
            $
            —




During
      2006, the Company began to generate taxable income and therefore is no longer
      recording a valuation allowance against its deferred tax assets.





**Note
      9. Recent Developments**





On
      April
      20, 2006 the Company and Aston Asset Management LLC, a newly formed Delaware
      limited liability company (“Aston”, and together with Highbury the “Highbury
      Entities”), entered into an Asset Purchase Agreement (“Asset Purchase
      Agreement”) with ABN AMRO Asset Management Holdings, Inc. (“AAAMHI”), ABN AMRO
      Investment Fund Services, Inc. (“AAIFS”), ABN AMRO Asset Management, Inc.,
      (“AAAMI”), Montag & Caldwell, Inc., (“Montag”), Tamro Capital Partners LLC,
      (“TAMRO”), Veredus Asset Management LLC, (“Veredus”), and River Road Asset
      Management, LLC, (“River Road” and together with AAAMHI, AAIFS, AAAMI, Montag,
      TAMRO and Veredus individually referred to as a “Seller” and collectively as
“Sellers”). Pursuant to the Asset Purchase Agreement, and subject to the
      satisfaction of the conditions set forth therein, the Highbury Entities will
      acquire substantially all of the Sellers’ business of providing investment
      advisory, administration, distribution and related services to the U.S. mutual
      funds (the “Target Funds”) specified in the Asset Purchase Agreement
      (collectively, the “Business”). In connection with the consummation of the sale
      of the Business (the “Closing”), Aston will enter into agreements with each of
      the Sellers that currently manage the Target Funds pursuant to which each such
      Seller will act as a sub-advisor to the applicable Target Fund. Pursuant to
      the
      Asset Purchase Agreement the Sellers have agreed not to terminate these
      agreements for a period of five years following the consummation of the sale
      of
      the Business.





Pursuant
      to the Asset Purchase Agreement, at the Closing the Highbury Entities will
      pay
      $38.6 million in cash to AAAMHI. On the second anniversary of the date of the
      Closing, the Asset Purchase Agreement provides for a contingent adjustment
      payment in cash as follows: in the event the annualized investment advisory
      fee
      revenue generated under investment advisory contracts between Aston and the
      Sellers applicable to the Target Funds for the six months prior to the second
      anniversary of the date of the Closing (“Target Revenue”) (x) exceeds $41.8
      million, the Highbury Entities will pay to AAAMHI the difference between the
      Target Revenue and $41.8 million, up to a total aggregate payment of $3.8
      million, or (y) is less than $34.2 million, AAAMHI will pay to the Highbury
      Entities the difference between the $34.2 million and the Target Revenue, up
      to
      a total aggregate payment of $3.8 million.





The
      sale
      of the Business currently is expected to be consummated in the second half
      of
      2006, after receipt of requisite approvals from (i) our stockholders, (ii)
      the
      stockholders of the Target Funds and (iii) the trustees of the Target Funds.
      The
      trustees of the Target Funds voted to approve the sale of the Business on May
      9,
      2006.





12




**ITEM
      2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF
      OPERATION**




The
      following discussion should be read in conjunction with our financial statements
      and related notes thereto contained in this Quarterly Report on Form
      10-QSB/A.





**Forward
      Looking Statements**





This
      Quarterly Report on Form 10-QSB/A includes forward-looking statements within
      the
      meaning of Section 27A of the Securities Act of 1933, as amended, and Section
      21E of the Securities Exchange Act of 1934, as amended. We have based these
      forward-looking statements on our current expectations and projections about
      future events. These forward-looking statements are subject to known and unknown
      risks, uncertainties and assumptions about us that may cause our actual results,
      levels of activity, performance or achievements to be materially different
      from
      any future results, levels of activity, performance or achievements expressed
      or
      implied by such forward-looking statements. In some cases, you can identify
      forward-looking statements by terminology such as “may,” “should,” “could,”
“would,” “expect,” “plan,” “anticipate,” “believe,” “estimate,” “continue,” or
      the negative of such terms or other similar expressions. Factors that might
      cause or contribute to such a discrepancy include, but are not limited to,
      those
      described in our other Securities and Exchange Commission filings, including
      our
      Registration Statement on Form S-1, as amended (File No. 333-127272), declared
      effective January 25, 2006 and the definitive Prospectus thereunder, our Annual
      Report on Form 10-KSB filed with the Securities and Exchange Commission on
      April
      10, 2006, and our Preliminary Proxy Statement originally filed with the
      Securities and Exchange Commission on May 31, 2006 and most recently amended
      on
      July 24, 2006.





