**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 March 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 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
                  filero
              Non-accelerated
                  filerþ


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
      May 8,
      2007, there were 19,900,028 shares of the Company's common stock, $.01 par
      value
      per share, outstanding.









2




**EPOCH
      HOLDING CORPORATION AND SUBSIDIARIES**


**FORM
      10-Q**


**TABLE
      OF CONTENTS**




**Page
                No.****Part
                I.**
            **Financial
                Information**Item
                1.
            Financial
                Statements.
            4CondensedConsolidated
                Balance Sheets -March
                31, 2007 (Unaudited) and June 30, 2006
            4CondensedConsolidated
                Statements of Operations (Unaudited) -Three
                and Nine Months Ended March 31, 2007 and 2006
            5Condensed
                Consolidated Statements of Changes in Stockholders' Equity - Nine
                Months Ended March 31, 2007(Unaudited) and Year Ended June 30,
                2006
            6CondensedConsolidated
                Statements of Cash Flows (Unaudited) -Nine
                Months Ended March 31, 2007 and 2006
            7Notes
                to Condensed Consolidated Financial Statements(Unaudited)
            8-19Item
                2.
            Management's
                Discussion and Analysis of Financial Conditionand
                Results of Operations.
            20-40Item
                3.
            Quantitative
                and Qualitative Disclosures About Market Risk.
            40Item
                4.
            Controls
                and Procedures.
            41**Part
                II.**
            **Other
                Information**Item
                1.
            Legal
                Proceedings.
            42Item1a.
            Risk
                Factors.
            42Item
                6.
            Exhibits.
            42Signatures
            43




3




**PART
                  I: FINANCIAL INFORMATION****Item
                  1. Financial Statements.****EPOCH
                  HOLDING CORPORATION AND SUBSIDIARIES****CONDENSED
                  CONSOLIDATED BALANCE SHEETS*****(Dollars
                  in thousands, except share data)*****March
                  31,**
              
              **June
                  30,****2007**
              
              **2006****(Unaudited)****ASSETS****Current
                  assets:**Cash
                  and cash equivalents
              
              $
              5,574
              
              $
              2,445Short-term
                  investments - (**Note
                  2**)
              
              
              15,900
              
              
              5,400Accounts
                  receivable
              
              
              4,918
              
              
              2,486Marketable
                  securities -**(Note
                  8)**
              
              
              4,910
              
              
              -Prepaid
                  and other current assets
              
              
              618
              
              
              316Total
                  current assets
              
              
              31,920
              
              
              10,647Property
                    and equipment (net of accumulated depreciation
                    of $844 and $552, respectively)
              
              
              1,967
              
              
              2,015Security
                  deposits
              
              
              843
              
              
              749Investments
                  in technology-related businesses - (**Note
                  8**)
              
              
              157
              
              
              157Other
                  investments - (**Note
                  10**)
              
              
              756
              
              
              -Total
                  assets
              
              $
              35,643
              
              $
              13,568**LIABILITIES
                  AND STOCKHOLDERS' EQUITY****Current
                  liabilities:**Accounts
                  payable and accrued liabilities
              
              $
              798
              
              $
              1,423Accrued
                  compensation and benefits
              
              
              2,705
              
              
              2,068Total
                  current liabilities
              
              
              3,503
              
              
              3,491Deferred
                  rent
              
              
              919
              
              
              1,011Subtenant
                  security deposit
              
              
              211
              
              
              211Total
                  liabilities
              
              
              4,633
              
              
              4,713**Commitments
                  and contingencies - (Note 7)****Stockholders'
                  equity: - (Note 9)**Preferred
                    stock, series A convertible, $1 par value per share, 1,000,000
                    shares
                    authorized; 10,000 shares issued and outstanding
              
              
              10
              
              
              -Common
                    stock, $0.01 par value per share, 60,000,000 shares authorized;
                    19,894,224
                    and 19,153,996 shares issued and outstanding,
                    respectively
              
              
              199
              
              
              191Additional
                  paid-in capital
              
              
              43,437
              
              
              28,500Accumulated
                  deficit
              
              
              (9,420
              )
              
              (13,251
              )Accumulated
                  other comprehensive income, net
              
              
              3,003
              
              
              -Unearned
                  share-based compensation
              
              
              (6,219
              )
              
              (6,585
              )Total
                  stockholders' equity
              
              
              31,010
              
              
              8,855Total
                  liabilities and stockholders' equity
              
              $
              35,643
              
              $
              13,568*The
                  accompanying notes are an integral part of these condensed consolidated
                  financial statements*
  4
  **EPOCH
                  HOLDING CORPORATION AND SUBSIDIARIES****CONDENSED
                  CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)*****(Dollars
                  in thousands, except per share data)*****Three
                  Months Ended**
                **March
                  31,**
              
              **Nine
                  Months Ended**
                **March
                  31,****2007**
              
              **2006**
              
              **2007**
              
              **2006****Revenues:**Investment
                  advisory and management fees
              
              $
              6,133
              
              $
              2,865
              
              $
              15,593
              
              $
              6,840Performance
                  fees
              
              
              -
              
              
              -
              
              
              971
              
              
              100Total
                  operating revenues
              
              
              6,133
              
              
              2,865
              
              
              16,564
              
              
              6,940**Operating
                  expenses:**Employee
                    related costs (excluding share-based
                    compensation)
              
              
              3,566
              
              
              2,177
              
              
              10,040
              
              
              6,230Share-based
                  compensation
              
              
              1,752
              
              
              1,199
              
              
              4,710
              
              
              3,451General,
                  administrative and occupancy
              
              
              912
              
              
              648
              
              
              2,558
              
              
              1,881Professional
                  fees and services
              
              
              542
              
              
              296
              
              
              1,395
              
              
              659Depreciation
                  and amortization
              
              
              101
              
              
              86
              
              
              292
              
              
              250Total
                  operating expenses
              
              
              6,873
              
              
              4,406
              
              
              18,995
              
              
              12,471**Loss
                  from operations**
              
              
              (740
              )
              
              (1,541
              )
              
              (2,431
              )
              
              (5,531
              )**Other
                  income: - (Notes 4, 8)**Dividend
                  income
              
              
              584
              
              
              -
              
              
              2,938
              
              
              -Realized
                  gain on investments
              
              
              2,057
              
              
              -
              
              
              2,266
              
              
              96Interest
                  and other income
              
              
              391
              
              
              249
              
              
              1,930
              
              
              684Total
                  other income
              
              
              3,032
              
              
              249
              
              
              7,134
              
              
              780**Income
                  (loss) before income taxes**
              
              
              2,292
              
              
              (1,292
              )
              
              4,703
              
              
              (4,751
              )Provision
                  for (benefit from) income taxes
              
              
              4
              
              
              (230
              )
              
              103
              
              
              (230
              )**Net
                  income (loss)**
              
              
              2,288
              
              
              (1,062
              )
              
              4,600
              
              
              (4,521
              )Cumulative
                  preferred stock dividends
              
              
              115
              
              
              -
              
              
              184
              
              
              -Non-cash
                    charge attributable to
                  beneficialconversion
                    feature
                  of
                    preferred stock - (**Note 9**)
              
              
              -
              
              
              -
              
              
              700
              
              
              -**Net
                    income (loss) available to common stockholders for basic earnings
                    per
                    share**
              
              $
              2,173
              
              $
              (1,062
              )
              $
              3,716
              
              $
              (4,521
              )**Basic
                  earnings (loss) per share**
              
              $
              0.11
              
              $
              (0.06
              )
              $
              0.19
              
              $
              (0.24
              )**Diluted
                  earnings (loss) per share**
              
              $
              0.11
              
              $
              (0.06
              )
              $
              0.19
              
              $
              (0.24
              )*The
                  accompanying notes are an integral part of these condensed consolidated
                  financial statements*
 5


**EPOCH
                  HOLDING CORPORATION AND SUBSIDIARIES****CONDENSED
                  CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS'
                  EQUITY*****(
                  in thousands)***
  **Preferred
                      Stock**
                    **Series
                      A Convertible**
                
                **Common
                    Stock**
                
                **Additional**
                  **Paid-in**
                
                **Accumulated**
                
                **Accumulated**
                  **Other**
                  **Comprehensive**
                
                **Unearned**
                  **Share-based****Shares**
                
                **Amount**
                
                **Shares**
                
                **Amount**
                
                **Capital**
                
                **Deficit**
                
                **Income,
                    net**
                
                **Compensation**
                
                **Totals****Balances
                    at June 30, 2005**
                
                
                -
                
                $
                -
                
                
                18,258
                
                $
                182
                
                $
                24,404
                
                $
                (7,529
                )
                $
                -
                
                $
                (7,480
                )
                $
                9,577Net
                    loss
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                (5,722
                )
                
