Tailwind Financial (TNF) 10-Q/A 2008 Q1 Quarterly report (amended)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q/A

(Amendment No. 1)

x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2007

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 001-33385

TAILWIND FINANCIAL INC.

(Exact Name of Registrant as Specified in its Charter)

Delaware
 (State or Other Jurisdiction of Incorporation or Organization) 13-4338095
(I.R.S. Employer Identification No.)

BCE Place, 181 Bay Street

Suite 2040

Toronto, Ontario, Canada M5J  2T3

(Address of Principal Executive Offices)

(416) 601-2422

(Registrant’s Telephone Number, Including Area Code)

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days:

Yes  x     No  o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non—accelerated filer. See definition of “accelerated filer and large accelerated filer” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer  o  Accelerated filer  o  Non-accelerated filer  x

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act):

Yes  x     No  o

State the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date: 13,376,838 shares issued and outstanding as of October 31, 2007.

TAILWIND FINANCIAL INC.

INDEX TO FORM 10-Q/A

PART I. FINANCIAL INFORMATION
Item 1.	Financial Statements	1
	Balance Sheets (unaudited) As of September 30, 2007	2
	Statements of Operations (unaudited) For the three month periods ended September 30, 2007 and September 30, 2006	3
	Statement of Stockholders’ Equity (unaudited) For the three month periods ended September 30, 2007 and September 30, 2006	4
	Statements of Cash Flows (unaudited) For the three month periods ended September 30, 2007 and September 30, 2006	5
	Notes To The Financial Statements	6
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	10
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	13
Item 4.	Controls and Procedures	13
PART II. OTHER INFORMATION		13
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	13
Item 6.	Exhibits	14

EXPLANATORY NOTE

This Form 10-Q/A amends our Form 10-Q for the period ended September 30, 2007, which was filed with the Securities and Exchange Commission on November 14, 2007 (the “Original Filing”). We are filing this Form 10-Q/A to correct the values for “Weighted average number of shares outstanding, basic and diluted” and the “Net income per share - basic and diluted” listed for the “Three months ended September 30, 2007” in the Statements of Operations.

In addition, in connection with the filing of this Form 10-Q/A and pursuant to Rules 13a-14(a) or 15d-14(a) under the Securities Exchange Act of 1934, we are including with this Form 10-Q/A certain currently dated certifications.

This Form 10-Q/A does not reflect events occurring after the Original Filing. Except for the foregoing amended information, this Form 10-Q/A continues to speak as of the date of the Original Filing and we have not otherwise updated disclosures contained therein or herein to reflect events that occurred at a later date. For the convenience of the reader, this Form 10-Q/A sets forth the Original Filing in its entirety as amended.

PART I.

FINANCIAL STATEMENTS

Tailwind Financial Inc.

(A Development Stage Company)

Index of Financial Statements

Unaudited Financial Statements
Balance Sheets as of September 30, 2007 and June 30, 2007	2
Statements of Operations for the three month periods ended
September 30, 2007 and September 30, 2006	3
Statements of Stockholders’ Equity for the three month periods ended
September 30, 2007 and September 30, 2006	4
Statements of Cash Flows for the three month periods ended
September 30, 2007 and September 30, 2006	5
Notes to Financial Statements for the three months ended
September 30, 2007	6

1

Tailwind Financial Inc.

(A Development Stage Company)

BALANCE SHEETS

	September 30, 2007		June 30, 2007
	(unaudited)
ASSETS
Current assets:
Cash	$	116,330	$	129,799
Cash and cash equivalents held in Trust (Note 1)	101,915,479		100,900,143
Prepaid insurance	66,673		83,338
Total Current Assets	$	102,098,482	$	101,113,280
Fixed assets	5,399		—
Total Assets	$	102,103,880	$	101,113,280
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Deferred underwriting fee (Note 4)	$	3,000,000	$	3,000,000
Accounts payable, accrued expenses and offering costs	353,273		271,852
Income taxes payable	617,000		271,000
Total current liabilities	$	3,970,273	$	3,542,852
Common stock subject to possible conversion (3,748,750 shares at conversion value) (Note 1)	30,345,402		30,147,534
Commitments (Note 4)
Stockholders’ Equity (Notes 1 and 3):
Preferred stock, par value $.01 per share, 5,000,000 shares authorized, 0 shares issued
Common stock, par value $.01 per share, 70,000,000 shares authorized, 11,876,250 shares issued and outstanding (excluding 3,748,750 shares subject to possible conversion)	12,298		12,298
Additional paid-in capital	66,590,839		66,885,309
Retained earnings accumulated in the development stage	1,185,069		525,287
Total stockholders’ equity	67,788,206		67,422,894
Total liabilities and stockholders’ equity	$	102,103,880	$	101,113,280

See notes to unaudited financial statements.

