- Amended Quarterly Report (10-Q/A)

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-Q/A

x Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the quarterly period ended March 31, 2008 or

o Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Commission File Number: 000-52015

Western Capital Resources, Inc.

(Exact Name of Registrant as Specified in its Charter)

Minnesota		47-0848102
(State or Other Jurisdiction of Incorporation or Organization)		(I.R.S. Employer Identification Number)

11550 “I” Street, Suite 150, Omaha, Nebraska, 68137

(Address of Principal Executive Offices) (Zip Code)

Registrant’s telephone number, including area code: (402) 551-8888

2201 West Broadway, Suite 1, Council Bluffs, Iowa 51501

(Former name, former address and former fiscal year, if changed since last report)

Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the past 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 o No þ

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

Large accelerated filer o	Accelerated filer o

Non-accelerated filer o	Smaller reporting company þ

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

Yes o No þ

APPLICABLE ONLY TO CORPORATE ISSUERS

As of April 30, 2009, the registrant had outstanding 7,971,007 shares of common stock, no par value per share.

Western Capital Resources, Inc.

Index

		Page
Explanation of Our Restatement		2

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements		3

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations		17

Item 3. Quantitative and Qualitative Disclosures About Market Risk		23

Item 4T. Controls and Procedures		23

PART II. OTHER INFORMATION

Item 1. Legal Proceedings		23

Item 1A. Risk Factors		23

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds		23

Item 3. Defaults Upon Senior Securities		23

Item 4. Submission of Matters to a Vote of Security Holders		23

Item 5. Other Information		24

Item 6. Exhibits		25

SIGNATURES		25

EXPLANATION OF OUR RESTATEMENT

As previously reported on a Current Reports on Form 8-K filed with the SEC, we announced that the consolidated financial statements contained in our Annual Report on Form 10-K for the year ended December 31, 2007, and subsequent interim reports for the quarterly periods through September 30, 2008, required restatement in order to correct errors related to the following:

·	the allocation of purchase price to customer relationships as opposed to goodwill for historical acquisitions, and

·	an understatement of share-based compensation expense for fiscal 2007.

Additionally, we announced that the Company’s Board of Directors was conducting an internal review of the propriety and categorization of certain expense reimbursements and certain other transactions. This review has been completed. As a result of that review and the execution of a settlement agreement with the former CEO, the Company determined that $175,000 of cost originally reported as a reduction of proceeds from stock issued in the consolidated statements of shareholders’ equity should be reported as an expense in the consolidated statements of operations.

This Form 10-Q/A reflects the restatement of our previously issued consolidated financial statements contained in this amended report. These adjustments are fully discussed in Note 2 to the condensed consolidated financial statements contained in this amended report. Along with this amended report, we are filing our amended Form 10-K/A for the year ended December 31, 2007, our amended Quarterly Reports on Form 10-Q/A for the second and third quarters of fiscal 2008, and our Annual Report on Form 10-K for fiscal 2008.

In addition, we have updated our consolidated financial statements to classify the results of operations for National Cash & Credit, LLC and the business we acquired from STEN Corporation (“NCC” and “STEN”), both of which were sold on December 31, 2008, as discontinued operations in accordance with Statement of Financial Accounting Standards No. 144 “Accounting for the Impairment or Disposal of Long-Lived Assets.” See Note 2 to the condensed consolidated financial statements for further description.

The following items have been amended as a result of the restatement:

Part I	Item 1. Financial Statements

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

Part I	Item 4(T). Controls and Procedures

Because we have changed our corporate name since we originally filed our Quarterly Report on Form 10-Q for the period ended March 31, 2008, we have updated this amended report to reflect our current name. Other than as described above or elsewhere if indicated, no other information in our original Quarterly Report on Form 10-Q for the period ended March 31, 2008 has been amended hereby as a result of the restatement contained in this amended report. For updated information regarding the Company, please see our Annual Report on Form 10-K for the year ended December 31, 2008 which, as we indicate above, we are filing concurrently with this amended report.

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

WESTERN CAPITAL RESOURCES, INC. AND SUBSIDIARIES

CONTENTS

	Page(s)

CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Condensed Consolidated Balance Sheets	4

Condensed Consolidated Statements of Operations	5

Condensed Consolidated Statements of Cash Flows	6

Notes to Condensed Consolidated Financial Statements	7

WESTERN CAPITAL RESOURCES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS (Restated)

	March 31, 2008			December 31, 2007
	(Unaudited)
ASSETS

CURRENT ASSETS
Cash	$	3,835,973		$	984,625
Loans receivable (less allowance for losses of $966,000 and $976,000)		3,591,410			4,117,497
Stock subscriptions receivable		-			4,422,300
Prepaid expenses and other		418,018			92,333
Deferred income taxes		443,000			662,000
Assets used in discontinued operations		850,405			-
TOTAL CURRENT ASSETS		9,138,806			10,278,755

PROPERTY AND EQUIPMENT		662,044			631,736

GOODWILL		8,041,722			7,905,746

INTANGIBLE ASSETS		342,886			347,586

DEFERRED INCOME TAX		78,000			109,000

OTHER		-			167,000

ASSETS USED IN DISCONTINUED OPERATIONS		629,319			-

TOTAL ASSETS	$	18,892,777		$	19,439,823

LIABILITIES AND SHAREHOLDERS’ EQUITY

CURRENT LIABILITIES
Accounts payable and accrued liabilities	$	532,380		$	1,733,844
Accounts payable - related parties		535,000			1,125,935
Accrued dividend payable		525,000			-
Deferred revenue		218,410			262,357
Liabilities from discontinued operations		32,110			-
TOTAL CURRENT LIABILITIES		1,842,900			3,122,136


SHAREHOLDERS' EQUITY
Series A convertible preferred stock, 10% cumulative dividends, $0.01 par value, $2.10 stated value, 10,000,000 shares authorized, issued and outstanding		100,000			100,000
Common stock, no par value, 240,000,000 shares authorized, 8,889,644 and 6,299,753 shares issued and outstanding		-			-
Additional paid-in capital		19,786,937			18,434,318
Retained earnings (deficit)		(2,837,060	)		(2,216,631	)
TOTAL SHAREHOLDERS’ EQUITY		17,049,877			16,317,687

TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY	$	18,892,777		$	19,439,823

See notes to condensed consolidated financial statements.