                
                
                
                
                
                
                (5,722
                )*Comprehensive
                    loss*
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                (5,722
                )Net
                    issuance of restricted common stock
                
                
                
                
                
                
                
                
                812
                
                
                8
                
                
                3,767
                
                
                
                
                
                
                
                
                (3,285
                )
                
                490Amortization
                      of unearned share-based compensation
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                4,180
                
                
                4,180Issuance
                      of common stock upon exercise of stock options
                
                
                
                
                
                
                
                
                84
                
                
                1
                
                
                329
                
                
                
                
                
                
                
                
                
                
                
                330**Balances
                    at June 30, 2006**
                
                
                -
                
                
                -
                
                
                19,154
                
                
                191
                
                
                28,500
                
                
                (13,251
                )
                
                -
                
                
                (6,585
                )
                
                8,855Net
                    income
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                4,600
                
                
                
                
                
                
                
                
                4,600Net
                    unrealized gains on available-for-salesecurities, net of
                    tax
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                3,003
                
                
                
                
                
                3,003*Comprehensive
                    income*
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                7,603Net
                    issuance of restricted common stock
                
                
                
                
                
                
                
                
                730
                
                
                7
                
                
                4,337
                
                
                
                
                
                
                
                
                (3,923
                )
                
                421Amortization
                      of unearned share-basedcompensation
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                4,289
                
                
                4,289Issuance
                    of series A convertible preferred stock
                
                
                10
                
                
                10
                
                
                
                
                
                
                
                
                9,990
                
                
                
                
                
                
                
                
                
                
                
                10,000Issuance
                      of common stock upon exercise of stock options
                
                
                
                
                
                
                
                
                10
                
                
                1
                
                
                (1
                )
                
                
                
                
                
                
                
                
                
                
                -Preferred
                    stock issuance cost
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                (89
                )
                
                
                
                
                
                
                
                
                
                
                (89
                )Preferred
                    stock dividends
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                (69
                )
                
                
                
                
                
                
                
                (69
                )Beneficial
                      conversion feature associated with preferred stock -
                    **(Note 9)**
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                700
                
                
                (700
                )
                
                
                
                
                
                
                
                -**Balances
                      at March 31, 2007 (Unaudited)**
                
                
                10
                
                $
                10
                
                
                19,894
                
                $
                199
                
                $
                43,437
                
                $
                (9,420
                )
                $
                3,003
                
                $
                (6,219
                )
                $
                31,010
  *The
                    accompanying notes are an integral part of these condensed consolidated
                    financial statements*


6


**EPOCH
                  HOLDING CORPORATION AND SUBSIDIARIES****CONDENSED
                  CONSOLIDATED STATEMENTS OF CASH FLOWS
                  (UNAUDITED)*****(Dollars
                  in thousands)***
  **Nine
                  Months Ended March 31,****2007**
              
              **2006****Cash
                  flows from operating activities:**Net
                  income (loss)
              
              $4,600
              
              $(4,521)Adjustments
                  to reconcile net income (loss) to net cash provided
                  by (used in) operating activities:Share-based
                  compensation
              
              4,710
              
              3,451Dividend
                  income received in stock
              
              (2,240)
              
              -Realized
                  gain on investments
              
              (2,266)
              
              (96)Depreciation
                  and amortization
              
              292
              
              250Increase
                  in operating assets:Accounts
                  receivable
              
              (2,432)
              
              (1,156)Income
                  taxes receivable
              
              -
              
              (230)Prepaid
                  and other current assets
              
              (302)
              
              (103)(Decrease)
                  increase in operating liabilities:Accounts
                  payable and accrued liabilities
              
              (625)
              
              123Accrued
                  compensation and benefits
              
              637
              
              3Deferred
                  rent
              
              (92)
              
              64Net
                  cash provided by (used in) operating activities
              
              2,282
              
              (2,215)**Cash
                  flows from investing activities:**Purchases
                  and sales of short-term investments, net
              
              
              (10,500
              )
              
              2,300Proceeds
                  from investments
              
              
              2,594
              
              
              96Other
                  investments
              
              
              (750
              )
              
              -Capital
                  expenditures
              
              
              (245
              )
              
              (225
              )Security
                  deposits
              
              
              (94
              )
              
              202Net
                  cash (used in) provided by investing activities
              
              
              (8,995
              )
              
              2,373**Cash
                  flows from financing activities:**Proceeds
                  from issuance of Series A convertible preferred stock
              
              
              10,000
              
              
              -Preferred
                  stock issuance costs
              
              
              (89
              )
              
              -Preferred
                  stock dividends paid
              
              
              (69
              )
              
              -Net
                  cash provided by financing activities
              
              
              9,842
              
              
              -Net
                  increase in cash and cash equivalents
              
              
              3,129
              
              
              158Cash
                  and cash equivalents at beginning of period
              
              
              2,445
              
              
              950Cash
                  and cash equivalents at end of period
              
              $
              5,574
              
              $
              1,108*The
                  accompanying notes are an integral part of these condensed consolidated
                  financial statements*




7


**EPOCH
        HOLDING CORPORATION AND SUBSIDIARIES**
 **NOTES
        TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**
 ***(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"),
      which was acquired in a business combination that was completed on June 2,
      2004
      as more fully described below. 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 City, with an office in Sherman Oaks, CA, the
      Company’s current product offerings include U.S. All Cap Value, U.S. Value, U.S.
      Small Cap Value, Global Small Cap Value, Global Absolute Return, International
      Small Cap, Balanced Portfolios, and Global Equity Shareholder
      Yield.





***Company
      Structure***





Operations
      commenced under the Company’s existing structure on June 2, 2004 when a
      subsidiary of J Net Enterprises, Inc. ("J Net," whose name was subsequently
      changed to Epoch Holding Corporation in November 2004), merged with EIP in
      a
      business combination which resulted in the former EIP stockholders acquiring
      51%
      of the issued and outstanding equity securities of J Net immediately following
      the merger. As a result of the majority of ownership interest in the Company
      being held by the former EIP stockholders, the business combination was
      accounted for as a reverse merger. Under generally accepted accounting
      principles in the United States of America, the legally acquired company, in
      this case, EIP, became the surviving entity for financial reporting purposes.
      EIP was formed on April 14, 2004 and did not have a predecessor business.





***Business
      segments***





The
      Company's sole line of business is the investment advisory and investment
      management business. 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, 2006.




8




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 value of the Company's cash and cash equivalents, short-term
      investments, accounts receivable, accounts payable and accrued expenses
      approximates fair value due to their short-term nature.





***Cash
      equivalents***





Cash
      equivalents are liquid investments primarily comprising money market instruments
      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 have
      been
      classified as current assets in the condensed consolidated balance sheets.
      All
      auction rate securities are bought and sold at par value.




Prior
      to
      the quarter ended December 31, 2006, the Company had classified its auction-rate
      securities as cash equivalents, based on the period from the purchase date
      to
      the next interest rate reset date. Beginning in the quarter ended
      December 31, 2006, the Company began classifying auction-rate securities as
      short-term investments that are available-for-sale because the underlying
      instruments have maturity dates exceeding three months. The Company also revised
      the presentation of the Condensed Consolidated Statements of Cash Flows to
      reflect the purchases and sales of these securities as investing activities.
      Prior period amounts have been reclassified to provide consistent presentation.
      This revision in classification had no impact on the total assets, current
      assets, or net income of the Company.




9




***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, and short-term
      investments. 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.





***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, net of tax,
      reported in Accumulated Other Comprehensive Income, a separate component of
      stockholders’ equity. Realized gains and losses on these securities are reported
      in the Statement of Operations. These securities are classified as current
      assets on the consolidated balance sheets as it is management’s intention to
      sell these securities within the next twelve months. See Note 8a - “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 the
      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,
      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. Property sold or retired is eliminated from the accounts in the
      period of disposition.





***Investments
      in technology-related businesses***





The
      Company holds minority investments in a few privately held, active
      technology-related companies. Ownership in each of these companies is less
      than
      20%. As of March 31, 2007, the Company also held investments in several inactive
      technology-related companies. The Company uses the cost method to account for
      the above investments.





It
      is the
      policy of the Company to evaluate its investments in technology-related
      businesses for possible impairment on an annual basis, or earlier if an
      indicator of impairment arises. Management uses a number of different criteria
      when evaluating an asset for possible impairment. Indicators such as significant
      decreases in the investee’s book value, cash flows which cannot be resolved or
      improved within a reasonable amount of time, sustained operating losses, adverse
      changes in the business climate, legal matters, losses of significant customers,
      and new technologies which could accelerate obsolescence of business products
      are used by management when making its evaluations.