2

Tailwind Financial Inc.

(A Development Stage Company)

STATEMENTS OF OPERATIONS

	Three months ended September 30, 2007		Three months ended September 30, 2006			For the period from June 30, 2006 (Inception) to September 30, 2007
	(unaudited)		(unaudited)			(unaudited)
Interest income	$	1,115,336	—			$	2,115,479
Formation, general and administrative expenses (Notes 4 and 5)	109,554		1,000			313,410
Net income (loss) before income taxes	1,005,782		(1,000		)	1,802,069
Income taxes (Note 5)	346,000					617,000
Net income (loss) for the period	$	659,782	$	(1,000	)	$	1,185,069
Accretion of Trust Account relating to common stock subject to possible conversion	197,868					355,402
Net income (loss) attributable to common stockholders	$	461,914	$	(1,000	)	$	829,667
Number of shares outstanding subject to possible conversion, basic and diluted	3,748,750		—
Net income per share subject to possible conversion, basic and diluted	$	0.05	—
Weighted average number of shares outstanding, basic and diluted	11,876,250		3,593,750
Net income per share – basic and diluted	$	0.04	$	0.00

See notes to unaudited financial statements.

3

Tailwind Financial Inc.

(A Development Stage Company)

STATEMENTS OF STOCKHOLDERS’ EQUITY

For the year ended June 30, 2006 (Inception) to September 30, 2007

	Common Stock					Additional						Retained  earnings  accumulated in the development
	Shares		Amount			Paid-in Capital			Treasury Stock			stage		Total
Balance at, June 30, 2006	—		$	—		$	—		$	—		$	—	$	—
Issuance of Common Stock to initial stockholder	3,593,750		3,594			27,656			—			—		31,250
Proceeds from sale of underwriter’s purchase option	—		—			100			—			—		100
Proceeds from issuance of warrants	—		—			4,700,000			—			—		4,700,000
Sale of 12,500,000 units through public offering net of underwriter’s discount and offering expenses and net of $29,990,000 of proceeds allocable to 3,748,750 shares of common stock subject to possible conversion	8,751,250		8,751			62,315,040			—			—		62,323,791
Forfeiture of common stock issued to initial stockholder						3,520,312			(3,520,312		)	—		—
Cancellation of common stock received from initial stockholder	(468,750	)	(47		)	(3,520,265		)	3,520,312			—		—
Net income for the year	—		—			—			—			525,287		525,287
Accretion of Trust Account relating to common stock subject to possible conversion	—		—			(157,534		)	—			—		(157,534		)
Balance at June 30, 2007	11,876,250		12,298			66,885,309			—			525,287		67,422,894
Net income for the period (unaudited)												659,782		659,782
Additional cost of initial public offering (unaudited)						(96,602		)						(96,602		)
Accretion of Trust Account relating to common stock subject to possible conversion (unaudited)						(197,868		)						(197,868		)
Balance at September 30, 2007 (unaudited)	11,876,250		$	12,298		$	66,590,839		$	—		$	1,185,069	$	67,788,206

See notes to unaudited financial statements.

4

Tailwind Financial Inc.

(A Development Stage Company)