**Restatement**




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




13




The
        previously issued unaudited June 30, 2006 financial statements in our
        Quarterly Report on Form 10-QSB/A filed on October 13, 2006 presented
        the fair value of the Warrants and the Purchase Option as liabilities
        and the related changes in valuations were included in operations, and
        should not be relied upon. The financial statements as of June 30, 2006 have
        been restated to account for the Warrants and the Purchase Option as
        equity. The changes to the June 30, 2006 financial statements were as
        follows:





June
                  30, 2006As
                  Previously Reported
              
              
              As
                  RestatedAssets
              
              $
              45,448,388
              
              $
              45,448,388Liabilities
              
              $
              16,376,921
              
              $
              1,350,921Common
                  stock subject to conversion
              
              $
              8,657,910
              
              $
              8,657,910Stockholders’
                  equity
              
              $
              19,813,557
              
              $
              35,439,557






Three
                  Months Ended
                June
                  30, 2006
              Six
                  Months Ended
                June
                  30, 2006
              Period
                  from July 13, 2005
                (inception)
                  to June 30, 2006As
                  Previously Reported
              
              
              As
                  Restated
              
              
              As
                  Previously Reported
              
              
              As
                  Restated
              
              
              As
                  Previously Reported
              
              
              As
                  RestatedLoss
                  from derivative liabilities:Warrants
              
              $
              (4,271,400
              )
              
              -
              
              $
              (5,537,000
              )
              
              -
              
              $
              (5,537,000
              )
              
              -Underwriters’
                  purchase option
              
              $
              (56,000
              )
              
              -
              
              $
              (174,000
              )
              
              -
              
              $
              (174,000
              )
              
              -Pre-tax
                  income (loss)
              
              $
              (4,020,503
              )
              $
              306,897
              
              $
              (5,249,753
              )
              $
              461,247
              
              $
              (5,252,205
              )
              $
              458,795Provision
                  for income taxes
              
              $
              (112,815
              )
              $
              (112,815
              )
              $
              (170,010
              )
              $
              (170,010
              )
              $
              (170,010
              )
              $
              (170,010
              )Net
                  income (loss)
              
              $
              (4,133,318
              )
              $
              194,082
              
              $
              (5,419,763
              )
              $
              291,237
              
              $
              (5,422,215
              )
              $
              288,785Weighted
                  average sharesBasic
              
              
              9,635,000
              
              
              9,635,000
              
              
              8,502,722
              
              
              8,502,722
              
              
              5,190,881
              
              
              5,190,881Earnings
                  (loss) per shareBasic
              
              $
              (0.43
              )
              $
              0.02
              
              $
              (0.64
              )
              $
              0.03
              
              $
              (1.04
              )
              $
              0.06




14





**Recent
      Developments**





On
      April
      20, 2006 we and Aston Asset Management LLC, a newly formed Delaware limited
      liability company (“Aston”, and together with Highbury the “Highbury Entities”),
      entered into an Asset Purchase Agreement (“Asset Purchase Agreement”) with ABN
      AMRO Asset Management Holdings, Inc. (“AAAMHI”), ABN AMRO Investment Fund
      Services, Inc. (“AAIFS”), ABN AMRO Asset Management, Inc., (“AAAMI”), Montag
& Caldwell, Inc., (“Montag”), Tamro Capital Partners LLC, (“TAMRO”), Veredus
      Asset Management LLC, (“Veredus”), and River Road Asset Management, LLC, (“River
      Road” and together with AAAMHI, AAIFS, AAAMI, Montag, TAMRO and Veredus
      individually referred to as a “Seller” and collectively as “Sellers”). Pursuant
      to the Asset Purchase Agreement, and subject to the satisfaction of the
      conditions set forth therein, the Highbury Entities will acquire substantially
      all of the Sellers’ business of providing investment advisory, administration,
      distribution and related services to the U.S. mutual funds (the “Target Funds”)
      specified in the Asset Purchase Agreement (collectively, the “Business”). In
      connection with the consummation of the sale of the Business (the “Closing”),
      Aston will enter into agreements with each of the Sellers that currently manage
      the Target Funds pursuant to which each such Seller will act as a sub-advisor
      to
      the applicable Target Fund. Pursuant to the Asset Purchase Agreement the Sellers
      have agreed not to terminate these agreements for a period of five years
      following the consummation of the sale of the Business.





