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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 June 30, 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
    
    
    15Item 3. Quantitative and Qualitative Disclosures About Market Risk
    
    
    17Item 4. Controls and Procedures
    
    
    18PART II. OTHER INFORMATION
    
    
    18Item 1. Legal Proceedings
    
    
    18Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
    
    
    18Item 3. Defaults Upon Senior Securities
    
    
    18Item 4. Submission of Matters to a Vote of Security Holders
    
    
    18Item 5. Other Information
    
    
    18Item 6. Exhibits
    
    
    19SIGNATURES
    
    
    20EX-31.1: CERTIFICATIONEX-31.2: CERTIFICATIONEX-32.1: CERTIFICATIONEX-32.2: CERTIFICATION
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PART 1  FINANCIAL INFORMATION
 
 Item 1. Condensed Financial Statements
 Inter-Atlantic Financial, Inc.
(a corporation in the development stage)
 CONDENSED BALANCE SHEETS
 June 30, 2009
    
    
    December 31, 2008(unaudited)ASSETSCurrent AssetsCash and cash equivalents
    
    $
    52,332
    
    
    $
    32,248Prepaid insurance
    
    
    29,250
    
    
    
    29,250Prepaid income taxes
    
    
    18,041
    
    
    
    51,061Total current assets
    
    
    99,623
    
    
    
    112,559Other AssetsInvestments held in Trust Account, at fair value
    
    
    68,521,491
    
    
    
    68,525,418Deferred tax asset
    
    
    500,000
    
    
    
    211,000Total other assets
    
    
    69,021,491
    
    
    
    68,736,418Total assets
    
    $
    69,121,114
    
    
    $
    68,848,977LIABILITIES AND STOCKHOLDERS EQUITYCurrent LiabilitiesAccrued expenses
    
    $
    464,272
    
    
    $
    20,833Notes payable, affiliate
    
    
    250,000Delaware franchise tax payable
    
    
    8,225
    
    
    
    32,900Total current liabilities
    
    
    722,497
    
    
    
    53,733Long-term LiabilitiesDeferred underwriters fee
    
    
    1,928,707
    
    
    
    1,928,707Common stock, subject to possible redemption, 2,582,229
shares at redemption value, approximately $7.96 per
share
    
    
    20,547,927
    
    
    
    20,547,927Total liabilities
    
    
    23,199,131
    
    
    
    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 in 2009 and 2008,
respectively
    
    
    1,049
    
    
    
    1,049Additional paid-in capital
    
    
    45,727,725
    
    
    
    45,727,725Retained earnings
    
    
    193,209
    
    
    
    589,836Total stockholders equity
    
    
    45,921,983
    
    
    
    46,318,610Total liabilities and stockholders equity
    
    $
    69,121,114
    
    
    $
    68,848,977
 See accompanying notes to condensed interim financial statements.
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Inter-Atlantic Financial, Inc.
 (a corporation in the development stage)
 CONDENSED STATEMENTS OF OPERATIONS
 (UNAUDITED)
 For the Periodfrom January12, 2007Three Months
    
    
    Three Months
    
    
    Six Months
    
    
    Six Months
    
    
    (inception)Ended June
    
    
    Ended June
    
    
    Ended June 30,
    
    
    Ended June
    
    
    through June30, 2009
    
    
    30, 2008
    
    
    2009
    
    
    30, 2008
    
    
    30, 2009Revenue
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    Formation,
transaction and
administrative
costs
    
    
    542,132
    
    
    
    120,405
    
    
    
    690,204
    
    
    
    244,416
    
    
    
    1,293,565Loss from operations
    
    
    (542,132
    )
    
    
    (120,405
    )
    
    
    (690,204
    )
    
    
    (244,416
    )
    
    
    (1,293,565
    )Interest income
    
    
    26,512
    
    
    
    304,162
    
    
    
    68,763
    
    
    
    715,891
    
    
    
    1,719,960Income (loss)
before provision
for income taxes
(income tax
benefit)
    
    
    (515,620
    )
    
    
    183,757
    
    
    
    (621,441
    )
    
    
    471,475
    
    
    
