**Table of Contents**

| ****x**** | **QUARTERLY REPORT PURSUANT TO SECTION 13        OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934** |
|-----------|----------------------------------------------------------------------------------------------------|
| ****o**** | **TRANSITION REPORT PURSUANT TO SECTION        13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934** |
|-----------|-----------------------------------------------------------------------------------------------------|
| **Illinois**                 | **75-2375969**                                    |
|------------------------------|---------------------------------------------------|
| **(State of incorporation)** | **(I.R.S. employer identification          no.)** |

| **Large accelerated filer o**                            |   |   | **Accelerated filer o**         |   |
|----------------------------------------------------------|--------|--------|---------------------------------|--------|
|                                                     |   |   |                            |   |
| **Non-accelerated filer o**                              |   |   | **Smaller reporting company x** |   |
| **(Do not check if a smaller reporting        company)** |   |   |

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| **PART I**                                                                                 | **FINANCIAL INFORMATION**                                                                                                     | **Page No.** |
|--------------------------------------------------------------------------------------------|-------------------------------------------------------------------------------------------------------------------------------|--------------|
|                                                                                       |                                                                                                                          |         |
| **Item 1.**                                                                                | **Unaudited Condensed Consolidated      Financial Statements:**                                                               | ** **   |
| ****                                                                                       | ** **                                                                                                                    | ** **   |
| ****                                                                                       | **Condensed Consolidated      Balance Sheets at June 30, 2009 (unaudited) and December 31, 2008**                             | **3**        |
| ****                                                                                       | ** **                                                                                                                    | ** **   |
| ****                                                                                       | **Unaudited Condensed      Consolidated Statements of Operations for Three and Six Months Ended June      30, 2009 and 2008** | **4**        |
| ****                                                                                       | ** **                                                                                                                    | ** **   |
| ****                                                                                       | **Unaudited Condensed Consolidated      Statements of Cash Flows for Six Months Ended June 30, 2009 and 2008**                | **5**        |
| ****                                                                                       | ** **                                                                                                                    | ** **   |
| ****                                                                                       | **Notes to Unaudited Condensed      Consolidated Financial Statements**                                                       | **6**        |
| ****                                                                                       |                                                                                                                          | ** **   |
| **Item 2.**                                                                                | **Management's Discussion and      Analysis of Financial Condition and Results of Operations**                                | **16**       |
|                                                                                       |                                                                                                                          |         |
| **Item 3.**                                                                                | **Quantitative and Qualitative      Disclosures about Market Risk**                                                           | **24**       |
|                                                                                       |                                                                                                                          |         |
| **Item 4T.**                                                                               | **Controls and Procedures**                                                                                                   | **24**       |
| ** **                                                                                 | ** **                                                                                                                    |         |
| **PART II**                                                                                | **OTHER INFORMATION**                                                                                                         | ** **   |
|                                                                                       |                                                                                                                          |         |
| **Item 1.**                                                                                | **Legal Proceedings**                                                                                                         | **24**       |
|                                                                                       |                                                                                                                          | ** **   |
| **Item 1A.**                                                                               | **Risk Factors**                                                                                                              | **25**       |
|                                                                                       |                                                                                                                          | ** **   |
| **Item 2.**                                                                                | **Unregistered Sales of Equity      Securities and Use of Proceeds**                                                          | **25**       |
|                                                                                       |                                                                                                                          | ** **   |
| **Item 3.**                                                                                | **Defaults in Senior Securities**                                                                                             | **25**       |
|                                                                                       |                                                                                                                          | ** **   |
| **Item 4.**                                                                                | **Submission of Matters to      a Vote of Security Holders**                                                                  | **25**       |
|                                                                                       |                                                                                                                          | ** **   |
| **Item 5.**                                                                                | **Other Information**                                                                                                         | **26**       |
|                                                                                       |                                                                                                                          | ** **   |
| **Item 6.**                                                                                | **Exhibits**                                                                                                                  | **26**       |
|                                                                                       |                                                                                                                          | ** **   |
| **Signatures**                                                                             | **27**                                                                                                                        |
| **Exhibit      31.1 Certification of Chief Executive Officer**                             | **28**                                                                                                                        |
| **Exhibit      31.2 Certification of Chief Financial Officer**                             | **29**                                                                                                                        |
| **Exhibit      32.1 Certification of Chief Executive Officer and Chief Financial Officer** | **30**                                                                                                                        |