Pursuant
      to the Asset Purchase Agreement, at the Closing the Highbury Entities will
      pay
      $38.6 million in cash to AAAMHI. On the second anniversary of the date of the
      Closing, the Asset Purchase Agreement provides for a contingent adjustment
      payment in cash as follows: in the event the annualized investment advisory
      fee
      revenue generated under investment advisory contracts between Aston and the
      Sellers applicable to the Target Funds for the six months prior to the second
      anniversary of the date of the Closing (“Target Revenue”) (x) exceeds $41.8
      million, the Highbury Entities will pay to AAAMHI the difference between the
      Target Revenue and $41.8 million, up to a total aggregate payment of $3.8
      million, or (y) is less than $34.2 million, AAAMHI will pay to the Highbury
      Entities the difference between the $34.2 million and the Target Revenue, up
      to
      a total aggregate payment of $3.8 million.





The
      sale
      of the Business currently is expected to be consummated in the second half
      of
      2006, after receipt of requisite approvals from (i) our stockholders, (ii)
      the
      stockholders of the Target Funds and (iii) the trustees of the Target Funds.
      The
      trustees of the Target Funds voted to approve the sale of the Business on May
      9,
      2006.




Unless
      otherwise indicated, the remainder of this Quarterly Report on Form 10-QSB/A
      assumes that the foregoing acquisition is not consummated and that we must
      seek
      a different business combination. There can be no assurance that the acquisition
      will be consummated.





If
      we
      consummate our initial business combination with the U.S. mutual fund business
      of Sellers, as described above, we plan to enter into a revolving credit
      facility with City National Bank at the closing. The following is a summary
      of
      the proposed terms of our credit facility. The final terms of our credit
      facility have not been determined, and we cannot assure you that we will enter
      into a credit facility at all. If we do enter into a credit facility, its terms
      may differ materially from those set forth below.





Our
      revolving credit facility will provide for aggregate borrowing of up to $6.0
      million. The credit facility may be used for working capital, general corporate
      purposes and to finance the conversion of shares of our common stock should
      the
      need arise in conjunction with the closing of the business combination and
      will
      terminate on the first anniversary of the business combination.




15




Our
      credit facility will be secured by a first priority perfected security interest
      in all of our and our potential future subsidiaries’ tangible and intangible
      property. Our borrowing under our credit facility will bear interest, at our
      option, at either the base rate minus 0.50% or LIBOR plus 1.50%. In addition,
      we
      will be required to pay annually a fee of 0.25% on the average daily balance
      of
      the unused portion of the credit facility. We will have to make interest
      payments monthly for any base rate borrowings. For any LIBOR borrowings,
      interest payments will be made at the end of any LIBOR contract or quarterly,
      whichever is sooner. Any outstanding principal is due at maturity which is
      one
      year from the date the credit facility is closed.





Our
      credit facility will contain customary and appropriate affirmative and negative
      covenants for financings of its type (subject to customary exceptions). The
      financial covenants will include: maximum total leverage ratio; and minimum
      net
      worth. Other covenants will, among other things, limit our ability to incur
      liens or other encumbrances, make capital expenditures, distributions,
      dividends, and divestitures, enter into mergers or acquisitions and experience
      a
      change of control.





For
      a
      more complete discussion of the Business and our proposed business combination,
      including the risks that are applicable to us with respect to our acquisition
      of
      the Business, see our Current Report on Form 8-K filed with the Securities
      and
      Exchange Commission on April 21, 2006 and our Preliminary Proxy Statement
      originally filed with the Securities and Exchange Commission on May 31, 2006
      and
      most recently amended on July 24, 2006.





