##### Table of Contents



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 September 30, 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 o
    
    Smaller reporting company þ(Do not check if a smaller reporting company)
  þ o




---



##### 



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
    
    
    13Item 3. Quantitative and Qualitative Disclosures About Market Risk
    
    
    16Item 4. Controls and Procedures
    
    
    16PART II. OTHER INFORMATION
    
    
    16Item 1. Legal Proceedings
    
    
    16Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
    
    
    16Item 3. Defaults Upon Senior Securities
    
    
    16Item 4. Submission of Matters to a Vote of Security Holders
    
    
    16Item 5. Other Information
    
    
    17Item 6. Exhibits
    
    
    17SIGNATURES
    
    
    18Exhibit 31.1: CERTIFICATIONExhibit 31.2: CERTIFICATIONExhibit 32.1: CERTIFICATIONExhibit 32.2: CERTIFICATION




---



##### Table of Contents








---



##### Table of Contents



PART 1  FINANCIAL INFORMATION
 
 ITEM 1. Condensed Financial Statements.
 Inter-Atlantic Financial, Inc.
 CONDENSED BALANCE SHEETS
 September 30, 2008
    
    
    December 31, 2007(Unaudited)ASSETSCurrent AssetsCash and cash equivalents
    
    $
    13,127
    
    
    $
    6,967Prepaid insurance
    
    
    58,500
    
    
    
    146,250Prepaid income taxes
    
    
    26,599
    
    
    
    Total current assets
    
    
    98,226
    
    
    
    153,217Other AssetsCash equivalents held in Trust Account
    
    
    68,588,679
    
    
    
    68,725,471Deferred tax asset
    
    
    224,000
    
    
    
    70,000Total other assets
    
    
    68,812,679
    
    
    
    68,795,471Total assets
    
    $
    68,910,905
    
    
    $
    68,948,688LIABILITIES AND STOCKHOLDERS EQUITYCurrent LiabilitiesAccrued expenses
    
    $
    44,241
    
    
    $
    35,250Accrued offering costs
    
    
    
    
    
    
    146,755Income taxes payable
    
    
    
    
    
    
    248,000Delaware franchise tax payable
    
    
    12,338
    
    
    
    46,560Total current liabilities
    
    
    56,579
    
    
    
    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
    
    
    22,533,213
    
    
    
    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
    
    
    648,918
    
    
    
    266,715Total stockholders equity
    
    
    46,377,692
    
    
    
    45,995,489Total liabilities and stockholders equity
    
    $
    68,910,905
    
    
    $
    68,948,688
 See accompanying notes to unaudited condensed financial statements.
  2




---



##### Table of Contents



Inter-Atlantic Financial, Inc.
 CONDENSED STATEMENTS OF OPERATIONS
 For the Period
    
    
    For the Periodfrom January 12,
    
    
    from January 12,2007
    
    
    2007Three Months
    
    
    Three Months
    
    
    Nine Months
    
    
    (inception)
    
    
    (inception)Ended
    
    
    Ended
    
    
    Ended
    
    
    through
    
    
    throughSeptember 30,
    
    
    September 30,
    
    
    September 30,
    
    
    September 30,
    
    
    September 30,2008
    
    
    2007
    
    
    2008
    
    
    2008
    
    
    2007(Unaudited)
    
    
    (Unaudited)
    
    
    (Unaudited)
    
    
    (Unaudited)
    
    
    (Unaudited)Revenue
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    Operating costs
    
    
    100,406
    
    
    
    15,355
    
    
    
    344,823
    
    
    
    501,501
    
    
    
    23,642Loss from operations
    
    
    (100,406
    )
    
    
    (15,355
    )
    
    
    (344,823
    )
    
    
    (501,501
    )
    
    
    (23,642
    )Interest income
    
    
    286,446
    
    
    
    
    
    
    
    1,002,337
    
    
    
    1,603,730
    
    
    
    Net income (loss) before
provision for income
taxes
    
    
    186,040
    
    
    
    (15,355
    )
    
    
    657,514
    
    
    
    1,102,229
    
    
    
    (23,642
    )Provision for income taxes
    
    
    68,546
    
    
    
    
    
    
    
    275,311
    
    
    
    453,311
    
    
    
    Net income (loss)
    
    
    117,494
    
    
    
    (15,355
    )
    