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**Table of Contents**

| **TERRA NOVA FINANCIAL GROUP, INC. AND        SUBSIDIARIES         CONDENSED CONSOLIDATED BALANCE SHEETS****(UNAUDITED)**                                                                                                                                                         |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                                                                                                                                                                                                                                                                   |   | **June 30,         2009** |  |  |  | December 31,         2008 |   |
| **ASSETS**                                                                                                                                                                                                                                                                        |
| Cash and cash equivalents                                                                                                                                                                                                                                                         | **$** | **9,193,572** |   |   | $ | 7,889,553 |   |
| Cash segregated in compliance with federal      regulations                                                                                                                                                                                                                       |   | **120,190,318** |   |   |   | 141,159,364 |   |
| Receivables from brokers,      dealers and clearing organizations                                                                                                                                                                                                                 |   | **18,611,294** |   |   |   | 13,568,459 |   |
| Receivables from customers and non-customers,      net                                                                                                                                                                                                                            |   | **8,850,339** |   |   |   | 4,858,360 |   |
| Property and equipment, net                                                                                                                                                                                                                                                       |   | **1,253,991** |   |   |   | 1,221,066 |   |
| Capitalized software development costs, net                                                                                                                                                                                                                                       |   | **1,913,053** |   |   |   | 2,060,015 |   |
| Intangible assets, net                                                                                                                                                                                                                                                            |   | **3,426,439** |   |   |   | 4,111,514 |   |
| Income tax receivables                                                                                                                                                                                                                                                            |   | **716,264** |   |   |   | 1,446,264 |   |
| Goodwill                                                                                                                                                                                                                                                                          |   | **7,501,408** |   |   |   | 7,501,408 |   |
| Deferred income taxes, net                                                                                                                                                                                                                                                        |   | **2,129,761** |   |   |   | 1,784,761 |   |
| Other assets                                                                                                                                                                                                                                                                      |   | **1,131,810** |   |   |   | 1,346,764 |   |
|            Total      assets                                                                                                                                                                                               | **$** | **174,918,249** |   |   | $ | 186,947,528 |   |
|                                                                                                                                                                                                                                                                              |   |   |   |   |   |   |   |
| **LIABILITIES AND SHAREHOLDERS' EQUITY**                                                                                                                                                                                                                                          |
|                                                                                                                                                                                                                                                                              |  | **** |   |   |   |  |   |
| Payables to brokers, dealers and clearing organizations                                                                                                                                                                                                                           | **$** | **811,995** |   |   | $ | 913,621 |   |
| Payables to customers and      non-customers                                                                                                                                                                                                                                      |   | **140,724,283** |   |   |   | 151,970,566 |   |
| Accounts payable and accrued expenses                                                                                                                                                                                                                                             |   | **2,605,058** |   |   |   | 2,525,692 |   |
|            Total      liabilities                                                                                                                                                                                          |   | **144,141,336** |   |   |   | 155,409,879 |   |
|                                                                                                                                                                                                                                                                              |   |   |   |   |   |   |   |
| **Commitments and contingencies**                                                                                                                                                                                                                                                 |   |   |   |   |   |   |   |
|                                                                                                                                                                                                                                                                              |   |   |   |   |   |   |   |
| **Shareholders' equity**                                                                                                                                                                                                                                                          |   |   |   |   |   |   |   |
| Preferred stock; $10 par value; 5,000,000 shares      authorized; (none issued)                                                                                                                                                                                                   |   | - |   |   |   | - |   |
| Common stock; $0.01 par value;      150,000,000 shares authorized; 25,482,942 shares           issued and 25,054,508 shares outstanding at June      30, 2009 and 25,482,942 shares           issued and outstanding at December 31, 2008 |   | **254,829** |   |   |   | 254,829 |   |
| Treasury stock, at cost; 428,434 shares at      June 30, 2009 and no shares at            December 31, 2008                                                                                                                                                   |   | **(272,056** | **)** |   |   | - |   |
| Additional paid-in capital                                                                                                                                                                                                                                                        |   | **52,061,933** |   |   |   | 52,005,418 |   |
| Accumulated deficit                                                                                                                                                                                                                                                               |   | **(21,267,793** | **)** |   |   | (20,722,598 | ) |
|            Total      shareholders' equity                                                                                                                                                                                 |   | **30,776,913** |   |   |   | 31,537,649 |   |
|            Total      liabilities and shareholders' equity                                                                                                                                                                 | **$** | **174,918,249** |   |   | $ | 186,947,528 |   |
|                                                                                                                                                                                                                                                                              |   |   |   |   |   |   |   |
|                                                                                                                                                                                                                                                                              |   |   |   |   |   |   |   |
| See accompanying notes to unaudited condensed        consolidated financial statements.                                                                                                                                                                                           |

