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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 FORM 10-Q
 þ
    
    QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934.
 For the quarterly period ended March 31, 2008
 OR
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934.
 For the transition period from  to.
 Commission file number 001-33721
 INTER-ATLANTIC FINANCIAL, INC.
  Delaware
 20-8237170
 400 Madison Ave.
New York, NY 10017
 (212) 581-2000
  þ o
  Large accelerated filer
o
    
    Accelerated filer o
    
    Non-accelerated filer þ
    
    Smaller reporting company o(Do not check if a smaller reporting company)
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TABLE OF CONTENTS
 PagePART I. FINANCIAL INFORMATION
    
    
    2Item 1. Condensed Financial Statements
    
    
    2Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    
    12Item 3. Quantitative and Qualitative Disclosures About Market Risk
    
    
    15Item 4. Controls and Procedures
    
    
    15PART II. OTHER INFORMATION
    
    
    15Item 1. Legal Proceedings
    
    
    15Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
    
    
    15Item 3. Defaults Upon Senior Securities
    
    
    15Item 4. Submission of Matters to a Vote of Security Holders
    
    
    16Item 5. Other Information
    
    
    16Item 6. Exhibits
    
    
    16SIGNATURES
    
    
    17EX-31.1:  CERTIFICATIONEX-31.2:  CERTIFICATIONEX-32.1:  CERTIFICATIONEX-32.2:  CERTIFICATION
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PART I. FINANCIAL INFORMATION
 
 ITEM 1. Condensed Financial Statements
 Inter-Atlantic Financial, Inc.
 CONDENSED BALANCE SHEETS
 March 31, 2008
    
    
    December 31, 2007(Unaudited)ASSETSCurrent AssetsCash
    
    $
    11,465
    
    
    $
    6,967Prepaid insurance
    
    
    117,000
    
    
    
    146,250Total current assets
    
    
    128,465
    
    
    
    153,217Other AssetsCash held in Trust Account
    
    
    68,611,630
    
    
    
    68,725,471Deferred tax asset
    
    
    125,000
    
    
    
    70,000Total other assets
    
    
    68,736,630
    
    
    
    68,795,471Total assets
    
    $
    68,865,095
    
    
    $
    68,948,688LIABILITIES AND STOCKHOLDERS EQUITYCurrent LiabilitiesAccrued expenses
    
    $
    35,942
    
    
    $
    35,250Accrued offering costs
    
    
    
    
    
    
    146,755Income taxes payable
    
    
    160,000
    
    
    
    248,000Delaware franchise tax payable
    
    
    20,563
    
    
    
    46,560Total current liabilities
    
    
    216,505
    
    
    
    476,565Long-term LiabilitiesDeferred underwriters fee
    
    
    1,928,707
    
    
    
    1,928,707Common stock, subject to possible redemption,
2,582,229 shares at conversion value
    
    
    20,547,927
    
    
    
    20,547,927Total liabilities
    
    
    22,693,139
    
    
    
    22,953,199Stockholders equityPreferred stock, $.0001 par value; 1,000,000
shares authorized; none issuedCommon stock, $.0001 par value, 49,000,000
shares authorized;
10,485,300 issued and outstanding
    
    
    1,049
    
    
    
    1,049Additional paid-in capital
    
    
    45,727,725
    
    
    
    45,727,725Earnings accumulated during the development
stage
    
    
    443,182
    
    
    
    266,715Total stockholders equity
    
    
    46,171,956
    
    
    
    45,995,489Total liabilities and stockholders equity
    
    $
    68,865,095
    
    
    $
    68,948,688
 See accompanying notes to financial statements.
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Inter-Atlantic Financial, Inc.
 CONDENSED STATEMENTS OF OPERATIONS
 For the Period from
    
    
    For the Period fromThree Months
    
    
    January 12, 2007
    
    
    January 12, 2007Ended March 31,
    
    
    (inception) through
    
    
    (inception) through2008
    
    
    March 31, 2007
    
    
    March 31, 2008(Unaudited)
    
    
    (Unaudited)
    
    
    (Unaudited)Revenue
    
    $
    
    
    
    $
    
    
    
