`UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                   FORM 10-QSB

(Mark One)

[X]  Quarterly report under Section 13 or 15(d) of the Securities Exchange Act
     of 1934

     For the quarterly period ended September 30, 2006

[_]  Transition report under Section 13 or 15(d) of the Exchange Act

     For the transition period from _____________ to _____________

                        Commission File Number 000-51200

                       Terra Nova Acquisition Corporation
        (Exact Name of Small Business Issuer as Specified in Its Charter)

            Delaware                                              98-0434371
(State or other Jurisdiction of                                (I.R.S. Employer
 Incorporation or Organization)                              Identification No.)

        2 Bloor Street West, Suite 3400, Toronto, Ontario, Canada M4W3E2
                     (Address of Principal Executive Office)

                                 (416) 644-6000
                (Issuer's Telephone Number, Including Area Code)

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

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

     As of November 14, 2006, 6,720,000 shares of common stock, par value $.0001
per share, were issued and outstanding.

     Transitional Small Business Disclosure Format (check one): Yes [_] No [X]






                                                                            Page
                                                                            ----
Part I:  Financial Information:

   Item 1 - Financial Statements (Unaudited):

      Balance Sheets                                                          3

      Statements of Operations                                                4

      Statements of Stockholders' Equity                                      5

      Statements of Cash Flows                                                6

      Summary of Significant Accounting Policies                              7

      Notes to Unaudited Financial Statements                                 8

   Item 2 - Management's Discussion and Analysis or Plan of Operation        13

   Item 3 - Controls and Procedures                                          15

Part II: Other Information

   Item 2 - Unregistered Sales of Equity Securities and Use of Proceeds      16

   Item 6 - Exhibits                                                         16

Signatures                                                                   17


                                       -2-



                                              TERRA NOVA ACQUISITION CORPORATION
                                        (A CORPORATION IN THE DEVELOPMENT STAGE)
                                                                  BALANCE SHEETS
--------------------------------------------------------------------------------



                                                            September 30, 2006
                                                                (unaudited)      December 31, 2005
                                                            ------------------   -----------------

ASSETS
Current assets:
   Cash and cash equivalents                                    $    57,590         $   609,769
   Securities held in Trust Fund (Note 2)                        30,221,274          29,084,736
   Accrued interest receivable, Trust Fund                               --             220,969
   Prepaid expenses                                                  25,064              35,616
                                                                -----------         -----------
Total current assets                                             30,303,928          29,951,090
                                                                -----------         -----------
Deferred acquisition costs (Note 4)                                 306,980                  --
                                                                -----------         -----------
Total assets                                                    $30,610,908         $29,951,090
                                                                ===========         ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
   Accrued expenses                                             $    35,299         $    67,805
   Accrued acquisition costs                                        188,271                  --
   Income taxes payable                                             112,558              57,788
                                                                -----------         -----------
      Total current liabilities                                     336,128             125,593
                                                                -----------         -----------
Common stock, subject to possible conversion,
   1,103,448 shares at conversion value (Note 2)                  6,041,229           5,858,210
                                                                -----------         -----------
Commitment (Note 5)
Stockholders' equity (Notes 2, 3, 6 and 7)
   Preferred stock, $.0001 par value, Authorized
      1,000,000 shares; none issued
   Common stock, $.0001 par value
      Authorized 30,000,000 shares
      Issued and outstanding 6,720,000 shares
         (which includes 1,103,448 subject to possible
         conversion)                                                    672                 672
   Additional paid-in capital                                    23,539,599          23,722,618
   Retained earnings accumulated during
      development stage                                             693,280             243,997
                                                                -----------         -----------
      Total stockholders' equity                                 24,233,551          23,967,287
                                                                -----------         -----------
Total liabilities and stockholders' equity                      $30,610,908         $29,951,090
                                                                ===========         ===========


    See summary of significant accounting policies and accompanying notes to
                             financial statements.


                                       -3-



                                              TERRA NOVA ACQUISITION CORPORATION
                                        (A CORPORATION IN THE DEVELOPMENT STAGE)
                                                        STATEMENTS OF OPERATIONS
                                                                     (UNAUDITED)
--------------------------------------------------------------------------------



                                                                                                                Period from
                                      Three months      Three months       Nine months       Nine months       July 21, 2004
                                    ended September   ended September   ended September   ended September     (inception) to
                                        30, 2006          30, 2005          30, 2006          30, 2005      September 30, 2006
                                    ---------------   ---------------   ---------------   ---------------   ------------------

Expenses:
   General and administrative
      expenses (Note 5)               $ (102,156)       $  (77,916)       $ (279,266)       $ (145,958)         $ (544,748)
                                      ----------        ----------        ----------        ----------          ----------
Operating loss for the period           (102,156)          (77,916)         (279,266)         (145,958)           (544,748)