WESTERN CAPITAL RESOURCES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Restated)

	Three months ended			Three months ended
	March 31, 2008 (Unaudited)			March 31, 2007 (Unaudited)
REVENUES
Loan fees	$	2,203,980		$	2,150,306
Check cashing fees		346,091			406,445
Guaranteed phone/Cricket fees		168,351			267,396
Other fees		61,969			47,526
		2,780,391			2,871,673

STORE EXPENSES
Salaries and benefits		734,689			683,971
Provisions for loan losses		341,270			273,482
Guaranteed phone/Cricket cost of sales		106,876			152,737
Occupancy		193,054			185,870
Advertising		85,526			126,289
Depreciation		26,955			34,688
Amortization of intangible assets		101,724			209,271
Other		332,465			290,319
		1,922,559			1,956,627

INCOME FROM STORES		857,832			915,046

GENERAL & ADMINISTRATIVE EXPENSES
Salaries and benefits		300,291			378,210
Depreciation		9,796			10,292
Other		670,616			96,630
		980,703			485,132

INCOME (LOSS) FROM CONTINUING OPERATIONS		(122,871	)		429,914

INCOME TAX EXPENSE (BENEFIT)		(30,100	)		161,000

NET INCOME (LOSS) BEFORE DISCONTINUED OPERATIONS		(92,771	)		268,914

LOSS FROM DISCONTINUED OPERATIONS		(2,658	)		-

NET INCOME (LOSS)		(95,429	)		268,914

SERIES A CONVERTIBLE PREFERRED STOCK DIVIDENDS (assumed for 2007)		(525,000	)		(525,000	)

NET LOSS AVAILABLE TO COMMON SHAREHOLDERS	$	(620,429	)	$	(256,086	)

NET LOSS PER COMMON SHARE-BASIC AND DILUTED
Continuing operations	$	(0.08	)	$	(0.23	)
Discontinued operations		0.00			0.00
Net income per common share	$	(0.08	)	$	(0.23	)

WEIGHTED AVERAGE COMMON SHARE OUTSTANDING -
Basic and diluted		8,150,208			1,125,000

See notes to condensed consolidated financial statements.

WESTERN CAPITAL RESOURCES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Restated)

Three Months Ended March 31,	2008			2007
	(Unaudited)			(Unaudited)
OPERATING ACTIVITIES
Net Income (Loss)	$	(95,429	)	$	268,914
Adjustments to reconcile net income (loss) to net cash provided (used) by operating activities:
Depreciation		42,409			44,980
Amortization		116,778			209,271
Deferred income taxes		236,000			(30,000	)
Loss on disposal of property and equipment		-			-
Changes in operating assets and liabilities
Loans receivable		721,390			638,694
Prepaid expenses and other assets		(192,907	)		43,968
Accounts payable and accrued liabilities		(1,856,236	)		33,656
Deferred revenue		(11,838	)		(26,122	)
Net cash provided (used) by operating activities		(1,039,833	)		1,183,361

INVESTING ACTIVITIES
Purchase of property and equipment		(42,060	)		(47,851	)
Acquisition of stores, net of cash acquired		(351,900	)		-
Net cash used by investing activities		(393,960	)		(47,851	)

FINANCING ACTIVITIES
Payments on notes payable		-			(530,000	)
Collection on sales of stock		4,437,050			-
Dividends		-			(405,395	)
Net cash provided (used) by financing activities		4,437,050			(935,395	)

NET INCREASE (DECREASE) IN CASH		3,003,257			200,115

CASH
Beginning of period		984,625			1,265,460
End of period		3,987,882			1,465,575
Less: Cash of discounted operations		(151,909	)		-
End of period, continuing operations	$	3,835,973		$	1,465,575

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION

Income taxes paid	$	-		$	191,000

Noncash investing and financing activities:
Dividend accrued	$	525,000		$	-
Stock issued for store acquisition		1,337,869			-

See notes to condensed consolidated financial statements.

WESTERN CAPITAL RESOURCES, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

1.	Nature of Business and Summary of Significant Accounting Policies –

Basis of Presentation

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with United States of America generally accepted accounting principles (GAAP) for interim financial information and with the instructions to Form 10-Q and Section 210.8-03(b) of Regulation S-X. Accordingly, the condensed consolidated financial statements do not include all of the information and footnotes required for complete financial statements.

In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the three month period ended March 31, 2008 is not necessarily indicative of the results that may be expected for the year ended December 31, 2008. For further information, refer to the Consolidated Financial Statements and footnotes thereto included in our Form 10-K/A as of and for the year ended December 31, 2007. The condensed consolidated balance sheet at December 31, 2007, has been derived from the audited consolidated financial statements at that date, but does not include all of the information and footnotes required by GAAP.

Nature of Business

Western Capital Resources, Inc. (WCR, formerly known as URON Inc.) through its wholly owned operating subsidiaries, Wyoming Financial Lenders, Inc. (WFL) and National Cash & Credit, LLC (NCC), collectively referred to as the “Company,” provides retail financial services to individuals in the midwestern and southwestern United States. These services include non-recourse cash advance loans, title loans, check cashing and other money services. The Company also is a non-recourse reseller of guaranteed phone service and Cricket cellular phones. As of March 31, 2008, the Company operated 63 stores in 11 states (Nebraska, Wyoming, Utah, Iowa, North Dakota, South Dakota, Kansas, Wisconsin, Montana, Colorado and Arizona). As of March 31, 2007, Company operated in 55 stores in 10 states. The condensed consolidated financial statements include the accounts of WCR, WFL, and NCC. All significant intercompany balances and transactions have been eliminated in consolidation.