    $
    Operating costs
    
    
    124,013
    
    
    
    76,885
    
    
    
    280,691Loss from operation
    
    
    (124,013
    )
    
    
    (76,885
    )
    
    
    (280,691
    )Interest income
    
    
    411,730
    
    
    
    
    
    
    
    1,013,123Net income (loss) before
provision for income
taxes
    
    
    287,717
    
    
    
    (76,885
    )
    
    
    732,432Provision for income taxes
    
    
    111,250
    
    
    
    
    
    
    
    289,250Net income (loss)
    
    
    176,467
    
    
    
    (76,885
    )
    
    
    443,182Maximum number of shares
subject to possible
conversion:Approximate weighted
average number of
shares
    
    
    2,582,000
    
    
    
    
    
    
    
    1,007,000Income per share
amount, basic and
diluted
    
    $
    
    
    
    $
    
    
    
    $
    Approximate weighted
average number of common
shares outstanding (not
subject to possible
conversion):Basic
    
    
    7,903,000
    
    
    
    1,875,000
    
    
    
    4,225,000Diluted
    
    
    11,657,000
    
    
    
    1,875,000
    
    
    
    5,700,000Net income per common
share not subject to
possible conversion:Basic
    
    $
    0.02
    
    
    $
    (0.04
    )
    
    $
    0.10Diluted
    
    $
    0.02
    
    
    $
    (0.04
    )
    
    $
    0.08
 See
accompanying notes to financial statements.
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Inter-Atlantic Financial, Inc.
 CONDENSED STATEMENTS OF CASH FLOWS
 For the Period from
    
    
    For the Period fromThree Months
    
    
    January 12, 2007
    
    
    January 12, 2007Ended March 31,
    
    
    (inception) through
    
    
    (inception) through2008
    
    
    March 31, 2007
    
    
    March 31, 2008(Unaudited)
    
    
    (Unaudited)
    
    
    (Unaudited)Cash flows from operating activities:Net income
    
    $
    176,467
    
    
    $
    (76,885
    )
    
    $
    443,182Adjustment to reconcile net income
to net cash provided by operating
activities:Deferred income tax benefit
    
    
    (55,000
    )
    
    
    
    
    
    
    (125,000
    )Increase (decrease) in cash
attributable to changes in
operating assets and liabilities:Prepaid insurance
    
    
    29,250
    
    
    
    
    
    
    
    (117,000
    )Accrued expenses
    
    
    692
    
    
    
    4,617
    
    
    
    35,942Delaware franchise tax payable
    
    
    (25,997
    )
    
    
    
    
    
    
    20,563Income taxes payable
    
    
    (88,000
    )
    
    
    
    
    
    
    160,000Net cash provided by (used in)
operating activities
    
    
    37,412
    
    
    
    (72,268
    )
    
    
    417,687Cash flows from investing activities:Cash held in trust account
    
    
    113,841
    
    
    
    
    
    
    
    (68,611,630
    )Cash flows from financing activities:Proceeds from issuance of common
stock to founders
    
    
    
    
    
    
    25,000
    
    
    
    25,000Proceeds
from notes payable, affiliate
    
    
    
    
    
    
    250,000
    
    
    
    250,000Gross proceeds of public offering
    
    
    
    
    
    
    
    
    
    
    68,882,400Proceeds from issuance of warrants
in private placement
    
    
    
    
    
    
    
    
    
    
    2,300,000Proceeds from issuance of
underwriters purchase option
    
    
    
    
    
    
    
    
    
    
    100Repayment of notes payable, affiliate
    
    
    
    
    
    
    
    
    
    
    (250,000
    )Payments of offering costs
    
    
    (146,755
    )
    
    
    
    
    
    
    (3,002,092
    )Net cash provided by financing
activities
    
    
    (146,755
    )
    
    
    275,000
    
    
    
    68,205,408Net increase in cash
    
    
    4,498
    
    
    
    202,732
    
    
    
    11,465Cash, beginning of period
    
    
    6,967
    
    
    
    
    
    
    
    Cash, end of period
    
    $
    11,465
    
    
    $
    202,732
    
    
    $
    11,465Supplemental
disclosure of cash flow information, cash paid during the period for:Income taxes
    