    426,395Provision for
income taxes
(income tax
benefit)
    
    
    (210,901
    )
    
    
    95,515
    
    
    
    (224,814
    )
    
    
    206,765
    
    
    
    233,186Net income (loss)
    
    
    (304,719
    )
    
    
    88,242
    
    
    
    (396,627
    )
    
    
    264,710
    
    
    
    193,209Maximum number of
shares subject to
possible
redemption:Approximate
weighted
average
number of shares
    
    
    2,582,000
    
    
    
    2,582,000
    
    
    
    2,582,000
    
    
    
    2,582,000
    
    
    
    1,805,000Approximate
weighted average
number of common
shares outstanding
(not subject to
possible
redemption):Basic
    
    
    7,903,000
    
    
    
    7,903,000
    
    
    
    7,903,000
    
    
    
    7,903,000
    
    
    
    6,089,000Diluted
    
    
    7,903,000
    
    
    
    11,740,000
    
    
    
    7,903,000
    
    
    
    11,701,000
    
    
    
    8,788,000Earnings (loss) per
common share not
subject to possible
redemption:Basic
    
    $
    (0.04
    )
    
    $
    0.01
    
    
    $
    (0.05
    )
    
    $
    0.03
    
    
    $
    0.03Diluted
    
    $
    (0.04
    )
    
    $
    0.01
    
    
    $
    (0.05
    )
    
    $
    0.02
    
    
    $
    0.02Earnings (loss) per
common share
subject to possible
redemption:Basic
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    Diluted
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
 See accompanying notes to condensed interim financial statements.
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Inter-Atlantic Financial, Inc.
 (a corporation in the development stage)
 CONDENSED STATEMENTS OF STOCKHOLDERS EQUITY
 For the Period from January 12, 2007 (inception) through June 30, 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 redemption)
    
    
    8,610,300
    
    
    
    861
    
    
    
    63,950,740
    
    
    
    
    
    
    
    63,951,601Reclassification of common stock subject
to possible redemption, 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)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (396,627
    )
    
    
    (396,627
    )Balances at June 30, 2009 (unaudited)
    
    
    10,485,300
    
    
    $
    1,049
    
    
    $
    45,727,725
    
    
    $
    193,209
    
    
    $
    45,921,983
 See accompanying notes to condensed interim financial statements.
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Inter-Atlantic Financial, Inc.
 (a corporation in the development stage)
 CONDENSED STATEMENTS OF CASH FLOWS
 (UNAUDITED)
 For the Periodfrom January12, 2007For the six
    
    
    For the six
    
    
    (inception)months ended
    
    
    months ended
    
    
    through JuneJune 30, 2009
    
    
    June 30, 2008
    
    
    30, 2009Cash flows from operating activities:Net income (loss)
    
    $
    (396,627
    )
    
    $
    264,710
    
    
    $
    193,209Adjustment to reconcile net income (loss) to net
cash and cash equivalents provided by (used in)
operating activities:Deferred income tax benefit
    
    
    (289,000
    )
    
    
    (95,000
    )
    
    
    (500,000
    )Increase (decrease) in cash and cash
equivalents attributable to changes in
operating assets and liabilities:Prepaid insurance
    
    
    
    
    
    
    58,500
    
    
    
    (29,250
    )Prepaid income taxes
    
    
    33,020
    
    
    
    
    
    
    
    (18,041
    )Accrued expenses
    
    
    443,439
    
    
    
    14,743
    
    
    
    464,272Income taxes payable
    
    
    
    
    
    
    (192,485
    )Delaware franchise tax payable
    
    
    (24,675
    )
    
    
    (5,435
    )
    
    
    8,225Net cash provided by (used in) operating activities
    
    
    (233,843
    )
    
    
    45,033
    
    
    
    118,415Cash flows from investing activities:Principal deposited in Trust Account
    
    
    
    
    
    
    
    
    
    
    (68,516,028
    )Interest reinvested in Trust Account
    
    
    (68,737
    )
    
    
    (715,766
    )
    
    
    (1,719,628
    )Redemptions from Trust Account
    
    
    72,664
    
    
    
    814,839
    
    
    