The Company provides short-term consumer loans, known as cash advance loans, in amounts that typically range from $100 to $500. Cash advance loans provide customers with cash in exchange for a promissory note with a maturity of generally two to four weeks and the customer’s personal check for the aggregate amount of the cash advanced plus a fee. The fee varies from state to state, based on applicable regulations and generally ranges from $15 to $20 per each $100 borrowed. To repay the cash advance loans, customers may pay with cash, in which their personal check is returned to them, or allow their check to be presented to the bank for collection.

The Company also provides title loans and other ancillary consumer financial products and services that are complementary to its cash advance-lending business, such as check-cashing services, money transfers, money orders and title loans. We also offer guaranteed phone/Cricket™ phones to our customers.

Our loans and other services are subject to state regulations (which vary from state to state) and federal and local regulations, where applicable.

Pursuant to an Agreement and Plan of Merger and Reorganization dated December 13, 2007 (Merger Agreement), by and among WCR, WFL Acquisition Corp., a Wyoming corporation and wholly owned subsidiary of the WCR, and WFL, WFL Acquisition Corp. merged with and into WFL, with WFL remaining as the surviving entity and a wholly owned operating subsidiary of WCR. This transaction is referred to throughout this report as the “Merger.”

The condensed consolidated financial statements account for the Merger as a capital transaction in substance (and not a business combination of two operating entities) that would be equivalent to WFL issuing securities to WCR in exchange for the net monetary liabilities of WCR, accompanied by a recapitalization and, as a result, no goodwill relating to the Merger has been recorded.

WESTERN CAPITAL RESOURCES, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

1.	Nature of Business and Summary of Significant Accounting Policies – (continued)

Use of Estimates

The preparation of condensed consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that may affect certain reported amounts and disclosures in the condensed consolidated financial statements and accompanying notes. Management bases its estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances. Actual results could differ from those estimates. Significant management estimates relate to the allowance for loans receivable, allocation of and carrying value of goodwill and intangible assets, value associated with stock-based compensation, and deferred taxes and tax uncertainties.

Revenue Recognition

The Company recognizes fees on cash advance loans on a constant-yield basis ratably over the loans’ terms. Title loan fees are recognized using the interest method. The Company records fees derived from check cashing, guaranteed phone/Cricket fees, and all other services in the period in which the service is provided.

Loan Loss Allowance

We maintain a loan loss allowance for anticipated losses for our cash advance and title loans. To estimate the appropriate level of the loan loss allowance, we consider the amount of outstanding loans owed to us, historical loans charged off, current and expected collection patterns and current economic trends. Our current loan loss allowance is based on our net write offs, typically expressed as a percentage of loan amounts originated for the last 12 months applied against the principal balance of outstanding loans that we write off. The Company also periodically performs a look-back analysis on its loan loss allowance to verify the historical allowance established tracks with the actual subsequent loan write-offs and recoveries. The Company is aware that as conditions change, it may also need to make additional allowances in future periods.

Included in loans receivable are cash advance loans that are currently due or past due and cash advance loans that have not been repaid. This generally is evidenced where a customer’s personal check has been deposited and the check has been returned due to non-sufficient funds in the customer’s account, a closed account, or other reasons. Cash advance loans are carried at cost less the allowance for doubtful accounts. The Company does not specifically reserve for any individual cash advance loan. The Company aggregates cash advance loans for purposes of estimating the loss allowance using a methodology that analyzes historical portfolio statistics and management’s judgment regarding recent trends noted in the portfolio. This methodology takes into account several factors, including the maturity of the store location and charge-off and recovery rates. The Company utilizes a software program to assist with the tracking of its historical portfolio statistics. As a result of the Company’s collection efforts, it historically writes off approximately 35% of the returned items. Based on days past the check return date, write-offs of returned items historically have tracked at the following approximately percentages: 1 to 30 days – 35%; 31 to 60 days – 60%; 61 to 90 days – 75%; 91 to 120 days – 80%; and 121 to 180 days – 86%. All returned items are charged-off after 180 days, as collections after that date have not been significant. The loan loss allowance is reviewed monthly and any adjustment to the loan loss allowance as a result of historical loan performance, current and expected collection patterns and current economic trends is recorded.

A rollforward of the Company’s loans receivable allowance for the three months ended March 31, 2008 and 2007 is as follows:

	Three Months Ended March 31,
	2008			2007

Loans receivable allowance, beginning of period	$	976,000		$	762,000
Provision for loan losses charged to expense		341,270			273,482
Charge-offs, net		(351,270	)		(364,856	)
Loans receivable allowance, end of period	$	966,000		$	670,606

WESTERN CAPITAL RESOURCES, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Net Loss Per Common Share

Basic net loss per common share is computed by dividing the loss available to common shareholders by the weighted average number of common shares outstanding for the year. Diluted net loss per common share is computed by dividing the net loss available to common shareholders’ by the sum of the weighted average number of common shares outstanding plus potentially dilutive common share equivalents (stock options, stock warrants, convertible preferred shares) when dilutive. Potentially dilutive securities of Series A Convertible Preferred Stock (10,000,000) and stock warrants (400,000) were anti-dilutive and therefore excluded from the dilutive net loss per share computation for 2008. Series A Convertible Preferred Stock (10,000,000) was anti-dilutive and therefore excluded for 2007.

