`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 June 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 August 15, 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     12

       Item 3 - Controls and Procedures                                       13

Part II:  Other Information

       Item 2 - Unregistered Sales of Equity Securities and Use of Proceeds   15

       Item 6 - Exhibits                                                      15

Signatures                                                                    16



















                                      -2-




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



=====================================================================================================================

                                                                            June 30, 2006          December 31, 2005
                                                                             (unaudited)

---------------------------------------------------------------------------------------------------------------------

ASSETS
Current assets:
     Cash and cash equivalents                                           $            300,986        $        609,769
     U.S. Government securities held in Trust Fund (Note 2)                        29,673,616              29,084,736
     Accrued interest receivable, Trust Fund (Note 2)                                 284,780                 220,969
     Prepaid expenses                                                                  24,908                  35,616
                                                                         --------------------        ----------------
Total current assets                                                               30,284,290              29,951,090
     Deferred acquisition costs (Note 4)                                               35,756                      --
                                                                         --------------------        ----------------
Total assets                                                             $         30,320,046        $     29,951,090
                                                                         ====================        ================

LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
     Accrued expenses                                                    $             22,784        $         67,805
     Accrued acquisition costs                                                         30,974                      --
     Income taxes payable                                                             148,161                  57,788
                                                                         --------------------        ----------------
          Total current liabilities                                                   201,919                 125,593
                                                                         --------------------        ----------------

Common stock, subject to possible conversion,
    1,103,448 shares at conversion value (Note 2)                                   5,988,683               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                                                    23,592,145              23,722,618
     Retained earnings accumulated during
          development stage                                                           536,627                 243,997
                                                                         --------------------        ----------------
          Total stockholders' equity                                               24,129,444              23,967,287
                                                                         --------------------        ----------------

Total liabilities and stockholders' equity                               $         30,320,046        $     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        Six months       Six months         July 21, 2004
                                       ended              ended             ended             ended          (inception) to
                                    June 30, 2006     June 30, 2005     June 30, 2006     June 30, 2005      June 30, 2006

---------------------------------------------------------------------------------------------------------------------------

Expenses:
   General and administrative
     expenses (Note 5)              $  (112,220)     $     (66,978)    $    (177,110)    $     (68,042)      $    (442,592)
                                    ------------     --------------     -------------    -------------       --------------

Operating loss for the period          (112,220)           (66,978)         (177,110)          (68,042)           (442,592)

Interest income                         348,308            157,232           657,548           157,232           1,325,712
                                    -----------      -------------     -------------     -------------       -------------

Net income before
   provision for income taxes           236,088             90,254           480,438            89,190             883,120

Provision for income taxes
   (Note 8)                             102,074             30,325           187,808            30,325             346,493
                                    -----------      -------------     -------------     -------------       -------------

Net income                              134,014             59,929           292,630            58,865             536,627
                                    ============     ==============     =============    ==============      ==============

Adjustments:
   Accretion of Trust Fund
   relating to common stock
   subject to possible conversion       (69,622)           (31,329)         (130,473)          (31,329)           (261,788)
                                    ------------     --------------    --------------    --------------      --------------

Net income attributable to
   common stockholders                   64,392             28,600           162,157            27,536             274,839
                                    ============     ==============     =============    ==============      ==============

Weighted average common shares
  outstanding                         6,720,000          5,414,505         6,720,000         3,318,895
                                    ============     ==============     =============    ==============

Basic and diluted income
   per share                        $      0.01      $         0.01    $         0.02    $         0.01
                                    ============     ==============     =============    ==============







    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
                                                                Common Stock         Additional  (deficit) 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)                               --       --       (130,473)              --          (130,473)

Net income for the period (unaudited)                               --       --             --          292,630           292,630

------------------------------------------------------------------------------------------------------------------------------------
Balance, June 30, 2006 (unaudited)                           6,720,000    $ 672   $ 23,592,145         $536,627       $24,129,444
====================================================================================================================================


    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
                                                                  Six months                Six months         July 21, 2004
                                                                     Ended                     Ended          (inception) to
                                                                 June 30, 2006             June 30, 2005       June 30, 2006

----------------------------------------------------------------------------------------------------------------------------

CASH FLOWS FROM OPERATING ACTIVITIES
     Net income                                               $     292,630           $      58,865         $     536,627
     Adjustments to reconcile net income
        to net cash used in operating activities
     Change in operating assets and liabilities:
        Increase in interest earned on investments
            held in Trust Fund                                     (652,691)               (156,725)           (1,309,596)
        Decrease (increase) in prepaid expenses                      10,708                 (89,040)              (24,908)
        Increase (decrease) in accrued expenses                     (45,021)                 61,476                22,784
        Increase in income taxes payable                             90,373                  30,325               148,161
                                                              -------------           -------------         -------------
Net cash used in operating activities                              (304,001)                (95,099)             (626,932)
                                                              -------------           -------------         -------------

CASH FLOWS FROM INVESTING ACTIVITIES
     Purchases of U.S. Government Securities
          held in Trust Fund                                    (59,030,000)            (28,648,800)         (116,762,800)
      Maturities of U.S. Government Securities held in
          Trust Fund                                             59,030,000)                     --            88,114,000
      Deferred acquisition costs                                     (4,782)                     --                (4,782)
                                                              -------------           -------------         -------------
Net cash used in investing activities                                (4,782)            (28,648,800)          (28,653,582)
                                                              -------------           -------------         -------------