**Plan
      of Operation**





We
      were
      formed on July 13, 2005, as a blank check company for the purpose of acquiring,
      through a merger, capital stock exchange, asset acquisition, stock purchase
      or
      other similar business combination, one or more financial services businesses.
      Our initial business combination must be with a target business or businesses
      whose fair market value is at least equal to 80% of net assets at the time
      of
      such acquisition. We intend to use cash derived from the proceeds of our
      recently completed public offering and private placement, our capital stock,
      debt or a combination of cash, capital stock and debt, to effect a business
      combination.





We
      closed
      our initial public offering on January 31, 2006. Gross proceeds from our initial
      public offering were $40,399,998. On February 3, 2006, we sold an additional
      1,010,000 units pursuant to the underwriters’ over-allotment option, raising
      additional gross proceeds of $6,060,000. Immediately preceding the offering,
      all
      of our initial stockholders, including all of our officers and directors,
      purchased an aggregate of 166,667 units from us in a private placement at a
      price per unit of $6.00. After deducting the underwriting discounts and
      commissions and the offering expenses, the total net proceeds to us from the
      offering and the private placement were approximately $43,783,582. We
      deposited **** $42,616,234
      of the net proceeds and the non-accountable expense allowance of $673,333,
      which
      the underwriters have agreed to defer until consummation of our initial business
      combination, into a trust account at Lehman Brothers, Inc. (referred to in
      this
      Quarterly Report on Form 10-QSB/A as the “trust account”) maintained by
      Continental Stock Transfer & Trust Company acting as trustee, for an initial
      total of $43,289,567 in the trust account. The remaining proceeds, $1,167,348,
      were made available to be used by us to provide for business, legal and
      accounting due diligence on prospective acquisitions and continuing general
      and
      administrative expenses. As of June 30, 2006, the balance held in the trust
      account was approximately $43,890,907, which included the deferred underwriters’
non-accountable expense allowance of $673,333 and accrued interest thereon.
      Additionally, as of June 30, 2006, we had approximately $566,986 outside the
      trust account to fund our working capital needs.





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




16




Based
      on
      our management team’s past experience managing and advising businesses, we
      believe that the funds available to us outside of the trust account will be
      sufficient to allow us to operate through January 31, 2008, assuming that our
      initial business combination is not consummated during that time. From January
      25, 2006 through January 25, 2008, we anticipate making the following
      expenditures:





·
            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.





All
      of
      these approximate dollar amounts are estimates. Those estimates may prove
      inaccurate, especially if a portion of the available funds is used to make
      a
      down payment or pay exclusivity or similar fees in connection with our initial
      business combination or if we expend a significant portion of the available
      funds in pursuit of our initial business combination that is not consummated.
      If
      we do not have sufficient funds available to fund our expenses, we may be forced
      to obtain additional financing, either from our management or the initial
      stockholders or from third parties. We may not be able to obtain additional
      financing and our initial stockholders and management are not obligated to
      provide any additional financing. If we do not have sufficient funds and cannot
      find additional financing, we may be forced to liquidate prior to consummating
      our initial business combination.





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





Net income
        of $194,082 reported for the quarter ended June 30, 2006 resulted primarily
        from
        investment income on the trust account. We incurred $76,639 expense for
        professional fees, including legal, accounting and investor relations services,
        $22,958 expense for director and officer liability insurance, $22,500 expense
        for a monthly administrative services agreement, $15,063 expense for franchise
        taxes, $18,435 expense for travel and entertainment, $14,926 for other expenses
        and $112,812 of income taxes. Investment income on the trust account during
        the
        period was $474,042. This excludes $46,840 of investment income we deferred
        in
        connection with our common stock subject to conversion and the deferred
        underwriting fees. Interest income on the cash balance held outside the trust
        account was $3,376.