----

**Table of Contents**

| **TERRA NOVA FINANCIAL GROUP, INC.          AND SUBSIDIARIES           CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS          (UNAUDITED)** |
|-----------------------------------------------------------------------------------------------------------------------------------------------|
|                                                                                                                                          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                                                                               |   **Three Months Ended June 30,** |    |       ** Six          Months Ended June 30,** |
|                                                                                                                                               |   | **2009** |   |   |   | 2008 |   |   |   | **2009** |   |   |   | 2008 |   |
| **REVENUES**                                                                                                                                  |   |   |   |   |   |    |   |    |   |   |   |   |   |    |   |
| Commissions and fees                                                                                                                          | **$** | **6,796,628** |   |   | $ | 7,122,860 |   |   | **$** | **13,472,764** |   |   | $ | 15,291,616 |   |
|                                                                                                                                          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest income                                                                                                                               |   | **440,307** |   |   |   | 1,400,545 |   |   |   | **860,583** |   |   |   | 3,471,429 |   |
| Interest expense on brokerage        accounts                                                                                                 |   | **-** |   |   |   | 213,686 |   |   |   | **-** |   |   |   | 822,429 |   |
|          Net        interest income                                                              |   | **440,307** |   |   |   | 1,186,859 |   |   |   | **860,583** |   |   |   | 2,649,000 |   |
|                                                                                                                                          |   | **** |   |   |   |  |   |   |   |  |   |   |   |  |   |
| Software fees, net                                                                                                                            |   | **229,682** |   |   |   | 193,333 |   |   |   | **487,201** |   |   |   | 352,336 |   |
| Other revenue                                                                                                                                 |   | **63,084** |   |   |   | 42,482 |   |   |   | **107,358** |   |   |   | 196,487 |   |
|                                                                                                                                          |   | **** |   |   |   |  |   |   |   |  |   |   |   |  |   |
|          Net        revenues                                                                     |   | **7,529,701** |   |   |   | 8,545,534 |   |   |   | **14,927,906** |   |   |   | 18,489,439 |   |
|                                                                                                                                          |   |   |   |   |   |   |   |   |   | **** |   |   |   |   |   |
| **EXPENSES**                                                                                                                                  |   | **** |   |   |   |  |   |   |   | **** |   |   |   |   |   |
| Commissions and clearing                                                                                                                      |   | **2,387,600** |   |   |   | 2,863,605 |   |   |   | **5,088,258** |   |   |   | 5,779,003 |   |
| Compensation and benefits                                                                                                                     |   | **2,140,300** |   |   |   | 2,015,573 |   |   |   | **4,400,677** |   |   |   | 4,809,325 |   |
| Software and market data                                                                                                                      |   | **860,240** |   |   |   | 1,599,970 |   |   |   | **1,753,641** |   |   |   | 3,250,110 |   |
| Advertising and promotional                                                                                                                   |   | **207,111** |   |   |   | 148,196 |   |   |   | **294,340** |   |   |   | 255,185 |   |
| Professional fees                                                                                                                             |   | **692,314** |   |   |   | 515,080 |   |   |   | **1,379,235** |   |   |   | 1,311,931 |   |
| Communications and information        technology                                                                                              |   | **227,275** |   |   |   | 191,523 |   |   |   | **466,465** |   |   |   | 448,094 |   |
| Depreciation and amortization                                                                                                                 |   | **568,987** |   |   |   | 568,368 |   |   |   | **1,132,255** |   |   |   | 1,125,931 |   |
| Other general and administrative        expenses                                                                                              |   | **796,260** |   |   |   | (36,129 | ) |   |   | **1,303,230** |   |   |   | 430,385 |   |
|                                                                                                                                          |   | **** |   |   |   |  |   |   |   | **** |   |   |   |  |   |
|          Total        expenses                                                                   |   | **7,880,087** |   |   |   | 7,866,186 |   |   |   | **15,818,101** |   |   |   | 17,409,964 |   |
|                                                                                                                                          |   | **** |   |   |   |  |   |   |   | **** |   |   |   |  |   |
| Income (loss) before income        taxes                                                                                                      |   | **(350,386** | **)** |   |   | 679,348 |   |   |   | **(890,195** | **)** |   |   | 1,079,475 |   |
|                                                                                                                                          |   | **** |   |   |   |  |   |   |   | **** |   |   |   |  |   |
| Income tax benefit (provision)                                                                                                                |   | **135,000** |   |   |   | (280,118 | ) |   |   | **345,000** |   |   |   | (508,118 | ) |
|                                                                                                                                          |   | **** |   |   |   |  |   |   |   | **** |   |   |   |  |   |
| Net income (loss)                                                                                                                             |   | **(215,386** | **)** |   |   | 399,230 |   |   |   | **(545,195** | **)** |   |   | 571,357 |   |
|                                                                                                                                          |   | **** |   |   |   |  |   |   |   | **** |   |   |   |  |   |
| Dividends on preferred        stock                                                                                                           |   | **-** |   |   |   | (2,538 | ) |   |   | **-** |   |   |   | (20,113 | ) |
|                                                                                                                                          |   | **** |   |   |   |  |   |   |   | **** |   |   |   |  |   |
| Net income (loss) attributable        to common shareholders                                                                                  | **$** | **(215,386** | **)** |   | $ | 396,692 |   |   | **$** | **(545,195** | **)** |   | $ | 551,244 |   |
|                                                                                                                                          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net income (loss) per common        share:                                                                                                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Basic                                                                                                                                         | **$** | **(0.01** | **)** |   | $ | 0.02 |   |   | **$** | **(0.02** | **)** |   | $ | 0.02 |   |
|                                                                                                                                          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Diluted                                                                                                                                       | **$** | **(0.01** | **)** |   | $ | 0.02 |   |   | **$** | **(0.02** | **)** |   | $ | 0.02 |   |
|                                                                                                                                          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Weighted average common        shares outstanding:                                                                                            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Basic                                                                                                                                         |   | **25,453,124** |   |   |   | 26,037,661 |   |   |   | **25,467,950** |   |   |   | 26,223,876 |   |
|                                                                                                                                          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Diluted                                                                                                                                       |   | **25,453,124** |   |   |   | 26,037,661 |   |   |   | **25,467,950** |   |   |   | 26,223,876 |   |
|                                                                                                                                          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| See accompanying notes to unaudited          condensed consolidated financial statements.                                                     |