STATEMENTS OF CASH FLOWS

	Three months ended September 30, 2007			Three months ended September 30, 2006			For the period from June 30, 2006  (Inception) to September 30, 2007
	(unaudited)			(unaudited)			(unaudited)
OPERATING ACTIVITIES
Net income (loss) for the period	$	659,782		$	(1,000	)	$	1,185,069
Adjustments to reconcile net income to net cash provided by operating activities:
Prepaid insurance	16,665			—			(66,673		)
Accounts payable and accrued expenses	81,421			—			253,273
Income taxes payable	346,000			—			617,000
Net cash provided by operating activities	$	1,103,868		$	(1,000	)	$	1,988,669
INVESTING ACTIVITIES
Cash contributed to Trust Account	—			—			$	(100,000,000	)
Interest reinvested in Trust Fund	(1,015,336		)	—			(1,915,479		)
Purchase of fixed assets	(5,399		)	—			(5,399		)
Net cash used in investing activities	$	(1,020,735	)	—			$	(101,920,878	)
FINANCING ACTIVITIES
Proceeds from issuance of common stock to initial stockholder	—			$	31,250		$	31,250
Proceeds from notes payable to initial stockholder	—			68,750			368,750
Deferred offering costs	—			(54,496		)	—
Repayment of notes payable to initial stockholder	—			—			(368,750		)
Proceeds from issuance of insider warrants	—			—			4,700,000
Proceeds from purchase of underwriter’s purchase options	—			—			100
Portion of net proceeds from sale of units through public offering allocable to shares of common stock subject to possible conversion	—			—			29,990,000
Net proceeds from sale of units through public offering allocable to:
Stockholders’ equity	—			—			62,423,791
Deferred underwriting fees	—			—			3,000,000
Additional cost of initial public offering	(96,602		)	—			(96,602		)
Net cash provided by (used in) financing activities	$	(96,602	)	$	45,504		$	100,048,539
Net increase (decrease) in cash	$	(13,469	)	$	44,504		$	116,330
Cash
Beginning of period	129,799			—			—
End of period	$	116,330		$	44,504		$	116,330
Supplemental disclosure of non-cash financing activity:
Fair value of underwriter’s purchase option included in offering costs	—						$	1,108,000
Accretion of Trust Account relating to common stock subject to possible conversion	$	197,868					$	355,402
Cash paid for income taxes	—			—			—

See notes to unaudited financial statements.

5

TAILWIND FINANCIAL INC.

(A Development Stage Company)

NOTES TO UNAUDITED FINANCIAL STATEMENTS

For the period from July 1, 2007 to September 30, 2007

NOTE 1—ORGANIZATION AND BUSINESS OPERATIONS

Tailwind Financial Inc. (the “Company”), was incorporated in Delaware on June 30, 2006 as a blank check development stage company whose objective is to acquire, through a purchase, asset acquisition, or other business combination (each a “Business Combination”) one or more operating businesses in the financial services industry.

As of September 30, 2007, the Company had not commenced any operations. All activity through September 30, 2007 relates to the Company’s formation, public offering described below (the “Offering”), as well as activities relating to identification of a suitable business combination candidate. The Company has selected June 30 as its fiscal year end.

The Company consummated the Offering on April 17, 2007. The Company’s management has broad discretion with respect to the specific application of the net proceeds of this Offering, although substantially all of the net proceeds of this Offering are intended to be generally applied toward consummating a Business Combination. Furthermore, there is no assurance that the Company will be able to successfully consummate a Business Combination. Upon the closing of the Offering, 100% of the proceeds were deposited in a trust account (“Trust Account”) and invested only in “government securities” or in money market funds meeting certain conditions under Rule 2a-7 promulgated under the Investment Company Act of 1940 until the earlier of (i) the consummation of a first Business Combination or (ii) dissolution and liquidation of the Company. The Company, after signing a definitive agreement for the acquisition of a target business, will submit such transaction for stockholder approval. In the event that stockholders owning 30% or more of the shares sold in the Offering vote against the Business Combination and exercise their conversion rights described below, the Business Combination will not be consummated. All of the Company’s stockholders prior to the Offering, including all of the officers and directors of the Company (“Initial Stockholders”), have agreed to vote their founding shares of common stock in accordance with the vote of the majority in interest of all other stockholders of the Company (“Public Stockholders”) with respect to any Business Combination. After consummation of a Business Combination, these voting safeguards will no longer be applicable.

With respect to a Business Combination which is approved and consummated, any Public Stockholder who voted against the Business Combination may demand that the Company convert his or her shares. The per share conversion price will equal the amount in the Trust Account, calculated as of two business days prior to the consummation of the proposed Business Combination, divided by the number of shares of common stock held by Public Stockholders at the consummation of the Offering. Accordingly, Public Stockholders holding 29.99% of the aggregate number of shares owned by all Public Stockholders may seek conversion of their shares in the event of a Business Combination. Such Public Stockholders are entitled to receive their per share interest in the Trust Account computed without regard to the shares held by the Initial Stockholders. An amount of $29,990,000 (plus accretion of $355,402) has been classified as common stock subject to possible conversion in the balance sheet as at September 30, 2007.