Interest income                          262,878           242,640           920,426           399,872           1,588,590
                                      ----------        ----------        ----------        ----------          ----------
Net income before
   provision for income taxes            160,722           164,724           641,160           253,914           1,043,842
Provision for income taxes
   (Note 8)                                4,069            65,230           191,877            95,555             350,562
                                      ----------        ----------        ----------        ----------          ----------
Net income                               156,653            99,494           449,283           158,359             693,280
                                      ==========        ==========        ==========        ==========          ==========
Adjustments:
   Accretion of Trust Fund
   relating to common stock
   subject to possible conversion        (52,546)          (47,501)         (183,019)          (78,830)           (314,334)
                                      ----------        ----------        ----------        ----------          ----------
Net income attributable to
   common stockholders                   104,107            51,993           266,264            79,529             378,946
                                      ==========        ==========        ==========        ==========          ==========
Weighted average common shares
  outstanding                          6,720,000         6,720,000         6,720,000         4,465,055
                                      ==========        ==========        ==========        ==========
Basic and diluted income
   per share                          $     0.02        $     0.01        $     0.04        $     0.02
                                      ----------        ----------        ----------        ----------


    See summary of significant accounting policies and accompanying notes to
                             financial statements.


                                       -4-



                                              TERRA NOVA ACQUISITION CORPORATION
                                        (A CORPORATION IN THE DEVELOPMENT STAGE)
                                              STATEMENTS OF STOCKHOLDERS' EQUITY
--------------------------------------------------------------------------------



                                                                                Retained earnings
                                                                                    (deficit)
                                                 Common Stock      Additional      accumulated          Total
                                             ------------------     Paid-In         during the      Stockholders'
                                               Shares    Amount     Capital     development stage      Equity
                                             ---------   ------   -----------   -----------------   -------------

Balance, July 21, 2004 (inception)                  --    $ --    $        --         $     --       $        --
Issuance of stock to initial
   stockholders (Notes 2 and 7)              1,200,000     120         24,880               --            25,000
Net loss for the period                                     --             --           (1,605)           (1,605)
                                             ---------    ----    -----------         --------       -----------
Balance, December 31, 2004                   1,200,000    $120    $    24,880         $ (1,605)      $   (23,395)
Sale of 5,520,000 units and
   underwriter's options, net of
   underwriters' discount and offering
   expenses (includes 1,103,448 shares
   subject to possible conversion) (Note
   3)                                        5,520,000     552     29,555,948               --        29,556,500
Proceeds in Trust Fund subject to
   possible conversion of 1,103,448 shares          --      --     (5,726,895)              --        (5,726,895)
Accretion of Trust Fund relating to
   common stock subject to possible
   conversion                                       --      --       (131,315)              --          (131,315)
Net income for the period                           --      --             --          245,602           245,602
                                             ---------    ----    -----------         --------       -----------
Balance, December 31, 2005                   6,720,000    $672    $23,722,618         $243,997       $23,967,287
Accretion of Trust Fund relating to
   common stock subject to possible
   conversion (unaudited)                           --      --       (183,019)              --          (183,019)
Net income for the period (unaudited)               --      --             --          449,283           449,283
                                             ---------    ----    -----------         --------       -----------
Balance, September 30, 2006 (unaudited)      6,720,000    $672    $23,539,599         $693,280       $24,233,551
                                             =========    ====    ===========         ========       ===========


    See summary of significant accounting policies and accompanying notes to
                              financial statements.


                                       -5-



                                              TERRA NOVA ACQUISITION CORPORATION
                                        (A CORPORATION IN THE DEVELOPMENT STAGE)
                                                        STATEMENTS OF CASH FLOWS
                                                                     (UNAUDITED)
--------------------------------------------------------------------------------



                                                                                                               Period From
                                                                     Nine Months          Nine Months         July 21, 2004
                                                                        Ended                Ended           (inception) to
                                                                 September 30, 2006   September 30, 2005   September 30, 2006
                                                                 ------------------   ------------------   ------------------

CASH FLOWS FROM OPERATING ACTIVITIES
   Net income                                                       $    449,283         $    158,359        $     693,280
   Adjustments to reconcile net income (loss)
      to net cash used in operating activities
   Change in operating assets and liabilities:
      Increase in interest earned on investments
         held in Trust Fund                                             (915,569)            (394,345)          (1,572,474)
      Decrease (increase) in prepaid expenses                             10,552              (62,328)             (25,064)
      Increase (decrease) in accrued expenses                            (32,506)              14,170               35,299
      Increase in income taxes payable                                    54,770               95,555              112,558
                                                                    ------------         ------------        -------------
Net cash used in operating activities                                   (433,470)            (188,589)            (756,401)
                                                                    ------------         ------------        -------------