Recent Accounting Pronouncements

In September 2006, the Financial Accounting Standards Board (FASB) issued Statement of Financial Accounting Standards (SFAS) No. 157, “Fair Value Measurements (as amended),” which defines fair value, establishes a framework for measuring fair value in generally accepted accounting principles and expands disclosure about fair value measurements. SFAS No. 157 applies whenever other standards require (or permit) assets or liabilities to be measured at fair value, and therefore, does not expand the use of fair value in any new circumstances. The effective date of this standard was for all full fiscal and interim periods beginning after November 15, 2007. The Company adopted SFAS 157 on January 1, 2008 with no impact on its condensed consolidated financial statements

In February 2008, the FASB issued Staff Position 157-2, Effective Date of FASB 157, (FSP 157-2) which deferred the provisions of SFAS 157 to annual periods beginning after November 15, 2008 for non-financial assets and liabilities. Non-financial assets include fair value measurements associated with business acquisitions and impairment testing of tangible and intangible assets. The Company is still evaluating the impact, if any, that the adoption of FSP 157-2 will have on its condensed consolidated financial statements.

In February 2007, the FASB issued Statement of Financial Accounting Standards No. 159, The Fair Value Option for Financial Assets and Financial Liabilities (SFAS 159). SFAS 159 permits entities to choose to measure many financial instruments and certain other items at fair value. The objective is to improve financial reporting by providing entities with the opportunity to mitigate volatility in reported earnings caused by measuring related assets and liabilities using different measurement techniques.

SFAS 159 requires additional disclosures related to fair value measurements included in the entity’s financial statements. This statement is effective for financial statements issued for fiscal years beginning after November 15, 2007. The Company adopted SFAS 159 on January 1, 2008 with no impact on its condensed consolidated financial statements.

In December 2007, the FASB issued Statement of Financial Accounting Standards No. 141R (revised 2007), Business Combinations (SFAS 141R). SFAS 141R broadens the guidance of SFAS 141, extending its applicability to all transactions and other events in which one entity obtains control over one or more other businesses. It broadens the fair value measurement and recognition of assets acquired, liabilities assumed, and interests transferred as a result of business combinations. SFAS 141R expands on required disclosures to improve the statement users’ abilities to evaluate the nature and financial effects of business combinations. SFAS 141R is effective for fiscal year beginning on or after December 15, 2008. The Company does not expect the adoption of SFAS 141R to have a material effect on its condensed consolidated financial statements.

2.	Restatement –

Subsequent to the filing of our Annual Report on Form 10-K for the year ended December 31, 2007, management determined that the consolidated financial statements for the years ended December 31, 2007 and 2006, and subsequent interim reports for the quarterly periods through September 30, 2008 required restatement to correct errors related to allocation of purchase price to customer relationships as opposed to goodwill for historical acquisitions, correct an understatement of share-based compensation expense for fiscal 2007 and to re-categorize $175,000 of cost originally reported as a reduction of proceeds from common stock in the consolidated statements of shareholders ’ equity to an expense in the consolidated statements of operations. The details of these items are as follows:

On December 31, 2007, we completed a reverse merger with WFL which included the purchase of certain intangible assets (customer lists). After revisiting certain assumptions and the analysis used in the initial, valuation management concluded that allocation of purchase price to customer lists from historical acquisitions should have been increased with a corresponding decrease to goodwill in the amount of $2,296,493. This resulted in an increase in amortization expense of $79,623 and $175,170 for the three month periods ended March 31, 2008 and 2007.

WESTERN CAPITAL RESOURCES, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

On November 29, 2007 we issued stock options and warrants to certain employees and nonemployees. After revisiting certain assumptions and the analysis used in the initial valuation, management concluded that the valuation of the shares should have been recorded at $0.54 per share rather than $0.23 per share. This resulted in an increase in stock compensation expense of $20,700 for the three months ended March 31, 2008.

On April 9, 2009, the Company’s Board of Directors concluded its internal review of certain expense reimbursements and certain other transactions. As a result of that review and the execution of a settlement agreement with the former CEO, the Company determined that $175,000 of cost originally reported, in the fourth quarter of 2007, as a reduction of proceeds from common stock in the consolidated statement of shareholders’ equity should be reported as an expense in the consolidated statements of operations.

In addition, we have updated our financial statements to classify the results of operations for NCC and STEN Corporation which were sold on December 31, 2008, as discontinued operations in accordance with Statement of Financial Accounting Standards No. 144 “Accounting for the Impairment or Disposal of Long-Lived Assets. ”

The following tables represent the effect of the restatement and discontinued operations:

WESTERN CAPITAL RESOURCES, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

CONDENSED CONSOLIDATED BALANCE SHEET

December 31, 2007	Reported			Adjustment			As Restated
ASSETS

CURRENT ASSETS
Cash	$	984,625		$	-		$	984,625
Loans receivable (less allowance for losses of $976,000)		4,117,497			-			4,117,497
Stock subscriptions receivable		4,422,300			-			4,422,300
Prepaid expenses and other		92,333			-			92,333
Deferred income taxes		526,000			136,000			662,000
TOTAL CURRENT ASSETS		10,142,755			136,000			10,278,755

PROPERTY AND EQUIPMENT		631,736			-			631,736

GOODWILL		9,883,659			(1,977,913	)		7,905,746

INTANGIBLE ASSETS		90,926			256,660			347,586

DEFERRED INCOME TAX		-			109,000			109,000

OTHER		167,000			-			167,000

TOTAL ASSETS	$	20,916,076		$	(1,476,253	)	$	19,439,823

LIABILITIES AND SHAREHOLDERS’ EQUITY

CURRENT LIABILITIES
Accounts payable and accrued liabilities	$	1,908,844		$	(175,000	)	$	1,733,844
Accounts payable - related parties		950,935			175,000			1,125,935
Accrued dividend payable		-			-			-
Deferred revenue		262,357			-			262,357
TOTAL CURRENT LIABILITIES		3,122,136			-			3,122,136

