**UNITED
      STATES**


**SECURITIES
      AND EXCHANGE COMMISSION**


**WASHINGTON,
      D.C. 20549**







**FORM
      10-Q**




**(Mark
      One)**


þ
            **QUARTERLY
                REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
                ACT OF
                1934**




**For
                the quarterly period ended December 31,
                2007**




**OR**




o
            **TRANSITION
                REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
                ACT OF
                1934**




**For
                the transition period from****_________________****to_________________**




**Commission
      file number: 1-9728**





Epoch Holding Logo





**Epoch
      Holding Corporation**


(Exact
      name of registrant as specified in its charter)




**Delaware**
            **20-1938886**(State
                or other jurisdiction
            (I.R.S.
                employerof
                incorporation or organization)
            identification
                no.)




**640
                Fifth Avenue, New York, NY 10019**
              (Address
                of principal executive offices)




**212-303-7200**


(Registrant's
      telephone number, including area code)




Indicate
      by check mark whether the registrant (1) has filed all reports required to
      be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934
      during the preceding 12 months (or for such shorter period that the registrant
      was required to file such reports), and (2) has been subject to such filing
      requirements for the past 90 days. Yes þ No o




Indicate
      by check mark whether the registrant is a large accelerated filer, an
      accelerated filer, or a non-accelerated filer. See definition of “accelerated
      filer and large accelerated filer” in Rule 12b-2 of the Exchange Act. (Check
      one):




Large
                accelerated filero
            Accelerated
                filerþ
            Non-accelerated
                filero




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




At
      February 5, 2007, there were 20,414,139 shares of the Company's common stock,
      $.01 par value per share, outstanding.










**EPOCH
      HOLDING CORPORATION AND SUBSIDIARIES**


**FORM
      10-Q**




**TABLE
      OF CONTENTS**





**Page No.****Part
                I.**
            **Financial
                Information**Item
                1.
            Financial
                Statements.
            
            3Condensed
                Consolidated Balance Sheets -December 31, 2007 (Unaudited) and
                June30, 2007
            
            3Condensed
                Consolidated Statements of
                Operations (Unaudited) - Three and Six Months Ended December 31,
                2007 and
                2006
            
            4Condensed
                Consolidated Statements of Changes in
                Stockholders' Equity - Six Months Ended December 31, 2007 (Unaudited)
                and Year Ended June 30, 2007
            
            5Condensed
                Consolidated Statements of Cash Flows
                (Unaudited) - Six Months Ended December 31, 2007 and
                2006
            
            6Notes
                to Condensed Consolidated Financial
                Statements (Unaudited)
            
            7-14Item
                2.
            Management's
                Discussion and Analysis of Financial Condition
                and Results of Operations.
            
            15-29Item
                3.
            Quantitative
                and Qualitative Disclosures About Market
                Risk.
            
            30Item
                4.
            Controls
                and Procedures.
            
            30**Part
                II.**
            **Other
                Information**
            
            31Item
                1.
            Legal
                Proceedings.
            
            31Item1a.
            Risk
                Factors.
            
            31Item
                4.
            Submission
                of Matters to a Vote of Security
                Holders.
            
            31Item
                6.
            Exhibits.
            
            31Signatures
            
            
            31




2
 Table
          Of
          Contents




**PART
      I. FINANCIAL INFORMATION**





**Item
      1. Financial Statements.**





**EPOCH
      HOLDING CORPORATION AND SUBSIDIARIES**


**CONDENSED
      CONSOLIDATED BALANCE
      SHEETS**


***(
      in thousands, except share data)***





**December 31,**
            
            **June 30,****2007**
            
            **2007****(Unaudited)****ASSETS****Current
                assets:**Cash
                and cash equivalents
            
            $
            32,929
            
            $
            3,097Short-term
                investments - (**Note
                2**)
            
            
            -
            
            
            21,850Accounts
                receivable
            
            
            6,496
            
            
            6,293Marketable
                securities (cost of $222 and $1,325, respectively) - (**Notes
                2 and 5**)
            
            
            1,035
            
            
            3,789Deferred
                tax asset - (**Note
                6**)
            
            
            181
            
            
            -Prepaid
                and other current assets
            
            
            643
            
            
            466Total
                current assets
            
            
            41,284
            
            
            35,495Property
                and equipment (net of accumulated depreciation of $1,160 and $949,
                respectively)
            
            
            1,858
            
            
            2,013Security
                deposits
            
            
            1,088
            
            
            1,072Other
                investments (cost of $4,325 and $756, respectively) - (**Note
                2**)
            
            
            4,287
            
            
            794Total
                assets
            
            $
            48,517
            
            $
            39,374**LIABILITIES
                AND STOCKHOLDERS' EQUITY****Current
                liabilities:**Accounts
                payable and accrued liabilities
            
            $
            912
            
            $
            901Accrued
                compensation and benefits
            
            
            5,371
            
            
            1,810Income
                taxes payable
            
            
            1,057
            
            
            99Total
                current liabilities
            
            
            7,340
            
            
            2,810Deferred
                rent
            
            
            855
            
            
            898Subtenant
                security deposit
            
            
            226
            
            
            223Total
                liabilities
            
            
            8,421
            
            
            3,931**Commitments
                and contingencies - (Note 4)****Stockholders'
                equity:**Preferred
                stock, series A convertible, $1 par value per share, 1,000,000 shares
                authorized; 10,000 shares issued and outstanding
            
            
            10
            
            
            10Common
                stock, $0.01 par value per share, 60,000,000 shares authorized; 20,141,406
                and 19,935,817 shares issued and outstanding, respectively
            
            
            201
            
            
            199Additional
                paid-in capital
            
            
            46,706
            
            
            43,852Accumulated
                deficit
            
            
            (2,447
            )
            
            (6,357
            )Unearned
                share-based compensation
            
            
            (5,149
            )
            
            (4,763
            )Accumulated
                other comprehensive income
            
            
            775
            
            
            2,502Total
                stockholders' equity
            
            
            40,096
            
            
            35,443Total
                liabilities and stockholders' equity
            
            $
            48,517
            
            $
            39,374




*The
      accompanying notes are an integral part of these condensed consolidated
      financial statements.*




3
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          Of
          Contents




**EPOCH
      HOLDING CORPORATION AND SUBSIDIARIES**


**CONDENSED
      CONSOLIDATED STATEMENTS OF OPERATIONS
      (UNAUDITED)**


***(in
      thousands, except share data)***





**For the Three Months Ended**
            
            **For the Six Months Ended****December 31,**
            
            **December 31,****2007**
            
            **2006**
            
            **2007**
            
            **2006****Revenues:**Investment
                advisory and management fees
            
            $
            8,551
            
            $
            5,141
            
            $
            16,428
            
            $
            9,460Performance
                fees
            
            
            172
            
            
            971
            
            
            172
            
            
            971Total
                revenues
            
            
            8,723
            
            
            6,112
            
            
            16,600
            
            
            10,431**Operating
                expenses:**Employee
                related costs (excluding share-based compensation)
            
            
            4,563
            
            
            3,637
            
            
            8,812
            
            
            6,473Share-based
                compensation
            
            
            1,029
            
            
            1,371
            
            
            2,104
            
            
            2,958General,
                administrative and occupancy
            
            
            1,342
            
            
            866
            
            
            2,726
            
            
            1,646Professional
                fees and services
            
            
            582
            
            
            548
            
            
            1,339
            
            
            853Depreciation
                and amortization
            
            
            107
            
            
            96
            
            
            211
            
            
            190Total
                operating expenses
            
            
            7,623
            
            
            6,518
            
            
            15,192
            
            
            12,120**Operating
                income (loss)**
            
            
            1,100
            
            
            (406
            )
            
            1,408
            
            
            (1,689
            )**Other
                income: - (Note 5)**Realized
                gains on investments
            
            
            2,551
            
            
            209
            
            
            3,417
            
            
            209Dividend
                income
            
            
            3
            
            
            2,354
            
            
            6
            
            
            2,354Interest
                and other income
            
            
            542
            
            
            1,291
            
            
            1,056
            
            
            1,537Total
                other income
            
            
            3,096
            
            
            3,854
            
            
            4,479
            
            
            4,100**Income
                before income taxes**
            
            
            4,196
            
            
            3,448
            
            
            5,887
            
            
            2,411Provision
                for income taxes - (**Note
                6**)
            
            
            (1,649
            )
            
            (99
            )
            
            (1,243
            )
            
            (99
            )**Net
                income**
            
            
            2,547
            
            
            3,349
            
            
            4,644
            
            
            2,312Cumulative
                preferred stock dividends - (**Note
                7**)
            
            
            (115
            )
            
            (69
            )
            
            (230
            )
            
            (69
            )Non-cash
                charge attributable to beneficial conversion feature of preferred
                stock
            
            
            -
            
            
            (700
            )
            
            -
            
            
            (700
            )**Net
                income available to common****stockholders
                for basic earnings per share**
            
            $
            2,432
            
            $
            2,580
            
            $
            4,414
            
            $
            1,543******Earnings
                per share - (Note 7)**Basic
            
            $
            0.12
            
            $
            0.13
            
            $
            0.22
            
            $
            0.08Diluted
            
            $
            0.12
            
            $
            0.13
            
            $
            0.21
            
            $
            0.08**Weighted
                Average Shares Outstanding:**Basic
            
            
            20,141
            
            
            19,667
            
            
            20,096
            
            
            19,592Diluted
            
            
            21,849
            
            
            20,663
            
            
            21,849
            
            
            20,090




*The
      accompanying notes are an integral part of these condensed consolidated
      financial statements.*




4
 Table
          Of
          Contents


**EPOCH
      HOLDING CORPORATION AND SUBSIDIARIES**


**CONDENSED
      CONSOLIDATED STATEMENTS OF CHANGES IN
      STOCKHOLDERS' EQUITY**


***(dollars
      and shares in thousands)***





**Accumulated****Preferred Stock**
            
            
            
            
            
            **Additional**
            
            
            
            **Unearned**
            
            **Other**
            
            **Total****Series A Convertible**
            
            **Common Stock**
            
            **Paid-in**
            
            **Accumulated**
            
            **Share-Based**
            
            **Comprehensive**
            
            **Stockholders'****Shares**
            
            **Amount**
            
            **Shares**
            
            **Amount**
            
            **Capital**
            
            **Deficit**
            
            **Compensation**
            
            **Income**
            
            **Equity****Balances
                at June 30, 2006**
            
            
            -
            
            $
            -
            
            
            19,154
            
            $
            191
            
            $
            28,500
            
            $
            (13,251
            )
            $
            (6,585
            )
            $
            -
            
            $
            8,855Net
                income
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            7,893
            
            
            
            
            
            
            
            
            7,893Other
                comprehensive income
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            2,502
            
            
            2,502*Comprehensive
                income*
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            10,395Net
                issuance of restricted common stock
            
            
            
            
            
            
            
            
            735
            
            
            7
            
            
            4,438
            
            
            -
            
            
            (3,933
            )
            
            
            
            
            512Amortization
                of unearned share-based compensation
            
            
            
            
            
            
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            5,755
            
            
            
            
            
            5,755Issuance
                of common stock upon exercise of stock options
            
            
            
            
            
            
            
            
            46
            
            
            1
            
            
            313
            
            
            -
            
            
            -
            
            
            
            
            
            314Issuance
                of series A convertible preferred stock
            
            
            10
            
            
            10
            
            
            
            
            
            
            
            
            9,990
            
            
            
            
            
            
            
            
            
            
            
            10,000Preferred
                stock issuance cost
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            (89
            )
            
            
            
            
            
            
            
            
            
            
            (89
            )Preferred
                stock dividends
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            (299
            )
            
            
            
            
            
            
            
            (299
            )Beneficial
                conversion feature associated with preferred stock
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            700
            
            
            (700
            )
            
            
            
            
            
            
            
            -**Balances
                at June 30, 2007**
            
            
            10
            
            
            10
            
            
            19,935
            
            
            199
            
            
            43,852
            
            
            (6,357
            )
            
            (4,763
            )
            
            2,502
            
            
            35,443Net
                income
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            4,644
            
            
            
            
            
            
            