10




As
      of
      March 31, 2007, only one such investment, TellMe Networks, Inc. (“TellMe”), had
      any value ascribed to it - $157 thousand.





On
      March
      12, 2007, TellMe announced an agreement by Microsoft Corporation (“Microsoft”)
      to acquire all of the outstanding common stock, preferred stock, and vested
      and
      unvested stock options of TellMe. This merger closed on April 30, 2007. As
      a
      result of the merger, the Company, as holder of the preferred stock of TellMe,
      will receive a cash payment of approximately $2.0 million in the quarter ending
      June 30, 2007. No such amounts have been recognized in the financial statements
      as of, and for the period ended, March 31, 2007, but the Company will record
      a
      gain in the quarter ending June 30, 2007. See Note 11 - “Subsequent Event” for
      further discussion.





During
      the quarter ended March 31, 2007, one of the Company’s privately held, active
      technology-related companies, Strategic Data Corp., was acquired. The Company
      recorded gains of $1.6 million and dividend income of $0.6 million in three
      months ended March 31, 2007. See Note 8b - “Strategic Data Corporation” for
      further discussion.





During
      the quarter ended December 31, 2006, another of the Company's privately held,
      active technology-related companies, eStara, Inc., was acquired by a publicly
      traded technology company and the resultant shares held by the Company are
      currently classified as Marketable Securities on the Condensed Consolidated
      Balance Sheet in accordance with SFAS No. 115, *Accounting
      for Certain Investments in Debt and Equity Securities* .
      During
      the nine months ended March 31, 2007 the Company recorded $2.4 million in
      dividend income and $0.2 million in realized gains from the eStara transaction.
      See Note 8a - “eStara Transaction" for further discussion.




There
      are
      no plans to make additional investments in technology-related
      businesses.





***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.





11




***Share-based
      compensation***





Effective
      July 1, 2005, the Company adopted Statement of Financial Accounting Standards
      No. 123 (Revised 2004), *Share-Based
      Payment* (“SFAS
      123R”), which requires employee and qualifying director share-based payments to
      be accounted for 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. The Company’s accounting treatment of
      restricted stock awards under SFAS 123R is consistent with that of the Company’s
      previous policies under Accounting Principles Board (“APB”) Opinion No. 25, *Accounting
      for Stock Issued to Employees* and the
      pro forma disclosures required in accordance with SFAS 123, *Accounting
      for Stock-Based Compensation* .
      The
      adoption of this standard did not have a material effect on the Company’s
      financial statements.





Under
      the
      modified prospective method transition of SFAS 123R, compensation costs related
      to any non-vested portion of stock option awards outstanding at the adoption
      date are based on the grant date fair value of those awards. All outstanding
      options previously issued under the Company’s plan were fully vested prior to
      the adoption of SFAS 123R. There were no further 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. 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
      of the deferred tax assets will not be realized.





***Earnings
      (loss) per common share***





Basic
      earnings (loss) per share (“EPS”) is calculated by dividing net earnings (loss)
      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 the common
      stock deliverable pursuant to stock options, or the common stock issuable upon
      conversion of the convertible preferred stock.





***Recently
      issued accounting standards***





On
      June 7, 2005, the Financial Accounting Standards Board (“FASB”) issued SFAS
      No. 154, *Accounting
      Changes and Error Corrections* ("SFAS
      No. 154"), replacing APB Opinion No. 20, *Accounting
      Changes* ,
      and
      SFAS No. 3, *Reporting
      Accounting Changes in Interim Financial Statements.* SFAS
      No. 154 alters the requirements for the accounting for, and reporting of, a
      change in accounting principle. Previously, most voluntary changes in accounting
      principles required recognition via a cumulative effect adjustment within net
      income of the period of the change. SFAS No. 154 requires retrospective
      application to prior periods' financial statements, unless it is impracticable
      to determine either the period-specific effects or the cumulative effect of
      the
      change. SFAS No. 154 is effective for accounting changes made in fiscal
      years beginning after December 15, 2005; however, SFAS No. 154 does
      not change the transition provisions of any existing accounting pronouncements.
      The adoption of SFAS No. 154 did not have a material effect on the
      Company’s condensed consolidated financial position, results of operations, or
      cash flows, as it did not make any voluntary accounting changes.




12




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. Early application is permitted. The Company
      is evaluating the effect, if any, the adoption of FIN 48 will have on its
      consolidated financial statements .





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 condition,
      results of operations, or cash flows.




In
      September 2006, the United States Securities and Exchange Commission (“SEC”)
      issued Staff Accounting Bulletin No. 108, *Considering
      the Effects of Prior Year Misstatements when Quantifying Misstatements in
      Current Year Financial Statements* (“SAB
      108”). This SAB provides guidance on the consideration of the effects of prior
      year misstatements in quantifying current year misstatements for the purpose
      of
      a materiality assessment. SAB 108 establishes an approach that requires
      quantification of financial statement errors based on the effects of each on
      the
      company’s balance sheet and statement of operations and the related financial
      statement disclosures. The SAB permits existing public companies to record
      the
      cumulative effect of initially applying this approach in the first year ending
      after November 15, 2006 by recording the necessary correcting adjustments to
      the
      carrying values of assets and liabilities as of the beginning of that year
      with
      the offsetting adjustment recorded to the opening balance of retained earnings.
      Additionally, the use of the cumulative effect transition method requires
      detailed disclosure of the nature and amount of each individual error being
      corrected through the cumulative adjustment and how and when it arose. The
      Company does not expect the adoption of this statement to have a material impact
      on its consolidated financial condition, results of operations, or cash
      flows.





**Note
      3 - Accounts Receivable**





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





13




***Significant
      customers and contracts***





For
      the
      three months ended March 31, 2007, CI Investments Inc. (“CI”), a Canadian-owned
      investment management company, accounted for approximately 18% of
      consolidated 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 24%. 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 nine months ended March 31, 2007, CI
      accounted for approximately 18% of consolidated revenues, while Genworth
      accounted for approximately 23%.




For
      the
      three months ended March 31, 2006, CI and Genworth each accounted for
      approximately 21% of consolidated revenues. For the nine months ended March
      31,
      2006, CI accounted for approximately 23% of consolidated revenues, while
      Genworth accounted for approximately 15%.




**Note
      4 - Other Income**




In
      November 2000, J Net, the predecessor company to Epoch, recorded an accrued
      liability related to a sale of certain assets to an unrelated third party.
      The
      recorded amount of $950 thousand represented management’s best estimate of
      additional settlement amounts due. In late November 2006, a final assessment
      was
      made by management which resulted in the reversal of the previously recorded
      accrual.





**Note
      5 - Earnings (Loss) Per Share**





Basic
      earnings (loss) per share is computed by dividing net earnings (loss) 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 1,080,000 and 1,267,500 issued and outstanding stock options at
      March 31, 2007 and 2006, respectively. The exercise price of some of these
      options was higher than the average market price of the common stock, for
      certain periods presented. The conversion of those particular options, whose
      exercise price was higher than the average market price of the common stock
      during the respective period, would have an anti-dilutive effect, and thus
      were
      excluded from the diluted earnings per share calculation.




The
      1,666,667 shares of common stock issuable upon conversion of the preferred
      stock
      has no effect on basic earnings per share, but has been included in the
      calculation of diluted earnings per share for the three and nine months ended
      March 31, 2007. Upon conversion, the issuable shares of common stock will be
      included in the calculation of both the basic and diluted earnings per
      share.





For
      purposes of determining basic earnings per share, dividends earned for the
      period on the cumulative preferred stock, although not yet declared, have been
      deducted from income available to common stockholders.