DEFERRED INCOME TAXES		545,000			(545,000	)		-

TOTAL LIABILITES		3,667,136			(545,000	)		3,122,136

SHAREHOLDERS' EQUITY
Series A convertible preferred stock		100,000			-			100,000
Common stock		-			-			-
Additional paid-in capital		17,639,318			795,000			18,434,318
Retained earnings (deficit)		(490,378	)		(1,726,253	)		(2,216,631	)
TOTAL SHAREHOLDERS’ EQUITY		17,248,940			(931,253	)		16,317,687

TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY	$	20,916,076		$	(1,476,253	)	$	19,439,823

WESTERN CAPITAL RESOURCES, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

CONDENSED CONSOLIDATED BALANCE SHEET

March 31, 2008	Reported			Adjustment			Discontinued Operations Adjustment			As Restated
ASSETS

CURRENT ASSETS
Cash	$	3,987,882		$	-		$	(151,909	)	$	3,835,973
Loans receivable (less allowance for losses of $966,000)		4,246,684						(655,274	)		3,591,410
Stock subscriptions receivable		-			-			-			-
Prepaid expenses and other		360,290			91,950			(34,222	)		418,018
Deferred income taxes		386,000			66,000			(9,000	)		443,000
Assets used in discontinued operations		-						850,405			850,405
TOTAL CURRENT ASSETS		8,980,856			157,950			-			9,138,806

PROPERTY AND EQUIPMENT		824,688			-			(162,644	)		662,044

GOODWILL		10,483,388			(2,296,493	)		(145,173	)		8,041,722

INTANGIBLE ASSETS		163,771			495,617			(316,502	)		342,886

DEFERRED INCOME TAX		-			83,000			(5,000	)		78,000

ASSETS USED IN DISCONTINUED OPERATIONS		-			-			629,319			629,319

TOTAL ASSETS	$	20,452,703		$	(1,559,926	)	$	-		$	18,892,777

LIABILITIES AND SHAREHOLDERS’ EQUITY

CURRENT LIABILITIES
Accounts payable and accrued liabilities	$	498,430		$	33,950		$	-		$	532,380
Accounts payable - related parties		535,000			-			-			535,000
Accrued dividend payable		525,000			-			-			525,000
Deferred revenue		250,520			-			(32,110	)		218,410
Liabilities from discontinued operations		-			-			32,110			32,110
TOTAL CURRENT LIABILITIES		1,808,950			33,950			-			1,842,900

DEFERRED INCOME TAXES		601,000			(601,000	)		-			-

TOTAL LIABILITES		2,409,950			(567,050	)		-			1,842,900

SHAREHOLDERS' EQUITY
Series A convertible preferred stock		100,000			-			-			100,000
Common stock		-			-			-			-
Additional paid-in capital		18,991,937			795,000			-			19,786,937
Retained earnings (deficit)		(1,049,184	)		(1,787,876	)		-			(2,837,060	)
TOTAL SHAREHOLDERS’ EQUITY		18,042,753			(992,876	)		-			17,049,877

TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY	$	20,452,703		$	(1,559,926	)	$	-		$	18,892,777

WESTERN CAPITAL RESOURCES, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS

For the three months ended March 31, 2007	Reported			Adjustment			As Restated
REVENUES
Loan fees	$	2,150,306		$	-		$	2,150,306
Check cashing fees		406,445			-			406,445
Guaranteed phone/Cricket fees		267,396			-			267,396
Other fees		47,526			-			47,526
Total Revenue		2,871,673			-			2,871,673

STORE EXPENSES
Salaries and benefits		683,971			-			683,971
Provisions for loan losses		273,482			-			273,482
Guaranteed phone/Cricket cost of sales		152,737			-			152,737
Occupancy		185,870			-			185,870
Advertising		126,289			-			126,289
Depreciation		34,688			-			34,688
Amortization of intangible assets		34,101			175,170			209,271
Other		290,319			-			290,319
Total Store Expense		1,781,457			175,170			1,956,627

INCOME (LOSS) FROM STORES		1,090,216			(175,170	)		915,046

GENERAL & ADMINISTRATIVE EXPENSE
Salaries and benefits		378,210			-			378,210
Depreciation		10,292			-			10,292
Merger transaction expenses		-			-			-
Other		96,630			-			96,630
		485,132			-			485,132

INCOME (LOSS) FROM CONTINUING OPERATIONS		605,084			(175,170	)		429,914

INCOME TAX (BENEFIT) EXPENSE		228,000			(67,000	)		161,000

NET INCOME (LOSS) BEFORE DISCONTINUED OPERATIONS		377,084			(108,170	)		268,914

INCOME FROM DISCONTINUED OPERATIONS		-			-			-

NET INCOME (LOSS)		377,084			(108,170	)		268,914

ASSUMED SERIES A CONVERTIBLE PREFERRED STOCK DIVIDENDS		(525,000	)		-			(525,000	)

NET LOSS AVAILABLE TO COMMON SHAREHOLDERS	$	(147,916	)	$	(108,170	)	$	(256,086	)

NET LOSS PER COMMON SHARE – BASIC AND DILUTED
Continuing operations	$	(0.13	)	$	(0.10	)	$	(0.23	)
Discontinued operations		(0.00	)		(0.00	)		(0.00	)
Net (loss) per common share	$	(0.13	)	$	(0.10	)	$	(0.23	)

WEIGHTED AVERAGE COMMON SHARES OUTSTANDING -
Basic and diluted		1,125,000						1,125,000

WESTERN CAPITAL RESOURCES, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS

For the three months ended March 31, 2008	Reported			Adjustment			Discontinued Operations Adjustment			As Restated
REVENUES
Loan fees	$	2,250,276		$	-		$	(46,296	)	$	2,203,980
Check cashing fees		346,091			-			-			346,091
Guaranteed phone/Cricket fees		168,351			-			-			168,351
Title loan fees		62,738			-			(62,738	)		-
Other fees		62,052			-			(83	)		61,969
Total Revenue		2,889,508			-			(109,117	)		2,780,391