            
            4,644Other
                comprehensive income - (**Note 8**)
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            (1,727
            )
            
            (1,727
            )*Comprehensive
                income*
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            2,917Net
                issuance of restricted common stock
            
            
            
            
            
            
            
            
            206
            
            
            2
            
            
            2,488
            
            
            -
            
            
            (2,236
            )
            
            
            
            
            254Amortization
                of unearned share-based compensation
            
            
            
            
            
            
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            1,850
            
            
            
            
            
            1,850Preferred
                stock dividends
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            (230
            )
            
            
            
            
            
            
            
            (230
            )Common
                stock dividends
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            (504
            )
            
            
            
            
            
            
            
            (504
            )Income
                tax benefit on dividends paid on unvested shares
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            13
            
            
            
            
            
            
            
            
            
            
            
            13Income
                tax benefit from the vesting of restricted shares
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            353
            
            
            
            
            
            
            
            
            
            
            
            353**Balances
                at December 31, 2007 (Unaudited)**
            
            
            10
            
            $
            10
            
            
            20,141
            
            $
            201
            
            $
            46,706
            
            $
            (2,447
            )
            $
            (5,149
            )
            $
            775
            
            $
            40,096




*The
      accompanying notes are an integral part of these condensed consolidated
      financial statements.*




5
 Table
          Of
          Contents





**EPOCH
      HOLDING CORPORATION AND SUBSIDIARIES**


**CONDENSED
      CONSOLIDATED STATEMENTS OF CASH FLOWS
      (UNAUDITED)**


***(
      in thousands)***





**For the Six Months Ended****December 31,****2007**
            
            **2006****Cash
                flows from operating activities:**Net
                income
            
            $
            4,644
            
            $
            2,312Adjustments
                to reconcile net income to net cash provided by operating
                activities:Deferred
                income taxes
            
            
            (181
            )
            
            -Share-based
                compensation
            
            
            2,104
            
            
            2,958Depreciation
                and amortization
            
            
            211
            
            
            190Realized
                gains on investments
            
            
            (3,417
            )
            
            (209
            )Dividend
                income received in stock - (**Note
                5a**)
            
            
            -
            
            
            (2,240
            )Income
                tax benefit from payment of dividends on unvested shares
            
            
            (13
            )Income
                tax benefit from the vesting of restricted shares
            
            
            (353
            )
            
            -(Increase)
                decrease in operating assets:Accounts
                receivable
            
            
            (203
            )
            
            (2,744
            )Prepaid
                and other current assets
            
            
            167
            
            
            (33
            )Increase
                (decrease) in operating liabilities:Accounts
                payable and accrued liabilities
            
            
            11
            
            
            (882
            )Accrued
                compensation and benefits
            
            
            3,561
            
            
            1,508Income
                taxes payable
            
            
            1,324
            
            
            -Deferred
                rent
            
            
            (43
            )
            
            (69
            )**Net
                cash provided by operating activities**
            
            
            7,812
            
            
            791**Cash
                flows from investing activities:**Purchases
                and sales of short-term investments, net
            
            
            21,850
            
            
            (11,700
            )Proceeds
                from sales of marketable securities
            
            
            4,113
            
            
            209Investments
                in Epoch managed funds and products
            
            
            (3,500
            )
            
            -Capital
                expenditures
            
            
            (56
            )
            
            (65
            )Security
                deposits, net
            
            
            (13
            )
            
            (11
            )Purchases
                of other investments
            
            
            (6
            )
            
            -**Net
                cash provided by (used in) investing activities**
            
            
            22,388
            
            
            (11,567
            )**Cash
                flows from financing activities:**Common
                stock dividends
            
            
            (504
            )
            
            -Income
                tax benefit from payment of dividends on unvested shares
            
            
            13
            
            
            -Income
                tax benefit from the vesting of restricted shares
            
            
            353
            
            
            -Preferred
                stock dividends
            
            
            (230
            )
            
            (69
            )Proceeds
                from issuance of Series A convertible preferred stock
            
            
            -
            
            
            10,000Preferred
                stock issuance costs
            
            
            -
            
            
            (89
            )**Net
                cash (used in) provided by financing activities**
            
            
            (368
            )
            
            9,842**Net
                increase (decrease) in cash and cash equivalents during
                period**
            
            
            29,832
            
            
            (934
            )Cash
                and cash equivalents at beginning of period
            
            
            3,097
            
            
            2,445Cash
                and cash equivalents at end of period
            
            $
            32,929
            
            $
            1,511




*The
      accompanying notes are an integral part of these condensed consolidated
      financial statements.*





6
 Table
          Of
          Contents


**EPOCH
      HOLDING CORPORATION AND SUBSIDIARIES**


**NOTES
      TO CONDENSED CONSOLIDATED FINANCIAL
      STATEMENTS**


**FOR
      THE THREE AND SIX MONTHS ENDED DECEMBER 31, 2007 AND 2006**





***(Unaudited)***




**Note
      1 - Organization**





***Business***


Epoch
      Holding Corporation ("Epoch" or the "Company"), a Delaware corporation, is
      a
      holding company whose sole line of business is investment advisory and
      investment management services. The operations of the Company are conducted
      through its wholly-owned subsidiary, Epoch Investment Partners, Inc. ("EIP").
      EIP is a registered investment adviser under the Investment Advisers Act of
      1940, as amended (the "Investment Advisers Act"). EIP provides investment
      advisory and investment management services to retirement plans, mutual funds,
      endowments, foundations and high net worth individuals. Headquartered in New
      York, NY with an office in Sherman Oaks, CA, the Company's current product
      offerings include U.S. All Cap Value, U.S. Value, U.S. Smid (small/mid) Cap
      Value, U.S. Small Cap Value, Global Small Cap, Global Absolute Return,
      International Small Cap, Balanced Portfolios, Global Equity Shareholder Yield,
      and Global All Cap.





***Business
      segments***


The
      Company's sole line of business is investment advisory and investment management
      services. There are no other operating or reportable segments.




**Note
      2 - Significant Accounting Policies**





***Basis
      of presentation***


The
      unaudited condensed consolidated financial statements of the Company included
      herein have been prepared in accordance with accounting principles generally
      accepted in the United States of America (“GAAP”), and in accordance with the
      instructions to Form 10-Q pursuant to the rules and regulations of the
      Securities and Exchange Commission (“SEC”). In the opinion of management, all
      adjustments, consisting of normal recurring adjustments, necessary for a fair
      presentation of the financial condition and interim results of operations have
      been made. The results for the interim periods are not necessarily indicative
      of
      the results to be obtained for a full fiscal year.




The
      Company's unaudited condensed consolidated financial statements and the related
      notes should be read together with the consolidated financial statements and
      the
      related notes included in the Company's Annual Report on Form 10-K for the
      fiscal year ended June 30, 2007.





Certain
      reclassifications have been made to prior period financial statements to conform
      with the current period presentation.





***Principles
      of consolidation***


The
      accompanying condensed consolidated financial statements include the accounts
      of
      the Company and its subsidiaries. All material intercompany accounts and
      transactions have been eliminated in consolidation.





***Use
      of estimates***


The
      preparation of financial statements in conformity with accounting principles
      generally accepted in the United States of America requires management to make
      certain estimates and assumptions. These estimates and assumptions impact the
      reported amounts of assets and liabilities and disclosure of contingent assets
      and liabilities as of the dates of these condensed consolidated financial
      statements and the reported amounts of revenue and expenses during the reporting
      periods. Actual results could differ from those estimates.




***Fair
      value of financial instruments***


The
      carrying values of the Company's cash and cash equivalents, short-term
      investments, accounts receivable and accounts payable approximate fair value
      due
      to their short-term nature. Marketable securities and other investments are
      carried at fair value based on quoted market prices.





***Financial
      instruments with concentration of credit risk***


The
      financial instruments that potentially subject the Company to concentrations
      of
      credit risk consist principally of cash, cash equivalents, short-term
      investments, and marketable securities. Epoch invests its cash and cash
      equivalents with high-credit quality financial institutions in amounts which,
      at
      times, may be in excess of the FDIC insurance limits. Cash is also invested
      in
      varied high-grade, short-term liquid investments, thereby limiting exposure
      to
      concentrations of credit risk.





7
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***Cash
      equivalents***


Cash
      equivalents are liquid investments primarily comprising money market instruments
      invested in short-term obligations of the U.S. government and its agencies,
      with
      maturities of three months or less when acquired. Cash equivalents are stated
      at
      cost, which approximates fair value due to their short maturity.




***Short-term
      investments***


Short-term
      investments consist of investment grade auction-rate securities with an active
      resale market and can be readily converted into cash to fund current operations,
      or satisfy other cash requirements as needed. Auction-rate securities have
      an
      underlying component of a long-term debt instrument. These securities mature
      on
      a shorter term than the underlying instrument based on an auction bid that
      resets the interest rate of the security. The auctions or interest rate
      reset dates occur at intervals that are generally between 7 and 28 days of
      the
      purchase. These securities provide a higher interest rate than similar
      short-term securities and provide higher liquidity than otherwise longer term
      investments. These securities are expected to be sold within one year,
      regardless of their legal maturity date. Accordingly, these securities were
      classified as current assets at June 30, 2007. All auction rate securities
      are
      bought and sold at par value.





During
      August and September 2007, in response to increasing credit quality concerns
      present in the fixed income securities market with respect to increasing
      mortgage defaults and delinquencies, tighter lending conditions, and severely
      constricted liquidity in the asset-backed commercial paper market, the Company
      liquidated all of its short-term investments. The proceeds from these
      liquidations have been invested solely in cash and cash equivalents as of
      December 31, 2007.





***Marketable
      securities***


Marketable
      securities are classified as available-for-sale and are carried at fair value
      based upon quoted market prices, with unrealized gains or losses reported in
      Accumulated Other Comprehensive Income, a separate component of stockholders’
equity. Realized gains and losses on the sales of these securities are
      calculated based on an average cost basis and reported in the Statement of
      Operations. These securities are classified as current assets on the Condensed
      Consolidated Balance Sheets as it is management’s intention to sell these
      securities within the next twelve months. See Note 5a - “eStara
      transaction” for further discussion.




***Property
      and equipment***


The
      cost
      of leasehold improvements are capitalized and such costs are amortized on a
      straight-line basis over the shorter of their estimated useful lives or lease
      term, as applicable. All other capital assets are recorded at cost and such
      costs are depreciated on a straight-line basis over their estimated useful
      lives. Generally, the useful lives are approximately 3 to 7 years for equipment,
      1 to 3 years for purchased software, and 3 to 10 years for leasehold
      improvements and exclude option periods, if any. Repairs and maintenance are
      charged to expense as incurred. Upon sale or disposition of property and
      equipment, the cost and related accumulated depreciation are removed from the
      accounts and any resulting gain or loss is recognized in
      operations.





***Other
      investments***


During
      the fiscal year ended June 30, 2007 the Company made an initial investment
      of
      $750 thousand split equally into each of the three Company-sponsored mutual
      funds—the Epoch Global Equity Shareholder Yield Fund (“EPSYX”), the Epoch U.S.
      All Cap Equity Fund (“EPACX”), and the Epoch International Small Cap Fund
      (“EPIEX”). The Company also made additional investments of $500 thousand in the
      Epoch Global Absolute Return Fund, LLC and $3 million in a separate account
      of
      Epoch’s Global All-Cap product during the quarter ended December 31, 2007. The
      investments in the Company-sponsored mutual funds and the separate account
      of
      Epoch's Global All-Cap Product are classified as Other investments on the
      Condensed Consolidated Balance Sheets, are treated as available-for-sale
      securities, and are carried at fair value based upon quoted market prices.
      The
      Company intends to hold these investments for a period in excess of one year
      from the time of purchase. Any resulting change in market value is recorded
      as
      unrealized gain or loss in Accumulated Other Comprehensive Income, a
      separate component of stockholders’ equity.




EIP
      is the managing member of the Epoch Global Absolute
      Return Fund, LLC, a limited partnership whose underlying assets consist of
      marketable securities. The Company's investment in this partnership is accounted
      for using the equity method, under which EIP's share of the net earnings or
      losses from the partnership is reflected in income as earned, and any
      distributions are reflected as reductions from the investment.