14




The
      following table sets forth the computation of basic and diluted earnings per
      share:


***(in
                thousands except per share data)***
              
              **Three
                  Months Ended**
                **March
                  31,**
              
              **Nine
                  Months Ended**
                **March
                  31,****2007**
              
              **2006**
              
              **2007**
              
              **2006*****Numerator:*****Net
                  income (loss) available to **common
                  stockholders:****Net
                  income (loss)
              
              $
              2,288
              
              $
              (1,062
              )
              $
              4,600
              
              $
              (4,521
              )Preferred
                  stock dividends
              
              
              (115
              )
              
              -
              
              
              (184
              )
              
              -Non-cash
                    charge attributable to beneficial conversion feature of preferred
                    stock
              
              
              -
              
              
              -
              
              
              (700
              )
              
              -Net
                    income (loss) available to common stockholders for basic earnings
                    per
                    share
              
              
              2,173
              
              
              (1,062
              )
              
              3,716
              
              
              (4,521
              )Effect
                  of dilutive securities:Preferred
                  stock dividends
              
              
              115
              
              
              -
              
              
              184
              
              
              -Net
                    income (loss) available to common stockholders after assumed
                    conversions
              
              $
              2,288
              
              $
              (1,062
              )
              $
              3,900
              
              $
              (4,521
              )***Denominator:***Average
                  common shares outstanding
              
              
              19,804
              
              
              18,825
              
              
              19,663
              
              
              18,635Effect
                  of dilutive securities:Weighted
                  average shares issuable upon conversion of preferred stock
              
              
              1,667
              
              
              -
              
              
              882
              
              
              -Net
                    common stock equivalents for the exercise of in-the-money stock
                    options
              
              
              36
              
              
              -
              
              
              -
              
              
              -Average
                    common and common equivalent shares outstanding - assuming
                    dilution
              
              
              21,507
              
              
              18,825
              
              
              20,545
              
              
              18,635Basic
                  earnings (loss) per share
              
              **$**
              **0.11**
              
              **$**
              **(0.06**
              **)**
              **$**
              **0.19**
              
              **$**
              **(0.24**
              **)**Diluted
                  earnings (loss) per share
              
              **$**
              **0.11**
              
              **$**
              **(0.06**
              **)**
              **$**
              **0.19**
              
              **$**
              **(0.24**
              **)**




**Note
      6 - Provision for Income Taxes**





The
      provision for income taxes presented on the Condensed Consolidated Statement
      of
      Operations is the result of alternative minimum tax (“AMT”). AMT creates a
      deferred tax asset stemming from a tax credit that may be carried forward
      indefinitely to reduce future regular federal income taxes payable. The Company
      has provided a full valuation allowance for such deferred tax asset because
      the
      ability to utilize AMT credits in the future cannot be reasonably
      assured.





15




**Note
      7 - Commitments and Contingencies**





***Employment
      agreements***





There
      are
      no employment contracts with any 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 $0.9 million at March 31, 2007. Of this amount, $0.3 million
      is
      included in accrued compensation and benefits on the Condensed Consolidated
      Balance Sheet at March 31, 2007. Approximately $0.2 million represents unearned
      restricted stock awards still to be issued during the fiscal year ending June
      30, 2007. Approximately $0.4 million will be accrued through the remainder
      of
      calendar 2007.





The
      Company is obligated to enter into an employment agreement with its Chief
      Executive Officer prior to June 2, 2007, the third anniversary of the business
      combination with EIP. Terms of the contract are to be customary for Chief
      Executive Officers of peer group companies and must be reviewed and approved
      by
      the Company's Compensation Committee. The Company and its Chief Executive
      Officer are currently in the process of evaluating the terms of such an
      agreement and expect to complete a mutually acceptable arrangement in accordance
      with the Company’s obligations.





***Lease
      commitments***





The
      Company entered into a sublease agreement for additional office space effective
      February 1, 2007. This agreement, which expires in June 2010, calls for payments
      totaling $310 thousand on an annual basis.





***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
      condensed consolidated financial statements.





**Note
      8 - Investments in Technology-Related Businesses**





**a)** ***eStara
      Transaction***





During
      the fiscal year ended June 30, 2000, 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 to be
      impaired by J Net’s management 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. Accordingly,
      this investment had no carrying value at October 2, 2006. Additionally, no
      dividends had been paid through October 2, 2006.





16




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.





As
      a
      result of the above-mentioned merger, the Company, as holder of the preferred
      stock of eStara, received an amount per share equal to the original issue price,
      plus the amount of any unpaid cumulative dividends. Additionally, the Company
      was entitled to its approximately 5% proportionate share of remaining merger
      consideration. Accordingly, the Company received 2,476,039 common shares of
      ARTG
      and $267 thousand in cash. An additional $56 thousand of cash is currently
      being
      held in escrow and is expected to be released to the Company by the first
      anniversary of the closing. Additional lesser amounts, up to $150 thousand,
      may
      also be realized, pursuant to the earn-out provisions of the merger. The common
      shares received from ARTG are subject to a lock-up agreement pursuant to which
      the shares will be released in equal monthly installments over a period of
      12 months, which commenced January 2007. The Company sold 362,978 shares of
      ARTG during the three months ended March 31, 2007 and recorded
      realized gains of approximately $0.4 million.




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





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. Such amount consisted of realized gain of $1.6 million and
      dividend income $0.6 million. The SDC merger also calls for contingent payments,
      dependent upon the achievement of certain targets and milestones after the
      merger is consummated, payable over a period of approximately 3.5 years, 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. No amounts related to the contingent payments
      or
      escrow fund have been accrued as of March 31, 2007, as such amounts are not
      readily estimable or determinable at this time.





**Note
      9 - Preferred Stock Issuance**




On
      November 6, 2006, the Company entered into a Securities Purchase Agreement
      (the
      "Purchase Agreement") with General American Investors Company, Inc. ("GAM"
      or
      the "Purchaser"), whereby GAM invested $10 million in Epoch and Epoch issued
      GAM
      10,000 shares of Series A Convertible Preferred Stock (the "Series A Preferred
      Stock").




17




The
      Company intends to use the proceeds for general business purposes and to support
      the Company's future growth. No placement or other broker fees were paid in
      connection with this transaction.




The
      Series A Preferred Stock has an annual cumulative cash dividend of 4.60%,
      payable semi-annually on June 30 and December 31, commencing December 31, 2006.
      These securities are convertible, in whole or in part at any time, into shares
      of the Company's common stock at a fixed conversion price of $6.00 per share,
      or
      1,666,667 common shares in total.





The
      conversion price of $6.00 per common share contained a beneficial conversion
      feature of $0.42 per share to the November 6, 2006 closing price of $6.42.
      This
      beneficial conversion feature of $0.7 million, which is the difference between
      the above closing price and the conversion price, was fully amortized through
      retained earnings (accumulated deficit) at the date of closing. A corresponding
      amount was credited to additional paid-in capital.




Upon
      the
      five year anniversary of the closing of the transaction, there is an automatic
      conversion into shares of the Company's common stock at the fixed conversion
      price. The Series A Preferred Stock also contains an automatic conversion
      provision upon a change in control (as defined in the Certificate of
      Designation), as well as customary conversion price adjustments for stock
      combinations, stock splits, stock dividends and other similar
      events.




Prior
      to
      the conversion, the number of shares of common stock issuable upon the
      conversion of the Series A Preferred Stock will have no effect on the Company's
      basic earnings per share calculation, but shall be included in its diluted
      earnings per share calculation. Upon conversion, the issuable shares of common
      stock shall be included in the calculation of both the basic and diluted
      earnings per share.




The
      holders of the Series A Preferred Stock generally have voting rights equivalent
      to the holders of the Company's common stock, and will be entitled to vote
      on an
      as-converted basis (1,666,667 shares) with the holders of the common stock
      together as a single class. The Series A Preferred Stock also provides for
      customary preference upon a Liquidation, as defined in the Certificate of
      Designation.




The
      Series A Preferred Stock was offered and sold to the Purchaser in a private
      placement transaction in reliance upon exemptions from registration pursuant
      to
      Section 4(2) of the Securities Act of 1933, as amended (the "Securities Act"),
      and the rules and regulations of the Securities and Exchange Commission (the
      "SEC") promulgated thereunder, including Regulation D. The Purchaser is an
      accredited investor as defined in Rule 501 of Regulation D under the Securities
      Act.




The
      Series A Preferred Stock is not registered under the Securities Act. The
      underlying common stock issuable upon conversion of the Series A Preferred
      Stock
      has been registered with the SEC and may be sold pursuant to an effective resale
      prospectus dated December 26, 2006.




**Note
      10 - Other Investments**




The
      Company invested $250 thousand into each of the three Company-sponsored mutual
      funds during the quarter ended March 31, 2007—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"). These
      investments are classified as Other Investments on the Condensed Consolidated
      Balance Sheet and treated as available-for-sale securities. Any resulting
      change in market value is record as unrealized gain or loss, net of tax, in
      the
      Accumulated Other Comprehensive Income, a separate component of
      stockholders’ equity.




18




**Note
      11 - Subsequent Event**




During
      the fiscal year ended June 30, 2001, J Net, the predecessor company to Epoch,
      made a $2.0 million investment in TellMe Networks, Inc. ("TellMe"), a
      technology-related company that specializes in voice technologies. This
      investment was comprised of 137,450 shares of Series D convertible preferred
      stock. As there was no readily available market for the securities and the
      investment represented less than a 20% interest in TellMe, the securities were
      valued at the Company’s initial cost. The investment in TellMe was reduced from
      $2.0 million to $157 thousand at


June
      1,
      2004. This reduction was due to purchase accounting adjustments in the J Net
      merger. As of March 12, 2007, the carrying value remained at $157 thousand.