STORE EXPENSES
Salaries and benefits		763,877			1,453			(30,641	)		734,689
Provisions for loan losses		356,074			-			(14,804	)		341,270
Guaranteed phone/Cricket cost of sales		106,876			-			-			106,876
Occupancy		218,664			-			(25,610	)		193,054
Advertising		85,526			-			-			85,526
Depreciation		32,613			-			(5,658	)		26,955
Amortization of intangible assets		37,155			79,623			(15,054	)		101,724
Other		354,073			-			(21,608	)		332,465
Total Store Expense		1,954,858			81,076			(113,375	)		1,922,559

INCOME (LOSS) FROM STORES		934,650			(81,076	)		4,258			857,832

GENERAL & ADMINISTRATIVE EXPENSE
Salaries and benefits		281,044			19,247			-			300,291
Depreciation		9,796			-			-			9,796
Merger transaction expenses		-			-			-			-
Other		670,616			-			-			670,616
		961,456			19,247			-			980,703

INCOME (LOSS) FROM CONTINUING OPERATIONS		(26,806	)		(100,323	)		4,258			(122,871	)

INCOME TAX (BENEFIT) EXPENSE		7,000			(38,700	)		1,600			(30,100	)

NET INCOME (LOSS) BEFORE DISCONTINUED OPERATIONS		(33,806	)		(61,623	)		2,658			(92,771	)

LOSS FROM DISCONTINUED OPERATIONS		-			-			(2,658	)		(2,658	)

NET LOSS		(33,806	)		(61,623	)		-			(95,429	)

SERIES A CONVERTIBLE PREFERRED STOCK DIVIDENDS		(525,000	)		-			-			(525,000	)

NET LOSS AVAILABLE TO COMMON SHAREHOLDERS	$	(558,806	)	$	(61,623	)	$	-		$	(620,429	)

NET LOSS PER COMMON SHARE – BASIC AND DILUTED
Continuing operations	$	(0.07	)	$	(0.01	)	$	-		$	(0.08	)
Discontinued operations		-			-			-			-
Net (loss) per common share	$	(0.07	)	$	(0.01	)	$	-		$	(0.08	)

WEIGHTED AVERAGE COMMON SHARES OUTSTANDING -
Basic and diluted		8,150,208									8,150,208

WESTERN CAPITAL RESOURCES, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

3.	Acquisitions –

Acquisition of North Dakota Stores

On March 1, 2008 the Company acquired, for $390,917 in cash, five stores offering cash advance loans in Fargo, Grand Forks, Bismarck, and Minot, North Dakota. These stores currently operate under the Ameri-Cash name.

Acquisition of National Cash & Credit

On February 26, 2008, the Company entered into an Exchange Agreement with National Cash & Credit, LLC, a Minnesota limited liability company (NCC), and the members of NCC. Under the Exchange Agreement, the members of NCC assigned all of the outstanding membership interests in NCC to the Company in exchange 1,114,891 shares (valued at $1.20 per share) of the Company’s common stock and a cash payment of $100,000.

The Company's CEO at the time of the acquisition had a material financial interest in NCC. The CEO’s ownership and conditions of the Exchange Agreement were disclosed to the Company's Board of Directors, which approved the Exchange Agreement.

NCC was formed approximately two years ago and owned and operated five stores located in suburban Phoenix, Arizona. NCC principally offered cash advance loans ranging from $100 to $2,500 and title loans ranging from $500 to $2,000.

Under the purchase method of accounting the assets and liabilities of the acquisitions were recorded at their respective estimated fair values as of the applicable purchase date as follows:

	2008

Cash	$	139,017
Loans receivable		850,577
Property and equipment		193,301
Intangible assets		468,850
Goodwill		240,879
Current liabilities		(63,837	)

	$	1,828,787

The results of the operations for the acquired locations have been included in the condensed consolidated financial statements since the date of the acquisitions. The following table presents the pro forma results of operations for the three months ended March 31, 2008 and 2007, as if these acquisitions had been consummated at the beginning of each period presented. The pro forma results of operations are prepared for comparative purposes only and do not necessarily reflect the results that would have occurred had the acquisition occurred at the beginning of the year presented or the results which may occur in the future.

	Three Month Ended March 31,
	2008			2007
Pro forma revenue	$	3,206,209		$	3,384,032
Pro forma net income (loss)		(34,153	)		366,434
Pro forma net loss per common share – basic and diluted	$	(0.07	)	$	(0.14	)

WESTERN CAPITAL RESOURCES, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

4.	Shareholders’ Equity –

During the quarter ended March 31, 2008, 1,475,000 options (mostly which were held by related parties) were exercised at an exercise price of $.01 per share. Also, 125,000 options and warrants were cancelled.

5.	Risks Inherent in the Operating Environment –

The Company’s short-term consumer loan activities are regulated under numerous local, state, and federal laws and regulations, which are subject to change. New laws or regulations could be enacted that could have a negative impact on the Company’s lending activities. Over the past few years, consumer advocacy groups and certain media reports have advocated governmental and regulatory action to prohibit or severely restrict deferred presentment cash advances. If this negative characterization of deferred presentment cash advances becomes widely accepted by consumers, demand for deferred presentment cash advances could significantly decrease, which could have a materially adverse affect on the Company’s financial condition.

Negative perception of deferred presentment cash advances could also result in increased regulatory scrutiny and increased litigation and encourage restrictive local zoning rules, making it more difficult to obtain the government approvals necessary to continue operating existing stores or open new short-term consumer loan stores.

For the three months ended March 31, 2008 and 2007, the Company had significant revenues by state as follows:

	2008 % of Revenues			2007 % of Revenues
Wyoming		10	%		-
Iowa		12	%		11	%
Nebraska		28	%		29	%

6.	Dividend Declaration and Payment-

On March 17, 2008, the Board of Directors of the Company approved the payment of the first quarter 2008 dividend on the Company's Series A Convertible Preferred Stock in the amount of $525,000. The dividends were paid on April 1, 2008.