***Revenue
      recognition***


Investment
      advisory and management fees are generally recognized as services are provided,
      pursuant to specific terms contained in advisory or sub-advisory contracts
      between EIP and its clients. Such contracts generally call for revenue to be
      determined as a percentage of assets under management (“AUM”). Generally, fees
      are billed on a quarterly basis, in arrears, based on the account's asset value
      at the end of a quarter. Advance payments, if received, are deferred and
      recognized during the periods for which services are provided.





The
      Company performs services for mutual funds under advisory and sub-advisory
      contracts. Fees for these contracts are calculated based upon the daily net
      asset values of the respective fund. Generally, advisory payments from the
      mutual funds are received monthly, while sub-advisory payments are received
      quarterly.





The
      Company also has certain contracts which contain “incentive clauses” that allow
      the Company to earn performance fees in the event that investment returns meet
      or exceed targeted amounts specified in the contracts. Revenues for these
      incentives are recognized only when such performance targets are met or exceeded
      at the end of the contract's year, typically at the end of each calendar year
      -
      the Company’s second fiscal quarter. Due to the inability to forecast financial
      markets, no revenues are recognized until the contract year ends, even when
      investment returns are exceeding the contractual targets within the contract
      year.




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***Share-based
      compensation***


Employee
      and qualifying director share-based payments are accounted for in accordance
      with Statement of Financial Accounting Standards No. 123 (Revised
      2004), *Share-Based Compensation* (“SFAS
      123R”) using the fair value method. The fair value of the Company's restricted
      stock awards is based on the closing price of the Company's common stock at
      the
      grant date. Share-based compensation costs related to equity instruments are
      charged against income ratably over the fixed vesting period for the related
      equity instruments, with the initial charge generally recorded in the first
      full
      month following the grant. All outstanding stock options were fully vested
      prior
      to the adoption of SFAS 123R, accordingly there were no additional compensation
      costs related to any non-vested stock options required to be recorded at that
      time. There were no additional stock options issued for all periods
      presented.




***Income
      taxes***


The
      Company accounts for income taxes in accordance with Statement of Financial
      Accounting Standard No. 109, *Accounting for Income Taxes* (“SFAS
      109”). SFAS 109 requires that deferred tax assets and liabilities arising from
      temporary differences between book and tax basis be recognized using the enacted
      statutory tax rates and laws that will be in effect when such differences are
      expected to reverse. Deferred tax assets are recognized for temporary
      differences that will result in deductible amounts in future years. Deferred
      tax
      liabilities are recognized for temporary differences that will result in taxable
      income in future years. In the case of deferred tax assets, SFAS 109
      requires a reduction in deferred tax assets if it is more likely than not that
      some portion or all of the deferred tax asset will not be realized.





Any
      potential interest and penalties associated with a tax contingency, should
      one
      arise, would be included as a component of income tax expense in the period
      in
      which the assessment arises.





***Earnings
      per common share***


Basic
      earnings per share (“EPS”) is calculated by dividing net earnings applicable to
      common shareholders by the weighted average number of common shares outstanding
      during the period. Diluted EPS includes the determinants of basic EPS and,
      in
      addition, reflects the dilutive effect, if any, of common stock deliverable
      pursuant to the exercise of stock options or common stock issuable upon the
      conversion of convertible preferred stock.





***Comprehensive
      income***


Total
      comprehensive income  is reported on the Condensed Consolidated Statement
      of Stockholder’s Equity and includes net income (loss) and, for investment
      securities available-for-sale, the change in unrealized gains (losses) and
      the
      reclassification of realized gains (losses) to net income.





***Recently
      issued accounting standards***


In
      June 2006, the FASB issued FASB Interpretation No. 48, *Accounting for Uncertainty in Income Taxes* — *an
      interpretation of FASB Statement No. 109* (“FIN
      48”). FIN 48 clarifies the accounting for income taxes by prescribing the
      minimum recognition threshold that a tax position must meet to be recognized
      in
      the financial statements. FIN 48 also provides guidance on measurement,
      derecognition, classification, interest and penalties, accounting in interim
      periods, disclosure and transition. FIN 48 must be implemented for fiscal years
      beginning after December 15, 2006. The Company adopted FIN 48 at the beginning
      of its fiscal year commencing July 1, 2007. The adoption of FIN 48 did not
      have
      a material effect on the Company's consolidated financial position, results
      of
      operations, or cash flows.





In
      September 2006, the FASB issued SFAS No. 157, *Fair
      Value Measurements* (“SFAS
      157”). SFAS 157 defines fair value, establishes a framework for measuring fair
      value and enhances disclosures about fair value measurements required under
      other accounting pronouncements, but does not change existing guidance as to
      whether or not an instrument is carried at fair value. SFAS 157 is effective
      for
      fiscal years beginning after November 15, 2007, with earlier application
      permitted. The Company does not expect the adoption of this statement to have
      a
      material impact on its consolidated financial position, results of operations,
      or cash flows.




In
      February 2007, the FASB issued SFAS No. 159, *The
      Fair Value Option for Financial Assets and Financial
      Liabilities* (“SFAS
      159”). SFAS 159 permits certain financial assets and financial liabilities to be
      measured at fair value, using an instrument-by-instrument election. The initial
      effect of adopting SFAS 159 must be accounted for as a cumulative effect
      adjustment to opening retained earnings for the fiscal year of adoption.
      Retrospective application to fiscal years preceding the effective date is not
      permitted. SFAS 159 is effective for the Company beginning July 1, 2008,
      although early adoption is permitted. The Company does not expect the adoption
      of this statement to have a material impact on its consolidated financial
      position, results of operations, or cash flows.





In
      June
      2007, the Financial Accounting Standards Board (“FASB”) ratified the consensus
      reached by the Emerging Issues Task Force (“EITF”) in EITF Issue No. 06-11,
“Accounting for Income Tax Benefits of Dividends on Share-Based Payment Awards”
(“EITF 06-11”). EITF 06-11 requires that the realized income tax benefit from
      dividends paid on nonvested equity-classified employee share-based payment
      awards that are charged to retained earnings be recorded as an increase to
      additional paid-in capital, rather than a reduction to tax expense. The amount
      recognized in additional paid-in capital for the realized income tax benefit
      from dividends on those awards should be included in the pool of excess tax
      benefits available to absorb tax deficiencies on share-based payment awards.
      EITF 06-11 applies prospectively to the income tax benefits on dividends paid
      on
      unvested common shares, for fiscal years beginning after December 15, 2007,
      with
      early adoption permitted. There were no dividends declared or paid on unvested
      common shares prior to the ratification of EITF 06-11. The Company paid a
      dividend in November 2007 and has declared a dividend payable in February 2008.
      The Company is accounting for the tax benefits on all dividends declared on
      unvested common shares as an increase to additional paid-in capital, in
      accordance with EITF 06-11. The adoption of this pronouncement did not have
      a
      material impact on the Company’s consolidated financial position, results of
      operations, or cash flows.




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**Note
      3 - Accounts Receivable**





The
      Company's accounts receivable balances do not include an allowance for doubtful
      accounts for the periods presented and there have been no bad debt expenses
      recognized during the three and six months ended December 31, 2007 and 2006,
      respectively. Management believes these receivables are fully
      collectible.




***Significant
      customers and contracts***


For
      the
      three months ended December 31, 2007, CI Investments Inc. (“CI”), a
      Canadian-owned investment management company, accounted for approximately
      16% of consolidated revenues, while Genworth Financial Asset Management, Inc.
      (“Genworth”), an investment adviser, through its investments in the
      EPIEX and EPSYX funds, as well as separate account mandates, accounted for
      approximately 26%. The Company's services and relationships with these clients
      are important to the Company's ongoing growth strategy, and retention of these
      customers is significant to the ongoing results of operations and liquidity
      of
      the Company. For the six months ended December 31, 2007, CI accounted for
      approximately 17% of consolidated revenues, while Genworth accounted for
      approximately 27% of consolidated revenues.





For
      the
      three months ended December 31, 2006, CI accounted for approxiamately 18% of
      consolidated revenues, while Genworth accounted for approximately 23%. For
      the
      six months ended December 31, 2006, CI accounted for approximately 19% of
      consolidated revenues, while Genworth accounted for approximately
      23%.





**Note
      4 - Commitments and Contingencies**





***Employment
      agreements***


The
      Company entered into a three year employment agreement with its Chief Executive
      Officer in November 2007, effective January 1, 2008. The agreement calls for
      a
      base annual salary of $350 thousand and
      bonus
      compensation in accordance with the Company’s bonus and incentive compensation
      plans then in effect. The
      agreement was reviewed and approved by the Company's Compensation Committee
      and
      the Board of Directors.





Other
      than as described above there are no employment contracts with any other
      employees or officers of the Company. There are written agreements with certain
      employees which provide for sales commissions or bonuses, subject to the
      attainment of certain performance criteria or continuation of employment. Such
      commitments under the various agreements total approximately $3.0 million at
      December 31, 2007. Of this amount, approximately $1.3 million is included
      in accrued compensation and benefits on the Condensed Consolidated Balance
      Sheet
      at December 31, 2007. An additional $0.5 million will be accrued during the
      remainder of the fiscal year ending June 30, 2008 and shortly thereafter.
      Approximately $1.2 million represents restricted stock awards to be issued
      during the remainder of the fiscal year ending June 30, 2008 and shortly
      thereafter.





***Legal
      matters***


From
      time
      to time, the Company or its subsidiaries may become parties to claims, legal
      actions and complaints arising in the ordinary course of business. Management
      is
      not aware of any claims which would have a material adverse effect on its
      consolidated financial statements.




**Note
      5 - Other Income**





**a)** ***eStara transaction***


During
      the fiscal year ended June 30, 2000, J Net Enterprises, Inc. (“J Net”), the
      predecessor company to Epoch, made a $4.0 million investment in eStara, Inc.
      ("eStara"), a technology-related company that provides conversion and tracking
      solutions to enhance on-line sales. This investment was comprised of 373,376
      shares of Series C-1 and 553,893 shares of Series C-2, respectively, 8%
      cumulative convertible redeemable preferred stock. As there was no readily
      available market for the securities and the investment represented less than
      a
      20% interest in eStara, the securities were valued at the Company’s initial
      cost. During the fiscal years ended June 30, 2001 and 2002, the carrying value
      of this investment was deemed, by J Net’s management, impaired and written down.
      During the fiscal year ended June 30, 2003, J Net’s management concluded its
      ability to recover its investment was remote and wrote down the remaining
      carrying value to zero. Accordingly, this investment had no carrying value
      at
      October 2, 2006. Additionally, no dividends had been paid through October 2,
      2006. On October 2, 2006, eStara’s stockholders approved the acquisition of its
      stock by Art Technology Group, Inc. (NASDAQ ticker symbol “ARTG”). Under the
      terms of the agreement, ARTG acquired all of the outstanding common stock,
      preferred stock, and vested and unvested stock options of eStara.





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The
      Company, as a holder of the preferred stock of eStara, received an amount per
      share equal to the original issue price, plus the amount of any accrued but
      unpaid cumulative dividends. Additionally, the Company was entitled to its
      approximately 5% proportionate share of remaining merger consideration.
      Accordingly, the Company received 2,431,577 common shares of ARTG and $267
      thousand in cash. An additional $36 thousand of cash was held in escrow and
      released to the Company upon the first anniversary of the closing.
      Additional amounts, up to $150 thousand, may also be realized, pursuant to
      the
      earn-out provisions set forth in the merger agreement. The resultant shares
      held
      by the Company are currently classified as Marketable Securities on the
      Condensed Consolidated Balance Sheets in accordance with SFAS No.
      115, *Accounting for Certain Investments in Debt and Equity
      Securities* .
      The
      common shares received from ARTG were subject to a lock-up agreement pursuant
      to
      which the shares were released to the Company in equal monthly installments
      over
      a period of 12 months, which commenced January 2007. As of December 31,
      2007 the lock-up has fully expired.