CASH FLOWS FROM INVESTING ACTIVITIES
   Purchases of Securities held in Trust Fund                        (89,049,000)         (28,648,800)        (146,781,800)
   Maturities of Securities held in Trust Fund                        89,049,000                   --          118,133,000
   Deferred acquisition costs                                           (118,709)                  --             (118,709)
                                                                    ------------         ------------        -------------
Net cash used in investing activities                                   (118,709)         (28,648,800)         (28,767,509)
                                                                    ------------         ------------        -------------

CASH FLOWS FROM FINANCING ACTIVITIES
   Proceeds from public offering of
      5,520,000 units, net                                                    --           29,556,400           29,556,400
   Proceeds from sale of shares of common stock
      to initial shareholders                                                 --                   --               25,000
   Proceeds from underwriter's option                                         --                  100                  100
   Proceeds from notes payable, stockholders                                  --               20,000               90,000
   Repayment of notes payable, stockholders                                   --              (90,000)             (90,000)
   Deferred registration costs                                                --               23,500                   --
                                                                    ------------         ------------        -------------
Net cash provided by financing activities                                     --           29,510,000           29,581,500
                                                                    ------------         ------------        -------------
Net increase (decrease) in cash and cash equivalents                $   (552,179)        $    672,611        $      57,590
Cash and cash equivalents at beginning of the period                     609,769               69,895                   --
                                                                    ------------         ------------        -------------
Cash and cash equivalents at end of the period                      $     57,590         $    742,506        $      57,590
                                                                    ============         ============        =============
Supplemental disclosure from cash flow information:
   Cash paid during the period for income taxes                     $    142,263         $         --        $     243,160
Supplemental disclosure of non-cash activities:
   Accrued acquisition costs                                        $    188,271         $         --        $     188,271
   Accretion of Trust Fund relating to
      common stock subject to possible conversion                   $    183,019         $     78,830        $     314,334


    See summary of significant accounting policies and accompanying notes to
                              financial statements


                                       -6-



                                              TERRA NOVA ACQUISITION CORPORATION
                                        (A CORPORATION IN THE DEVELOPMENT STAGE)

                                      SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
--------------------------------------------------------------------------------

   CASH AND CASH                 The Company considers all highly liquid
      EQUIVALENTS                investments with original maturities of three
                                 months or less to be cash equivalents.

   SECURITIES HELD IN            The Company carries its investment in
      TRUST FUND                 securities at cost, which approximates fair
                                 value.

   INCOME TAXES                  The Company follows Statement of Financial
                                 Accounting Standards No. 109 ("SFAS No. 109"),
                                 "Accounting for Income Taxes" which is an asset
                                 and liability approach that requires the
                                 recognition of deferred tax assets and
                                 liabilities for the expected future tax
                                 consequences of events that have been
                                 recognized in the Company's financial
                                 statements or tax returns.

                                 There were no deferred taxes as at September
                                 30, 2006 or December 31, 2005.

   NET INCOME PER SHARE          Basic net income per share is calculated by
                                 dividing net income attributable to common
                                 shareholders by the weighted average number of
                                 common shares outstanding during the period. No
                                 effect has been given to potential issuances of
                                 common stock from warrants or the underwriter
                                 option in the diluted computation, as the
                                 effect would not be dilutive.

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

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


                                       -7-



                                              TERRA NOVA ACQUISITION CORPORATION
                                        (A CORPORATION IN THE DEVELOPMENT STAGE)

                                         NOTES TO UNAUDITED FINANCIAL STATEMENTS
--------------------------------------------------------------------------------

1. BASIS OF PRESENTATION         The accompanying financial statements are
                                 unaudited and have been prepared in accordance
                                 with accounting principles generally accepted
                                 in the United States of America for interim
                                 financial information and with the instructions
                                 to Form 10QSB. Accordingly, certain information
                                 and footnote disclosures normally included in
                                 financial statements prepared in accordance
                                 with accounting principles generally accepted
                                 in the United States of America have been
                                 omitted pursuant to such rules and regulations.
                                 These financial statements should be read in
                                 conjunction with the audited financial
                                 statements that were included in the Company's
                                 Form 10-KSB for the year ended December 31,
                                 2005.

                                 In the opinion of management, all adjustments
                                 (consisting primarily of normal accruals) have
                                 been made that are necessary to present fairly
                                 the financial position of the Company.
                                 Operating results for the interim periods
                                 presented are not necessarily indicative of the
                                 results to be expected for a full year.