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**Table of Contents**

| **TERRA NOVA FINANCIAL GROUP, INC.            AND SUBSIDIARIES             CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS             (UNAUDITED)** |
|------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                                                                                                                                      | **Six Months Ended June 30,** |
|                                                                                                                                                      |   | **2009** |   |   |   | 2008 |   |
| **OPERATING ACTIVITIES**                                                                                                                             |   |   |   |   |   |   |   |
| Net income (loss)                                                                                                                                    | **$** | **(545,195** | **)** |   | $ | 571,357 |   |
| Adjustments to reconcile          net income (loss) to net cash provided by operating activities:                                                    |   |  |   |   |   |  |   |
| Share-based compensation                                                                                                                             |   | **56,515** |   |   |   | 70,806 |   |
| Depreciation          and amortization                                                                                                               |   | **1,132,255** |   |   |   | 1,125,931 |   |
| Deferred income taxes                                                                                                                                |   | **(345,000** | **)** |   |   | 85,889 |   |
| Reversal of legal reserve                                                                                                                            |   | **-** |   |   |   | (140,000 | ) |
| Gain on extinguishment of liabilities                                                                                                                |   | **(60,626** | **)** |   |   | (540,000 | ) |
| Loss on write-off of          assets                                                                                                                 |   | **-** |   |   |   | 29,857 |   |
| Change in operating assets and liabilities:                                                                                                          |   |  |   |   |   |  |   |
| (Increase) decrease in          assets:                                                                                                              |   |  |   |   |   |  |   |
| Cash segregated in compliance with federal          regulations                                                                                      |   | **20,969,046** |   |   |   | (5,926,613 | ) |
| Receivables from brokers,          dealers and clearing organizations                                                                                |   | **(5,042,835** | **)** |   |   | 10,201,144 |   |
| Receivables from customers and non-customers                                                                                                         |   | **(3,991,979** | **)** |   |   | 14,247,001 |   |
| Income tax receivables                                                                                                                               |   | **730,000** |   |   |   | - |   |
| Other assets                                                                                                                                         |   | **214,954** |   |   |   | 86,453 |   |
| Increase (decrease) in          liabilities:                                                                                                         |   |  |   |   |   |  |   |
| Payables to brokers, dealers and clearing          organizations                                                                                     |   | **(101,626** | **)** |   |   | 5,399,246 |   |
| Payables to customers          and non-customers                                                                                                     |   | **(11,246,283** | **)** |   |   | (14,241,696 | ) |
| Accounts payable and accrued expenses                                                                                                                |   | **139,992** |   |   |   | 710,811 |   |
| Income tax liability                                                                                                                                 |   | **-** |   |   |   | (572,945 | ) |
|                                                                                                                                                 |   |  |   |   |   |  |   |
| Net cash provided by          operating activities                                                                                                   |   | **1,909,218** | ** ** |   |   | 11,107,241 |   |
|                                                                                                                                                 |   |  |   |   |   |  |   |
| **INVESTING ACTIVITIES**                                                                                                                             |   |  |   |   |   |  |   |
| Purchases of property and equipment                                                                                                                  |   | **(216,286** | **)** |   |   | (153,323 | ) |
| Capitalization of software          development costs                                                                                                |   | **(116,857** | **)** |   |   | (613,467 | ) |
|                                                                                                                                                 |   |  |   |   |   |  |   |
| Net cash used in investing          activities                                                                                                       |   | **(333,143** | **)** |   |   | (766,790 | ) |
|                                                                                                                                                 |   |  |   |   |   |  |   |
| **FINANCING ACTIVITIES**                                                                                                                             |   |  |   |   |   |  |   |
| Repurchase and retirement of common stock                                                                                                            |   | **-** |   |   |   | (674,221 | ) |
| Purchase of treasury          stock                                                                                                                  |   | **(272,056** | **)** |   |   | (589,260 | ) |
| Preferred dividends paid                                                                                                                             |   | **-** |   |   |   | (50,063 | ) |
| Redemption of preferred          stock                                                                                                               |   | **-** |   |   |   | (781,100 | ) |
| Net payments on line of credit                                                                                                                       |   | **-** |   |   |   | (10,848,000 | ) |
|                                                                                                                                                 |   |  |   |   |   |  |   |
| Net cash used in financing activities                                                                                                                |   | **(272,056** | **)** |   |   | (12,942,644 | ) |
|                                                                                                                                                 |   |  |   |   |   |  |   |
| Net increase (decrease) in cash and cash          equivalents                                                                                        |   | **1,304,019** | ** ** |   |   | (2,602,193 | ) |
| Cash and cash equivalents          at beginning of period                                                                                            |   | **7,889,553** |   |   |   | 7,937,880 |   |
| Cash and cash equivalents at end of period                                                                                                           | **$** | **9,193,572** |   |   | $ | 5,335,687 |   |
|                                                                                                                                                 |   |   |   |   |   |   |   |
| Supplemental Disclosure of Cash Flow Information:                                                                                                    |   |   |   |   |   |   |   |
| Cash paid for interest                                                                                                                               | **$** | **-** |   |   | $ | 822,429 |   |
|                                                                                                                                                 |   |   |   |   |   |   |   |
| Cash (received) paid for income taxes                                                                                                                | **$** | **(696,322** | **)** |   | $ | 360,000 |   |
|                                                                                                                                                 |   |   |   |   |   |   |   |
| See accompanying notes to unaudited            condensed consolidated financial statements.                                                          |

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**Table of Contents**

| • | Securities and Exchange Commission ("SEC")      as a broker-dealer                  |
|--------|-------------------------------------------------------------------------------------|
| • | Financial Industry Regulatory Authority ("FINRA")      as a broker-dealer           |
| • | National Futures Association ("NFA") as a futures      commission merchant          |
| • | Commodity Futures Trading Commission ("CFTC")      as a futures commission merchant |

| • | The Depository Trust Company             |
|--------|------------------------------------------|
| • | National Securities Clearing Corporation |
| • | The Options Clearing Corporation         |

| • | Chicago Stock Exchange  |
|--------|-------------------------|
| • | CBOE Stock Exchange     |
| • | ISE Stock Exchange      |
| • | National Stock Exchange |
| • | NYSE Arca Equities      |
| • | NYSE Amex Equities      |
| • | NYSE Euronext           |
| • | NASDAQ Stock Market     |
| • | NASDAQ OMX BX           |

| • | Boston Options Exchange           |
|--------|-----------------------------------|
| • | NYSE Arca Options                 |
| • | NASDAQ OMX PHLX                   |
| • | NYSE Amex Options                 |
| • | International Securities Exchange |

| • | Securities Investor Protection Corporation |
|--------|--------------------------------------------|

----

**Table of Contents**

| • | Market Wise Stock Trading School, LLC ("MW      School"), provides analysis tools to individuals and entities |
|--------|---------------------------------------------------------------------------------------------------------------|
| • | Market Wise Securities, LLC ("MW Securities"),      a FINRA broker-dealer                                     |
| • | QNT, LLC, a newly formed and inactive subsidiary,      formed on July 27, 2009                                |

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**Table of Contents**

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**Tableof Contents**

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**Table of Contents**

|                                             |
|--------------------------------------------------|
|                                             | For Three Months Ended June 30, |   | For Six Months Ended June 30, |
|                                             |   | 2009 |   |   |   | 2008 |   |   |   | 2009 |   |   |   | 2008 |   |
| Weighted average shares      outstanding - Basic |   | 25,453,124 |   |   |   | 26,037,661 |   |   |   | 25,467,950 |   |   |   | 26,223,876 |   |
| Weighted average shares outstanding - Diluted    |   | 25,453,124 |   |   |   | 26,037,661 |   |   |   | 25,467,950 |   |   |   | 26,223,876 |   |
|                                             |