    
    382,203
    
    
    
    648,918
    
    
    
    (23,642
    )Maximum number of shares
subject to possible
conversion:Approximate weighted
average number of
shares
    
    
    2,582,000
    
    
    
    
    
    
    
    2,582,000
    
    
    
    1,467,000
    
    
    
    Approximate weighted
average number of common
shares outstanding (not
subject to possible
conversion):Basic
    
    
    7,903,000
    
    
    
    1,875,000
    
    
    
    7,903,000
    
    
    
    5,299,000
    
    
    
    1,875,000Diluted
    
    
    11,776,000
    
    
    
    1,875,000
    
    
    
    11,544,000
    
    
    
    7,461,000
    
    
    
    1,875,000Net income (loss) per
common share not subject
to possible conversion:Basic
    
    $
    0.01
    
    
    $
    (0.01
    )
    
    $
    0.05
    
    
    $
    0.12
    
    
    $
    (0.01
    )Diluted
    
    $
    0.01
    
    
    $
    (0.01
    )
    
    $
    0.03
    
    
    $
    0.09
    
    
    $
    (0.01
    )
 See accompanying notes to unaudited condensed financial statements.
  3




---



##### Table of Contents



Inter-Atlantic Financial, Inc.
 STATEMENT OF STOCKHOLDERS EQUITY
 For the Period from January 12, 2007 (inception) through September 30, 2008
 EarningsAccumulatedAdditional
    
    
    During theCommon Stock
    
    
    Paid-in-
    
    
    DevelopmentShares
    
    
    Amount
    
    
    Capital
    
    
    Stage
    
    
    TotalBalances at January 12, 2007 (inception)
    
    
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    Issuance of common stock to founders
    
    
    1,875,000
    
    
    
    188
    
    
    
    24,812
    
    
    
    
    
    
    
    25,000Issuance of warrants in private placement
    
    
    
    
    
    
    
    
    
    
    2,300,000
    
    
    
    
    
    
    
    2,300,000Sale of 8,610,300 units (including the
1,110,300 units pursuance to the
over-allotment option) at a price of
$8.00 per unit, net of underwriters
discount and offering expenses
(including 2,582,229 shares subject to
possible conversion)
    
    
    8,610,300
    
    
    
    861
    
    
    
    63,950,740
    
    
    
    
    
    
    
    63,951,601Reclassification of common stock subject
to possible conversion, 2,582,229 shares
    
    
    
    
    
    
    
    
    
    
    (20,547,927
    )
    
    
    
    
    
    
    (20,547,927
    )Issuance of underwriters purchase option
    
    
    
    
    
    
    
    
    
    
    100
    
    
    
    
    
    
    
    100Net Income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    266,715
    
    
    
    266,715Balances at December 31, 2007
    
    
    10,485,300
    
    
    $
    1,049
    
    
    $
    45,727,725
    
    
    $
    266,715
    
    
    $
    45,995,489Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    382,203
    
    
    
    382,203Balances at September 30, 2008
    
    
    10,485,300
    
    
    $
    1,049
    
    
    $
    45,727,725
    
    
    $
    648,918
    
    
    $
    46,377,692
 See accompanying notes to unaudited condensed financial statements.
  4




---



##### Table of Contents



Inter-Atlantic Financial, Inc.
 CONDENSED STATEMENTS OF CASH FLOWS
 For the Period
    
    
    For the Periodfrom January 12,
    
    
    from January 12,2007
    
    
    2007Nine Months
    
    
    (inception)
    
    
    (inception)Ended
    
    
    through
    
    
    throughSeptember 30,
    
    
    September 30,
    
    
    September 30,2008
    
    
    2008
    
    
    2007(Unaudited)
    
    
    (Unaudited)
    
    
    (Unaudited)Cash flows from operating activities:Net income (loss)
    
    $
    382,203
    
    
    $
    648,918
    
    
    $
    (23,642
    )Adjustment to reconcile net income
(loss) to net cash provided by (used
in) operating activities:Deferred income tax benefit
    
    
    (154,000
    )
    
    
    (224,000
    )
    
    
    Increase (decrease) in cash
attributable to changes in operating
assets and liabilities:Prepaid insurance
    
    
    87,750
    
    
    
    (58,500
    )
    
    
    Prepaid income taxes
    
    
    (26,599
    )
    