2. ORGANIZATION AND BUSINESS     Terra Nova Acquisition Corporation (the
   OPERATIONS                    "Company") was incorporated in Delaware on July
                                 21, 2004 as a blank check company whose
                                 objective is to acquire an operating business.
                                 The Company's initial stockholders purchased
                                 1,200,000 shares of common stock, $.0001 par
                                 value, for $25,000 on July 21, 2004.

                                 The registration statement for the Company's
                                 initial public offering ("Offering") was
                                 declared effective April 18, 2005. The Company
                                 consummated the offering on April 22, 2005 and
                                 received net proceeds of approximately
                                 $25,594,000. Such amount was net of
                                 registration costs incurred through that date.
                                 On April 26, 2005 the underwriters exercised
                                 their over-allotment option and the Company
                                 received net proceeds of approximately
                                 $3,962,400. The Company's management has broad
                                 discretion with respect to the specific
                                 application of the net proceeds of this
                                 Offering, although substantially all of the net
                                 proceeds of this Offering are intended to be
                                 generally applied toward consummating a
                                 business combination with an operating business
                                 ("Business Combination"). Furthermore, there is
                                 no assurance that the Company will be able to
                                 successfully effect a Business Combination. As
                                 at September 30, 2006 an amount of $30,221,274
                                 is being held in an interest-bearing trust
                                 account ("Trust Account") until the earlier of
                                 (i) the consummation of a Business Combination
                                 or (ii) liquidation of the Company. Under the
                                 agreement governing the Trust Account, funds
                                 will only be invested in United States
                                 government securities (Treasury Bills) with a
                                 maturity of 180 days or less, or in money
                                 market funds meeting certain conditions under
                                 rule 2a-7 promulgated under the Investment
                                 Company Act of 1940. The remaining net proceeds
                                 (not held in the Trust Account) may be used to
                                 pay for business, legal and accounting due
                                 diligence on prospective acquisitions and
                                 continuing general and administrative expenses.


                                       -8-



                                              TERRA NOVA ACQUISITION CORPORATION
                                        (A CORPORATION IN THE DEVELOPMENT STAGE)

                                         NOTES TO UNAUDITED FINANCIAL STATEMENTS
--------------------------------------------------------------------------------

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

                                 All of the Company's stockholders prior to the
                                 Offering, including all of the officers and
                                 directors of the Company ("Initial
                                 Stockholders"), have agreed to vote their
                                 1,200,000 founding shares of common stock in
                                 accordance with the vote of the majority in
                                 interest of all other stockholders of the
                                 Company ("Public Stockholders") with respect to
                                 any Business Combination. After consummation of
                                 a Business Combination, these voting safeguards
                                 will no longer be applicable.

                                 With respect to a Business Combination which is
                                 approved and consummated, any Public
                                 Stockholder who voted against the Business
                                 Combination may demand that the Company convert
                                 his shares. The per share conversion price will
                                 equal the amount in the Trust Account,
                                 calculated as of two business days prior to the
                                 consummation of the proposed Business
                                 Combination, divided by the number of shares of
                                 common stock held by Public Stockholders at the
                                 consummation of the Offering. Accordingly,
                                 Public Stockholders holding 19.99% of the
                                 aggregate number of shares owned by all Public
                                 Stockholders may seek conversion of their
                                 shares in the event of a Business Combination.
                                 Such Public Stockholders are entitled to
                                 receive their per share interest in the Trust
                                 Account computed without regard to the shares
                                 held by Initial Stockholders. In this respect
                                 $6,041,229 (which includes accretion of Trust
                                 Fund aggregating $314,334) has been classified
                                 as common stock subject to possible conversion
                                 at September 30, 2006.

                                 The Company's Amended and Restated Certificate
                                 of Incorporation provides for mandatory
                                 liquidation of the Company in the event that
                                 the Company does not consummate a Business
                                 Combination within 18 months from the date of
                                 the consummation of the Offering (such date
                                 would be October 22, 2006), or 24 months from
                                 the consummation of the Offering if certain
                                 extension criteria have been satisfied (that
                                 date is April 22, 2007). The Company has
                                 satisfied the extension criteria (see Note 4).
                                 In the event of liquidation, it is likely that
                                 the per share value of the residual assets
                                 remaining available for distribution (including
                                 Trust Account assets) will be less than the
                                 initial public offering price per share in the
                                 Offering due to costs related to the Offering
                                 (assuming no value is attributed to the
                                 Warrants contained in the Units sold in the
                                 Offering (See Note 3)).