    1,714,165Net cash provided by (used in) investing activities
    
    
    3,927
    
    
    
    99,073
    
    
    
    (68,521,491
    )Cash flows from financing activities:Proceeds from issuance of common stock to founders
    
    
    
    
    
    
    
    
    
    
    25,000Proceeds from notes payable, affiliate
    
    
    250,000
    
    
    
    
    
    
    
    500,000Proceeds from 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
    
    
    250,000
    
    
    
    (146,755
    )
    
    
    68,455,408Net increase (decrease) in cash and cash equivalents
    
    
    20,084
    
    
    
    (2,649
    )
    
    
    52,332Cash and cash equivalents, beginning of period
    
    
    32,248
    
    
    
    6,967Cash and cash equivalents, end of period
    
    $
    52,332
    
    
    $
    4,318
    
    
    $
    52,332Supplemental disclosure of cash flow information,
cash paid during the period for income taxes:
    
    $
    54,923
    
    
    $
    588,250
    
    
    $
    775,018Supplemental 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 redemption
    
    $
    
    
    
    $
    
    
    
    $
    20,547,927
 See accompanying notes to condensed interim financial statements.
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Inter-Atlantic Financial, Inc.
(a corporation in the development stage)
Notes to Condensed Financial Statements
(UNAUDITED)
  Accounting and Reporting By Development Stage Enterprises st
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7




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Earnings (Loss) Per Share:
 Earnings Per Share
 Classification and
Measurement of Redeemable Securities
  8




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Concentration of Credit Risk:
  Use of estimates:
  Income taxes:
 Accounting for Income Taxes
 Accounting for Uncertainty in Income Taxes
 Newly Issued and Adopted Accounting Pronouncements:
 Business Combinations
  9




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Noncontrolling Interests in Consolidated
Financial Statements Consolidated Financial Statements
 Determining the Fair
Value of a Financial Asset When the Market for That Asset Is Not Active . Fair Value Measurements , Accounting Changes and Error
Corrections .
 The FASB Accounting Standards
Codification and the Hierarchy of Generally Accepted Accounting Principles
   10




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Redeemable Common Stock:
 Classification and Measurement of Redeemable Securities
  Cash and Cash Equivalents:
  Fair Value of Financial Instruments:
 Disclosures About Fair Value of Financial Instruments
 Subsequent Events
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Fair Value Measurements Effective
Date of FASB Statement No. 157 ,
   QuotedPrices in
    
    
    Significant Other
    
    
    SignificantJune 30,
    
    
    Active
    
    
    Observable
    
    
    Unobservable2009
    
    
    Markets
    
    
    Inputs
    
    
    InputsDescription
    
    (unaudited)
    
    
    (Level 1)
    
    
    (Level 2)
    
    
    (Level 3 )Assets:Cash Equivalents
    
    $
    18
    
    
    $
    18
    
    
    $
    
    
    
    $
    Investments held in
Trust Account, at
fair value
    
    
    68,521
    
    
    
    68,521
    
    
    
    
    
    
    
    $
    68,539
    
    
    $
    68,539
    
    
    $
    
    
    
    $
    
  13




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QuotedPrices in
    
    
    Significant Other
    
    
    SignificantActive
    
    
    Observable
    
    
    UnobservableDecember
    
    
    Markets
    
    
    Inputs
    
    
    InputsDescription
    
    31, 2008
    
    
    (Level 1)
    
    
    (Level 2)
    
    
    (Level 3 )Assets:Cash Equivalents
    
    $
    14
    
    
    $
    14
    
    
    $
    
    
    
    $
    Investments held in
Trust Account, at
fair value
    
    
    68,525
    
    
    
    68,525
    
    
    
    
    
    
    
    $
    68,539
    
    
    $
    68,539
    
    
    $
    
    
    
    $
    
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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
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
    
    may adversely affect prevailing market prices for our common stock.
  
    
    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
   17




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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
  19




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SIGNATURES
  INTER-ATLANTIC FINANCIAL, INC.By:
    /s/ Andrew S. LernerName:
    Andrew S. LernerTitle:
    Chief Executive Officer  20




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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 18U.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
  21