The
      Company sold approximately 1.0 million shares of ARTG during the second half
      of
      the fiscal year ended June 30, 2007 and continues to sell shares. For the three
      and six months ended December 31, 2007, the Company sold approximately 0.8
      million and 1.2 million shares, respectively, of ARTG and recorded realized
      gains of approximately $2.1 million and $3.0 million, respectively. These gains
      were reclassified, in accordance with the provisions of SFAS No. 115,
“ *Accounting
      for Certain Investments in Debt and Equity Securities,* ”
from
      Accumulated Other Comprehensive Income, a separate component of stockholders’
equity, to Realized gains on investments on the Condensed Statement of
      Operations. As of December 31, 2007, the Company had approximately 238 thousand
      shares of ARTG with a market value of approximately $1.0 million, the value
      of
      which is shown as marketable securities on the Condensed Consolidated Balance
      Sheet.





**b)**  ***Strategic
      Data Corporation transaction***


During
      the fiscal year ended June 30, 2000, J Net, the predecessor company to Epoch,
      made a $1.1 million investment in Strategic Data Corp. ("SDC"), a
      technology-related company that specializes in advertising optimization
      technology. This investment was comprised of 892,500 shares of Series B and
      1,966,963 shares of Series C, convertible preferred stock. As there was no
      readily available market for the securities and the investment represented
      less
      than a 20% interest in SDC, the securities were valued at the Company’s initial
      cost. During the fiscal year ended June 30, 2001, the carrying value of this
      investment was deemed to be impaired by J Net’s management and written down to
      zero. Accordingly, this investment had no carrying value at February 20, 2007.
      Additionally, no dividends had been paid through February 20, 2007.




On
      February 20, 2007, SDC’s stockholders approved the acquisition of its stock by
      Fox Interactive Media, Inc. (“FIM”). Under the terms of the agreement, FIM
      acquired all of the outstanding common stock, preferred stock, and vested and
      unvested stock options of SDC.





As
      a
      result of the above-mentioned merger, the Company, as holder of the preferred
      stock of SDC, received an initial cash payment of approximately $2.2 million
      on
      March 22, 2007.





The
      SDC
      merger also calls for contingent payments, upon the achievement of certain
      targets and milestones, payable over a period of approximately 3.5 years from
      the closing, as well as release of an escrow fund. The Company’s share of
      additional contingent payments and escrow funds stemming from the acquisition
      ranges from zero to approximately $15.4 million.





The
      first
      target measurement date was November 2007 and the Company became entitled to
      receive approximately $344 thousand. Such amount has been accrued for and
      included in Realized gains on investments in the Condensed Consolidated
      Statement of Operations for the three and six months ended December 31,
      2007.





**Note
      6 - Income taxes**





In
      calculating the provision for income taxes, the Company uses an estimate of
      the
      annual effective tax rate based upon the facts and circumstances known at each
      interim period. On a quarterly basis, the actual effective tax rate is adjusted,
      as appropriate, based upon changed facts and circumstances, if any, as compared
      to those forecasted at the beginning of the fiscal year and each interim period
      thereafter.





***Valuation
      allowance release***


The
      Company reviews its deferred tax asset valuation allowances on a quarterly
      basis, or whenever events or changes in circumstances indicate that a review
      is
      required. In determining the requirement for a valuation allowance, the
      historical and projected financial results of the legal entity or consolidated
      group recording the net deferred tax asset is considered, along with any other
      positive or negative evidence. Since future financial results may differ from
      previous estimates, periodic adjustments to the Company’s valuation allowances
      may be necessary.




Based
      on
      the Company’s recent annual operating projections and the significant gains
      realized on sales of marketable securities, the Company concluded that it was
      more likely than not that the tax benefits from its tax basis on a previously
      impaired investment would be utilized in the future. As such, in the first
      quarter, the Company reversed the entire valuation allowance of approximately
      $1.1 million attributable to this fully valued deferred tax asset, as a credit
      to income tax expense.




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**Note
      7 – Earnings
      Per Share**





Basic
      earnings per share is computed by dividing net earnings by the weighted average
      number of common shares outstanding during the period.





Diluted
      earnings per share is computed by dividing net earnings, adjusted for the effect
      of dilutive securities, by the weighted average number of common and common
      equivalent shares outstanding during the period. The Company had 1,035,000
      and
      1,130,000 issued and outstanding stock options at December 31, 2007 and 2006,
      respectively.





For
      the
      three and six months ended December 31, 2006, the exercise price of the options
      was higher than the average market price of the common stock. The conversion
      of
      those options would have had an anti-dilutive effect, and thus, were excluded
      from the diluted earnings per share calculation for the three and six months
      ended December 31, 2006.





Preferred
      stock issued on November 7, 2006 and convertible into 1,666,667 shares of common
      stock has
      no
      effect on basic earnings per share, but was included in the calculation of
      diluted earnings per share for the three and six months ended December 31,
      2007
      and 2006, respectively.  Upon
      conversion, the issuable shares of common stock will be included in the
      calculation of both the basic and diluted earnings per share.





The
      table on the following page sets forth the computation of basic and diluted
      earnings per share ( *in
      thousands, except per share data* ):


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 **Three
                  Months Ended**
              
              **Six
                  Months Ended****December
                  31,**
              
              **December
                  31,****2007**
              
              **2006**
              
              **2007**
              
              **2006*****Numerator:*****Net
                  income available to common stockholders:**Net
                  income
              
              $
              2,547
              
              $
              3,349
              
              $
              4,644
              
              $
              2,312Preferred
                  stock dividends
              
              
              (115
              )
              
              (69
              )
              
              (230
              )
              
              (69
              )Non-cash
                  charge attributable to beneficial conversion feature of preferred
                  stock
              
              
              -
              
              
              (700
              )
              
              -
              
              
              (700
              )Net
                  income available to common stockholders for basic earnings per
                  share
              
              
              2,432
              
              
              2,580
              
              
              4,414
              
              
              1,543Effect
                  of dilutive securities:Preferred
                  stock dividends
              
              
              115
              
              
              69
              
              
              230
              
              
              69Net
                  income available to common stockholders after assumed
                  conversions
              
              $
              2,547
              
              $
              2,649
              
              $
              4,644
              
              $
              1,612***Denominator:***Average
                  common shares outstanding
              
              
              20,141
              
              
              19,667
              
              
              20,096
              
              
              19,592Effect
                  of dilutive securities:Weighted
                  average shares issuable upon conversion of preferred stock
              
              
              1,667
              
              
              996
              
              
              1,667
              
              
              498Net
                  common stock equivalents for the exercise of in-the-money stock
                  options
              
              
              41
              
              
              -
              
              
              86
              
              
              -Average
                  common and common equivalent shares outstanding - assuming
                  dilution
              
              
              21,849
              
              
              20,663
              
              
              21,849
              
              
              20,090Basic
                  earnings per share
              
              $
              0.12
              
              $
              0.13
              
              $
              0.22
              
              $
              0.08Diluted
                  earnings per share
              
              $
              0.12
              
              $
              0.13
              
              $
              0.21
              
              $
              0.08
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**Note
      8 - Comprehensive Income**





A
      summary
      of comprehensive income is as follows ( *in
      thousands* ):




**For
                  the Three Months**
              
              **For
                  the Six Months****Ended
                  December 31,**
              
              **Ended
                  December 31,****2007**
              
              **2006**
              
              **2007**
              
              **2006**Net
                  income
              
              $
              2,547
              
              $
              3,349
              
              $
              4,644
              
              $
              2,312Other
                  comprehensive income:Change
                  in unrealized gain on available-for-sale securities
              
              
              831
              
              
              3,536
              
              
              1,346
              
              
              3,536Reclassification
                  of realized gains to net income
              
              
              (2,207
              )
              
              -
              
              
              (3,073
              )
              
              -Comprehensive
                  income
              
              $
              1,171
              
              $
              6,885
              
              $
              2,917
              
              $
              5,848


The
      total
      aggregate proceeds from sales of available-for-sale securities were
      approximately $2.9 million and $4.1 million, respectively, during the three
      and
      six months ended December 31, 2007.





**Note
      9 - Subsequent Events**





*Dividends*


On
      January 14, 2008, the Company’s Board of Directors declared a quarterly cash
      dividend on the Company's Common Stock of $0.025 per share payable on February
      20, 2008 to stockholders of record at the close of business on February 5,
      2008.
      The total dividend to be paid is approximately $510
      thousand.




The
      Company expects quarterly dividends going forward to be paid in February, May,
      August and November of each fiscal year, and anticipates a total annual dividend
      of $0.10 per common share. However, the actual declaration of future cash
      dividends, and the establishment of record and payment dates, will be subject
      to
      final determination by the Board of Directors each quarter after its review
      of
      the Company's financial performance.





*Share-
      based compensation*


On
      January 31, 2008 the Company issued 272,733 restricted stock awards to employees
      of the Company. Recipients of the restricted awards were immediately vested
      in
      12.5% of the total shares received. The remaining 87.5% of unvested shares
      will
      vest over the next three years, subject to the recipients remaining as employees
      of the Company. Issuance of these awards will result in total stock compensation
      expense of $3.0 million over the vesting period, assuming no
      forfeitures.





*****




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**Item
      2.** **Management's
      Discussion and Analysis of Financial Condition and
      Results of Operations.**





Set
      forth
      on the following pages is management's discussion and analysis of our financial
      condition and results of operations for the three and six months ended December
      31, 2007 and 2006. Such information should be read in conjunction with our
      unaudited condensed consolidated financial statements together with the notes
      to
      the unaudited condensed consolidated financial statements. When we use the
      terms
      the “Company,” “management,” “we,” “us,” and “our,” we mean Epoch Holding
      Corporation, a Delaware corporation, and its consolidated
      subsidiaries.




**Forward-Looking
      Statements**





*Certain
      information included, or incorporated by reference in this Quarterly Report
      on
      Form 10-Q and other materials filed or to be filed by Epoch
      Holding Corporation (“Epoch" or the “Company") with the Securities and
      Exchange Commission (“SEC") contain statements that may be considered
      forward-looking within the meaning of the Private Securities Litigation Reform
      Act of 1995. In some cases, you can identify these statements by forward-looking
      words such as “may," “might," “will," “should," “expect," “plan," “anticipate,"
“believe," “estimate," “predict," “potential" or “continue," and the negative of
      these terms and other comparable terminology. These forward-looking statements,
      which are subject to known and unknown risks, uncertainties and assumptions
      about the Company, may include projections of the Company's future financial
      performance based on the Company's growth strategies and anticipated trends
      in
      the Company's business. These statements are only predictions based on the
      Company's current expectations and projections about future events. There are
      important factors that could cause the Company's actual results, level of
      activity, performance or achievements to differ materially from the results,
      level of activity, performance or achievements expressed or implied by the
      forward-looking statements. In particular, you should consider the risks and
      uncertainties outlined in “Factors Which May Affect Future
      Results.”*





*These
      risks and uncertainties are not exhaustive. Other sections of this Quarterly
      Report on Form 10-Q may include additional factors which could adversely impact
      the Company's business and financial performance. Moreover, the Company operates
      in a very competitive and rapidly changing environment. New risks and
      uncertainties emerge from time to time, and it is not possible for the Company's
      management to predict all risks and uncertainties, nor can the Company assess
      the impact of all factors on the Company's business or the extent to which
      any
      factor, or combination of factors, may cause actual results to differ materially
      from those contained in any forward-looking statements.*





*Although
      the Company believes the expectations reflected in the forward-looking
      statements are reasonable, the Company cannot guarantee future results, level
      of
      activity, performance or achievements. Moreover, neither the Company nor any
      other person assumes responsibility for the accuracy or completeness of any
      of
      these forward-looking statements. You should not rely upon forward-looking
      statements as predictions of future events. The Company is under no duty to
      update any of these forward-looking statements after the date of this Quarterly
      Report on Form 10-Q, nor to conform the Company's prior statements to actual
      results or revised expectations, and the Company does not intend to do
      so.*





*Forward-looking
      statements include, but are not limited to, statements about the
      Company’s:*


·
                  *business
                      strategies and investment
                      policies,*
 ·
              *possible
                  or assumed future results of operations and operating cash
                  flows,*
 ·
              *financing
                  plans and the availability of short-term
                  borrowing,*
 ·
              *competitive
                  position,*
 ·
              *potential
                  growth opportunities,*
 ·
              *recruitment
                  and retention of the Company's key
                  employees,*
 ·
              *potential
                  operating performance, achievements, productivity improvements,
                  efficiency
                  and cost reduction efforts,*
 ·
              *likelihood
                  of success and impact of
                  litigation,*
 ·
              *expected
                  tax rates,*
 ·
              *expectations
                  with respect to the economy, securities markets, the market for
                  mergers
                  and acquisitions activity, the market for**asset
                  management activity and other industry
                  trends,*
 ·
              *competition,
                  and*
 ·
              *effect
                  from the impact of future legislation and regulation on the
                  Company.*





**Available
      Information**





Reports
      the Company files electronically with the SEC via the SEC’s Electronic Data
      Gathering, Analysis and Retrieval system (“EDGAR”) may be accessed through the
      internet. The SEC maintains an internet site that contains reports, proxy and
      information statements, and other information regarding issuers that file
      electronically with the SEC, at *www.sec.gov* .