                                       -9-



                                              TERRA NOVA ACQUISITION CORPORATION
                                        (A CORPORATION IN THE DEVELOPMENT STAGE)

                                         NOTES TO UNAUDITED FINANCIAL STATEMENTS
--------------------------------------------------------------------------------

3. OFFERING                      The Company sold 5,520,000 units ("Units") in
                                 the Offering, which includes the 720,000 Units
                                 subject to the underwriters' over-allotment.
                                 Each Unit consists of one share of the
                                 Company's common stock, $.0001 par value, and
                                 two Redeemable Common Stock Purchase Warrants
                                 ("Warrants"). Each Warrant entitles the holder
                                 to purchase from the Company one share of
                                 common stock at an exercise price of $5.00
                                 commencing the later of the completion of a
                                 Business Combination or one year from the
                                 effective date of the Offering and expiring
                                 four years from the effective date of the
                                 Offering. The Warrants will be redeemable, upon
                                 prior written consent of EarlyBirdCapital,
                                 Inc., at a price of $.01 per Warrant upon 30
                                 days' notice after the Warrants become
                                 exercisable, only in the event that the last
                                 sale price of the common stock is at least
                                 $8.50 per share for any 20 trading days within
                                 a 30 trading day period ending on the third day
                                 prior to the date on which notice of redemption
                                 is given. In connection with this Offering, the
                                 Company issued an option, for $100, to the
                                 representative of the underwriters to purchase
                                 240,000 Units at an exercise price of $9.90 per
                                 Unit. In addition, the warrants underlying such
                                 Units are exercisable at $6.65 per share.

4. PROPOSED MERGER AND           On August 9, 2006, the Company entered into an
   DEFERRED ACQUISITION COSTS    Agreement and Plan of Merger ("Merger
                                 Agreement") with ClearPoint Business Resources,
                                 Inc. ("ClearPoint") and all of its stockholders
                                 ("Stockholders"). The Company formed a wholly
                                 owned subsidiary on July 19, 2006 to effectuate
                                 the transactions contemplated by the Merger
                                 Agreement with ClearPoint ("Merger").
                                 ClearPoint will be the surviving corporation in
                                 the Merger, becoming the Company's wholly-owned
                                 subsidiary. ClearPoint, based in Chalfont,
                                 Pennsylvania, is a privately owned workforce
                                 management solutions provider that was founded
                                 in 2001. ClearPoint focuses on human
                                 resource/staffing outsourcing, vendor
                                 management services, customized managed service
                                 programs, and workforce optimization. It also
                                 provides business services including business
                                 process outsourcing, support services for the
                                 transportation, logistics and staffing
                                 industries and benefits solutions and
                                 administration. ClearPoint is also known for
                                 its project-based staff augmentation service
                                 which includes full service project solutions,
                                 executive search and permanent placement,
                                 contract recruiting services and short and long
                                 term hourly based assignments.

                                 Pursuant to the Merger Agreement, the
                                 Stockholders, in exchange for all of the
                                 securities of ClearPoint outstanding
                                 immediately prior to the Merger, will receive
                                 from the Company 5,997,727 shares of its common
                                 stock, subject to certain closing adjustments
                                 based on levels of funded debt, minimum levels
                                 of defined working capital and adjusted
                                 earnings before interest, taxes, depreciation
                                 and amortization. The number of shares of
                                 common stock issued by the Company will be
                                 increased if certain holders of warrants to
                                 purchase common stock of ClearPoint exercise
                                 their warrants and become holders of ClearPoint
                                 common stock prior to closing. In addition,
                                 the Stockholders are entitled to receive
                                 additional performance payments


                                      -10-



                                              TERRA NOVA ACQUISITION CORPORATION
                                        (A CORPORATION IN THE DEVELOPMENT STAGE)

                                         NOTES TO UNAUDITED FINANCIAL STATEMENTS
--------------------------------------------------------------------------------

                                 based on the share price of the Company's
                                 common stock after closing. 10% of the common
                                 stock being issued at the time of the Merger
                                 will be placed into escrow to secure the
                                 Company's indemnity rights under the Merger
                                 Agreement and will be governed by the terms of
                                 an Escrow Agreement. A further 10% of the
                                 shares being issued at the time of the Merger
                                 will be escrowed to effectuate the closing
                                 adjustments.

                                 The financial statements have been prepared
                                 assuming the Company will continue as a going
                                 concern. In the event the Merger Agreement is
                                 not consummated before April 22, 2007, the
                                 Company will be forced to liquidate. Under such
                                 circumstances, an agreement with the Company's
                                 Chairman and Chief Executive Officer would be
                                 implemented, whereby, he would become
                                 personally liable for settlement of accrued
                                 expenses and acquisition costs incurred to the
                                 extent such items are in excess of the net
                                 proceeds of the Offering not held in the Trust
                                 Fund

                                 In connection with this proposed business
                                 combination, the Company incurred $306,980 in
                                 Deferred Acquisition costs as of September 30,
                                 2006, $188,271 of which was unpaid as of this
                                 date.