On
      March
      12, 2007, TellMe announced an agreement by Microsoft Corporation (“Microsoft”)
      to acquire all of the outstanding common stock, preferred stock, and vested
      and
      unvested stock options of TellMe. This merger closed on April 30, 2007. As
      a
      result of the merger, the Company, as holder of the preferred stock of TellMe,
      will receive a cash payment of approximately $2.0 million in the quarter ending
      June 30, 2007. No such amounts have been recognized in the financial statements
      as of, and for the period ended, March 31, 2007, but the Company will record
      a
      gain in the quarter ending June 30, 2007.






















*****





19




**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 nine months ended March
      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 in this Quarterly Report on Form 10-Q and other materials
      filed or to be filed by the Company with the Securities and Exchange Commission
      ("SEC") contain statements that may be considered forward-looking. 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. See "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.*





20





*Forward-looking
              statements include, but are not limited to,
              statements about:**•*
            *the
                Company's business strategies and investment
                policies,**•*
            *the
                Company's possible or assumed future results of operations and operating
                cash flows,**•*
            *the
                Company's financing plans and the availability of short-term
                borrowing,**•*
            *the
                Company's competitive position,**•*
            *potential
                growth opportunities available to the Company,**•*
            *the
                recruitment and retention of the Company's managing directors and
                employees,**•*
            *the
                Company's expected levels of compensation,**•*
            *the
                Company's potential operating performance, achievements, productivity
                improvements, efficiency and cost reduction
                efforts,**•*
            *the
                likelihood of success and impact of litigation,**•*
            *the
                Company's expected tax rates,**•*
            *the
                Company's 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,**•*
            *the
                benefits to the Company resulting from the effects of separation
                and
                recapitalization transactions and additional financing
                transactions,**•*
            *the
                effects of competition on the Company, and**•*
            *the
                impact of future legislation and regulation on the
                Company.*





**Available
      Information**





The
      Company maintains a website which contains current information on operations
      and
      other corporate governance 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 our 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 as soon as reasonably practicable after we electronically file such material
      with, or furnish it to, the SEC.





**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.




21




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, 2006.





**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**





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, 2006. 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, 2006.




The
      following are additional critical accounting policies for the three and nine
      months ended March 31, 2007:





***Short-Term
      Investments***




Prior
      to
      the quarter ended December 31, 2006, the Company had classified its auction-rate
      securities as cash equivalents, based on the period from the purchase date
      to
      the next interest auction-rate reset date. Beginning in the quarter ended
      December 31, 2006, the Company began classifying auction-rate securities as
      short-term investments that are available-for-sale because the underlying
      instruments have maturity dates exceeding three months. The Company also revised
      the presentation of the Consolidated Statements of Cash Flows to reflect the
      purchases and sales of these securities as investing activities. Prior periods
      have been reclassified to provide consistent presentation. This revision in
      classification had no impact on the total assets, current assets, or net income
      of the Company.




***Marketable
      Securities***




The
      company received marketable securities during the
      three months ended December 31, 2006 as a result of the eStara
      transaction.  See "eStara Transaction" for further details.  These
      marketable securities are classified as available-for-sale and are carried
      at
      fair value based on quoted market prices, with unrealized gains or losses
      reported in Other Comprehensive Income, a separate component of stockholders'
      equity.  Realized gains and losses on these securities are reported in the
      Statement of Operations.  These securities are classified as current
      assets on the Condensed Consolidated Balance Sheet as it is management's
      intention to sell these securities within the next twelve
      months.


22




**Financial
      Highlights**





The
      Company continued to achieve positive operating leverage for the quarter ended
      March 31, 2007, which is defined as the total revenue growth rate that exceeds
      the rate of growth of expenses. Total operating revenue increased by 114% while
      total operating expenses increased by 56%. Operating margins continue to
      improve. The main driver of this positive trend has been the significant
      increase in assets under management (“AUM”), led primarily by an increase in
      sub-advisory and institutional mandates, coupled with market appreciation of
      the
      Company’s various products. The Company finished the quarter ended March 31,
      2007 with AUM of $5.4 billion, more than double the AUM of $2.5 billion a year
      ago.





For
      the
      three months ended March 31, 2007, the Company recorded net income of $2.3
      million, compared to a net loss of $1.1 million for the same period a year
      ago.
      The significant increase in revenue, coupled with investment income from the
      Strategic Data transaction and realized gains on the sale of ARTG securities,
      were the primary reasons for this increase. Basic earnings per share were $0.11
      per share for the three months ended March 31, 2007, from a loss of $0.06 per
      share for the same period a year ago.





For
      the
      nine months ended March 31, 2007, the Company recorded net income of $4.6
      million, compared to a net loss of $4.5 million for the same period a year
      ago.
      The significant increase in revenue, along with income from the Strategic Data
      and eStara transactions, were the primary reasons for this increase. Basic
      earnings per share were $0.19 per share for the nine month period ended March
      31, 2007, compared to a loss of $0.24 per share for the same period a year
      ago.





**Business
      Environment**





As
      an
      investment advisory and management 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 March 31, 2007 was volatile,
      but finished the quarter virtually unchanged. In
      the
      U.S., economic growth, although lower than in recent quarters, remained solid.
      Global economic conditions remained generally favorable although it appeared
      to
      slow toward the end of the quarter.  These
      factors left stock market indices near levels of the previous quarter. For
      the
      quarter ended March 31, 2007, the S&P 500 Index increased by 0.2%, while the
      Dow Jones Industrial Average decreased by 0.9% and the NASDAQ Composite Index
      increased by 0.3%.





For
      the
      nine months ended March 31, 2007, the S&P 500 Index increased by 11.9%,
      while the Dow Industrial Average Index and the NASDAQ Composite Index increased
      by 10.8% and 11.5%, respectively. This environment was favorable to our business
      as market appreciation contributed notably to the increase in assets under
      management (“AUM”) for the nine months ended March 31, 2007.





23




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





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





AUM
      increased to $5.4 billion at March 31, 2007, from $2.5 billion at March 31,
      2006. This increase was primarily attributable to the ongoing expansion of
      the
      Company’s client base, as well as market appreciation. The Company continued to
      expand its institutional and sub-advisory businesses. The Company experienced
      growth in AUM in virtually all products, and particularly in its All Cap and
      Global Equity Shareholder Yield products as a percentage of AUM.


**Three
                  Months Ended**
                **March
                  31,**2007
              
              2006Beginning
                  of period assets
              
              $
              4,408
              
              $
              2,232Net
                  inflows/(outflows)
              
              
              795
              
              
              116Market
                  appreciation
              
              
              172
              
              
              158End
                  of period assets
              
              $
              5,375
              
              $
              2,506
  **Nine
                  Months Ended**
                **March
                  31,**2007
              
              
              2006Beginning
                  of period assets
              
              $
              3,253
              
              $
              1,402Net
                  inflows/(outflows)
              
              
              1,487
              
              
              847Market
                  appreciation
              
              
              635
              
              
              257End
                  of period assets
              
              $
              5,375
              
              $
              2,506
  24





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










25













26




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


***(Dollars
                    in Millions)*****As
                    of March 31,****Distribution
                    Channel:**
                
                **2007**
                
                **2006**
                
                **Amount**
                  **Increased**
                
                **Percent**
                  **Increased**Sub-advisory
                
                $
                2,595
                
                $
                1,523
                
                $
                1,072
                
                
                70
                %Institutional
                
                
                2,443
                
                
                684
                
                
                1,759
                
                
                257
                %High
                    net worth
                
                
                337
                
                
                299
                
                
                38
                
                
                13
                %Total
                    AUM
                
                $
                5,375
                
                $
                2,506
                
                $
                2,869
                
                
                114
                %
  As
        a
        result of the increase in AUM from the prior year period, the percentage
        of
        assets under management from CI Mutual Funds, Inc. of Canada ("CI"), a
        significant sub-advisory customer, declined to approximately 42% at March
        31,
        2007 from approximately 50% at March 31, 2006.


27














28




***Revenues***





Total
      revenues from investment advisory and investment management services for the
      three months ended March 31, 2007 were $6.1 million, increasing approximately
      114%, from $2.9 million, for the same period a year ago. This increase was
      attributable to the increase in assets under management. We expect this positive
      revenue trend to continue during the next quarter as AUM levels are notably
      higher than comparative periods from the prior year.





For
      the
      three months ended March 31, 2007, CI accounted for approximately 18% 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 24% of revenues.





For
      the
      three months ended March 31, 2006, CI and Genworth each accounted for
      approximately 21% of revenues.