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**Table of Contents**

|                                                                                                                         | **Three Months Ended June 30,** |            | **Six Months Ended June 30,** |
|------------------------------------------------------------------------------------------------------------------------------|---------------------------------|-----------------|-------------------------------|
|                                                                                                                              |                            | **2009**        |                          |   |   | 2008 |   |   |   | **2009** |   |   |   | 2008 |   |
| **Revenues:**                                                                                                                |                            | **(Unaudited)** |                          |   |   | (Unaudited) |   |   |   | **(Unaudited)** |   |   |   | (Unaudited) |   |
| **Brokerage Services      Segment**                                                                                          |                            |            |                          |   |   |   |   |   |   |   |   |   |   |   |   |
| Revenues, excluding interest                                                                                                 | **$**                           | **6,859,712**   |                          |   | $ | 7,165,350 |   |   | **$** | **13,580,122** |   |   | $ | 15,488,119 |   |
| Interest income                                                                                                              |                            | **440,307**     |                          |   |   | 1,400,537 |   |   |   | **860,583** |   |   |   | 3,471,413 |   |
| Interest expense on brokerage accounts                                                                                       |                            | **-**           | ** **                    |   |   | (213,686 | ) |   |   | **-** |   |   |   | (822,429 | ) |
| Totals                                                                                                                       |                            | **7,300,019**   |                          |   |   | 8,352,201 |   |   |   | **14,440,705** |   |   |   | 18,137,103 |   |
|                                                                                                                         |                            |                 |                          |   |   |  |   |   |   |  |   |   |   |   |   |
| **Software Services Segment**                                                                                                |                            |                 |                          |   |   |  |   |   |   |  |   |   |   |   |   |
| Revenues                                                                                                                     |                            | **491,552**     |                          |   |   | 747,944 |   |   |   | **1,059,907** |   |   |   | 1,303,666 |   |
|                                                                                                                         |                            |                 |                          |   |   |  |   |   |   |  |   |   |   |   |   |
| Elimination of intercompany charges from             the Software segment to Brokerage segment |                            | **(261,870**    | **)**                         |   |   | (554,611 | ) |   |   | **(572,706** | ) |   |   | (951,330 | ) |
| Totals                                                                                                                       |                            | **229,682**     |                          |   |   | 193,333 |   |   |   | **487,201** |   |   |   | 352,336 |   |
|                                                                                                                         |                            |                 |                          |   |   |  |   |   |   |  |   |   |   |   |   |
|       Net      revenues                                                                        | **$**                           | **7,529,701**   |                          |   | $ | 8,545,534 |   |   | $ | **14,927,906** |   |   | $ | 18,489,439 |   |
|                                                                                                                         |                            |            |                          |   |   |   |   |   |   |   |   |   |   |   |   |
| **Depreciation and amortization:**                                                                                           |                            |            |                          |   |   |   |   |   |   |   |   |   |   |   |   |
| Brokerage Services Segment                                                                                                   | **$**                           | **394,097**     |                          |   | $ | 385,903 |   |   | **$** | **784,105** |   |   | $ | 770,720 |   |
| Software Services Segment                                                                                                    |                            | **76,889**      |                          |   |   | 84,498 |   |   |   | **151,956** |   |   |   | 157,853 |   |
| Corporate and Unallocated                                                                                                    |                            | **98,001**      |                          |   |   | 97,967 |   |   |   | **196,194** |   |   |   | 197,358 |   |
| Totals                                                                                                                       | **$**                           | **568,987**     |                          |   | $ | 568,368 |   |   | **$** | **1,132,255** |   |   | $ | 1,125,931 |   |
|                                                                                                                         |                            |            |                          |   |   |   |   |   |   |   |   |   |   |   |   |
| **Income (loss) before      income taxes:**                                                                                  |                            |            |                          |   |   |   |   |   |   |   |   |   |   |   |   |
| Brokerage Services Segment                                                                                                   | **$**                           | **751,597**     |                          |   | $ | 773,420 |   |   | **$** | **1,078,639** |   |   | $ | 1,868,589 |   |
| Software Services Segment                                                                                                    |                            | **(103,654**    | **)**                         |   |   | 400,795 |   |   |   | **(180,708** | **)** |   |   | 97,354 |   |
| Corporate and Unallocated                                                                                                    |                            | **(998,329**    | **)**                         |   |   | (494,867 | ) |   |   | **(1,788,126** | **)** |   |   | (886,468 | ) |
| Totals                                                                                                                       | **$**                           | **(350,386**    | **)**                         |   | $ | 679,348 |   |   | **$** | **(890,195** | **)** |   | $ | 1,079,475 |   |
|                                                                                                                         |                            |            |                          |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                                                              |                            |            |                          |   |   |   |   |   |   | **June 30,** |   |   |   | December 31, |   |
| **Total Assets:**                                                                                                            |                            |            |                          |   |   |   |   |   |   | **2009** |   |   |   | 2008 |   |
| Brokerage Services Segment                                                                                                   | ****                            |            |                          |   |   |   |   |   | **$** | **167,378,910** |   |   | $ | 181,868,725 |   |
| Software Services Segment                                                                                                    |                            |            |                          |   |   |   |   |   |   | **776,498** |   |   |   | 733,125 |   |
| Corporate and Unallocated                                                                                                    |                            |            |                          |   |   |   |   |   |   | **6,762,841** |   |   |   | 4,345,678 |   |
| Total assets                                                                                                                 | ****                            |            |                          |   |   |   |   |   | **$** | **174,918,249** |   |   | $ | 186,947,528 |   |
|                                                                                                                         |                            |            |                          |   |   |   |   |   |   |   |   |   |   |   |   |