5. COMMITMENT                    The Company presently occupies office space
                                 provided by an affiliate of an Initial
                                 Stockholder. Such affiliate has agreed that,
                                 until the acquisition of a target business by
                                 the Company, it will make such office space, as
                                 well as certain office and secretarial
                                 services, available to the Company, as may be
                                 required by the Company from time to time. The
                                 Company has agreed to pay such affiliate $7,500
                                 per month for such services commencing on April
                                 18, 2005, the effective date of the Offering.
                                 Amounts of $22,500 for the three-month period
                                 ended September 30, 2006, $22,500 for the three
                                 months ended September 30, 2005, $67,500 for
                                 the nine months ended September 30, 2006,
                                 $41,250 for the nine months ended September 30,
                                 2005 and $131,250 for the period from July 21,
                                 2004 (inception) to September 30, 2006 are
                                 included in general and administrative for such
                                 services.


                                      -11-



                                              TERRA NOVA ACQUISITION CORPORATION
                                        (A CORPORATION IN THE DEVELOPMENT STAGE)

                                         NOTES TO UNAUDITED FINANCIAL STATEMENTS
--------------------------------------------------------------------------------

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

7. COMMON STOCK                  On March 3, 2005, the Company's Board of
                                 Directors authorized a stock dividend of 0.6
                                 shares of common stock for each outstanding
                                 share of common stock. In addition, on March 3,
                                 2005 the Company's Board of Directors approved
                                 an amendment to the Company's Amended and
                                 Restated Certificate of Incorporation to
                                 increase the number of authorized shares of
                                 common stock to 30,000,000. All references in
                                 the accompanying financial statements to the
                                 number of shares of common stock have been
                                 retroactively restated to reflect these
                                 transactions.

                                 At September 30, 2006, 11,760,000 shares of
                                 common stock were reserved for issuance upon
                                 exercise of redeemable warrants and
                                 underwriters' unit purchase option.

8. PROVISION FOR INCOME TAXES    Provision for current income taxes
                                 consists of:



                                                                                         Total
                                                                     Federal   State    Current
                                                                    --------  -------  --------

                                 Three months ended
                                 September 30, 2006                 $(20,059) $24,128  $  4,069
                                                                    ========  =======  =========
                                 Three months ended
                                 September 30, 2005                 $ 52,302  $12,928  $ 65,230
                                                                    ========  =======  ========
                                 Nine months ended
                                 September 30, 2006                 $131,586  $60,291  $191,877
                                                                    ========  =======  ========
                                 Nine months ended
                                 September 30, 2005                 $ 74,175  $21,380  $ 95,555
                                                                    ========  =======  ========
                                 Period from July 21, 2004
                                 (inception) to September 30, 2006  $259,715  $90,847  $350,562
                                                                    ========  =======  ========



                                      -12-



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

     The following discussion should be read in conjunction with the Company's
Consolidated Financial Statements and footnotes thereto contained in this
report.

OVERVIEW

     We were formed on July 21, 2004, to serve as a vehicle to effect a merger,
capital stock exchange, asset acquisition or other similar business combination
with an operating business. Until consummation of our initial public offering in
April 2005, all of our activity related to our formation and initial public
offering. Since then, we have been searching for prospective target businesses
to acquire. We intend to utilize cash derived from the proceeds of our recently
completed public offering, our capital stock, debt or a combination of cash,
capital stock and debt, in effecting a business combination.

FORWARD LOOKING STATEMENTS

     The statements discussed in this Report include forward looking statements
that involve risks and uncertainties detailed from time to time in the Company's
reports filed with the Securities and Exchange Commission.

RECENT DEVELOPMENTS

     On August 9, 2006, we entered into an Agreement and Plan of Merger ("Merger
Agreement") with ClearPoint Business Resources, Inc. ("ClearPoint") and all of
its stockholders ("Stockholders"). We formed a wholly owned subsidiary on July
19, 2006 to effectuate the transactions contemplated by the Merger Agreement
with ClearPoint ("Merger"). ClearPoint will be the surviving corporation in the
Merger, becoming our wholly-owned subsidiary. ClearPoint, based in Chalfont,
Pennsylvania, is a privately owned workforce management solutions provider that
was founded in 2001. ClearPoint focuses on human resource/staffing outsourcing,
vendor management services, customized managed service programs, and workforce
optimization. It also provides business services including business process
outsourcing, support services for the transportation, logistics and staffing
industries and benefits solutions and administration. ClearPoint is also known
for its project-based staff augmentation service which includes full service
project solutions, executive search and permanent placement, contract recruiting
services and short and long term hourly based assignments.