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          $    (308,783)          $     766,101         $     300,986
Cash and cash equivalents at beginning of the period                609,769                  69,895                    --
                                                              -------------           -------------         -------------
Cash and cash equivalents at end of the period                $     300,986           $     835,996         $     300,986
                                                              =============           =============         =============

Supplemental disclosure from cash flow information:
     Cash paid during the period for income taxes             $     102,591           $          --         $     203,488
                                                              =============           =============         =============

Supplemental disclosure of non-cash activities:
     Accrued acquisition costs                                $      30,974           $          --         $      30,974
                                                              =============           =============         =============
     Accretion of Trust Fund relating to
     common stock subject to possible conversion              $     130,473           $      31,329         $     261,788
                                                              =============           =============         =============



    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 investments
       EQUIVALENTS           with original maturities of three months or less to
                             be cash equivalents.


     SECURITIES HELD IN     The Company carries its investment in U.S.
       TRUST FUND           government 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 June 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.

     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          Terra Nova Acquisition Corporation (the "Company")
       AND                   was incorporated in Delaware on July 21, 2004 as a
       BUSINESS              blank check company whose objective is to acquire
       OPERATIONS            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 (including $23,500 that had been incurred as
                             at December 31, 2004). 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 June 30, 2006 an amount of
                             $29,958,396 (which includes accrued interest of
                             $284,780) 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. 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, after signing a definitive agreement
                             for the acquisition of a target business, will
                             submit such transaction for stockholder approval.
                             In the event that stockholders owning 20% or more
                             of the shares sold in the Offering vote against the
                             Business Combination and exercise their conversion
                             rights described below, the Business Combination
                             will not be consummated.

                             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
                             $5,988,683 (which includes accretion of Trust Fund
                             aggregating $261,788) has been classified as common
                             stock subject to possible conversion at June 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 (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       On August 9, 2006, the Company entered into an
       AND DEFERRED          Agreement and Plan of Merger ("Merger Agreement")
       ACQUISITION COSTS     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. In addition, the Stockholders are
                             entitled to receive additional performance payments
                             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 $35,756 in
                             Deferred Acquisition costs as of June 30, 2006.

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 June 30, 2006, $18,750 for
                             the three months ended June 30, 2005, $45,000 for
                             the six months ended June 30, 2006, $18,750 for the
                             six months ended June 30, 2005 and $108,750 for the
                             period from July 21, 2004 (inception) to June 30,
                             2006 are included in general and administrative for
                             such services.




                                      -10-

                                              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 June 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    Provision for current income taxes consists of:
       TAXES

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

 Three months ended
 June 30, 2006                   $    83,550    $    18,524         $   102,074
                                 ===========    ===========         ===========

 Three months ended
 June 30, 2005                   $    21,873    $     8,452         $    30,325
                                 ===========    ===========         ===========

 Six months ended
 June 30, 2006                   $   151,645     $   36,163         $   187,808
                                 ===========     ==========         ===========

 Six months ended
 June 30, 2005                   $    21,873     $    8,452         $    30,325
                                 ===========     ==========         ===========

 Period from July 21, 2004
  (inception) to June 30, 2006   $   279,774     $   66,719         $   346,493
                                 ===========     ==========         ===========




                                      -11-





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.

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. 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.

PLAN OF OPERATIONS

         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.

         Net income for the three months ended June 30, 2006 of $134,014
consisted of $348,308 of interest income reduced by $22,500 for a monthly
administrative services agreement, $25,752 for insurance, $10,857 for
professional fees, $38,433 for traveling expenses, $102,074 for income taxes and
$14,678 for other expenses.

         Net income for the three months ended June 30, 2005 of $59,929
consisted of $157,232 of interest income reduced by $18,750 for monthly
administrative services agreement, $17,808 for insurance, $11,032 for
professional fees, $15,937 for traveling expenses, $30,325 for income taxes and
$3,451 for other expenses.

         Net income for the six months ended June 30, 2006 of $292,630 consisted
of $657,548 of interest income reduced by $45,000 for a monthly administrative
services agreement, $52,464 for insurance, $18,964 for professional fees,
$40,195 for traveling expenses, $187,808 for income taxes and $20,487 for other
expenses.

         Net income for the six months ended June 30, 2005 of $58,865 consisted
of $157,232 of interest income reduced by $18,750 for monthly administrative
services agreement, $17,808 for insurance, $11,032 for professional fees,
$15,937 for traveling expenses, $30,325 for income taxes and $4,515 for other
expenses.

         Net income for the period from July 21, 2004 (inception) to June 30,
2006 of $536,627 consisted of $1,325,712 of interest income reduced by $108,750
for a monthly administrative services agreement, $123,696 for insurance, $73,056
for professional fees, $78,327 for traveling expenses, $346,493 for income taxes
and $58,763 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


                                      -12-


$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. We will use substantially all of
the net proceeds of this offering to acquire a target business, including
identifying and evaluating prospective acquisition candidates, selecting the
target business, and structuring, negotiating and consummating the business
combination. 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 believe we will have sufficient available
funds outside of the trust fund to operate through April 22, 2007, assuming that
a business combination is not consummated during that time. 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.

         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.


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 June 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



                                      -13-


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.

























                                      -14-


                                   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.


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




                                      -15-


                                   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: August 15, 2006
                                             /s/ Vahan Kololian
                                             ----------------------------------
                                             Vahan Kololian
                                             Chief Executive Officer


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


























                                      -16-`