Net income
        of $291,237 reported for the six month period ended June 30, 2006 resulted
        primarily from investment income on the trust account. We incurred $108,954
        expense for professional fees, including legal, accounting and investor
        relations services, $39,745 expense for director and officer liability
        insurance, $38,952 expense for a monthly administrative services agreement,
        $30,025 expense for franchise taxes, $25,486 expense for travel and
        entertainment, $17,512 for other expenses and $170,010 of income taxes.
        Investment income on the trust account during the period was $718,545. This
        excludes $112,795 of investment income we deferred in connection with our
        common
        stock subject to conversion and the deferred underwriting fees. Interest
        income
        on the cash balance held outside the trust account was $3,376.





Net income
        of $288,785 reported for the period from July 13, 2005 (inception) through
        June
        30, 2006 resulted primarily from investment income on the trust account.
        We incurred $108,954 expense for professional fees, including legal,
        accounting and investor relations services, $39,745 expense for director
        and
        officer liability insurance, $38,952 expense for a monthly administrative
        services agreement, $32,021 expense for franchise taxes, $25,486 expense
        for
        travel and entertainment, $17,968 for other expenses and $170,010 of income
        taxes. Investment income on the trust account during the period was $718,545.
        This excludes $112,795 of investment income we deferred in connection with
        our
        common stock subject to conversion and the deferred underwriting fees. Interest
        income on the cash balance held outside the trust account was $3,376.




17




At
      June
      30, 2006, we had cash outside of the trust fund of $566,986, prepaid expenses
      of
      $105,355 and accounts payable and accrued expenses of $496,607 (including
      $409,709 of costs deferred in connection with the acquisition of the U.S. mutual
      fund business of ABN AMRO). Until we enter into a business combination, we
      will
      not have revenues other than interest income, and will continue to incur
      expenses relating to identifying a target business to acquire.





The
      Company presently occupies office space provided by Berkshire Capital Securities
      LLC, an affiliate of several of our Initial Stockholders. Such
      affiliate has agreed that, until the acquisition of a target business by the
      Company, it will make such office space, as well as certain office and
      secretarial services, available to the Company, as may be required by the
      Company from time to time. The Company has agreed to pay such affiliate $7,500
      per month for such services commencing on January 26, 2006. The statements
      of
      operations for the three month and six month periods ended June 30, 2006 include
      $16,452 and $38,952 related to this agreement, respectively. The Company and
      Berkshire Capital intend to amend this agreement upon consummation of the
      acquisition to extend the agreement upon the same terms. If extended, the
      agreement will be terminable by either party upon six months’ prior
      notice.




**Off
          Balance Sheet Arrangements**
 
 Options
          and warrants issued in conjunction with our initial public offering are
          equity
          linked derivatives and accordingly represent off balance sheet arrangements.
          The
          options and warrants meet the scope exception in paragraph 11(a) of FAS
          133 and
          are accordingly not accounted for as derivatives for purposes of FAS 133,
          but
          instead are accounted for as equity. See Footnote 3 to the financial statements
          for a discussion of the options and warrants.




18


**ITEM
      3. CONTROLS AND PROCEDURES.**




We
      carried out an evaluation, under the supervision and with the participation
      of
      our management, including our chief executive officer and chief financial
      officer, of the effectiveness of our disclosure controls and procedures as
      of
      June 30, 2006. Based on that evaluation, our chief executive officer and chief
      financial officer concluded that our disclosure controls and procedures are
      effective as of the end of the period covered by this report to ensure that
      information required to be disclosed by us in reports that we file or submit
      under the Securities Exchange Act of 1934 is recorded, processed, summarized
      and
      reported within the time periods specified in Securities and Exchange Commission
      rules and forms.





During
      the most recently completed fiscal quarter, there has been no significant change
      in our internal control over financial reporting that has materially affected,
      or is reasonably likely to materially affect, our internal control over
      financial reporting.