7.	Other Expense-

A breakout of other expense is as follows:

	Three Months Ended March 31,
	2008		2007

Store expenses:
Insurance	$	25,219	$	16,454
Collection costs		63,134		38,204
Repairs & maintenance		34,425		27,501
Supplies		29,323		41,683
Telephone and utilities		68,446		72,359
Other		111,918		94,118
	$	332,465	$	290,319

General & administrative expenses:
Professional fees		593,154		-
Other		77,462		96,630
	$	670,616	$	96,630

8.	Subsequent Events-

On May 13, 2008, the Company submitted its common stock listing application to the American Stock Exchange LLC. The Company is awaiting approval by the American Stock Exchange LLC to have its common stock listed for trading on this national exchange. The Company currently trades as a bulletin board stock on the over-the-counter markets.

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

Restatement

As previously described in the “Explanation of Our Restatement” preface to this amendment, we have restated our consolidated financial statements for the years ended December 31, 2007 and 2006, and subsequent interim reports for the quarterly periods through September 30, 2008, to correct errors related to the allocation of purchase price to customer relationships as opposed to goodwill for historical acquisitions, correct an understatement of share-based compensation expense for fiscal 2007 and to re-categorize $175,000 of costs originally reported as a reduction of proceeds from common stock in the consolidated statements of shareholders' equity to an expense in the consolidated statements of operations. The following Management’s Discussion and Analysis of Financial Condition and Results of Operations has been updated to reflect the restatement and discontinued operations which is more fully described in Note 2 to our condensed consolidated financial statements. Except as amended to reflect the restatements previously described, the information in this Item 2 has not been updated and continues to speak as of the date of the original filing.

Forward-Looking Statements

Except for the historical information contained herein, the matters discussed in this Report on Form 10-Q/A are forward-looking statements involving risks and uncertainties that could cause actual results to differ materially from those in such forward-looking statements. Numerous factors, risks and uncertainties affect the Company’s operating results and could cause the Company’s actual results to differ materially from forecasts and estimates or from any other forward-looking statements made by, or on behalf of, the Company, and there can be no assurance that future results will meet expectations, estimates or projections. Further information regarding these and other risks is included in the “Risk Factors” section of our most recent Annual Report on Form 10-K for fiscal 2008.

Overview

Throughout this report, we refer to Western Capital Resources, Inc., a Minnesota corporation, as “we,” “us,” “Western Capital Resources” and the “Company.” Prior to July 29, 2008, the Company’s corporate name was URON Inc.

Pursuant to the December 13, 2007 Merger Agreement, WFL Acquisition Corp. merged with and into Wyoming Financial Lenders, Inc., with Wyoming Financial Lenders remaining as the surviving entity and a wholly owned operating subsidiary of the Company. As indicated above, this transaction is referred to throughout this report as the “Merger ”. The Merger was effective as of the close of business on December 31, 2007.

Since the Merger, the Company (primarily through Wyoming Financial Lenders, Inc.) provides retail financial services to individuals in the mid-western and southwester United States. These services include non-recourse cash advance loans, check cashing and other money services. At the close of business on December 31, 2007, the Company owned and operated 52 stores in ten states (Colorado, Iowa, Kansas, Montana, Nebraska, North Dakota, South Dakota, Utah, Wisconsin and Wyoming). As of May 15, 2008 (the date on which we originally filed the quarterly report for the period covered by this amended report), we owned and operated a total of 61 stores in the foregoing states and Arizona.

On February 26, 2008, we entered into an Exchange Agreement with National Cash & Credit, LLC., a Minnesota limited liability company, and its members. Under the Exchange Agreement, the members of National Cash & Credit assigned to us all of the outstanding membership interests in National Cash & Credit in exchange for our issuance to them of an aggregate of 1,114,891 shares of common stock and a cash payment of $100,000. The closing of the transactions contemplated by the Exchange Agreement occurred effective as of February 26, 2008. As a result of this transaction, we acquired five new stores located in the Phoenix, Arizona market. These stores engage in cash advance lending and title lending.

We provide short-term consumer loans—known as cash advance loans—in amounts that typically range from $100 to $500. Cash advance loans provide customers with cash in exchange for a promissory note with a maturity of generally two to four weeks and the customer’s post-dated personal check for the aggregate amount of the cash advanced, plus a fee. The fee varies from state to state, based on applicable regulations, and generally ranges from $15 to $20 for each $100 borrowed. To repay the cash advance loans, customers may pay with cash, in which case their personal check is returned to them, or allow the check to be presented to the bank for collection. All of our loans and other services are subject to state regulations (which vary from state to state), federal regulations and local regulation, where applicable.

Our expenses primarily relate to the operations of our stores. The most significant expenses include salaries and benefits for our store employees, provisions for loan losses, occupancy expense for our leased real estate and advertising. Our other significant expenses are general and administrative, which includes compensation of employees, professional fees and stock-based compensation expenses and merger transaction expenses.

With respect to our cost structure, salaries and benefits are one of our largest costs and are driven primarily by the addition of branches throughout the year and growth in loan volumes. Our provision for losses is also a significant expense. We have experienced seasonality in our operations, with the first and fourth quarters typically being our strongest periods as a result of broader economic factors, such as holiday spending habits at the end of each year and income tax refunds during the first quarter.

We evaluate our stores based on revenue growth, gross profit contributions and loss ratio (which is losses as a percentage of revenues), with consideration given to the length of time the branch has been open and its geographic location. We evaluate changes in comparable branch financial and other measures on a routine basis to assess operating efficiency. We define comparable branches as those branches that are open during the full periods for which a comparison is being made. For example, comparable branches for the annual analysis we undertook as of December 31, 2007 have been open at least 24 months on that date. We monitor newer branches for their progress toward profitability and rate of loan growth.