***Employee
      related costs (excluding share-based compensation)***





Expenses
      in this category include salaries, benefits, severance, incentive compensation,
      signing bonuses and commission expenses. For the three months ended March 31,
      2007, these expenses were $3.6 million, an increase of $1.4 million or 64%
      from
      $2.2 million for the three months ended March 31, 2006. Increased headcount,
      including the addition of several senior experienced professionals to support
      the growth and expansion of the business, was the primary reason 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.





***Share-based
      compensation***





Share-based
      compensation for the three months ended March 31, 2007 was $1.8 million, up
      $0.6
      million or 46% from $1.2 million for the three months ended March 31, 2006.
      Share-based compensation includes the amortization on 5.5 million shares of
      restricted stock that were issued to employee owners associated with the
      acquisition of EIP, as well as restricted stock issued to employees during
      fiscal years 2005 and 2006, and the nine months ended March 31, 2007. The
      increase from the same quarter a year ago is primarily attributable to the
      increase in employees.





Share-based
      compensation expense is recognized as follows: 12.5% immediately, with the
      remaining 87.5% ratably over the subsequent three years. Epoch generally grants
      annual share-based compensation awards in January of each year. In the three
      months ended March 31, 2007 and 2006, a total of 229,431 and 179,648 shares
      of
      restricted stock, respectively, were issued to employees. A total of 28,694
      and
      22,893 shares of the awards issued in the three months ended March 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 three months ended March 31, 2007 and 2006, a total of 7,883 and
      11,617 shares, respectively, were forfeited by terminated employees.





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




29




Amortization
      of the aforementioned shares issued to employee owners in connection with the
      acquisition of EIP, which equals approximately $0.8 million per quarter, will
      be
      completed in the quarter ended June 30, 2007.





***General,
      administrative and occupancy expenses***





These
      expenses consist primarily of office rentals, travel and entertainment,
      advertising and marketing, information technology expenses, utilities,
      insurance, and other office related expenses. For the three months ended March
      31, 2007, such expenses were $0.9 million, an increase of $0.3 million from
      the
      comparable period a year ago. Increases in market data services and information
      technology costs, as well as insurance and rent on additional office space
      leased at the Company’s headquarters, were the primary contributors.





***Professional
      fees and services***





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 March 31, 2007, such fees were $0.5
      million, an increase of $0.2 million from the comparable period a year ago.
      An
      increase in consulting fees in connection with compliance with Section 404
      of
      the Sarbanes Oxley Act of 2002 (“SOX”), as well as higher legal costs in
      conjunction with the continued expansion of the business, were the primary
      reason for this increase.





At
      the
      end of the second fiscal quarter ended December 31, 2006, the Company achieved
      a
      market capitalization of shares held by non-affiliates in excess of $75 million.
      As a result, the Company will become an accelerated filer beginning with its
      June 30, 2007 Annual Report on Form 10-K. Accordingly, management will be
      required to report on its assessment of, and the Company’s independent
      registered public accounting firm will be required to express an opinion on,
      the
      Company’s internal control over financial reporting at June 30, 2007. The
      Company anticipates professional fees and service costs to increase due to
      the
      costs of compliance with Section 404 of SOX.





***Other
      income***





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 March 31, 2007, other income increased to $3.0 million, an increase of
      $2.7 million from $0.3 million for the three months ended March 31, 2006. The
      primary reason for this increase was the result of the Strategic Data
      transaction. This transaction resulted in $2.2 million of other income,
      comprising $0.6 million in dividend income and $1.6 million in realized gains.
      Additionally, realized gains from the sale of ARTG shares contributed
      approximately $0.4 million, while interest income on higher cash balances
      generated the remaining $0.1 million increase.





***Provision
      for income taxes***




For
        the
        three months ended March 31, 2007 the Company recorded an
        income tax expense of $4 thousand. The Company is not subject to regular
        income
        tax rates because of its net operating loss carry forwards but is 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. We expect to be subject to AMT for the
        entire fiscal year 2007. In most cases the recognition of AMT does not result
        in
        tax expense. However, since our net deferred tax asset is subject to a full
        valuation allowance, any liability for AMT is recorded as tax expense. The
        Company has substantial net operating loss carry forwards and does not expect
        to
        pay significant income taxes for the foreseeable future.




30




**Results
      of operations - nine months ended March 31, 2007 and 2006**




***Revenues***





Total
      revenues from investment advisory and investment management services, including
      performance-based fees, for the nine months ended March 31, 2007 were $16.6
      million, more than doubling revenues earned for the same period a year ago.
      This
      increase was attributable to the increase in assets under management, led
      primarily by an increase in institutional and sub-advisory mandates.
      Additionally, the $0.9 million increase in year-over-year performance fees
      contributed to this increase. We expect this positive revenue trend to continue
      during the next quarter as AUM levels are notably higher than comparative
      periods from the prior year.





For
      the
      nine months ended March 31, 2007, CI accounted for approximately 18% of
      revenues, while Genworth, 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 23% of revenues.





For
      the
      nine months ended March 31, 2006, CI accounted for approximately 23% of
      revenues, while Genworth accounted for approximately 15%.





***Employee
      related costs (excluding share-based compensation)***





For
      the
      nine months ended March 31, 2007, these expenses were $10.0 million, an increase
      of $3.8 million or 61% from $6.2 million for the nine months ended March 31,
      2006. Increased headcount, including the addition of several senior experienced
      professionals to support the growth and expansion of the business, was the
      primary reason for this increase. We expect employee related costs to increase
      in future periods due to changes in staffing levels to support the growth and
      expansion of our business.





***Share-based
      compensation***





Share-based
      compensation for the nine months ended March 31, 2007 was $4.7 million, up
      $1.3
      million or 36% from $3.5 million for the nine months ended March 31, 2006.
      Share-based compensation includes amortization on 5.5 million shares of
      restricted stock that were issued to employee owners associated with the
      acquisition of EIP, as well as restricted stock issued to employees during
      fiscal years 2005 and 2006, and the nine months ended March 31, 2007. The
      increase from the same period a year ago is primarily attributable to the
      increase in employees.





Share-based
      compensation expense is recognized as follows: 12.5% immediately, with the
      remaining 87.5% ratably over the subsequent three years. In the nine months
      ended March 31, 2007 and 2006, a total of 690,089 and 656,649 shares of
      restricted stock, respectively, were issued to employees. A total of 86,277
      and
      82,520 shares of the awards, or approximately 12.5% of the shares issued in
      the
      nine months ended March 31, 2007 and 2006, respectively, were immediately
      vested. The remaining 87.5% of the shares vest ratably over the subsequent
      three
      years. Approximately 26,201 and 26,533 shares were forfeited by terminated
      employees in the nine months ended March 31, 2007 and 2006, respectively.





During
      the nine months ended March 31, 2007 and March 31, 2006 **,** a
      total
      of **** 66,228
      and zero shares, respectively, were granted to directors of the Company. The
      prior year’s director awards were granted in the quarter ended June 30, 2005, in
      advance of their fiscal 2006 services. The recently issued directors' shares
      vest over one year. The prior years’ issued directors’ shares are subject to a
      three-year vesting period and vest one-third each year, or immediately in the
      event of death or disability. Prospective director stock awards will vest over
      one year. Share-based compensation expense is recognized ratably over the
      respective vesting period, in accordance with their underlying vesting
      provisions.




31




Amortization
      of the aforementioned shares issued to employee owners in connection with the
      acquisition of EIP, which equaled approximately $2.3 million for the nine months
      ended March 31, 2007, will be completed in the quarter ended June 30,
      2007.





***General,
      administrative and occupancy expenses***





For
      the
      nine months ended March 31, 2007, such fees were $2.6 million, an increase
      of
      $0.7 million from the comparable period a year ago. Increases in market data
      services and information technology costs, as well as insurance and rent on
      additional office space leased at the Company’s headquarters, were the primary
      contributors.





***Professional
      fees and services***





For
      the
      nine months ended March 31, 2007, such fees were $1.4 million, an increase
      of
      $0.7 million from the comparable period a year ago. An increase in employee
      placement fees was one of the primary contributors of this increase, as several
      senior experienced professionals were added to staff. Other contributors to
      this
      increase included technology consulting fees, to help support the
      upgrading of systems and expansion of operations, as well as SOX consulting
      fees.





At
      the
      end of the second fiscal quarter ended December 31, 2006, the Company achieved
      a
      market capitalization of shares held by non-affiliates in excess of $75 million.
      As a result, the Company will become an accelerated filer beginning with its
      June 30, 2007 Annual Report on Form 10-K. Accordingly, management will be
      required to report on its assessment of, and the Company’s independent
      registered public accounting firm will be required to express an opinion on,
      the
      Company’s internal control over financial reporting at June 30, 2007. The
      Company anticipates professional fees and service costs to increase due to
      the
      costs of compliance with Section 404 of SOX.