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|                        |
|-----------------------------|
|                             |   |   |   |   | Net capital requirement |   | Excess net capital |
|                             |   | Net Capital |   |   |   | FINRA |   |   |   | CFTC |   |   |   | FINRA |   |   |   | CFTC |   |
| Terra Nova Financial, LLC   | $ | 12,198,687 |   |   | $ | 1,500,000 |   |   | $ | 500,000 |   |   | $ | 10,698,687 |   |   | $ | 11,698,687 |   |
| Market Wise Securities, LLC | $ | 29,598 |   |   | $ | 5,000 |   |   | $ | - |   |   | $ | 24,598 |   |   | $ | - |   |
|                        |

|   |                                          |   |
|--------|-----------------------------------------------|--------|
|   | Employee      Stock Option and Warrant Plans  |   | Authorized |   |   |   | Outstanding |   |   |   | Available |   |   |
|   | 2005 Long-Term Incentive      Plan ("LTIP")   |   | 4,341,767 |   |   |   | 533,024 |   |   |   | 3,808,743 |   |   |
|   | 2006 Warrant      Incentive Plan ("2006 WIP") |   | 3,500,000 |   |   |   | 3,027,500 |   |   |   | 472,500 |   |   |
|   | Balance at June 30, 2009                      |   | 7,841,767 |   |   |   | 3,560,524 |   |   |   | 4,281,243 |   |   |
|   |                                          |   |

|   |                                 |   |
|--------|--------------------------------------|--------|
|   | Employee      Stock Options          |   | Employee         Stock Options        Outstanding |   | Weighted         Average         Exercise Price |   | Weighted         Average         Remaining         Contract Term        (in years) |   |   | Aggregate         Intrinsic Value |   |   |
|   | Balance at December 31, 2008         |   |   | 589,274 |   |   | $ | 1.71 |   |   |   | 3.7 |   |   | $ | - |   |   |
|   | Granted                              |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |
|   | Exercised                            |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |
|   | Cancelled                            |   |   | (56,250 | ) |   |   | 1.65 |   |   |   | - |   |   |   | - |   |   |
|   | Balance at June 30, 2009             |   |   | 533,024 |   |   | $ | 1.71 |   |   |   | 3.2 |   |   | $ | - |   |   |
|   | Options exercisable at June 30, 2009 |   |   | 235,512 |   |   | $ | 1.84 |   |   |   | 3.0 |   |   | $ | - |   |   |
|   |                                 |   |

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|   |                                  |   |
|--------|---------------------------------------|--------|
|   | Employee      Warrants                |   | Employee        Warrants        Outstanding |   | Weighted         Average         Exercise Price |   | Weighted         Average         Remaining         Contract Term         (in years) |   |   | Aggregate         Intrinsic Value |   |   |
|   | Balance at December 31, 2008          |   |   | 3,027,500 |   |   | $ | 2.56 |   |   |   | 2.6 |   |   | $ | - |   |   |
|   | Granted                               |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |
|   | Exercised                             |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |
|   | Cancelled                             |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |
|   | Balance at June 30, 2009              |   |   | 3,027,500 |   |   | $ | 2.56 |   |   |   | 2.1 |   |   | $ | - |   |   |
|   | Warrants exercisable at June 30, 2009 |   |   | 1,801,250 |   |   | $ | 2.60 |   |   |   | 2.0 |   |   | $ | - |   |   |
|   |                                  |   |

|                                      |
|-------------------------------------------|
|                                           |   |   |   | June 30, 2009 |   | December 31, 2008 |
|                                      |   | Estimated         Useful         Life in Years |   | Property and        equipment |   | Capitalized         software         development        costs |   | Property and         equipment |   | Capitalized         software         development        costs |
| Computer and software                     |   | 3-5 |   | $ | 645,131 |   |   | $ | 2,897,485 |   |   | $ | 668,531 |   |   | $ | 2,780,628 |   |
| Furniture, fixtures and equipment         |   | 3-7 |   |   | 1,184,351 |   |   |   | - |   |   |   | 1,185,672 |   |   |   | - |   |
| Leasehold improvements                    |   | 5-10 |   |   | 119,590 |   |   |   | - |   |   |   | 119,590 |   |   |   | - |   |
|                                      |   |   |   |   | 1,949,072 |   |   |   | 2,897,485 |   |   |   | 1,973,793 |   |   |   | 2,780,628 |   |
|                                      |   |   |   |   |  |   |   |   |  |   |   |   |  |   |   |   |  |   |
| Accumulated depreciation and amortization |   |   |   |   | (695,081 | ) |   |   | (984,432 | ) |   |   | (752,727 | ) |   |   | (720,613 | ) |
| Net balance                               |   |   |   | $ | 1,253,991 |   |   | $ | 1,913,053 |   |   | $ | 1,221,066 |   |   | $ | 2,060,015 |   |
|                                      |

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|   |                                                      |          |
|--------|-----------------------------------------------------------|---------------|
|   | Financial instruments owned, at fair      value:          | June 30, 2009 |   |
|   | Money market funds      held in cash and cash equivalents | $             | 8,874,187 |   |   |
|   | U.S. Treasury securities held as clearing      deposits   |          | 5,198,370 |   |   |
|   | Total                                                     | $             | 14,072,557 |   |   |
|   |                                                      |          |

|                                                      |
|-----------------------------------------------------------|
|                                                           |   | Quoted Prices in        Active Markets         for Identical        Assets |   | Significant         Other Observable        Inputs |   | Significant         Unobservable         Inputs |   |   |   |   |
| Financial      instruments owned, at fair value:          |   |   | Level 1 |   |   |   | Level 2 |   |   |   | Level 3 |   |   |   | Total |   |
| Money market funds held in      cash and cash equivalents |   | $ | 8,874,187 |   |   | $ | - |   |   | $ | - |   |   | $ | 8,874,187 |   |
| U.S. Treasury securities held as clearing deposits        |   |   | 5,198,370 |   |   |   | - |   |   |   | - |   |   |   | 5,198,370 |   |
| Total                                                     |   | $ | 14,072,557 |   |   | $ | - |   |   | $ | - |   |   | $ | 14,072,557 |   |
|                                                      |

|   |                                     |   |
|--------|------------------------------------------|--------|
|   |                                          |   | June 30, 2009 |   | December 31, 2008 |   |
|   |                                          |   |   | Receivables |   |   |   | Payables |   |   |   | Receivables |   |   |   | Payables |   |   |
|   | Securities borrowed/loaned               |   | $ | 10,723,275 |   |   | $ | - |   |   | $ | 4,332,350 |   |   | $ | - |   |   |
|   | Clearing deposits & receivables/payables |   |   | 7,888,019 |   |   |   | 811,995 |   |   |   | 9,236,109 |   |   |   | 913,621 |   |   |
|   | Total                                    |   | $ | 18,611,294 |   |   | $ | 811,995 |   |   | $ | 13,568,459 |   |   | $ | 913,621 |   |   |
|   |                                     |   |