On March 14, 2007, the Company’s amended and restated certificate of incorporation was filed which provides for the Company’s common stock to have a par value of $0.001 per share (as retroactively reflected in the financial statements). On April 12, 2007, the Company amended and restated its certificate of incorporation to provide for mandatory dissolution of the Company and subsequent liquidation of the funds held in the Trust Account in the event that the Company does not consummate a Business Combination or execute a letter of intent, agreement in principal or definitive agreement for a Business Combination within 18 months from the date of the consummation of the Offering (October 17, 2008). It also provides that 24 months from consummation of the Offering the Company’s corporate existence will cease (April 17, 2009). On March 14, 2007, the Company’s Board of Directors declared a 1 for 1.15 stock split in the form of a stock dividend (as retroactively reflected in the financial statements). In the event of dissolution and liquidation, it is likely that the per share value of the residual assets remaining available for distribution (including Trust Account assets) will be less than the initial public offering price per share in the Offering (assuming no value is attributed to the Warrants contained in the Units to be offered in the Offering discussed in Note 3). The amended and restated certificate of incorporation authorizes 5,000,000 shares of preferred stock and 70,000,000 shares of common stock.

As indicated in the accompanying financial statements, at September 30, 2007, the Company has no operations other than interest income on funds held in the Trust Account. Further, the Company has incurred and expects to continue to incur

6

significant costs in pursuit of its financing and acquisition plans. There is no assurance that the Company’s plans to consummate a Business Combination will be successful or successful within the target business acquisition period.

NOTE 2—SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

The financial statements include the accounts of the Company. All activity through September 30, 2007 is related to the Company’s formation and preparation for the Offering as well as activities relating to identification of a suitable business combination candidate. The Company has selected June 30 as its fiscal year end.

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingencies at the date of the financial statements and the reported amounts of expenses during the reporting period. Actual amounts could differ from those estimates.

Cash and Cash Equivalents

The Company considers all highly liquid investments with original maturities of three months or less to be cash equivalents.

Fixed Assets

Fixed assets, consisting of computer equipment at a cost or $5,399, were not in service as at September 30, 2007

Concentration of Credit Risk

Financial instruments that potentially subject the Company to credit risk consist of cash and cash equivalents. The Company’s policy is to limit the amount of credit exposure to any one financial institution and place investments with financial institutions evaluated as being creditworthy, or in short-term money market funds which are exposed to minimal interest rate and credit risk.

Income Taxes

The Company recognizes deferred tax assets and liabilities for the expected future tax consequences of events that have been recognized in the Company’s financial statements or tax returns. Under this method, deferred tax assets and liabilities are determined based on the difference between the financial statement carrying amounts and the tax bases of assets and liabilities using enacted tax rates in effect in the years in which the differences are expected to reverse.

Earnings Per Common Share

Basic earnings per share is computed by dividing income available to common stockholders by the weighted average common shares outstanding for the period. Basic net income per share is calculated by dividing net income attributable to common stockholders by their weighted average number of common shares outstanding during the period. Calculation of the weighted average common shares outstanding during the period is based on 3,593,750 initial shares outstanding throughout the period from June 30, 2006 (inception) to June 30, 2007, 468,750 initial shares cancelled by the Company on May 17, 2007 (retroactively restated to June 30, 2006) and 8,751,250 common shares outstanding after the completion of the Offering on April 17, 2007. Basic net income per share subject to possible conversion is calculated by dividing accretion of Trust Account relating to common stock subject to possible conversion by 3,748,750 common shares subject to possible conversion. Diluted earnings per share reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock or resulted in the issuance of common stock that then shared in the earnings of the entity. Since the effect of outstanding warrants to purchase common stock and outstanding Unit Purchase Option are antidilutive, they have been excluded from the Company’s computation of net income per share.

7

Recently Issued Accounting Standards

In July 2006, the Financial Accounting Standards Board (“FASB”) issued Interpretation No. 48 (“FIN 48”), “Accounting for Uncertainty in Income taxes, and Interpretation of FASB Statement No. 10.”  FIN 48 clarifies the accounting for uncertainty in income taxes recognized in a company’s financial statements and prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in an income tax return. FIN 48 also provides guidance in derecognition, classification, interest and penalties, accounting in interim periods, disclosures and transition. FIN 48 was effective for the fiscal years beginning after December 15, 2006. The adoption of FIN 48 did not have a material impact on the Company’s financial statements.