***Other
      income***





For
      the
      nine months ended March 31, 2007, other income increased to $7.1 million, an
      increase of $6.3 million from $0.8 million for the nine months ended March
      31,
      2006. This increase stems from the October 2006 eStara transaction, which
      resulted in $2.6 million of other income, as well as the March 2007 Strategic
      Data transaction which resulted in $2.2 million of other income.





In
      November 2000, J Net, the predecessor company to Epoch, recorded an accrued
      liability related to a sale of certain assets to an unrelated third party.
      The
      recorded amount of $950 thousand represented management’s best estimate of
      additional settlement amounts due. In late December 2006, a final assessment
      was
      made by management which resulted in the reversal of the previously recorded
      accrual.





Additionally,
      realized gains from the sale of ARTG shares contributed approximately $0.4
      million. Interest income on higher cash balances and short-term investments,
      stemming from the preferred stock proceeds received in November 2006 as well
      as
      higher management fees, generated the remaining increase in other
      income.




32




***Provision
      for income taxes***




For
        the
        nine months ended March 31, 2007 the Company recorded an
        income tax expense of $103 thousand. The Company is not subject to regular
        income tax rates because of its net operating loss carry forwards but is
        obligated to pay tax under the federal AMT,
        which limits the application of net operating loss carry forwards to 90%
        of
        taxable income in addition to certain AMT adjustments. We
        expect
        to be subject to AMT for the entire fiscal year 2007. In most cases the
        recognition of AMT does not result in tax expense. However, since our net
        deferred tax asset is subject to a full valuation allowance, any liability
        for
        AMT is recorded as tax expense. The Company has substantial net operating
        loss
        carry forwards and does not expect to pay significant income taxes for the
        foreseeable future.




**Liquidity
      and Capital Resources**





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


**March
                  31,****2007**
              
              **2006**Cash
                  flows provided by (used in) :Operating
                  activities
              
              $
              2,282
              
              $
              (2,215
              )Investing
                  activities
              
              
              (8,995
              )
              
              2,373Financing
                  activities
              
              
              9,842
              
              
              -Net
                  increase in cash and cash equivalents
              
              
              3,129
              
              
              158Cash
                  and cash equivalents at beginning of period
              
              
              2,445
              
              
              950Cash
                  and cash equivalents at end of period
              
              
              5,574
              
              
              1,108Short-term
                  investments
              
              
              15,900
              
              
              5,300Cash,
                    cash equivalents and short-term investments at end of
                    period
              
              $
              21,474
              
              $
              6,408




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 sheets. All auction rate securities
      are bought and sold at par value.




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 March 31, 2007, the
      Company had $5.6 million of cash and cash equivalents, $15.9 million of
      short-term investments, and $4.9 million of accounts receivable to fund its
      business growth strategy.




33




At
      March
      31, 2007, accounts payable and accrued liabilities, which consist of accrued
      professional fees, trade payables and other liabilities, were $0.8 million.
      Accrued compensation and benefits, which consist primarily of accrued employee
      bonuses and sales commissions, were $2.7 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, as well as short-term investments comprising approximately 60%
      of
      its total assets at March 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, cash equivalents, and short-term
      investments are adequate to provide the necessary resources to meets its
      operating needs for the foreseeable future as well as to implement its growth
      objectives.





The
      Company’s liquidity position strengthened during the second quarter ended
      December 31, 2006, as a result of the November 7, 2006 private placement -
      see
“Significant Transactions- Preferred Stock Issuance” discussion which follows.
      The Company believes that the proceeds from the private placement will enable
      the Company to accelerate its growth objectives.





**Preferred
      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 Company paid $69 thousand
      in
      preferred dividends on December 31, 2006 which represents dividends for the
      period November 7, 2006 to December 31, 2006. The semi-annual dividend payments
      are expected to be $230 thousand, each June and December.





**Working
      Capital**





The
      Company’s working capital and current ratio (current assets divided by current
      liabilities) for the quarter ended March 31, 2007 and recent fiscal year ended
      June 30, 2006 is set forth in the table below ( *in
      thousands* ):


March
                  31,
                2007
              
              June
                  30,
                2006
              
              Increase
              
              Percent
                IncreaseCurrent
                  assets
              
              $
              31,920
              
              $
              10,647
              
              $
              21,273
              
              
              200
              %Current
                  liabilities
              
              
              3,503
              
              
              3,491
              
              
              12
              
              
              0
              %Working
                  capital
              
              $
              28,417
              
              $
              7,156
              
              $
              21,261
              
              
              297
              %Current
                  ratio
              
              
              9.11
              
              
              3.05
              
              
              6.06
              
              
              199
              %
  34


**Current
      Assets**





Current
      assets increased $21.3 million at March 31, 2007 compared with June 30, 2006
      primarily as a result of the following three items:





•
$10
      million proceeds received in November 2006 from the preferred stock
      issuance. These proceeds are presently invested in auction-rate securities,
      classified as Short-term investments on the balance sheet.





•
ARTG
      marketable securities received in the eStara transaction, the balance of which
      was $4.9 million at March 31, 2007. The previous eStara investment had a
      carrying value of zero at June 30, 2006.





•
      Increases in cash and accounts receivable balances as a result of business
      expansion.




**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 March 31, 2007, the remaining future
      minimum payments under this lease total $1.7 million. Future minimum receipts
      from the subtenant, net of profit sharing with the landlord, total $2.1 million
      as of March 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.





There
      are
      no employment contracts with any officers or employees of the Company. The
      Company is obligated to enter into an employment agreement with its Chief
      Executive Officer prior to June 2, 2007, the third anniversary of the business
      combination with EIP. Terms of the contract are to be customary for Chief
      Executive Officers of peer group companies and must be reviewed and approved
      by
      the Company's Compensation Committee. The Company and its Chief Executive
      Officer are currently in the process of evaluating the terms of such an
      agreement and expect to complete a mutually acceptable arrangement in accordance
      with the Company’s obligations.





35




**Summary
      of Contractual Obligations**





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


**Payments
                    due in Fiscal Years Ended June 30,****Remaining****Payments
                    in Fiscal****Year
                  Ended**
                **June
                  30, 2007**
              
              **2008-2009**
              
              **2010-2011**
              
              **2012
                  and thereafter**
              
              **Total**Primary
                  New York operations
              
              $
              218
              
              $
              1,952
              
              $
              1,525
              
              $
              3,047
              
              $
              6,742Subleased
                  New York lease
              
              
              120
              
              
              961
              
              
              641
              
              
              -
              
              
              1,722Other
                  office locations
              
              
              8
              
              
              6
              
              
              -
              
              
              -
              
              
              14Other
                  operating leases
              
              
              8
              
              
              30
              
              
              11
              
              
              -
              
              
              49Total
                  obligations
              
              
              354
              
              
              2,949
              
              
              2,177
              
              
              3,047
              
              
              8,527Sublease
                  income
              
              
              (143
              )
              
              (1,148
              )
              
              (765
              )
              
              -
              
              
              (2,056
              )Net
                  obligations
              
              $
              211
              
              $
              1,801
              
              $
              1,412
              
              $
              3,047
              
              $
              6,471




**Off-Balance
      Sheet Arrangements**





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




**New
      Accounting Pronouncements**





On
      June 7, 2005, the Financial Accounting Standards Board (“FASB”) issued SFAS
      No. 154, *Accounting
      Changes and Error Corrections* ("SFAS
No. 154"), replacing APB Opinion No. 20, *Accounting
      Changes* ,
      and
      SFAS No. 3, *Reporting
      Accounting Changes in Interim Financial Statements.* SFAS
      No. 154 alters the requirements for the accounting for and reporting of a
      change in accounting principle. Previously, most voluntary changes in accounting
      principles required recognition via a cumulative effect adjustment within net
      income of the period of the change. SFAS No. 154 requires retrospective
      application to prior periods' financial statements, unless it is impracticable
      to determine either the period-specific effects or the cumulative effect of
      the
      change. SFAS No. 154 is effective for accounting changes made in fiscal
      years beginning after December 15, 2005; however, SFAS No. 154 does
      not change the transition provisions of any existing accounting pronouncements.
      The adoption of SFAS No. 154 did not have a material effect on the
      Company’s condensed consolidated financial position, results of operations, or
      cash flows, as it did not make any voluntary accounting changes.




36




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. Early application is permitted. The Company
      is evaluating the effect, if any, the adoption of FIN 48 will have on its
      consolidated financial statements .





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 condition,
      results of operations, or cash flows.