    
    (26,599
    )Accrued expenses
    
    
    8,991
    
    
    
    44,241
    
    
    
    664Delaware franchise tax payable
    
    
    (34,222
    )
    
    
    12,338
    
    
    
    Income taxes payable
    
    
    (248,000
    )
    
    
    
    
    
    
    Net cash provided by (used in)
operating activities
    
    
    16,123
    
    
    
    396,398
    
    
    
    (22,978
    )Cash flows from investing activities:Cash equivalents held in trust account
    
    
    136,792
    
    
    
    (68,588,679
    )
    
    
    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
    
    
    
    
    
    
    68,882,400
    
    
    
    Proceeds from issuance of warrants in
private placement
    
    
    
    
    
    
    2,300,000
    
    
    
    Proceeds from issuance of underwriters
purchase option
    
    
    
    
    
    
    100
    
    
    
    Repayment of notes payable, affiliate
    
    
    
    
    
    
    (250,000
    )
    
    
    Payments of offering costs
    
    
    (146,755
    )
    
    
    (3,002,092
    )
    
    
    (147,479
    )Net cash provided by (used in)
financing activities
    
    
    (146,755
    )
    
    
    68,205,408
    
    
    
    127,521Net increase in cash
    
    
    6,160
    
    
    
    13,127
    
    
    
    104,543Cash and cash equivalents, beginning of period
    
    
    6,967
    
    
    
    
    
    
    
    Cash and cash equivalents, end of period
    
    $
    13,127
    
    
    $
    13,127
    
    
    $
    104,543Supplemental disclosure of cash flow
information, cash paid during the
period for:Income taxes
    
    $
    655,352
    
    
    $
    655,352
    
    
    $
    Supplemental disclosure of non-cash
financing activities:Deferred underwriters fees
    
    $
    
    
    
    $
    1,928,707
    
    
    $
    Accrual of deferred offering costs
    
    $
    
    
    
    $
    
    
    
    $
    161,577
 See accompanying notes to unaudited condensed financial statements.
  5




---



##### Table of Contents



Inter-Atlantic Financial, Inc.
(a corporation in the development stage)
Notes to Unaudited Condensed Financial Statements
     st
   6




---



##### Table of Contents



7




---



##### Table of Contents



Earnings (Loss) Per Share:
   Use of estimates:
  Income tax:
   8




---



##### Table of Contents



Accounting for Uncertainty in Income taxes
 Recently Issued Accounting Pronouncements:
   . , .
  9




---



##### Table of Contents



Redeemable Common Stock:
   Cash and Cash Equivalents:
   10




---



##### Table of Contents



11




---



##### Table of Contents



Fair Value Measurement Effective
Date of FASB Statement No. 157,
   Quoted
    
    
    SignificantPrices in
    
    
    Other
    
    
    SignificantActive
    
    
    Observable
    
    
    UnobservableSeptember 30,
    
    
    Markets
    
    
    Inputs
    
    
    InputsDescription
    
    2008
    
    
    (Level 1)
    
    
    (Level 2)
    
    
    (Level 3 )Assets:Cash equivalents
    
    $
    8.7
    
    
    $
    8.7
    
    
    $
    
    
    
    $
    Cash equivalents held in trust
    
    
    68,588.7
    
    
    
    68,588.7
    
    
    
    
    
    
    
    Total
    
    $
    68,597.4
    
    
    $
    68,597.4
    
    
    $
    
    
    
    $
    
    12




---



##### Table of Contents



Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations.
 Overview
     
    
    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.
  13




---



##### Table of Contents




    
    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.
     14




---



##### Table of Contents



15




---



##### Table of Contents



Item 3. Quantitative and Qualitative Disclosures about Market Risk.
  
 Item 4. Controls and Procedures.
   
 OTHER INFORMATION
 
 Item 1. Legal Proceedings.
  
 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.
  
 Item 3. Defaults Upon Senior Securities.
  
 Item 4. Submission of Matters to a Vote of Security Holders.
   16




---



##### Table of Contents



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
  17




---



##### Table of Contents



SIGNATURES
  INTER-ATLANTIC FINANCIAL, INC.By:
    /s/ Andrew S. LernerName:
    Andrew S. LernerTitle:
    Chief Executive Officer  18




---



##### Table of Contents



EXHIBIT INDEX
 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
  19