In September 2006, the FASB issued Statement No. 157, Fair Value Measurements (“SFAS No. 157”), which defines fair value, establishes a framework for measuring fair value under GAAP, and expands disclosures about fair value measurements. SFA No. 157 applies to other accounting pronouncements that require or permit fair value estimates. The new guidance is effective for financial statements issued for fiscal years beginning after November 15, 2007, and for interim periods within those fiscal years. The Company will evaluate the potential impact, if any, of the adoption of SFAS No. 157 on its financial position and results of operations.

In February 2007, the FASB issued SFAS No. 159, “the Fair Value Option for Financial Assets and Financial Liabilities – including an amendment of FASB No. 115 (“SFAS No. 159”). SFAS No. 159 permits entities to elect to measure many financial instruments and certain other items at fair value.

Upon adoption of SFAS No. 159, an entity may elect the fair value option for eligible items that exist at the adoption date. Subsequent to the initial adoption, the election of the fair value option should only be made at initial recognition of the asset or liability or on a remeasurement event that fives rise to new-basis accounting. SFAS No. 159 does not effect any existing accounting literature that requires certain assets and liabilities to be carried at fair value nor does it eliminate disclosure requirements included in other accounting standards. SFAS No. 159 is effective for fiscal years beginning after November 15, 2007 and may be adopted earlier but only if the adoption is in the first quarter of the fiscal year. The Company is evaluating whether it will adopt the provisions of SFAS No. 159.

The Company does not believe that any other recently issued, but not yet effective, accounting standards if currently adopted would have a material effect on the accompanying financial statements.

NOTE 3—PUBLIC OFFERING

In the Offering, the Company sold to the public 12,500,000 units (“Units”) at a price of $8.00 per Unit. Proceeds from the Offering totaled approximately $95,300,000, which was net of approximately $4,700,000 in underwriting fees and other expenses paid at closing or previously. The Company also sold in a private placement immediately prior to the Offering 4,700,000 warrants for proceeds of $4,700,000.

Each Unit consists of one share of the Company’s common stock, $0.001 par value, and one Callable Common Stock Purchase Warrant (“Warrant”). Each Warrant entitles the holder to purchase from the Company one share of common stock at an exercise price of $6.00 commencing the later of the consummation of a Business Combination with a target business or April 11, 2008 and expiring April 11, 2011. The Warrants are callable at a price of $.01 per Warrant upon 30 days’ notice after the Warrants become exercisable, only in the event that the last sale price of the common stock is at least $11.50 per share for any 20 trading days within a 30 trading day period ending on the third day prior to the date on which notice of the call is given. The Company may not call the warrants unless the warrants and the shares of common stock underlying the warrants are covered by an effective registration statement from the beginning of the measurement period through the date fixed for the call.

The Company sold the Units issued in the Offering to Deutsche Bank Securities Inc. at a price per share equal to $7.44 (a discount of $0.56 per share), resulting in an aggregate underwriting discount to Deutsche Bank Securities Inc. of $7,000,000. The Company also sold to Deutsche Bank Securities Inc., for $100, an option to purchase up to a total of 625,000 units. The Company accounted for the fair value of the option as an expense of the public offering resulting in a charge to stockholders equity with an equivalent increase in additional paid-in capital. The Company has determined, based upon a Black-Scholes model, that the fair value of the option on the date of sale was approximately $1.1 million using an expected life of four years, volatility of 27.96% and a risk-free interest rate of 4.65%. The expected volatility of approximately 27.96%

8

was estimated by management based on an evaluation of the historical volatilities of public entities in the financial services industry.

The units issuable upon exercise of the above noted option are identical to those offered in the Offering except that the warrants included in the option have an exercise price of $7.20 per share (120% of the exercise price of the warrants included in the units sold in the Offering). This option is exercisable at $9.60 per unit, commencing on the later of the consummation of a business combination and April 11, 2008 and expiring April 11, 2011. The option and the 625,000 units, the 625,000 shares of common stock and the 625,000 warrants underlying such units, and the 625,000 shares of common stock underlying such warrants, have been deemed compensation by the NASD and are therefore subject to a 180-day lock-up pursuant to Rule 2710(g)(1) of the NASD Conduct Rules. Additionally, the option may not be sold, transferred, assigned, pledged or hypothecated for a one-year period (including the foregoing 180-day period) following the effective date of the registration statement except to any underwriter and selected dealer participating in the offering and their bona fide officers or partners. The purchase option and its underlying securities have been registered under the registration statement of which the Offering prospectus forms a part. The exercise price and number of units issuable upon exercise of the option may be adjusted in certain circumstances including in the event of a stock dividend, extraordinary dividend, our recapitalization, reorganization, merger or consolidation. However, the option will not be adjusted for issuances of common stock at a price below the exercise price of the warrants included in the option.