In
      September 2006, the United States Securities and Exchange Commission (“SEC”)
      issued Staff Accounting Bulletin No. 108, *Considering
      the Effects of Prior Year Misstatements when Quantifying Misstatements in
      Current Year Financial Statements* (“SAB
      108”). This SAB provides guidance on the consideration of the effects of prior
      year misstatements in quantifying current year misstatements for the purpose
      of
      a materiality assessment. SAB 108 establishes an approach that requires
      quantification of financial statement errors based on the effects of each on
      the
      company’s balance sheet and statement of operations and the related financial
      statement disclosures. The SAB permits existing public companies to record
      the
      cumulative effect of initially applying this approach in the first year ending
      after November 15, 2006 by recording the necessary correcting adjustments to
      the
      carrying values of assets and liabilities as of the beginning of that year
      with
      the offsetting adjustment recorded to the opening balance of retained earnings.
      Additionally, the use of the cumulative effect transition method requires
      detailed disclosure of the nature and amount of each individual error being
      corrected through the cumulative adjustment and how and when it arose. We do
      not
      expect the adoption of this statement to have a material impact on our
      consolidated financial condition, results of operations, or cash
      flows.





**Significant
      Transactions**





***eStara
      Transaction***





During
      the fiscal year ended June 30, 2000, 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 to be
      impaired by J Net’s management 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. 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.




37




As
      a
      result of the above-mentioned merger, the Company, as holder of the preferred
      stock of eStara, received an amount per share equal to the original issue price,
      plus the amount of any unpaid cumulative dividends. Additionally, the Company
      was entitled to its approximately 5% proportionate share of remaining merger
      consideration. Accordingly, the Company received 2,476,039 common shares of
      ARTG
      and $267 thousand in cash. An additional $56 thousand of cash is currently
      being
      held in escrow and is expected to be released to the Company by the first
      anniversary of the closing. Additional lesser amounts, up to $150 thousand,
      may
      also be realized, pursuant to the earn-out provisions of the merger. The common
      shares received from ARTG are subject to a lock-up agreement pursuant to which
      the shares will be released in equal monthly installments over a period of
      12 months, which commenced January 2007. The Company sold 362,978 shares of
      ARTG during the three months ended March 31, 2007 and recorded
      realized gains of approximately $0.4 million.





***Strategic
      Data Corporation***





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. Such amount consisted of realized gain of $1.6 million and
      dividend income $0.6 million. The SDC merger also calls for contingent payments,
      dependent upon the achievement of certain targets and milestones after the
      merger is consummated, payable over a period of approximately 3.5 years, 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. No amounts related to the contingent payments
      or
      escrow fund have been accrued as of March 31, 2007, as such amounts are not
      readily estimable or determinable at this time.





38




**Preferred
      Stock Issuance**




On
      November 6, 2006, the Company entered into a Securities Purchase Agreement
      (the
      "Purchase Agreement") with General American Investors Company, Inc. ("GAM"
      or
      the "Purchaser"), whereby GAM invested $10 million in Epoch and Epoch issued
      GAM
      10,000 shares of Series A Convertible Preferred Stock (the "Series A Preferred
      Stock").




The
      Company intends to use the proceeds for general business purposes and to support
      the Company's future growth. No placement or other broker fees were paid in
      connection with this transaction.




The
      Series A Preferred Stock has an annual cumulative cash dividend of 4.60%,
      payable semi-annually on June 30 and December 31, commencing December 31, 2006.
      These securities are convertible, in whole or in part at any time, into shares
      of the Company's common stock at a fixed conversion price of $6.00 per share,
      or
      1,666,667 common shares in total.





The
      conversion price of $6.00 per common share contained a beneficial conversion
      feature of $0.42 per share to the November 6, 2006 closing price of $6.42.
      This
      beneficial conversion feature of $0.7 million, which is the difference between
      the above closing price and the conversion price, was fully amortized through
      retained earnings (accumulated deficit) at the date of closing. A corresponding
      amount was credited to additional paid-in capital.




Upon
      the
      five year anniversary of the closing of the transaction, there is an automatic
      conversion into shares of the Company's common stock at the fixed conversion
      price. The Series A Preferred Stock also contains an automatic conversion
      provision upon a change in control (as defined in the Certificate of
      Designation), as well as customary conversion price adjustments for stock
      combinations, stock splits, stock dividends and other similar
      events.




Prior
      to
      the conversion, the number of shares of common stock issuable upon the
      conversion of the Series A Preferred Stock will have no effect on the Company's
      basic earnings per share calculation, but shall be included in its diluted
      earnings per share calculation. Upon conversion, the issuable shares of common
      stock shall be included in the calculation of both the basic and diluted
      earnings per share.




The
      holders of the Series A Preferred Stock generally have voting rights equivalent
      to the holders of the Company's common stock, and will be entitled to vote
      on an
      as-converted basis (1,666,667 shares) with the holders of the common stock
      together as a single class. The Series A Preferred Stock also provides for
      customary preference upon a Liquidation, as defined in the Certificate of
      Designation.




The
      Series A Preferred Stock was offered and sold to the Purchaser in a private
      placement transaction in reliance upon exemptions from registration pursuant
      to
      Section 4(2) of the Securities Act of 1933, as amended (the "Securities Act"),
      and the rules and regulations of the Securities and Exchange Commission (the
      "SEC") promulgated thereunder, including Regulation D. The Purchaser is an
      accredited investor as defined in Rule 501 of Regulation D under the Securities
      Act.




The
      Series A Preferred Stock is not registered under the Securities Act. The
      underlying common stock issuable upon conversion of the Series A Preferred
      Stock
      has been registered with the SEC and may be sold pursuant to an effective resale
      prospectus dated December 26, 2006.




39




**Subsequent
      Event**




During
      the fiscal year ended June 30, 2001, J Net, the predecessor company to Epoch,
      made a $2.0 million investment in TellMe Networks, Inc. ("TellMe"), a
      technology-related company that specializes in voice technologies. This
      investment was comprised of 137,450 shares of Series D convertible preferred
      stock. As there was no readily available market for the securities and the
      investment represented less than a 20% interest in TellMe, the securities were
      valued at the Company’s initial cost. The investment in TellMe was reduced from
      $2.0 million to $157 thousand at


June
      1,
      2004. This reduction was due to purchase accounting adjustments in the J Net
      merger. As of March 12, 2007, the carrying value remained at $157 thousand.




On
      March
      12, 2007, TellMe announced an agreement by Microsoft Corporation (“Microsoft”)
      to acquire all of the outstanding common stock, preferred stock, and vested
      and
      unvested stock options of TellMe. This merger closed on April 30, 2007. As
      a
      result of the merger, the Company, as holder of the preferred stock of TellMe,
      will receive a cash payment of approximately $2.0 million in the quarter ending
      June 30, 2007. No such amounts have been recognized in the financial statements
      as of, and for the period ended, March 31, 2007, but the Company will record
      a
      gain in the quarter ending June 30, 2007.





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




***Available-for-sale
      securities***





The
      Company is exposed to fluctuations in the market price of its marketable
      securities presented on its condensed consolidated balance sheet. The total
      fair
      value of these securities as of March 31, 2007 was $4.9 million. The Company
      does not hedge its market risk related to these securities and does not intend
      to do so in the future.





At
      March
      31, 2007, the Company performed sensitivity analysis to assess the potential
      loss in the fair value of these market-risk sensitive securities. If the S&P
      500 Index were to decline in fair value by 10%, we estimate this would cause
      an
      approximate $0.6 million decline in the fair value of its marketable
      securities.





40




**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 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 Form 10-Q. Based
      on
      such evaluation, the Company's principal executive officer and principal
      financial officer have concluded that as of such date, the Company's disclosure
      controls and procedures were designed 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 time periods specified
      in applicable SEC rules and forms and were effective.





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





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





41




**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****.**





Other
      than the risk factor noted below, 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, 2006.





*Common
      shareholders may suffer dilution from the exercise of existing conversion rights
      pursuant to the issuance of the Series A Convertible Preferred
      Stock.*





The
      ownership interests of existing common stockholders will be diluted when
      additional shares of common stock are issued upon conversion of the Company’s
      Series A Convertible Preferred Stock. The number of shares of the Company’s
      common stock that can be issued upon conversion of the Series A Convertible
      Preferred Stock is 1,666,667 common shares.





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




(a)
      Exhibits:





Exhibit
                No.
            Description


8.1
            Press
                release announcing AUM as of March 31, 2007 (A)31.1
            Chief
                Executive Officer Certification (B)31.2
            Principal
                Financial Officer Certification (B)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 (B)




(A)
            -
                Incorporated by reference to Registrant’s Form 8-K dated April 4,
                2007.


(B)
            -
                Included herein.


42





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
                BorakAdam
                BorakChief
                Financial Officer


Date:
      May
      15, 2007




43