     Pursuant to the Merger Agreement, the Stockholders, in exchange for all of
the securities of ClearPoint outstanding immediately prior to the Merger, will
receive 5,997,727 shares of our common stock, subject to certain closing
adjustments based on levels of funded debt, minimum levels of defined working
capital and adjusted earnings before interest, taxes, depreciation and
amortization. The number of shares of common stock issued by the Company will be
increased if certain holders of warrants to purchase common stock of ClearPoint
exercise their warrants and become holders of ClearPoint common stock prior to
closing. In addition, the Stockholders are entitled to receive additional
performance payments based on the share price of our common stock after closing.
10% of the common stock being issued at the time of the Merger will be placed
into escrow to secure our indemnity rights under the Merger Agreement and will
be governed by the terms of an Escrow Agreement. A further 10% of the shares
being issued at the time of the Merger will be escrowed to effectuate the
closing adjustments.

     For a more complete discussion of our proposed business combination, see
our Current Report on Form 8-K dated August 9, 2006 and filed with the SEC on
August 15, 2006, our Preliminary Proxy Statement filed with the SEC on
September 15, 2006 and Amendment No. 1 to the Preliminary Proxy Statement filed
with the SEC on October 26, 2006.

     In connection with this proposed business combination, the Company incurred
$306,980 in Deferred Acquisition costs as of September 30, 2006, $188,271 of
which was unpaid as of this date.


                                      -13-



RESULTS OF OPERATIONS

     Net income for the three months ended September 30, 2006 of $156,653
consisted of $262,878 of interest income reduced by $22,500 for a monthly
administrative services agreement, $25,272 for insurance, $6,951 for
professional fees, $36,823 for traveling expenses, $4,069 for income taxes and
$10,610 for other expenses.

     Net income for the three months ended September 30, 2005 of $99,494
consisted of $242,640 of interest income reduced by $22,500 for a monthly
administrative services agreement, $26,712 for insurance, $19,955 for
professional fees, $4,477 for traveling expenses, $65,230 for income taxes and
$4,272 for other expenses.

     Net income for the nine months ended September 30, 2006 of $449,283
consisted of $920,426 of interest income reduced by $67,500 for a monthly
administrative services agreement, $77,736 for insurance, $25,915 for
professional fees, $77,018 for traveling expenses, $191,877 for income taxes and
$31,097 for other expenses.

     Net income for the nine months ended September 30, 2005 of $158,359
consisted of $399,872 of interest income reduced by $41,250 for a monthly
administrative services agreement, $44,520 for insurance, $30,987 for
professional fees, $20,414 for traveling expenses, $95,555 for income taxes and
$8,787 for other expenses.

     Net income for the period from July 21, 2004 (inception) to September 30,
2006 of $693,280 consisted of $1,588,590 of interest income reduced by $131,250
for a monthly administrative services agreement, $148,968 for insurance, $80,007
for professional fees, $115,150 for traveling expenses, $350,562 for income
taxes and $69,373 for other expenses.

     We consummated our initial public offering on April 22, 2005. On April 26,
2005, we consummated the closing of an additional 720,000 units that were
subject to the underwriters' over-allotment option. Gross proceeds from our
initial public offering were $33,120,000. We paid a total of $3,081,600 in
underwriting discounts and commissions, and approximately $482,000 was paid for
costs and expenses related to the offering. After deducting the underwriting
discounts and commissions and the offering expenses, the total net proceeds to
us from the offering were approximately $29,556,400, of which $28,648,800 was
deposited into the trust account (or $5.19 per share sold in the offering). The
remaining proceeds are available to be used by us to provide for business, legal
and accounting due diligence on prospective acquisitions and continuing general
and administrative expenses. To the extent that our capital stock is used in
whole or in part as consideration to effect a business combination, the proceeds
held in the trust fund as well as any other net proceeds not expended will be
used to finance the operations of the target business. We do not believe we will
need to raise additional funds following this offering in order to meet the
expenditures required for operating our business. However, we may need to raise
additional funds through a private offering of debt or equity securities if such
funds are required to consummate a business combination that is presented to us.
We would only consummate such a financing simultaneously with the consummation
of a business combination. In the event a business combination is not
consummated before April 22, 2007, the Company will be forced to liquidate.
Under such circumstances, an agreement with the Company's Chairman and Chief
Executive Officer would be implemented, whereby, he would become personally
liable for settlement of accrued expenses and acquisition costs incurred to the
extent such items are in excess of the net proceeds of the Offering not held in
the Trust Fund.