NOTE 4—COMMITMENT

The Company utilizes certain administrative, technology and secretarial services, as well as certain limited office space provided by an affiliate of one of the Initial Stockholders. Such affiliate has agreed that, until the acquisition of a target business by the Company, it will make such services available to the Company, as may be required by the Company from time to time. The Company has agreed to pay such affiliate $7,500 per month for such services commencing on the effective date of the Offering. Included in formation, general and administrative expenses for the three month period ended September 30, 2007 is $22,500 ($45,000 for the period from July 1, 2006 to September 30, 2007) related to such services.

In connection with the Offering, the Company entered into an underwriting agreement (the “Underwriting Agreement”) with the underwriters in the Offering. Pursuant to the Underwriting Agreement, the Company was obligated to the underwriter for certain fees and expenses related to the Offering, including underwriters discounts of $7,000,000. The Company paid $4,000,000 of the underwriting discount upon closing of the Offering. The Company and the underwriters have agreed that payment of the balance of the underwriting discount of $3,000,000 will be deferred until consummation of the Business Combination. Accordingly, a deferred underwriting fee comprised of the deferred portion of the underwriting discount is included in the accompanying balance sheet at September 30, 2007.

NOTE 5—INCOME TAXES

Provision for income taxes for the three month period ended September 30, 2007 consists of Current Federal tax of $346,000 ($617,000 for the period from July 1, 2006 to September 30, 2007).

The Company’s effective tax rate approximates the federal statutory rate. No provision for state and local income taxes has been made since the Company was formed as a vehicle to effect a Business Combination and, as a result does not conduct operations and is not engaged in a trade or business in any state. The Company is incorporated in Delaware and accordingly is subject to franchise taxes. Delaware franchise tax expense of $30,000 for the three month period ended September 30, 2007 ($65,000 for the period from July 1, 2006 to September 30, 2007), is included as part of general and administrative expenses in the accompanying statements of operations.

9

Item 2.  Management’s Discussion and Analysis of Financial Condition and Results of Operations

This Quarterly Report on Form 10-Q/A includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Such forward-looking statements include statements regarding, among others, (a) our expectations about possible business combinations, (b) our growth strategies, (c) our future financing plans, and (d) our anticipated needs for working capital. Forward-looking statements, which involve assumptions and describe our future plans, strategies, and expectations, are generally identifiable by use of the words “may,” “will,” “should,” “expect,” “anticipate,” “approximate,” “estimate,” “believe,” “intend,” “plan,” or “project,” or the negative of these words or other variations on these words or comparable terminology. This information may involve known and unknown risks, uncertainties, and other factors that may cause our actual results, performance, or achievements to be materially different from the future results, performance, or achievements expressed or implied by any forward-looking statements. These statements may be found in this prospectus. Actual events or results may differ materially from those discussed in forward-looking statements as a result of various factors, including, without limitation, the risks described in this 10-Q/A. In light of these risks and uncertainties, the events anticipated in the forward-looking statements may or may not occur.

Forward-looking statements are based on our current expectations and assumptions regarding our business, the economy and other future conditions. Because forward-looking statements relate to the future, by their nature, they are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict. Our actual results may differ materially from those contemplated by the forward-looking statements. We caution you therefore that you should not rely on any of these forward-looking statements as statements of historical fact or as guarantees or assurances of future performance. Important factors that could cause actual results to differ materially from those in the forward-looking statements include regional, national or global political, economic, business, competitive, market and regulatory conditions and the following:

•our status as a development stage company;

•our dissolution or liquidation prior to a business combination;

•the reduction of the proceeds held in the Trust Account due to third party claims;

•our selection of a prospective target business or asset;

•our issuance of our capital shares or incurrence of debt to consummate a business combination;

•our ability to consummate an attractive business combination due to our limited resources and the significant competition for business combination opportunities;

•our dependence on our key personnel;

•conflicts of interest of our officers, directors and existing investors;

•potential future affiliations of our officers and directors with competing businesses;

•our ability to obtain additional financing if necessary;

•the control by our private stockholders of a substantial interest in us;

•our common stock becoming subject to the SEC’s penny stock rules;

•the adverse effect the outstanding warrants and the unit purchase option may have on the market price of our common shares;

•the existence of registration rights with respect to the securities owned by our founding stockholders and the securities underlying the unit purchase option granted to Deutsch bank Securities Inc.;

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•our being deemed an investment company;

•the lack of a market for our securities;

•costs of complying with United States securities laws and regulations;

•market risks;

•risks of acquiring and operating a business outside the United States; and

•regulatory risks and operational risks.