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| • | Attract sophisticated traders by providing      access to algorithmic trading, "black box" and non-click trading strategies;     |
|--------|----------------------------------------------------------------------------------------------------------------------------------|
| • | Attract international active trading clients      who are interested in the U.S. markets;                                        |
| • | Attract displaced institutional trading professionals      who may turn to independent trading or trade group participation; and |
| • | Capture new prime brokerage clients by attracting      underserved small to mid-sized hedge funds.                               |

| • | Enhance the Tradient platforms and application      program interface ("API");    |
|--------|-----------------------------------------------------------------------------------|
| • | Broaden the set of platforms from which to      choose;                           |
| • | Refine complex options strategy offerings across      all trading platforms;      |
| • | Accessibility to portfolio margining; and                                         |
| • | Ability to trade futures products on proprietary      Tradient trading platforms. |

| • | Enhance the lead pipeline through increased      web-based marketing and advertising programs targeted at highly active traders; |
|--------|----------------------------------------------------------------------------------------------------------------------------------|
| • | Increase the sales team personnel; and                                                                                           |
| • | Enable the sales team with improved tools and      support.                                                                      |

| • | Optimize order-flow costs;                                                                             |
|--------|--------------------------------------------------------------------------------------------------------|
| • | Continue to align costs of order routing with      third-party platforms; and                          |
| • | Continue to reduce cost structure by optimizing      a variety of management and IT systems processes. |

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|   |                                      |   | Three Months Ended June 30, |            | Six Months Ended June 30, |   |
|--------|-------------------------------------------|--------|-----------------------------|-----------------|---------------------------|--------|
|   |                                           |   |                        | **2009**        |                      |   | 2008 |   |   | **2009** |   |   | 2008 |   |
|   |                                      |   |                        | **(Unaudited)** |                      |   |   | (Unaudited) |   |   |   | **(Unaudited)** |   |   |   | (Unaudited) |   |   |
|   | Commissions and fees                      |   | **$**                       | **6,796,628**   |                      |   |   | 7,122,860 |   |   | **$** | **13,472,764** |   |   |   | 15,291,616 |   |   |
|   |                                      |   |                        | ****            |                      |   |   |  |   |   |   |  |   |   |   |  |   |   |
|   | Interest income                           |   |                        | **440,307**     |                      |   |   | 1,400,545 |   |   |   | **860,583** |   |   |   | 3,471,429 |   |   |
|   | Interest expense on brokerage accounts    |   |                        | **-**           |                      |   |   | 213,686 |   |   |   | **-** |   |   |   | 822,429 |   |   |
|   | Net interest income                       |   |                        | **440,307**     |                      |   |   | 1,186,859 |   |   |   | **860,583** |   |   |   | 2,649,000 |   |   |
|   |                                      |   |                        | ****            |                      |   |   |  |   |   |   |  |   |   |   |  |   |   |
|   | Software fees, net                        |   |                        | **229,682**     |                      |   |   | 193,333 |   |   |   | **487,201** |   |   |   | 352,336 |   |   |
|   | Other revenue                             |   |                        | **63,084**      |                      |   |   | 42,482 |   |   |   | **107,358** |   |   |   | 196,487 |   |   |
|   | Net revenues                              |   |                        | **7,529,701**   |                      |   |   | 8,545,534 |   |   |   | **14,927,906** |   |   |   | 18,489,439 |   |   |
|   |                                      |   |                        | ****            |                      |   |   |  |   |   |   |  |   |   |   |  |   |   |
|   | Commissions and clearing                  |   |                        | **2,387,600**   |                      |   |   | 2,863,605 |   |   |   | **5,088,258** |   |   |   | 5,779,003 |   |   |
|   | Compensation and benefits                 |   |                        | **2,140,300**   |                      |   |   | 2,015,573 |   |   |   | **4,400,677** |   |   |   | 4,809,325 |   |   |
|   | Software and market data                  |   |                        | **860,240**     |                      |   |   | 1,599,970 |   |   |   | **1,753,641** |   |   |   | 3,250,110 |   |   |
|   | Advertising and promotional               |   |                        | **207,111**     |                      |   |   | 148,196 |   |   |   | **294,340** |   |   |   | 255,185 |   |   |
|   | Professional fees                         |   |                        | **692,314**     |                      |   |   | 515,080 |   |   |   | **1,379,235** |   |   |   | 1,311,931 |   |   |
|   | Communications and information technology |   |                        | **227,275**     |                      |   |   | 191,523 |   |   |   | **466,465** |   |   |   | 448,094 |   |   |
|   | Depreciation and amortization             |   |                        | **568,987**     |                      |   |   | 568,368 |   |   |   | **1,132,255** |   |   |   | 1,125,931 |   |   |
|   | Other general and administrative expenses |   |                        | **796,260**     |                      |   |   | (36,129 | ) |   |   | **1,303,230** |   |   |   | 430,385 |   |   |
|   | Total expenses                            |   |                        | **7,880,087**   |                      |   |   | 7,866,186 |   |   |   | **15,818,101** |   |   |   | 17,409,964 |   |   |
|   |                                      |   |                        | ****            |                      |   |   |  |   |   |   |  |   |   |   |  |   |   |
|   | Income (loss) before income      taxes    |   |                        | **(350,386**    | **)**                     |   |   | 679,348 |   |   |   | **(890,195** | **)** |   |   | 1,079,475 |   |   |
|   |                                      |   |                        | ****            |                      |   |   |  |   |   |   |  |   |   |   |  |   |   |
|   | Income tax benefit (provision)            |   |                        | **135,000**     |                      |   |   | (280,118 | ) |   |   | **345,000** |   |   |   | (508,118 | ) |   |
|   |                                      |   |                        | ****            |                      |   |   |  |   |   |   |  |   |   |   |  |   |   |
|   | Net income (loss)                         |   | **$**                       | **(215,386**    | **)**                     |   | $ | 399,230 |   |   | **$** | **(545,195** | **)** |   | $ | 571,357 |   |   |
|   |                                      |   |                        |            |                      |   |   |   |   |   |   |   |   |   |   |   |   |   |