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The
      Company maintains a website which contains current information on operations
      and
      other matters. The website address is *www.eipny.com* .
      Through
      the Investor Relations section of our website, and “Link to SEC Website”
therein, we make available, free of charge, our Proxy Statement, Annual Report
      on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K,
      and
      any amendments to those reports filed or furnished pursuant to Section 13(a)
      or
      15(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) as
      soon as reasonably practicable after we electronically file such material with,
      or furnish it to, the SEC.





Also
      available free of charge on our website within the Investors Relations section
      is our code of ethics and business conduct and charters for the Audit,
      Nominating/Corporate Governance, and the Compensation committees of our board
      of
      directors.





**Factors
      Which May Affect Future Results**





There
      are
      numerous risks which may affect the results of operations of the Company.
      Factors which could affect the Company's success include, but are not limited
      to, the Company's limited operating history in the investment advisory and
      investment management business, the ability to attract and retain clients,
      performance of the financial markets and invested assets managed by the Company,
      retention of key employees, misappropriation of assets and information by
      employees, system failures, significant changes in regulations, the costs of
      compliance associated with existing regulations and the penalties associated
      with non-compliance, and the risks associated with loss of key members of the
      management team.





In
      addition, the Company's ability to expand or alter its product offerings,
      whether through acquisitions or internal development is critical to its
      long-term success and has inherent risks. This success is dependent on the
      ability to identify and fund those products or acquisitions on terms which
      are
      favorable to the Company. There can be no assurance that any of these operating
      factors or acquisitions can be achieved or, if undertaken, they will be
      successful.




These
      and
      other risks related to our Company are discussed in greater detail under Part
      I,
      Item 1A. “Risk Factors” in the Company's Annual Report on Form 10-K for the
      fiscal year ended June 30, 2007.





**Overview**





Epoch
      Holding Corporation ("Epoch" or the "Company") is a holding company whose sole
      line of business is investment advisory and investment management services.
      The
      operations of the Company are conducted through its wholly-owned subsidiary,
      Epoch Investment Partners, Inc. ("EIP"). EIP is a registered investment adviser
      under the Investment Advisers Act of 1940, as amended (the "Investment Advisers
      Act").





**Critical
      Accounting Policies**  **and
      Critical Accounting Estimates**





Our
      significant accounting policies are described in Note 2 of the Notes to the
      Consolidated Financial Statements included in our Annual Report on Form 10-K
      for
      the fiscal year ended June 30, 2007. A discussion of critical accounting
      policies is included in Management's Discussion and Analysis of Financial
      Condition and Results of Operations in our Annual Report on Form 10-K for the
      fiscal year ended June 30, 2007.




**Financial
      Highlights**




For the
      quarter ended December 31, 2007, the Company continued to achieve positive
      operating leverage, which is defined as the total revenue growth rate that
      exceeds the rate of growth of expenses. Total operating revenue increased by
      43%
      from $6.1 million to $8.7 million, while total operating expenses increased
      by
      17%. For the six months ended December 31, 2007, operating revenue increased
      by
      59% from $10.4 million to $16.6 million, while total operating expenses
      increased by 25%. Operating margins continue to improve as the Company achieved
      operating profits of $1.1 million and $1.4 million for the three and six months
      ended December 31, 2007, respectively. The main driver of this positive trend
      has been the significant increase in assets under management (“AUM”), stemming
      from continued inflows, together with market appreciation. The Company finished
      the quarter ended December 31, 2007 with AUM of $6.7 billion, a 52% increase
      from AUM of $4.4 billion a year ago.





While
      operating income increased by $1.5 million from the same quarter a year
      ago, the Company recorded a reduction in net income of $0.8 million. The
      reduction in net income was primarily the result of a decrease in Other Income
      coupled with an increase in the provision for income taxes. The prior year
      tax
      provision was reduced significantly by the tax benefit of the utilization
      of net operating loss carryfowards. Basic earnings per share were $0.12 per
      share for the quarter ended December 31, 2007, down $0.01 from the same period
      a
      year ago.





For
      the
      six months ended December 31, 2007 the Company’s net income doubled, an increase
      of $2.3 million compared with the same period a year ago. The increase was
      primarily the result of a significant increase in management fees due to higher
      AUM levels. Basic earnings per share were $0.22 per share for the six months
      ended December 31, 2007, up $0.14 from the same period a year ago.




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***Business
      Environment***





As
      an
      investment management and advisory firm, our results of operations can be
      directly impacted by global market, political, and economic trends. A favorable
      business environment can be depicted by several factors, including strong
      business profitability, robust investor confidence, low unemployment, and
      financial market transparency. These factors can directly affect capital
      appreciation, which in turn, impacts our investment advisory and management
      business.





The
      global market environment during the quarter ended December 31, 2007 experienced
      a negative trend, and ended the quarter weaker than it had begun. Worries about
      the U.S. economy, along with concerns about credit quality, continued to
      increase while energy prices moved higher. These factors led to a weaker stock
      market that lasted through the quarter. For the quarter ended December 31,
      2007,
      assuming dividend reinvestment, the NASDAQ Composite Index decreased by 1.6%,
      while the Dow Jones Industrial Average and S&P 500 Index decreased by 3.9%
      and 3.3%, respectively. The global market environment was also volatile, driven
      by increasing concerns of economic slowdowns both in the U.S. and
      internationally, while a significantly weaker U.S. dollar helped returns of
      foreign equities in U.S. dollars terms. On a broad basis, developed global
      markets, as represented by the MSCI World Index, decreased by 2.4 % for the
      quarter.




For
      the
      six months ended December 31, 2007, the NASDAQ Composite Index increased by
      2.3%
      and the Dow Jones Industrial Average increased by 0.1%, while the S&P 500
      Index decreased by 1.4%. On a broad basis, developed global markets, as
      represented by the MSCI World Index, decreased by 0.1%.




In
      light
      of the weaker market conditions noted above, market depreciation negatively
      impacted AUM by $73 million during the three months ended December 31, 2007.
      Continued weakness in markets may further negatively impact AUM.





The
      following table sets forth the changes in our assets under management for the
      periods presented:





***Assets
      Under Management and Flows (in millions)***


**Three Months Ended****December
                  31,**2007
              
              2006Beginning
                  of period assets
              
              $
              6,426
              
              $
              3,847Net
                  Inflows/(Outflows)
              
              
              329
              
              
              258Market
                  (Depreciation)/ Appreciation
              
              
              (73
              )
              
              303End
                  of period assets
              
              $
              6,682
              
              $
              4,408





**Six
                Months Ended****December
                31,**2007
            
            2006Beginning
                of period assets
            
            $
            6,001
            
            $
            3,253Net
                Inflows/(Outflows)
            
            
            600
            
            
            692Market
                Appreciation
            
            
            81
            
            
            463End
                of period assets
            
            $
            6,682
            
            $
            4,408




The
      following charts show the Company's products as a percentage of AUM as of
      December 31, 2007 and 2006, respectively:




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Epoch Holding Logo




Epoch Holding Logo




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The
      table
      and charts that follow set forth the amount of AUM by distribution
      channel:





**Assets
                Under Management By Distribution Channel*****(dollars
                in millions)***




**As
                of December 31,**
            
            **Amount**
              **Increased**
            
            **Percent****Increased****2007**
            
            **2006**
            
            **(Decreased)**
            
            **(Decreased)****Distribution
                Channel:**Institutional
            
            $
            3,285
            
            $
            1,940
            
            $
            1,345
            
            
            69
            %Sub-advisory
            
            
            3,081
            
            
            2,146
            
            
            935
            
            
            44
            %High
                net worth
            
            
            316
            
            
            322
            
            
            (6
            )
            
            (2
            %)Total
                AUM
            
            $
            6,682
            
            $
            4,408
            
            $
            2,274
            
            
            52
            %




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Epoch Holding Logo




Epoch Holding Logo





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**Results
      of operations - three months ended December 31, 2007 and
      2006**





**Change***(Dollars
                in thousands)*
            
            **2007**
            
            **2006**
            
            **$**
            
            **%*****Revenues******Investment
                advisory and management fees***
            
            $
            8,551
            
            $
            5,141
            
            $
            3,410
            
            
            66
            %***Performance
                fees***
            
            
            172
            
            
            971
            
            
            (799
            )
            
            (82
            %)***Total
                operating revenues***
            
            $
            8,723
            
            $
            6,112
            
            $
            2,611
            
            
            43
            %




Total
      revenues from investment advisory and investment management services for the
      three months ended December 31, 2007 were $8.7 million, increasing approximately
      43% from $6.1 million for the same period a year ago. This increase was
      attributable to the increase in assets under management from new customers,
      as
      well as market appreciation since the preceding year. Partially offsetting
      this
      increase was a reduction in performance fees of $0.8 million, stemming from
      reduced overall market returns in calendar year 2007 compared to calendar year
      2006.





For
      the
      three months ended December 31, 2007, CI accounted for approximately 16% of
      revenues, while Genworth Financial Asset Management, Inc. (“Genworth”),
      an investment adviser, through its investments in the Epoch
      International Small Cap Fund (“EPIEX”) and the Epoch Global Equity Shareholder
      Yield Fund (“EPSYX”), as well as separate account mandates, accounted for
      approximately 26% of revenues.





For
      the
      three months ended December 31, 2006, CI accounted for approximately 18% of
      consolidated revenues, while Genworth accounted for approximately 23% of
      consolidated revenues.


**Change***(Dollars
                in thousands)*
            
            **2007**
            
            **2006**
            
            **$**
            ****
            **%*****Employee
                      related costs (excluding share-******based
                      compensation)***
            
            $
            4,563
            
            $
            3,637
            
            $
            926
            
            
            25
            %




Expenses
      in this category include salaries, benefits, severance, incentive compensation,
      signing bonuses and commission expenses. For the three months ended December
      31,
      2007, these expenses were $4.6 million, an increase of $0.9 million, or 25%,
      from $3.6 million for the three months ended December 31, 2006. Increased
      headcount, including the addition of several senior experienced professionals
      to
      support the growth and expansion of the business, as well as higher incentive
      compensation levels, were the primary reasons for this increase. We expect
      the
      level of overall employee related costs to increase in future periods due to
      changes in staffing levels to support the growth and expansion of our
      business.




**Change***(Dollars
                in thousands)*
            
            **2007**
            
            **2006**
            
            **$**
            ****
            **%*****Share-based
                compensation***
            
            $
            1,029
            
            $
            1,371
            
            $
            (342
            )
            
            (25
            %)




The
      Company believes that share-based compensation promotes unity in the workplace
      and a common objective with shareholders. Employee share-based compensation
      expense is recognized as follows: 12.5% immediately, and the remaining 87.5%
      ratably over the three-year vesting period of those awards.





Share-based
      compensation for the three months ended December 31, 2007 decreased by $0.3
      million, or 25%, from $1.4 million for the three months ended December 31,
      2006.
      Amortization of the shares issued to employee owners in connection with the
      acquisition of EIP in June 2004, which equaled approximately $0.8 million per
      quarter, was completed as of June 30, 2007. This reduction was partially offset
      by amortization of new stock awards.