    $
    254,250
    
    
    $
    
    
    
    $
    254,250Supplemental disclosure of non-cash
financing activities:Deferred underwriters fees
    
    $
    1,928,707
    
    
    $
    
    
    
    $
    1,928,707
 See accompanying notes to financial statements.
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Inter-Atlantic Financial, Inc.
(a corporation in the development stage)
Notes to Condensed Financial Statements
     st
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Earnings (Loss) Per Share:
   Use of estimates:
  Income tax:
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Accounting for Uncertainty in Income taxes
 Recently Issued Accounting Pronouncements:
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Redeemable Common Stock:
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Fair Value Measurement Effective Date of FASB Statement No. 157,
   Quoted
    
    
    SignificantPrices in
    
    
    Other
    
    
    SignificantActive
    
    
    Observable
    
    
    UnobservableMarch 31,
    
    
    Markets
    
    
    Inputs
    
    
    InputsDescription
    
    2008
    
    
    (Level 1)
    
    

(Level 2)
    
    
    (Level 3)Assets:Cash
    
    $
    11.5
    
    
    $
    11.5Cash and cash equivalents held in trust
    
    $
    68,611.6
    
    
    $
    68,611.6Total
    
    $
    68,623.1
    
    
    $
    68,623.1
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Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
 Overview
   short-term
  
    
    may significantly reduce the equity interest of our stockholders;
    
    will likely cause a change in control if a substantial number of our shares of
common stock are issued, which may affect, among other things, our ability to use
our net operating loss carry forwards, if any, and may also result in the
resignation or removal of one or more of our present officers and directors; and
    
    may adversely affect prevailing market prices for our common stock.
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
    
    default and foreclosure on our assets if our operating revenues after a business
combination were insufficient to pay our debt obligations;
    
    acceleration of our obligations to repay the indebtedness even if we have made all
principal and interest payments when due if the debt security contained covenants that
required the maintenance of certain financial ratios or reserves and any such covenant
were breached without a waiver or renegotiation of that covenant; our immediate payment
of all principal and accrued interest, if any, if the debt security was payable on
demand; and
    
    our inability to obtain additional financing, if necessary, if the debt security
contained covenants restricting our ability to obtain additional financing while such
security was outstanding.
   non-operating
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Item 3. Quantitative and Qualitative Disclosures about Market Risk
  
 Item 4. Controls and Procedures
   
 PART II. OTHER INFORMATION
 
 Item 1. Legal Proceedings.
  
 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.
  
 Item 3. Defaults Upon Senior Securities.
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Item 4. Submission of Matters to a Vote of Security Holders.
  
 Item 5. Other Information.
  
 Item 6. Exhibits.
 ExhibitNumber
    
    Exhibit Description31.1
    
    Certification by Principal Executive Officer pursuant to Section
302 of the Sarbanes-Oxley Act of 200231.2
    
    Certification by Principal Financial Officer pursuant to Section
302 of the Sarbanes-Oxley Act of 200232.1
    
    Certification by Principal Executive Officer pursuant to 18 U.S.C.
Section 1350, as adopted to Section 906 of the Sarbanes-Oxley Act
of 200232.2
    
    Certification by Principal Financial Officer pursuant to 18 U.S.C.
Section 1350, as adopted pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002
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INTER-ATLANTIC FINANCIAL, INC.By:
    /s/ Andrew S. LernerName:
    Andrew S. LernerTitle:
    Chief Executive Officer  17




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ExhibitNumber
    
    Exhibit Description31.1
    
    Certification by Principal Executive Officer pursuant to Section
302 of the Sarbanes-Oxley Act of 200231.2
    
    Certification by Principal Financial Officer pursuant to Section
302 of the Sarbanes-Oxley Act of 200232.1
    
    Certification by Principal Executive Officer pursuant to 18 U.S.C.
Section 1350, as adopted to Section 906 of the Sarbanes-Oxley Act
of 200232.2
    
    Certification by Principal Financial Officer pursuant to 18 U.S.C.
Section 1350, as adopted pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002
  18