These risks are not exhaustive.

Any forward-looking statement made by us speak only as of the date on which we make it, and is expressly qualified in its entirety by the foregoing cautionary statements. Factors or events that could cause our actual results to differ may emerge from time to time, and it is not possible for us to predict all of them. We undertake no obligation to publicly update any forward-looking statement, whether as a result of new information, future developments or otherwise.

We were formed on June 30, 2006 to consummate a merger, capital stock exchange, asset acquisition, exchangeable share transaction or other similar business combination with an operating business in the financial services industry. Our initial business combination must be with a business or businesses whose collective fair market value is at least equal to 80% of our net assets (excluding the amount held in the Trust Account representing a portion of the underwriters’ discount) at the time of the acquisition.

On April 17, 2007, we completed our initial public offering (“IPO”) of 12,500,000 Units. Each Unit consists of one share of our common stock, par value $0.001 per share, (the “Common Stock”) and one warrant entitling the holder to purchase one share of our Common Stock at a price of $6.00. The public offering price of each Unit was $8.00, and we generated gross proceeds of $100,000,000 in the IPO. Of the gross proceeds: (i) we deposited $95,300,000 into a trust account at JP Morgan Chase Bank, NA, maintained by American Stock Transfer & Trust Company, as trustee, which included $3,000,000 of contingent underwriting discount; (ii) the underwriters received $4,000,000 as underwriting discount (excluding the contingent underwriting discount); and (iii) we retained $600,000 for offering expenses, plus $100,000 for working capital. In addition, we deposited into the trust account $4,700,000 that we received from the issuance and sale of 4,700,000 warrants to Parkwood Holdings Ltd., an entity owned 37.5% by our Chairman, Gordon McMillan, 12.5% by our CEO, Andrew McKay and 50% by JovFunds Management Inc.

We intend to use substantially all of the funds held in the trust account, less the payment due the underwriter for the deferred underwriting discount, to acquire a target business. However, as long as we consummate a business combination with one or more target acquisitions with a fair market value equal to at least 80% of our net assets (excluding the amount held in the trust account representing the underwriters’ deferred discount), we may use the assets in the trust account for any purpose we may choose. To the extent that our capital stock or debt is used in whole or in part as consideration to consummate a business combination, the remaining proceeds held in the trust account will be used as working capital, including director and officer compensation, change-in-control payments or payments to affiliates, or to finance the operations of the target business, make other acquisitions and pursue our growth strategies.

We believe that the funds available to us outside of the trust account ($100,000) and up to $1,600,000 of the interest earned on the trust account that may be released to us will be sufficient to allow us to operate for at least the next 24 months, assuming that a business combination is not consummated during that time. Over this time period although we are not required to, we intend to use these funds to identify and evaluate prospective acquisition candidates, to perform business due diligence on prospective target businesses, to travel to and from offices, plants or similar locations of prospective target businesses, to select the target business to acquire and to structure, negotiate, and consummate the business combination.

We anticipate that we will incur approximately $700,000 of expenses for legal, accounting and other expenses attendant to the due diligence investigation, structuring and negotiating of a business combination, $180,000 for the administrative fee payable to Parkwood Holdings Ltd. or an affiliate of Parkwood Holdings Ltd. ($7,500 per month for

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24 months), $100,000 of expenses in legal and accounting fees relating to our SEC reporting obligations, $120,000 for general working capital that can be used for fairness opinions in connection with our acquisition plans, and approximately $355,000 for director and officer liability insurance premiums and other miscellaneous expenses, including trustee and escrow agent fees, and reserves. We do not believe that we will need to raise additional funds following this offering in order to meet the expenditures required for operating our business. However, we may need to raise additional funds through an offering of debt or equity securities if funds are required to consummate a business combination that is presented to us, although we have not entered into any such arrangements and have no current intention of doing so. Messrs. McMillan and McKay and JovFunds each have jointly and severally agreed to pay, on our behalf any expenses in excess of $1,700,000 that we may incur in connection with our pursuit of a business combination. Such amounts will be reimbursed upon consummation of our initial business combination.