     Commencing on April 18, 2005 and ending upon the acquisition of a target
business, we began incurring a fee from TerraNova Management Corp., an affiliate
of Vahan Kololian, our chairman of the board and chief executive officer, Lee W.
Chung, our chief financial officer and Jesse Gill, our vice president, of $7,500
per month for providing us with office space and certain general and
administrative services. In addition, in November 2004 and March 2005, TerraNova
Partners L.P. advanced $70,000 and $20,000, respectively, to us for payment on
our behalf of offering expenses. These loans were repaid following our initial
public offering from the net proceeds of the offering.

     On October 23, 2006, the Company borrowed $25,000 from TerraNova Partners
L.P., an affiliate of Messrs. Kololian, Chung and Gill. The loan is unsecured,
non-interest bearing and will be repaid on the earlier of the consummation by
the Company of a business combination or upon demand by TerraNova


                                      -14-



Partners L.P.; provided however that if a business combination is not
consummated, the Company will be required to repay the loan only to the extent
it has sufficient funds available to it outside of the trust account.

ITEM 3. CONTROLS AND PROCEDURES.

     Disclosure controls and procedures are controls and other procedures that
are designed to ensure that information required to be disclosed in company
reports filed or submitted under the Securities Exchange Act of 1934 (the
"Exchange Act") is recorded, processed, summarized and reported, within the time
periods specified in the Securities and Exchange Commission's rules and forms.
Disclosure controls and procedures include without limitation, controls and
procedures designed to ensure that information required to be disclosed in
company reports filed or submitted under the Exchange Act is accumulated and
communicated to management, including our chief executive officer and treasurer,
as appropriate to allow timely decisions regarding disclosure.

     As required by Rules 13a-15 and 15d-15 under the Exchange Act, our chief
executive officer and chief financial officer carried out an evaluation of the
effectiveness of the design and operation of our disclosure controls and
procedures as of September 30, 2006. Based on their evaluation, they concluded
that our disclosure controls and procedures were effective.

     Our internal control over financial reporting is a process designed by, or
under the supervision of, our chief executive officer and chief financial
officer and effected by our board of directors, management and other personnel,
to provide reasonable assurance regarding the reliability of our financial
reporting and the preparation of our financial statements for external purposes
in accordance with generally accepted accounting principles. Internal control
over financial reporting includes policies and procedures that pertain to the
maintenance of records that in reasonable detail accurately reflect the
transactions and dispositions of our assets; provide reasonable assurance that
transactions are recorded as necessary to permit preparation of our financial
statements in accordance with generally accepted accounting principles, and that
our receipts and expenditures are being made only in accordance with the
authorization of our board of directors and management; and provide reasonable
assurance regarding prevention or timely detection of unauthorized acquisition,
use or disposition of our assets that could have a material effect on our
financial statements.

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


                                      -15-



                                    PART II.

                                OTHER INFORMATION

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

     On April 22, 2005, we consummated our initial public offering of 4,800,000
Units, with each unit consisting of one share of our common stock and two
warrants, each to purchase one share of our common stock at an exercise price of
$5.00 per share. On April 26, 2005, we closed on an additional 720,000 units
that were subject to the underwriters' over-allotment option. The units were
sold at an offering price of $6.00 per unit, generating total gross proceeds of
$33,120,000. EarlyBirdCapital, Inc. acted as lead underwriter. The securities
sold in the offering were registered under the Securities Act of 1933 on a
registration statement on Form S-1 (No. 333-122439). The Securities and Exchange
Commission declared the registration statement effective on April 18, 2005.

     We paid a total of $3,081,600 in underwriting discounts and commissions,
and approximately $482,000 was paid for costs and expenses related to the
offering.

     After deducting the underwriting discounts and commissions and the offering
expenses, the total net proceeds to us from the offering were approximately
$29,556,400, of which $28,648,800 was deposited into a trust fund (or $5.19 per
share sold in the offering) and the remaining proceeds are available to be used
to provide for business, legal and accounting due diligence on prospective
business combinations and continuing general and administrative expenses.

     For a description of the use of the proceeds generated in our initial
public offering, see Part I, Item 2 of this Form 10-QSB.

ITEM 6: EXHIBITS

     (a)  Exhibits:

          31.1 - Section 302 Certification by CEO

          31.2 - Section 302 Certification by CFO

          32.1 - Section 906 Certification by CEO

          32.2 - Section 906 Certification by CFO


                                      -16-



                                   SIGNATURES

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


                                        TERRA NOVA AQUISITION CORPORATION

Dated: November 14, 2006


                                        /s/ Vahan Kololian
                                        ----------------------------------------
                                        Vahan Kololian
                                        Chief Executive Officer


                                        /s/ Lee W. Chung
                                        ----------------------------------------
                                        Lee W. Chung
                                        Chief Financial Officer


                                      -17-`