In
      the
      three months ended December 31, 2007 and 2006, a total of 18,761 and 0 shares
      of
      restricted stock, respectively, were issued to employees. A total of 2,345
      shares of the awards issued in the three months ended December 31, 2007, or
      approximately 12.5%, were immediately vested. The remaining 87.5% of the shares
      vest ratably over the subsequent three years. During the three months ended
      December 31, 2007 and 2006, a total of 0 and 9,369 shares, respectively, were
      forfeited by terminated employees.





For
      the
      current fiscal year non-employee directors receive $80,000 per year for their
      services. Non-employee director compensation is to be paid either fully in
      stock
      or a combination of a minimum of $60,000 in stock and a maximum of $20,000
      in
      cash, at the election of the director. For the prior fiscal year non-employee
      directors received $50,000 for their services, payable fully in
      stock.





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During
      the three months ended December 31, 2007 and December 31, 2006, **** no
      shares
      were granted to directors of the Company. Shares issued to directors through
      June 30, 2006 are subject to a three-year vesting period and vest one-third
      each
      year, or immediately in the event of death or disability. All director stock
      awards issued after June 30, 2006 will vest over one year. Share-based
      compensation expense is recognized ratably over the respective vesting period,
      in accordance with their underlying vesting provisions.




We
      expect
      share-based compensation costs will be lower than previous year levels as a
      result of the fully amortized employee owners’ shares noted above.




**Change***(Dollars
                in thousands)*
            
            **2007**
            
            **2006**
            
            **$**
            ****
            **%*****General,
                administrative and occupancy***
            
            $
            1,342
            
            $
            866
            
            $
            476
            
            
            55
            %





These
      expenses consist primarily of office rents, as well as expenses for travel
      and
      entertainment, advertising and marketing, information technology, utilities,
      insurance, and other office related expenses. For the three months ended
      December 31, 2007, such expenses were $1.3 million, an increase of $0.5 million
      from the comparable period a year ago. Increases in costs from travel-related
      expenses to support distribution efforts of new business relationships, higher
      market data services and information technology costs as a result of increased
      business activity levels, as well as increased rent expense for the additional
      space leased at the Company’s headquarters beginning in February 2007 were the
      main reasons for the rise in general, administrative and occupancy
      costs.





**Change***(Dollars
                in thousands)*
            
            **2007**
            
            **2006**
            
            **$**
            ****
            **%*****Professional
                fees and services***
            
            $
            582
            
            $
            548
            
            $
            34
            
            
            6
            %




These
      expenses consist primarily of outside legal fees for general corporate legal
      affairs, independent accountants' fees, consulting fees, and other professional
      services. For the three months ended December 31, 2007, such fees were virtually
      unchanged.





**Change***(Dollars
                in thousands)*
            
            **2007**
            
            **2006**
            
            **$**
            ****
            **%*****Other
                income***
            
            $
            3,096
            
            $
            3,854
            
            $
            (758
            )
            
            (20
            %)




Other
      income includes interest income, dividend income, realized gains on investments,
      and rental income from subleased office space in New York. For the three months
      ended December 31, 2007, other income was $3.1 million, a decrease of $0.8
      million from the three months ended December 31, 2006. The current quarter
      primarily includes realized gains from the sales of marketable securities.
      The
      comparable period a year ago includes dividend income and realized gains from
      the eStara transaction, along with the reversal of a previously recorded
      estimate, which was included in Interest and other income .


**Change***(Dollars
                  in thousands)*
              
              **2007**
              
              **2006**
              
              **$**
              ****
              **%*****Provision
                  for income taxes***
              
              $
              1,649
              
              $
              99
              
              $
              1,550
              
              
              1566
              %




For
      the
      three months ended December 31, 2007, the Company used an estimated annual
      effective income tax rate based upon facts and circumstances known at the end
      of
      the interim period. On a quarterly basis, the estimated effective tax rate
      is
      adjusted, as appropriate, based upon changed facts and circumstances, if any,
      as
      compared to those forecasted at the beginning of the fiscal year and each
      interim period thereafter.





The
      Company was not subject to regular income tax rates in the prior year because
      of
      its net operating loss carry forwards but was obligated to pay tax under the
      federal alternative minimum tax (“AMT”), which limits the application of net
      operating loss carry forwards to 90% of taxable income, in addition to
      certain AMT adjustments. The
      Company is subject to regular income tax rates in the current year, as the
      remaining net operating losses available to be utilized by the Company are
      subject to annual limitations, and are less, in the aggregate, than were
      available in the prior year.





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**Results
      of operations - six months ended December 31, 2007 and
      2006**





For
      the
      six months ended December 31, 2007, the Company recorded net income of $4.6
      million, compared to $2.3 million for the same period a year ago. Basic earnings
      per share were $0.22 per share for the six month period ended December 31,
      2007,
      from $0.08 per share for the same period a year ago.





The
      primary reasons for the improvement in earnings were the following:


·
              Total
                  operating revenues increased approximately 59%, to $16.6 million
                  from
                  $10.4 million as a result of the significant increase in AUM as
                  previously
                  discussed.·
              Share-based
                  compensation decreased by $0.9 million for the six months ended
                  December
                  31, 2007 when compared with the same period a year ago. Amortization
                  of
                  the shares issued to employee owners in connection with the acquisition
                  of
                  EIP in June 2004, which equaled approximately $0.8 million per
                  quarter,
                  was completed as of June 30, 2007. This reduction was partially
                  offset by
                  amortization of new stock awards.·
              Other
                  income increased by $0.4 million, which includes realized gains
                  from the
                  sales of marketable securities.·
              The
                  Company released a valuation allowance during the first quarter
                  ended
                  September 30, 2007 of approximately $1.1 million against a deferred
                  tax
                  asset, the benefit of which is expected to be realized during the
                  current
                  fiscal year.




**Change***(Dollars
                in thousands)*
            
            **2007**
            
            **2006**
            
            **$**
            ****
            **%*****Revenues****Investment
                advisory and management fees*
            
            $
            16,428
            
            $
            9,460
            
            $
            6,968
            
            
            74
            %*Performance
                fees*
            
            
            172
            
            
            971
            
            
            (799
            )
            
            (82
            )%***Total
                operating revenues***
            
            $
            16,600
            
            $
            10,431
            
            $
            6,169
            
            
            59
            %




Total
      revenues from investment advisory and investment management services for the
      six
      months ended December 31, 2007 were $16.6 million, increasing approximately
      59%,
      from $10.4 million, for the same period a year ago. This increase was
      attributable to the increase in assets under management from new customers,
      as
      well as market appreciation since the preceding year.





For
      the
      six months ended December 31, 2007, CI accounted for approximately 17% of
      revenues, while Genworth Financial Asset Management, Inc. (“Genworth”),
      an investment adviser, through its investments in the Epoch
      International Small Cap Fund (“EPIEX”) and the Epoch Global Equity Shareholder
      Yield Fund (“EPSYX”), as well as separate account mandates, accounted for
      approximately 27% of revenues.





For
      the
      six months ended December 31, 2006, CI accounted for approximately 19% of
      consolidated revenues, while Genworth accounted for approximately 23% of
      consolidated revenues.


**Change***(Dollars
                    in thousands)*
                
                **2007**
                
                **2006**
                
                **$**
                ****
                **%*****Employee
                          related costs (excluding share-based
                          compensation)***
                
                $
                8,812
                
                $
                6,473
                
                $
                2,339
                
                
                36
                %


For
      the
      six months ended December 31, 2007, these expenses were $8.8 million, an
      increase of $2.3 million, or 36%, from $6.5 million for the six months ended
      December 31, 2006. Increased headcount, including the addition of several senior
      experienced professionals to support the growth and expansion of the business,
      as well as higher incentive compensation levels, were the primary reasons for
      this increase. We expect the level of overall employee related costs to increase
      in future periods due to changes in staffing levels to support the growth and
      expansion of our business.




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**Change***(Dollars
                  in thousands)*
              
              **2007**
              
              **2006**
              
              **$**
              ****
              **%*****Share-based
                  compensation***
              
              $
              2,104
              
              $
              2,958
              
              $
              (854
              )
              
              (29
              )%





Share-based
      compensation for the six months ended December 31, 2007 decreased by $0.9
      million, or 29% from $3.0 million for the six months ended December 31, 2006.
      Amortization of the shares issued to employee owners in connection with the
      acquisition of EIP in June 2004, which equaled approximately $0.8 million per
      quarter, was completed as of June 30, 2007. This reduction was partially offset
      by amortization of new stock awards.





In
      the
      six months ended December 31, 2007 and 2006, a total of 171,434 and 460,658
      shares of restricted stock, respectively, were issued to employees. A total
      of
      21,430 and 57,582 shares of the awards issued in the six months ended December
      31, 2007 and 2006, respectively, or approximately 12.5%, were immediately
      vested. The remaining 87.5% of the shares vest ratably over the subsequent
      three
      years. During the six months ended December 31, 2007 and 2006, a total of 1,449
      and 18,318 shares, respectively, were forfeited by terminated
      employees.





For
      the
      current fiscal year non-employee directors receive $80,000 per year for their
      services. Non-employee director compensation is to be paid either fully in
      stock
      or a combination of a minimum of $60,000 in stock and a maximum of $20,000
      in
      cash, at the election of the director. For the prior fiscal year non-employee
      directors received $50,000 for their services, payable fully in
      stock.





During
      the six months ended December 31, 2007 and December 31, 2006 **,** a
      total
      of **** 35,604
      and 66,228 shares, respectively, were granted to directors of the Company.
      Shares issued to directors' after June 30, 2006 vest over one year. Shares
      issued to directors through June 30, 2006 are subject to a three-year vesting
      period and vest one-third each year, or immediately in the event of death or
      disability. Share-based compensation expense is recognized ratably over the
      respective vesting period, in accordance with their underlying vesting
      provisions.





We
      expect
      share-based compensation costs will be lower than previous year levels as a
      result of the fully amortized employee owners’ shares noted above.


**Change***(Dollars
                  in thousands)*
              
              **2007**
              
              **2006**
              
              **$**
              ****
              **%*****General,
                  administrative and occupancy***
              
              $
              2,726
              
              $
              1,646
              
              $
              1,080
              
              
              66
              %





For
      the
      six months ended December 31, 2007, such expenses were $2.7 million, an increase
      of $1.1 million from the comparable period a year ago. Increases in costs from
      travel-related expenses to support distribution efforts of new business
      relationships, higher market data services and information technology costs
      as a
      result of increased business activity levels, as well as increased rent expense
      from the additional space leased at the Company’s headquarters beginning in
      February 2007 were the main reasons for the rise in general, administrative
      and
      occupancy costs.


**Change***(Dollars
                  in thousands)*
              
              **2007**
              
              **2006**
              
              **$**
              ****
              **%*****Professional
                  fees and services***
              
              $
              1,339
              
              $
              853
              
              $
              486
              
              
              57
              %




For
      the
      six months ended December 31, 2007, such fees were $1.3 million, an increase
      of
      $0.5 million from the comparable period a year ago. The
      primary reasons for this increase were higher consulting expenses and audit
      fees
      in connection with compliance with Section 404 of the Sarbanes Oxley Act of
      2002
      (“SOX”), and increased legal fees in conjunction with our continued business
      expansion.


**Change***(Dollars
                  in thousands)*
              
              **2007**
              
              **2006**
              
              **$**
              ****
              **%*****Other
                  income***
              
              $
              4,479
              
              $
              4,100
              
              $
              379
              
              
              9
              %





For
      the
      six months ended December 31, 2007, other income increased to $4.5 million,
      an
      increase of $0.4 million from the six months ended December 31, 2006. The
      primary reason for this increase was the result of realized
      gains from the sales of marketable securities during the six months ended
      December 31, 2007. Other income in the previous year primarily included dividend
      income and realized gains from the eStara transaction.