As indicated in the accompanying financial statements, at September 30, 2007, we had $116,330 in cash and $101,915,479 in cash held in the trust account. Further, we have incurred and expect to continue to incur significant costs in pursuit of our financing and acquisition plans. We cannot assure you that our plan to consummate a business combination will be successful. These factors, among others, raise substantial doubt as to our ability to continue as a going concern.

For the three month period ended September 30, 2007, we had net income of $659,782, consisting of interest income of approximately $1.1 million less costs attributable to organization, formation and general and administrative expenses of $109,554 and net of a provision for income taxes of $346,000. Through September 30, 2007 we did not engage in any significant operations. Our entire activity from inception through September 30, 2007 was to prepare for our IPO and begin the identification of a suitable business combination candidate.

Our financial statements as of and for the period ending June 30, 2007 were audited, and we filed these audited financial statements included in a Current Report on Form 10-K dated September 25, 2007.

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Item 3.   Quantitative and Qualitative Disclosures About Market Risk

Market risk is the sensitivity of income to changes in interest rates, foreign exchanges, commodity prices, equity prices, and other market-driven rates or prices. We are not presently engaged in and, if a suitable business target is not identified by us prior to the prescribed liquidation date of the trust account, we may not engage in, any substantive commercial business. Accordingly, we are not and, until such time as we consummate a business combination, we will not be, exposed to risks associated with foreign exchange rates, commodity prices, equity prices or other market-driven rates or prices. The net proceeds of our initial public offering held in the trust account may be invested by the trustee only in United States “government securities” within the meaning of Section 2(a)(16) of the Investment Company Act of 1940 having a maturity of 180 days or less, or in money market funds meeting certain conditions under Rule 2a-7 promulgated under the Investment Company Act of 1940. Given our limited risk in our exposure to government securities and money market funds, we do not view the interest rate risk to be significant.

Item 4.   Controls and Procedures

As required by Rule 13a-15 under the Securities Exchange Act of 1934, as of September 30, 2007, the end of the quarter covered by this report, the Company carried out an evaluation under the supervision and with the participation of the Company’s management, including the Company’s Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of the Company’s disclosure controls and procedures. In designing and evaluating the Company’s disclosure controls and procedures, the Company and its management recognize that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives, and the Company’s management necessarily was required to apply its judgment in evaluating and implementing possible controls and procedures. Based upon that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that the Company’s disclosure controls and procedures were effective at the reasonable assurance level to ensure that information required to be disclosed by the Company in the reports it files or submits under the Exchange Act is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure, and is recorded, processed, summarized and reported, within the time periods specified in the Securities and Exchange Commission’s rules and forms.

There has not been any change in our internal control over financial reporting in connection with the evaluation required by Rule 13a-15(d) under the Exchange Act that occurred during the three month period ended September 30, 2007 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

PART II.

OTHER INFORMATION

Item 2.   Unregistered Sales of Equity Securities and Use of Proceeds.

Use of Proceeds

On April 17, 2007, we consummated our initial public offering of 12,500,000 Units. Each Unit consists of one share of our Common Stock and one warrant entitling the holder to purchase from us one share of our Common Stock at an exercise price of $6.00. The Units were sold at an offering price of $8.00 per unit, generating total gross proceeds of $93,000,000,000. Deutsche Bank Securities Inc. acted as representative of the underwriters. The securities sold in the offering were registered under the Securities Act of 1933 on a registration statement on Form S-1 (No. 333- 135790) that was declared effective on April 11, 2007.

Of the gross proceeds from the IPO: (i) we deposited $95,300,000 into a trust account at JP Morgan Chase Bank, NA, maintained by American Stock Transfer & Trust Company, as trustee, which amount included $3,000,000 of contingent underwriting discount; (ii) the underwriters received $4,000,000 as underwriting discount (excluding the contingent underwriting discount); and (iii) we used $782,811 for offering expenses.

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Item 6.   Exhibits.

Exhibit Number	Exhibit Description
31.1	Certification by Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2	Certification by Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1	Certification by Principal Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
32.2	Certification by Principal Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

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SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	TAILWIND FINANCIAL INC.
Date: November 15, 2007	By:	/s/ Andrew A. McKay
		Andrew A. McKay Chief Executive Officer

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