19


**PART
      II.**


**OTHER
      INFORMATION**




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





The
      effective date of our registration statement, which was filed on Form S-1 under
      the Securities Act of 1933 (File No. 333-127272), and which relates to the
      initial public offering of our units, was January 25, 2006. Each unit consists
      of one share of common stock, $.0001 par value per share, and two warrants,
      each
      to purchase one share of common stock at an exercise price of $5.00 per share.
      The units were sold at an offering price of $6.00 per unit. The offering was
      closed on January 31, 2006. The co-lead managing underwriters for the offering
      were ThinkEquity Partners LLC and EarlyBirdCapital, Inc. A total of 6,733,333
      units were sold in the offering, generating gross proceeds of $40,399,998.
      On
      February 3, 2006, ThinkEquity Partners LLC and EarlyBirdCapital, Inc. acquired
      an additional 1,010,000 units pursuant to an over-allotment option, generating
      gross proceeds of $6,060,000. On January 25, 2006, immediately preceding our
      initial public offering, all of our initial stockholders, including all of
      our
      officers and directors, purchased an aggregate of 166,667 units from us in
      a
      private placement (referred to in this Quarterly Report on Form 10-QSB/A as
      the
“private placement”) at a price per unit of $6.00. The units sold in the private
      placement were identical to the units sold in our initial public
      offering.





We
      paid a
      total of $2,400,433 in underwriting discounts and commissions, which does not
      include $673,333, plus accrued interest, net of taxes payable, for the
      underwriters’ non-accountable expense allowance which will be paid upon the
      consummation of our initial business combination, and incurred approximately
      $602,652 for other costs and expenses related to the offering. No expenses
      of
      our initial public offering were paid to any of our directors or officers or
      any
      of their respective affiliates. We did, however, repay $70,000 to R. Bruce
      Cameron, Richard S. Foote, the Hillary Appel Trust, the Catey Lauren Appel
      Trust, R. Bradley Forth and Broad Hollow LLC who had advanced us such amount
      to
      pay certain expenses related to our initial public offering. This amount was
      reflected in the offering expenses and did not reduce our available funds of
      approximately $1,167,348.





After
      deducting the underwriting discounts and commissions (including the $673,333
      deferred underwriting fee) and the offering expenses, the total net proceeds
      to
      us from our initial public offering and the private placement were approximately
      $43,783,582, of which approximately $42,616,234 was placed in the trust account.
      Additionally, ThinkEquity Partners LLC and EarlyBirdCapital, Inc. have agreed
      to
      defer the non-accountable expense allowance of approximately $673,333 until
      the
      consummation of our initial business combination. This amount has also been
      placed in the trust account which initially aggregated $43,289,567. Upon
      completion of our initial business combination, we will pay the underwriters
      approximately $673,333, plus accrued interest on such amount, net of taxes
      payable, less approximately $0.11 for each share of our common stock that our
      public stockholders elect to convert in connection with our initial business
      combination. The proceeds will not be released from the trust account until
      the
      earlier of the completion of our initial business combination or our
      liquidation. The proceeds held in the trust account may be used as consideration
      to pay the sellers of one or more target businesses with which we ultimately
      complete our initial business combination.





We
      may
      not use all of the proceeds in the trust account in connection with our initial
      business combination, either because the consideration for our initial business
      combination is less than the proceeds in the trust account or because we finance
      a portion of the consideration with our capital stock or debt securities. In
      that event, we will use the net proceeds not expended, including any remaining
      proceeds held in the trust account, to finance the operations of the target
      business or businesses, which may include subsequent acquisitions. The proceeds
      not held in the trust account are available to be used to provide for business,
      legal and accounting due diligence on prospective business combinations and
      continuing general and administrative expenses.





For
      additional information on our use of proceeds from our initial public offering,
      see Item 2 of Part I of this Quarterly Report on Form 10-QSB/A.





20


**ITEM
      6: EXHIBITS**





(a) Exhibits:**Exhibit
                Number**
            
            **Description
                of Document**10.1
            
            Asset
                Purchase Agreement, dated as of April 20, 2006, by and among ABN
                AMRO
                Asset Management Holdings, Inc., ABN AMRO Investment Fund Services,
                Inc.,
                ABN AMRO Asset Management, Inc., Montag & Caldwell, Inc., Tamro
                Capital Partners LLC, Veredus Asset Management LLC, River Road Asset
                Management LLC and Aston Asset Management LLC (incorporated by reference
                to Exhibit 10.1 to Registrant’s Current Report on Form 8-K filed with the
                SEC on April 21, 2006).**10.2
            