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**Change***(Dollars
                  in thousands)*
              
              **2007**
              
              **2006**
              
              **$**
              ****
              **%*****Provision
                  for income taxes***
              
              $
              1,243
              
              $
              99
              
              $
              1,144
              
              
              1156
              %




For
      the
      six months ended December 31, 2007, the Company used an estimated annual
      effective income tax rate based upon facts and circumstances known at the end
      of
      the interim period. On a quarterly basis, the estimated effective tax rate
      is
      adjusted, as appropriate, based upon changed facts and circumstances, if any,
      as
      compared to those forecasted at the beginning of the fiscal year and each
      interim period thereafter. The Company’s provision for income taxes for the six
      months ended December 31, 2007 has been reduced for the release
      of a valuation allowance of approximately $1.1 million against a previously
      impaired investment during the quarter ended September 30, 2007.





The
      Company was not subject to regular income tax rates in the prior year because
      of
      its net operating loss carry forwards but was obligated to pay tax under the
      federal alternative minimum tax (“AMT”), which limits the application of net
      operating loss carry forwards to 90% of taxable income, in addition to
      certain AMT adjustments. The
      Company is subject to regular income tax rates in the current year, as the
      remaining net operating losses available to be utilized by the Company are
      subject to annual limitations, and are less, in the aggregate, than were
      available in the prior year.





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**Liquidity
      and Capital Resources**





A
      summary
      of cash flow data, together with short-term investments for the six months
      ended
      December 31, 2007 and 2006, respectively, is as follows *(in
      thousands):*





**December
                31,****2007**
            
            **2006**Cash
                flows provided by (used in):Operating
                activities
            
            $
            7,812
            
            $
            791Investing
                activities
            
            
            22,388
            
            
            (11,567
            )Financing
                activities
            
            
            (368
            )
            
            9,842Net
                increase (decrease) in cash and cash equivalents
            
            
            29,832
            
            
            (934
            )Cash
                and cash equivalents at beginning of year
            
            
            3,097
            
            
            2,445Cash
                and cash equivalents at end of the period
            
            
            32,929
            
            
            1,511Short-term
                investments
            
            
            -
            
            
            17,100Cash,
                cash equivalents and short-term investments at end of
                period
            
            $
            32,929
            
            $
            18,611





Short-term
      investments consist of investment grade auction-rate securities with an active
      resale market and can be readily converted into cash to fund current operations,
      or satisfy other cash requirements as needed. Auction-rate securities have
      an
      underlying component of a long-term debt instrument. These securities mature
      on
      a shorter term than the underlying instrument based on an auction bid that
      resets the interest rate of the security. The auction or reset dates occur
      at
      intervals that are generally between 7 and 28 days of the purchase. These
      securities provide a higher interest rate than similar short-term securities
      and
      provide higher liquidity than otherwise longer term investments. These
      securities are expected to be sold within one year, regardless of their legal
      maturity date. Accordingly these securities have been classified as current
      assets in the Condensed Consolidated Balance Sheet. All auction rate securities
      are bought and sold at par value.





During
      August and September 2007, in response to increasing credit quality concerns
      present in the fixed income securities market such as increasing mortgage
      defaults and delinquencies, tighter lending conditions, and severely constricted
      liquidity in the asset-backed commercial paper market, the Company liquidated
      all of its short-term investments. The $21.9 million of proceeds from these
      liquidations were invested solely in cash and cash equivalents on the Condensed
      Consolidated Balance Sheet as of December 31, 2007.




Sources
      of funds for the Company's operations are derived from investment advisory
      and
      investment management fees, interest on the Company's cash, cash equivalents,
      and short-term investments, and sublease income. As of December 31, 2007, the
      Company had $32.9 million of cash and cash equivalents and $6.5 million of
      accounts receivable to fund its business growth strategy.




At
      December 31, 2007, accounts payable and accrued liabilities, which consist
      of
      accrued professional fees, trade payables and other liabilities, were $0.9
      million. Accrued compensation and benefits, which consist primarily of accrued
      employee bonuses and sales commissions, were $5.4 million. There was no debt
      and
      management does not foresee any reason to incur debt unless a significant
      business opportunity warrants such action.





The
      Company's business does not require it to maintain significant capital balances.
      The Company's current financial condition is highly liquid, with cash and cash
      equivalents comprising approximately 68% of its total assets at December 31,
      2007.





The
      Company expects to continue to increase staff to support the growth and
      expansion of its business and the related distribution efforts for its products.
      Management believes the existing cash and cash equivalents are adequate to
      provide the necessary resources to meet its operating needs for the foreseeable
      future as well as to implement its growth objectives.





**Preferred
      Stock Dividends**





As
      a
      result of the November 7, 2006 preferred stock issuance, the Company began
      paying semi-annual dividends on newly issued Series A Convertible Preferred
      Stock on December 31 and June 30 of each year. The semi-annual dividend payments
      are approximately $230 thousand, each June and December.





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**Common
      Stock Dividends**





On
      October 9, 2007, the Company’s Board of Directors declared a quarterly cash
      dividend on the Company's Common Stock of $0.025 per share payable on November
      15, 2007 to stockholders of record at the close of business on October 31,
      2007.
      The total dividend paid was approximately $504 thousand.





On
      January 14, 2008, the Company’s Board of Directors declared a quarterly cash
      dividend on the Company's Common Stock of $0.025 per share payable on February
      20, 2008 to stockholders of record at the close of business on February 5,
      2008.
      The total dividend to be paid is approximately $510
      thousand.





The
      Company expects quarterly dividends going forward to be paid in February, May,
      August and November of each fiscal year, and anticipates a total annual dividend
      of $0.10 per common share. However, the actual declaration of future cash
      dividends, and the establishment of record and payment dates, will be subject
      to
      final determination by the Board of Directors each quarter after its review
      of
      the Company's financial performance.





**Working
      Capital**





The
      Company's working capital and current ratio (current assets divided by current
      liabilities) for the six months ended December 31, 2007 and recent fiscal year
      ended June 30, 2007 is set forth in the table below ( *in
      thousands* ):





**December
                31,**
            
            **June
                30,**
            
            **Increase**
            
            **Percent****2007**
            
            **2007**
            
            **(Decrease)**
            
            **Change**Current
                Assets
            
            $
            41,284
            
            $
            35,495
            
            $
            5,789
            
            
            16
            %Current
                Liabilities
            
            
            7,340
            
            
            2,810
            
            
            4,530
            
            
            161
            %Working
                Capital
            
            $
            33,944
            
            $
            32,685
            
            $
            1,259
            
            
            4
            %Current
                Ratio
            
            
            5.62
            
            
            12.63
            
            
            (7.01
            )
            
            (55
            %)




**Current
      Assets**





Current
      assets increased $5.8 million at December 31, 2007 compared with June 30, 2007
      primarily attributable to increases in cash and cash equivalents as a result
      of
      business expansion and the resultant revenue increases, along with proceeds
      from
      sales of marketable securities.





**Current
      Liabilities**





Current
      liabilities increased by $4.5 million at December 31, 2007 compared with June
      30, 2007 primarily as a result of the increase in accrued incentive compensation
      and benefits coupled with an increase in income taxes payable.





**Contractual
      Obligations**





The
      Company's primary headquarters and operations are located in New York, New
      York.
      Business is conducted at a location with approximately 10,000 square feet under
      a long-term lease that expires in September 2015. The Company entered into
      a
      sublease agreement for an additional 3,100 square feet at its Company
      headquarters effective February 1, 2007.





The
      Company is also the primary party to another lease in New York, New York which
      expires in December 2010. This property is subleased to an unrelated third
      party. While the Company remains responsible for obligations under the lease,
      the sublease income, net of profit sharing with the landlord, more than offsets
      the Company's obligations under this lease. The subtenant has performed its
      obligations under the sublease agreement and the Company is not aware of any
      credit issues with the subtenant. As of December 31, 2007, the remaining future
      minimum payments under this lease total $1.4 million. Future minimum receipts
      from the subtenant, net of profit sharing with the landlord, total $1.5 million
      as of December 31, 2007.





The
      Company also has an office lease in Sherman Oaks, California with an annual
      option to renew. The obligations under this lease are minimal.





As
      previously disclosed in the Company’s Current Report on form 8-K dated November
      28, 2007, the Company entered into a three year employment agreement with its
      Chief Executive Officer, effective January 1, 2008. The agreement calls for
      a
      base annual salary of $350 thousand and
      bonus
      compensation in accordance with the Company’s bonus and incentive compensation
      plans then in effect. The
      agreement was reviewed and approved by the Company's Compensation Committee
      and
      the Board of Directors.





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**Summary
      of Contractual Obligations**





The
      following table summarizes all contractual obligations, including the
      aforementioned office leases ( *in
      thousands* ):


**Remaining**
              
              **Payments
                  Due in****Payments in**
              
              **Fiscal
                  Years Ended June 30,****2009
                  -**
              
              **2011
                  -**
              
              **2013
                  and****2008**
              
              **2010**
              
              **2012**
              
              **thereafter**
              
              **Total**Primary
                  New York operations
              
              $
              488
              
              $
              1,952
              
              $
              1,421
              
              $
              2,330
              
              $
              6,191Subleased
                  New York lease
              
              
              240
              
              
              961
              
              
              200
              
              
              -
              
              
              1,401Other
                  office locations
              
              
              14
              
              
              5
              
              
              -
              
              
              -
              
              
              19Other
                  operating leases
              
              
              20
              
              
              74
              
              
              -
              
              
              -
              
              
              94Total
                  obligations
              
              
              762
              
              
              2,992
              
              
              1,621
              
              
              2,330
              
              
              7,705Sublease
                  income
              
              
              (287
              )
              
              (1,148
              )
              
              (95
              )
              
              -
              
              
              (1,530
              )Net
                  obligations
              
              $
              475
              
              $
              1,844
              
              $
              1,526
              
              $
              2,330
              
              $
              6,175




**Off-Balance
      Sheet Arrangements**





As
      of
      December 31, 2007 the Company had no off-balance sheet
      arrangements.




**Significant
      Transactions**





**** ***eStara
      transaction***


During
      the fiscal year ended June 30, 2000, J Net Enterprises, Inc. (“J Net”), the
      predecessor company to Epoch, made a $4.0 million investment in eStara, Inc.
      ("eStara"), a technology-related company that provides conversion and tracking
      solutions to enhance on-line sales. This investment was comprised of 373,376
      shares of Series C-1 and 553,893 shares of Series C-2, respectively, 8%
      cumulative convertible redeemable preferred stock. As there was no readily
      available market for the securities and the investment represented less than
      a
      20% interest in eStara, the securities were valued at the Company’s initial
      cost. During the fiscal years ended June 30, 2001 and 2002, the carrying value
      of this investment was deemed, by J Net’s management, impaired and written down.
      During the fiscal year ended June 30, 2003, J Net’s management concluded its
      ability to recover its investment was remote and wrote down the remaining
      carrying value to zero. Accordingly, this investment had no carrying value
      at
      October 2, 2006. Additionally, no dividends had been paid through October 2,
      2006. On October 2, 2006, eStara’s stockholders approved the acquisition of its
      stock by Art Technology Group, Inc. (NASDAQ ticker symbol “ARTG”). Under the
      terms of the agreement, ARTG acquired all of the outstanding common stock,
      preferred stock, and vested and unvested stock options of eStara.





The
      Company, as a holder of the preferred stock of eStara, received an amount per
      share equal to the original issue price, plus the amount of any accrued but
      unpaid cumulative dividends. Additionally, the Company was entitled to its
      approximately 5% proportionate share of remaining merger consideration.
      Accordingly, the Company received 2,431,577 common shares of ARTG and $267
      thousand in cash. An additional $36 thousand of cash was held in escrow and
      released to the Company upon the first anniversary of the closing. Additional
      amounts, up to $150 thousand, may also be realized, pursuant to the earn-out
      provisions set forth in the merger agreement. The resultant shares held by
      the
      Company are currently classified as Marketable securities on the Condensed
      Consolidated Balance Sheets in accordance with SFAS No. 115, *Accounting for Certain Investments in Debt and Equity
      Securities* .
      The
      common shares received from ARTG were subject to a lock-up agreement pursuant
      to
      which the shares were released to the Company in equal monthly installments
      over
      a period of 12 months, which commenced January 2007. As of December 31,
      2007 the lock-up has fully expired.





