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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, 2009
 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
 o o
  Large accelerated filer o
    
    Accelerated filer o
    
    Non-accelerated filer o
    
    Smaller reporting company þ
 þ o




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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
    
    
    14Item 3. Quantitative and Qualitative Disclosures About Market Risk
    
    
    16Item 4. Controls and Procedures
    
    
    17PART II. OTHER INFORMATION
    
    
    17Item 1. Legal Proceedings
    
    
    17Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
    
    
    17Item 3. Defaults Upon Senior Securities
    
    
    17Item 4. Submission of Matters to a Vote of Security Holders
    
    
    17Item 5. Other Information
    
    
    17Item 6. Exhibits
    
    
    18SIGNATURES
    
    
    19EX 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, 2009
    
    
    December 31, 2008(unaudited)ASSETSCurrent AssetsCash and cash equivalents
    
    $
    35,419
    
    
    $
    32,248Prepaid insurance
    
    
    
    
    
    
    29,250Prepaid income taxes
    
    
    
    
    
    
    51,061Total current assets
    
    
    35,419
    
    
    
    112,559Other AssetsInvestments held in Trust Account
    
    
    68,530,780
    
    
    
    68,525,418Deferred tax asset
    
    
    267,000
    
    
    
    211,000Total other assets
    
    
    68,797,780
    
    
    
    68,736,418Total assets
    
    $
    68,833,199
    
    
    $
    68,848,977LIABILITIES AND STOCKHOLDERS EQUITYCurrent LiabilitiesAccrued expenses
    
    $
    97,315
    
    
    $
    20,833Income taxes payable
    
    
    
    
    
    
    11,985Delaware franchise tax payable
    
    
    20,563
    
    
    
    32,900Total current liabilities
    
    
    129,863
    
    
    
    53,733Long-term LiabilitiesDeferred underwriters fee
    
    
    1,928,707
    
    
    
    1,928,707Common stock, subject to possible conversion,
2,582,229 shares at conversion value,
approximately $7.96 per share
    
    
    20,547,927
    
    
    
    20,547,927Total liabilities
    
    
    22,606,497
    
    
    
    22,530,367CommitmentStockholders 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
    
    
    
    45,727,725Retained earnings
    
    
    497,928
    
    
    
    589,836Total stockholders equity
    
    
    46,226,702
    
    
    
    46,318,610Total liabilities and stockholders equity
    
    $
    68,833,199
    
    
    $
    68,848,977
 See accompanying notes to condensed financial statements.
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Inter-Atlantic Financial, Inc.
 CONDENSED STATEMENTS OF OPERATIONS
(UNAUDITED)
 For the Period fromFor the three
    
    
    For the three
    
    
    January 12, 2007months ended
    
    
    months ended
    
    
    (inception) throughMarch 31, 2009
    
    
    March 31, 2008
    
    
    March 31, 2009Revenue
    
    $
    
    
    
    $
    
    
    
    $
    Formation,
transaction and
administrative
costs
    
    
    148,072
    
    
    
    124,013
    
    
    
    751,433Loss from operations
    
    
    (148,072
    )
    
    
    (124,013
    )
    
    
    (751,433
    )Interest income
    
    
    42,251
    
    
    
    411,730
    
    
    
    1,693,448Income (loss)
before provision
for income taxes
    
    
    (105,821
    )
    
    
    287,717
    
    
    
    942,015Provision for
income taxes
(income tax
benefit)
    
    
    (13,913
    )
    
    
    111,250
    
    
    
    444,087Net income (loss)
    
    $
    (91,908
    )
    
    $
    176,467
    
    
    $
    497,928Maximum number of
shares subject to
possible
conversion:Approximate
weighted
average
number of shares
    
    
    2,582,000
    
    
    
    2,582,000
    
    
    
    1,718,000Approximate
weighted average
number of common
shares outstanding
(not subject to
possible
conversion):Basic
    
    
    7,903,000
    
    
    
    7,903,000
    
    
    
    5,885,000Diluted
    
    
    11,881,000
    
    
    
    11,657,000
    
    
    
    8,427,000Income (loss) per
common share not
subject to possible
conversion:Basic
    
    $
    (0.01
    )
    
    $
    0.02
    
    
    $
    0.08Diluted
    
    $
    (0.01
    )
    
    $
    0.02
    
    
    $
    0.06Income (loss)per
common share
subject to possible
conversion:Basic
    
    $
    
    
    
    $
    
    
    
    $
    Diluted
    
    $
    
    
    
    $
    
    
    
    $
    
 See accompanying notes to condensed financial statements.
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Inter-Atlantic Financial, Inc.
 CONDENSED STATEMENTS OF STOCKHOLDERS EQUITY

For the Period from January 12, 2007 (inception) through March 31, 2009
 Additional
    
    
    
    
    
    
    TotalCommon Stock
    
    
    Paid-in-
    
    
    Retained
    
    
    StockholdersShares
    
    
    Amount
    
    
    Capital
    
    
    Earnings
    
    
    EquityBalances at January 12, 2007 (inception)
    
    
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    Issuance of common stock to founders on
January 12, 2007 at approximately $.01
per share
    
    
    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
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    323,121
    
    
    