            Side
                Letter Agreement, dated as of April 20, 2006, by and among Highbury
                Financial Inc., Aston Asset Management LLC and Veredus Asset Management
                LLC (incorporated by reference to Exhibit 10.2 to Registrant’s Current
                Report on Form 8-K filed with the SEC on April 21, 2006).
                **10.3
            
            Side
                Letter Agreement, dated as of April 20, 2006, by and among Highbury
                Financial Inc., Aston Asset Management LLC and River Road Asset Management
                LLC (incorporated by reference to Exhibit 10.3 to Registrant’s Current
                Report on Form 8-K filed with the SEC on April 21, 2006).
                **10.4
            
            Side
                Letter Agreement, dated as of April 20, 2006, by and among Highbury
                Financial Inc., Aston Asset Management LLC and Montag & Caldwell, Inc.
                (incorporated by reference to Exhibit 10.4 to Registrant’s Current Report
                on Form 8-K filed with the SEC on April 21, 2006). **10.5
            
            Side
                Letter Agreement, dated as of April 20, 2006, by and among Highbury
                Financial Inc., Aston Asset Management LLC and ABN AMRO Asset Management
                Holdings, Inc. (incorporated by reference to Exhibit 10.5 to Registrant’s
                Current Report on Form 8-K filed with the SEC on April 21, 2006).
                **10.6
            
            Amended
                and Restated Limited Liability Company Agreement of Aston Asset Management
                LLC, dated as of April 20, 2006 (incorporated by reference to Exhibit
                10.6
                to Registrant’s Current Report on Form 8-K filed with the SEC on April 21,
                2006). **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**April
                21, 2006
            
            1.01,
                7.01, 9.01





21


**SIGNATURES**





In
      accordance with the requirements of the Exchange Act, the registrant caused
      this
      report to be signed on its behalf by the undersigned, thereunto duly
      authorized.




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


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










**EXHIBIT
      INDEX**





**Exhibit
                Number**
            
            **Description
                of Document**10.1
            
            Asset
                Purchase Agreement, dated as of April 20, 2006, by and among ABN
                AMRO
                Asset Management Holdings, Inc., ABN AMRO Investment Fund Services,
                Inc.,
                ABN AMRO Asset Management, Inc., Montag & Caldwell, Inc., Tamro
                Capital Partners LLC, Veredus Asset Management LLC, River Road Asset
                Management LLC and Aston Asset Management LLC (incorporated by reference
                to Exhibit 10.1 to Registrant’s Current Report on Form 8-K filed with the
                SEC on April 21, 2006). **10.2
            
            Side
                Letter Agreement, dated as of April 20, 2006, by and among Highbury
                Financial Inc., Aston Asset Management LLC and Veredus Asset Management
                LLC (incorporated by reference to Exhibit 10.2 to Registrant’s Current
                Report on Form 8-K filed with the SEC on April 21, 2006).
                **10.3
            
            Side
                Letter Agreement, dated as of April 20, 2006, by and among Highbury
                Financial Inc., Aston Asset Management LLC and River Road Asset Management
                LLC (incorporated by reference to Exhibit 10.3 to Registrant’s Current
                Report on Form 8-K filed with the SEC on April 21, 2006).
                **10.4
            
            Side
                Letter Agreement, dated as of April 20, 2006, by and among Highbury
                Financial Inc., Aston Asset Management LLC and Montag & Caldwell, Inc.
                (incorporated by reference to Exhibit 10.4 to Registrant’s Current Report
                on Form 8-K filed with the SEC on April 21, 2006). **10.5
            
            Side
                Letter Agreement, dated as of April 20, 2006, by and among Highbury
                Financial Inc., Aston Asset Management LLC and ABN AMRO Asset Management
                Holdings, Inc. (incorporated by reference to Exhibit 10.5 to Registrant’s
                Current Report on Form 8-K filed with the SEC on April 21, 2006).
                **10.6
            
            Amended
                and Restated Limited Liability Company Agreement of Aston Asset Management
                LLC, dated as of April 20, 2006 (incorporated by reference to Exhibit
                10.6
                to Registrant’s Current Report on Form 8-K filed with the SEC on April 21,
                2006). **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.