The
      Company sold approximately 1.0 million shares of ARTG during the second half
      of
      the fiscal year ended June 30, 2007 and continues to sell shares. For the three
      and six months ended December 31, 2007, the Company sold approximately 0.8
      million and 1.2 million shares, respectively, of ARTG and recorded realized
      gains of approximately $2.1 million and $3.0 million, respectively. These gains
      were reclassified, in accordance with the provisions of SFAS No. 115,
“ *Accounting
      for Certain Investments in Debt and Equity Securities,* ”
from
      Accumulated other comprehensive income, a separate component of stockholders’
equity, to Realized gains on investments on the Condensed Statement of
      Operations. As of December 31, 2007, the Company had approximately 238 thousand
      shares of ARTG with a market value of approximately $1.0 million, the value
      of
      which is shown as marketable securities on the Condensed Consolidated Balance
      Sheet.





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***Strategic
      Data Corporation transaction***


During
      the fiscal year ended June 30, 2000, J Net, the predecessor company to Epoch,
      made a $1.1 million investment in Strategic Data Corp. ("SDC"), a
      technology-related company that specializes in advertising optimization
      technology. This investment was comprised of 892,500 shares of Series B and
      1,966,963 shares of Series C, convertible preferred stock. As there was no
      readily available market for the securities and the investment represented
      less
      than a 20% interest in SDC, the securities were valued at the Company’s initial
      cost. During the fiscal year ended June 30, 2001, the carrying value of this
      investment was deemed to be impaired by J Net’s management and written down to
      zero. Accordingly, this investment had no carrying value at February 20, 2007.
      Additionally, no dividends had been paid through February 20, 2007.




On
      February 20, 2007, SDC’s stockholders approved the acquisition of its stock by
      Fox Interactive Media, Inc. (“FIM”). Under the terms of the agreement, FIM
      acquired all of the outstanding common stock, preferred stock, and vested and
      unvested stock options of SDC.





As
      a
      result of the above-mentioned merger, the Company, as holder of the preferred
      stock of SDC, received an initial cash payment of approximately $2.2 million
      on
      March 22, 2007.





The
      SDC
      merger also calls for contingent payments, upon the achievement of certain
      targets and milestones, payable over a period of approximately 3.5 years from
      the closing, as well as release of an escrow fund. The Company’s share of
      additional contingent payments and escrow funds stemming from the acquisition
      ranges from zero to approximately $15.4 million.





The
      first
      target measurement date was November 2007 and the Company became entitled to
      receive approximately $344 thousand. Such amount has been accrued for and
      included in Realized gains on investments in the Condensed Consolidated
      Statement of Operations for the three and six months ended December 31,
      2007.




**New
      Accounting Pronouncements**





In
      June 2006, the FASB issued FASB Interpretation No. 48, *Accounting for Uncertainty in Income Taxes* — *an
      interpretation of FASB Statement No. 109* (“FIN
      48”). FIN 48 clarifies the accounting for income taxes by prescribing the
      minimum recognition threshold that a tax position must meet to be recognized
      in
      the financial statements. FIN 48 also provides guidance on measurement,
      derecognition, classification, interest and penalties, accounting in interim
      periods, disclosure and transition. FIN 48 must be implemented for fiscal years
      beginning after December 15, 2006. The Company adopted FIN 48 at the beginning
      of its fiscal year commencing July 1, 2007. The adoption of FIN 48 did not
      have
      a material effect on the Company's consolidated financial position, results
      of
      operations, or cash flows.





In
      September 2006, the FASB issued SFAS No. 157, *Fair
      Value Measurements* (“SFAS
      157”). SFAS 157 defines fair value, establishes a framework for measuring fair
      value and enhances disclosures about fair value measurements required under
      other accounting pronouncements, but does not change existing guidance as to
      whether or not an instrument is carried at fair value. SFAS 157 is effective
      for
      fiscal years beginning after November 15, 2007, with earlier application
      permitted. The Company does not expect the adoption of this statement to have
      a
      material impact on its consolidated financial position, results of operations,
      or cash flows.




In
      February 2007, the FASB issued SFAS No. 159, *The
      Fair Value Option for Financial Assets and Financial
      Liabilities* (“SFAS
      159”). SFAS 159 permits certain financial assets and financial liabilities to be
      measured at fair value, using an instrument-by-instrument election. The initial
      effect of adopting SFAS 159 must be accounted for as a cumulative effect
      adjustment to opening retained earnings for the fiscal year of adoption.
      Retrospective application to fiscal years preceding the effective date is not
      permitted. SFAS 159 is effective for the Company beginning July 1, 2008,
      although early adoption is permitted. The Company does not expect the adoption
      of this statement to have a material impact on its consolidated financial
      position, results of operations, or cash flows.





In
      June
      2007, the Financial Accounting Standards Board (“FASB”) ratified the consensus
      reached by the Emerging Issues Task Force (“EITF”) in EITF Issue No. 06-11,
“Accounting for Income Tax Benefits of Dividends on Share-Based Payment Awards”
(“EITF 06-11”). EITF 06-11 requires that the realized income tax benefit from
      dividends paid on nonvested equity-classified employee share-based payment
      awards that are charged to retained earnings be recorded as an increase to
      additional paid-in capital, rather than a reduction to tax expense. The amount
      recognized in additional paid-in capital for the realized income tax benefit
      from dividends on those awards should be included in the pool of excess tax
      benefits available to absorb tax deficiencies on share-based payment awards.
      EITF 06-11 applies prospectively to the income tax benefits on dividends paid
      on
      unvested common shares, for fiscal years beginning after December 15, 2007,
      with
      early adoption permitted. There were no dividends declared or paid on unvested
      common shares prior to the ratification of EITF 06-11. The Company paid a
      dividend in November 2007 and has declared a dividend payable in February 2008.
      The Company is accounting for the tax benefits on all dividends declared on
      unvested common shares as an increase to additional paid-in capital, in
      accordance with EITF 06-11. The adoption of this pronouncement did not have
      a
      material impact on the Company’s consolidated financial position, results of
      operations, or cash flows.





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**Item
                3.****Quantitative
                and Qualitative Disclosures About Market Risk.**




***Marketable
      securities***


The
      Company is exposed to fluctuations in the market price of its marketable
      securities and other investments presented on its Condensed Consolidated Balance
      Sheets. These securities were acquired in connection with the eStara
      transaction. The total fair value of these securities as of December 31, 2007
      was $1.0 million and $4.3 million, respectively. The Company does not hedge
      its
      market risk related to these securities and does not intend to do so in the
      future.





At
      December 31, 2007, the Company performed sensitivity analysis to assess the
      potential loss in the fair value of these market-risk sensitive securities.
      The
      following table represents the impact on the Company’s financial position
      assuming a hypothetical 10% decline in associated market indices ( *dollars
      in thousands* ):




**Estimated Fair****Value After****Hypothetical**
            
            **Hypothetical**
            
            **Decrease
                in****Fair
                Value at**
            
            **Percentage**
            
            **Percentage**
            
            **Stockholders'****December 31, 2007**
            
            **Change**
            
            **Change**
            
            **Equity
                (****1****)**Marketable
                securities
            
            $
            1,035
            
            
            10
            %
            $
            911
            
            $
            124Other
                investments
            
            $
            4,287
            
            
            10
            %
            $
            3,898
            
            $
            389




*1**)*
            *Marketable
                securities and the investments in the Epoch mutual funds and the
                separate account of Epoch's Global All-Cap Product are classified
                as
                available-for-sale securities. Unrealized losses on available-for-sale
                securities are excluded from earnings and recorded in other comprehensive
                income as a separate *component
                of stockholders’ equity until realized. The investment in the Epoch Global
                Absolute Return Fund, LLC is accounted for using the equity method,
                under
                which the Company's share of net realized and unrealized earnings
                or
                losses from the partnership is reflected in
                income.**




***Cash
      and cash equivalents***





Cash
      and
      cash equivalents are exposed to market risk due to changes in interest rates,
      which impacts interest income. We do not expect our interest income to be
      significantly affected by a sudden change in market interest rates. Presently,
      the Company neither participates in hedging activities nor does it have any
      derivative financial instruments.





**Item
      4. Controls and Procedures.**





***Evaluation
      of Disclosure Controls and Procedures*** .





Our
      management, with the participation of the Company's principal executive officer
      and principal financial officer, has evaluated the effectiveness of the design
      and operation of our disclosure controls and procedures (as defined in Rules
      13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended
      (the "Exchange Act")), as of the end of the period covered by this Quarterly
      Report on Form10-Q. Based on such evaluation, the Company's principal executive
      officer and principal financial officer have concluded that, as of the end
      of
      the period covered by this report, the Company's disclosure controls and
      procedures are effective to ensure that information required to be disclosed
      by
      us in reports that we file or submit under the Exchange Act is recorded,
      processed, summarized and reported within the required time periods and are
      designed to ensure that information required to be disclosed in our reports
      is
      accumulated and communicated to our management, including our principal
      executive officer and principal financial officer, as appropriate to allow
      timely decisions regarding required disclosure.





***Changes
      in Internal Control Over Financial Reporting*** .





There
      has
      been no change in our internal control over financial reporting (as defined
      in
      Rules 13a-5(f) and 15d-15(f) under the Exchange Act) during the period covered
      by this Quarterly Report on Form 10-Q that has materially affected, or that
      is
      reasonably likely to materially affect, our internal control over financial
      reporting.




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**PART
      II. OTHER INFORMATION**




**Item
      1.****Legal
      Proceedings.**





From
      time
      to time, the Company or its subsidiaries may become parties to claims, legal
      actions and complaints arising in the ordinary course of business. Management
      is
      not aware of any claims which would have a material adverse effect on its
      condensed consolidated financial statements.




**Item
      1a. Risk Factors.**





There
      were no material changes from the risk factors set forth under Part I, Item
      1A“Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended
      June 30, 2007.





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





On
      November 29, 2007, the stockholders of Epoch Holding Corporation re-elected
      the
      chairman and the other five (5) directors standing for re-election at the annual
      meeting. Allan R. Tessler was re-elected as Chairman of the Board of Directors
      with 16,499,829 votes. The following individuals were also re-elected to the
      Company's Board of Directors and won with the following number of affirmative
      votes: William W. Priest (19,032,866), Eugene M. Freedman (18,913,830), Jeffrey
      L. Berenson (18,881,336), Enrique R. Arzac (19,025,166), and Peter A. Flaherty
      (18,912,764).





As
      previously disclosed in the Company’s Current Report on form 8-K dated November
      28, 2007, David R.
      Markin retired from the Board of Directors effective as of the annual meeting.
      The Board has not nominated a replacement for Mr. Markin and, at such time
      as
      the Board deems appropriate, the Board may reduce the size of the Board,
      designate a substitute or leave the vacancy unfilled.




**Item
      6.** **Exhibits.**




(a)
      Exhibits:





Exhibit
                No.
            
            Description10.1
            
            
            Employment
                agreement with Chief Executive Officer (D)31.1
            
            
            Chief
                Executive Officer Certification (A)31.2
            
            
            Principal
                Financial Officer Certification (A)32.1
            
            
            Certification
                of Chief Executive Officer and Chief Financial Officer pursuant to
                18
                U.S.C. Section 1350 as Adopted Pursuant to Section 906 of the
                Sarbanes-Oxley Act of 2002 (A)99.1
            
            
            Press
                release announcing AUM as of December 31, 2007 (B)99.2
            
            
            Press
                release announcing declaration of common stock dividend
                (C)99.3
            
            
            Press
                release announcing employment agreement with Chief Executive Officer
                and
                retirement of Board member (D)


(A)-
                  Included herein.(B)
                  - Incorporated by reference to Registrant’s Form 8-K dated January 7,
                  2008.(C) -
                  Incorporated by reference to Registrant’s Form 8-K dated January 14,
                  2008.(D)
                  –
                  Incorporated by reference to Registrant’s Form 8-K dated November 28,
                  2007.




Signature





Pursuant
      to the requirements of the Securities Exchange Act of 1934, the Registrant
      has
      duly caused this report to be signed on its behalf by the undersigned thereunto
      duly authorized.


EPOCH
                HOLDING CORPORATION(Registrant)By:
              /s/ Adam
                  BorakChief
                  Financial OfficerDate:
                  February 11, 2008




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