    323,121Balances at December 31, 2008
    
    
    10,485,300
    
    
    $
    1,049
    
    
    $
    45,727,725
    
    
    $
    589,836
    
    
    $
    46,318,610Net loss (unaudited)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (91,908
    )
    
    
    (91,908
    )Balances at March 31, 2009 (unaudited)
    
    
    10,485,300
    
    
    $
    1,049
    
    
    $
    45,727,725
    
    
    $
    497,928
    
    
    $
    46,226,702
 See accompanying notes to condensed financial statements.
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Inter-Atlantic Financial, Inc.
 CONDENSED STATEMENTS OF CASH FLOWS
(UNAUDITED)
 For the Period fromFor the three
    
    
    For the three
    
    
    January 12, 2007months ended
    
    
    months ended
    
    
    (inception) throughMarch 31, 2009
    
    
    March 31, 2008
    
    

March 31, 2009Cash flows from operating activities:Net income (loss)
    
    $
    (91,908
    )
    
    $
    176,467
    
    
    $
    497,928Adjustment to reconcile net income (loss) to net
cash provided by operating activities:Deferred income tax benefit
    
    
    (56,000
    )
    
    
    (55,000
    )
    
    
    (267,000
    )Increase (decrease) in cash attributable to
changes in operating assets and liabilities:Prepaid insurance
    
    
    29,250
    
    
    
    29,250Prepaid income taxes
    
    
    51,061Accrued expenses
    
    
    76,482
    
    
    
    692
    
    
    
    97,315Income taxes payable
    
    
    11,985
    
    
    
    (88,000
    )
    
    
    11,985Delaware franchise tax payable
    
    
    (12,337
    )
    
    
    (25,997
    )
    
    
    20,563Net cash provided by operating activities
    
    
    8,533
    
    
    
    37,412
    
    
    
    360,791Cash flows from investing activities:Principal deposited in Trust Account
    
    
    
    
    
    
    
    
    
    
    (68,516,028
    )Interest reinvested in Trust Account
    
    
    (42,241
    )
    
    
    (411,657
    )
    
    
    (1,693,132
    )Redemptions from Trust Account
    
    
    36,879
    
    
    
    525,499
    
    
    
    1,678,380Net cash provided by (used in) investing activities
    
    
    (5,362
    )
    
    
    113,841
    
    
    
    (68,530,780
    )Cash flows from financing activities:Proceeds from issuance of common stock to founders
    
    
    
    
    
    
    
    
    
    
    25,000Proceeds from notes payable, affiliate
    
    
    
    
    
    
    
    
    
    
    250,000Proceeds 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 and underwriters fees
    
    
    
    
    
    
    (146,755
    )
    
    
    (3,002,092
    )Net cash provided by (used in) financing activities
    
    
    
    
    
    
    (146,755
    )
    
    
    68,205,408Net increase in cash and cash equivalents
    
    
    3,171
    
    
    
    4,498
    
    
    
    35,419Cash and cash equivalents, beginning of period
    
    
    32,248
    
    
    
    6,967Cash and cash equivalents, end of period
    
    $
    35,419
    
    
    $
    11,465
    
    
    $
    35,419Supplemental schedule of cash flow information,
cash paid during the period for:Income taxes
    
    $
    5,663
    
    
    $
    254,250
    
    
    $
    725,773Supplemental schedule of non-cash financing
activities:Deferred underwriters fees
    
    $
    
    
    
    $
    
    
    
    $
    1,928,707Common stock issued in the public offering
reclassified to mezzanine debt for common stock
subject to possible conversion
    
    $
    
    
    
    $
    
    
    
    $
    20,547,927
 See accompanying notes to condensed 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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7




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Earnings (Loss) Per Share:
   Concentration of Credit Risk:
   8




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Use of estimates:
  Income tax:
   Newly Adopted Accounting Pronouncements:
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. , .
  Redeemable Common Stock:
   10




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Cash and Cash Equivalents:
  Fair Value of Financial Instruments:
      11




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,
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QuotedPrices in
    
    
    
    
    
    
    SignificantMarch 31,
    
    
    Active
    
    
    Significant Other
    
    
    Unobservable2009
    
    
    Markets
    
    
    Observable
    
    
    InputsDescription
    
    (unaudited)
    
    
    (Level 1)
    
    
    Inputs (Level 2)
    
    
    (Level 3 )Assets:Investments held in Trust Account
    
    $
    68,530
    
    
    $
    68,530
    
    
    $
    
    
    
    $
    
 QuotedPrices in
    
    
    
    
    
    
    SignificantMarch 31,
    
    
    Active
    
    
    Significant Other
    
    
    Unobservable2008
    
    
    Markets
    
    
    Observable
    
    
    InputsDescription
    
    (unaudited)
    
    
    (Level 1)
    
    
    Inputs (Level 2)
    
    
    (Level 3 )Assets:Investments held in Trust Account
    
    $
    68,612
    
    
    $
    68,612
    
    
    $
    
    
    
    $
    
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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.
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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.
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Item 3.
Quantitative and Qualitative Disclosures about Market Risk.
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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.
  
 Item 5. Other Information.
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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  19




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ExhibitNumber
    
    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
  20