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| • | Net loss for the six months ended June 30,      2009 of $545,195 includes the following non-cash expenses among other non-cash      items: |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------|

|   | ° | Depreciation expense on property      and equipment of $183,361 |
|--------|--------|-----------------------------------------------------------------|
|   | ° | Amortization expense on capitalized      software of $263,819   |
|   | ° | Amortization expense on intangible      assets of $685,075      |
|   | ° | Share-based compensation of $56,515                             |

| • | Overall trading activity based on tickets was      down 24% and reflects a 36% decrease in the number of tickets executed on      third-party software trading platforms and a 19% decline in the tickets      executed on the Tradient platform during the six months ended June 30, 2009      compared to the same period in 2008.                                                                                                                                                                                              |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | Higher net software fees of $135,000 from Tradient      platform subscriptions for the six months ended June 30, 2009 versus the      same period last year. The number of Tradient platforms users declined from      2,665 as of June 30, 2008 to 2,109 as of June 30, 2009. The net increase      was primarily due to fewer users qualifying for the rebate for the six months      ended June 30, 2009 compared to the same period last year. The rebate is      based on users achieving certain trading levels each month. |
| • | Posted average revenue per employee of approximately      $85,600 based on eighty-eight full-time employees for the three months ended      June 30, 2009 compared to $97,100 based on eighty-eight full-time employees      for the same period in 2008. Revenue per employee was down for the six months      ended June 30, 2009 compared to the same period last year due to lower net      interest income and commission revenue.                                                                                           |

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|   |           |   |
|--------|----------------|--------|
|   | Quarter ending |        | Total number         of shares        purchased        in quarter |  | Total number         of shares         purchased as         part of         publicly         announced plan |  |  Average price         paid per share |  |  Approximate         dollar value        of shares         purchased         under the plan |   |
|   | June 2009      |   | 428,434 |   |   | 428,434 |   |   | $ | 0.63 |   |   | $ | 272,056 |   |   |
| ****   |           |   |

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|   |                |             |
|--------|---------------------|------------------|
|   |                | **For Election** |   | **Withhold** |   | **Abstain /         Broker Non-Votes** |   |
|   |                | **Number**       |  | **Percentage** |  | **Number** |  | **Percentage** |   | **Number** |   |
|   | Gayle C. Tinsley    | 18,487,045       |   | 99.07% |   | 174,191 |   | 0.93% |   | - |   |
|   | Stephen B. Watson   | 18,464,338       |   | 98.99% |   | 187,898 |   | 1.01% |   | - |   |
|   | Bernay Box          | 18,531,672       |   | 99.35% |   | 120,564 |   | 0.65% |   | - |   |
|   | Charles B. Brewer   | 18,531,672       |   | 99.35% |   | 120,564 |   | 0.65% |   | - |   |
|   | Michael G. Nolan    | 18,594,422       |   | 99.69% |   | 57,814 |   | 0.31% |   | - |   |
|   | Russell N. Crawford | 18,464,338       |   | 98.99% |   | 187,898 |   | 1.01% |   | - |   |
|   |                |             |

|   | **For**    |        | **Against** |        | **Abstain /         Broker         Non-Votes** |        | **Total**  |   |
|--------|------------|--------|-------------|--------|------------------------------------------------|--------|------------|--------|
|   | 18,649,279 |   | 704         |   | 2,253                                          |   | 18,652,236 |   |
|   | 99.99%     |   | 0.00%       |   | 0.01%                                          |   | 100%       |   |

| Exhibit No.       | Description                                                                                                                                                                                                                       |
|-------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| Exhibit      31.1 | Certification      of Chief Executive Officer Pursuant to Rule 13a-14(a) or Rule 15d-14(a)                                                                                                                                        |
| Exhibit      31.2 | Certification      of Chief Financial Officer Pursuant to Rule 13a-14(a) or Rule 15d-14(a)                                                                                                                                        |
| Exhibit      32.1 | Certification      of Chief Executive Officer and Chief Financial Officer Pursuant to Rule      13a-14(b) or Rule 15d-14(b) and 18 U.S.C. Section 1350, as Adopted Pursuant      to Section 906 of the Sarbanes-Oxley Act of 2002 |
|              |                                                                                                                                                                                                                              |

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|   |                  | Terra Nova Financial Group, Inc.       (Registrant)                                                                       |
|--------|-----------------------|---------------------------------------------------------------------------------------------------------------------------|
|   |                  |                                                                                                                      |
|   | Date: August 13, 2009 | /s/ Michael G. Nolan                                                                                                      |
|   |                  | Michael G. Nolan                                                                                                          |
|   |                  | President and Chief Executive Officer      (Principal Executive Officer)                                                  |
|   |                  |                                                                                                                      |
|   | Date: August 13, 2009 | /s/ Murrey Wanstrath                                                                                                      |
|   |                  | Murrey Wanstrath       Chief Financial Officer       (Principal Financial Officer and       Principal Accounting Officer) |
|   |                  |                                                                                                                      |
|   |                  |                                                                                                                      |
|   |                  |                                                                                                                      |

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