We also have 10,000,000 shares of Series A Convertible Preferred Stock (10% cumulative dividends, $0.01 par value, $2.10 stated value) authorized, issued and outstanding. Our board of directors votes quarterly to approve this dividend in the amount of $525,000, which represents an annual cost to us of $2.1 million. The dividend can be paid either in cash or in shares of our common stock at the investor's discretion. This dividend is calculated in to the net income or loss available to common stockholders.

Our obligation to pay dividends significantly impacts our cash flow and our ability to grow through acquisitions, which is the most significant way in which we expect to grow. For instance, our use of cash in satisfaction of the dividend payment obligations prevents us from using that cash as part of acquisition transactions. The present condition of the credit markets also makes it difficult for us to surmount this obstacle through borrowing. In addition, our use of cash in satisfaction of the dividend payment obligations makes it more difficult for us to manage our cash in way that we will ensure the availability of cash for lending to our cash advance customers during the fall and winter months, which is typically the busiest time of year for payday lending.

According to the Community Financial Services Association of America (CFSA), industry analysts estimate that the industry has grown to approximately 22,000 payday loan branches in the United States and these branches extend approximately $40 billion in short-term credit to millions of households that experience cash-flow shortfalls between paydays. We believe our industry is highly fragmented as ten companies presently operate approximately 10,200 branches in the United States. With this industry growth and current fragmentation (discussed above), we believe there are opportunities to grow our business, primarily through acquisitions as opposed to organic growth. We are actively identifying possible store locations in numerous states in which we currently operate and evaluating the regulatory environment and market potential in the various states in which we currently do not have stores. In addition to expanding our geographic reach, our strategic expansion plans also involve the expansion and diversification of our product and service offerings. We believe that successful expansion, both geographically and product- and service-wise, will help to mitigate the regulatory and economic risk inherent in our business by making us less reliant on (i) cash advance lending alone and (ii) any particular aspect of our business that concentrated geographically.

The growth of the payday loan industry has followed, and continues to be significantly affected by, payday lending legislation and regulation in the various states and nationally. We actively monitor and evaluate legislative and regulatory initiatives in each of the states and nationally, and are involved with the efforts of the various industry lobbying efforts. To the extent that states enact legislation or regulations that negatively impacts payday lending, whether through preclusion, fee reduction or loan caps, our business could be adversely affected.

As of May 15, 2008, legislation was pending in Arizona which would have extended a law permitting cash advance loans. In the absence of such legislation, law permitting cash advance loans was set to “sunset” or expire at the end of 2009. The failure to extend or outrightly permit cash advance lending would negatively affect us. In Nebraska, legislation was introduced to ban all cash advance loans in Nebraska. This bill was ultimately defeated. Nevertheless, since we derive approximately 36% (for the 12 months ended December 31, 2007) of our revenues in Nebraska, any subsequent attempts to pass similar legislation in Nebraska, or other legislation that would restrict our ability to make cash advance loans in Nebraska, would pose significant risks to our business.

In 2007, the federal government passed legislation (the 2007 Military Authorization Act) prohibiting the making of payday (cash advance) loans and title loans to members of the United States military. The law also prohibits creditors in general from charging more than 36% interest to military borrowers (in calculating the applicable rate of interest, all fees, service charges, renewal charges, credit insurance premiums or any other product sold with the loan must be included). Management does not believe that this 2007 law has materially affected or will materially affect the Company and its business. As with the various state legislatures, however, it is possible that the federal government may enact legislation or regulation that further restricts payday lending or title lending in general, which would undoubtedly affect our business in adverse ways.

Discussion of Critical Accounting Policies

Our condensed consolidated financial statements and accompanying notes have been prepared in accordance with accounting principles generally accepted in the United States of America applied on a consistent basis. The preparation of these financial statements requires us to make a number of estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. We evaluate these estimates and assumptions on an ongoing basis. We base these estimates on the information currently available to us and on various other assumptions that we believe are reasonable under the circumstances. Actual results could vary materially from these estimates under different assumptions or conditions.

We believe that the following critical accounting policies affect the more significant estimates and assumptions used in the preparation of our condensed consolidated financial statements:

Loan Loss Allowance

Included in loans receivable are cash advance loans that are currently due or past due and cash advance loans that have not been repaid. This generally is evidenced where a customer’s personal check has been deposited and the check has been returned due to non-sufficient funds in the customer’s account, a closed account, or other reasons. Cash advance loans are carried at cost less the allowance for doubtful accounts. The Company does not specifically reserve for any individual cash advance loan. The Company aggregates cash advance loans for purposes of estimating the loss allowance using a methodology that analyzes historical portfolio statistics and management’s judgment regarding recent trends notes in the portfolio. This methodology takes into account several factors, including the maturity of the store location and charge-off and recovery rates. The Company utilizes a software program to assist with the tracking of its historical portfolio statistics. As a result of the Company’s collection efforts, it historically experiences returned items of approximately 6.5% of gross loans written and writes off approximately 35% of these returned items. All returned items are charged-off after 180 days, as collections after that date have not been significant. The loan loss allowance is reviewed monthly and any adjustment to the loan loss allowance as a result of historical loan performance, current and expected collection patterns and current economic trends is recorded. The Company uses a third party collection agency to assist in the collection of the loan collateral related to title loans, when and as the Company determines appropriate.

The Company entered into the title loan business with the acquisition of National Cash & Credit, LLC in February 2008. Currently, title loans are not a significant portion of the Company’s loans receivable portfolio.

Valuation of long-lived and Intangible Assets

The Company assesses the impairment of long-lived and intangible assets whenever events or changes in circumstances indicate that the carrying value may not be recoverable. Factors that could trigger an impairment review include significant underperformance relative to expected historical or projected future cash flows, significant changes in the manner of use of acquired assets or the strategy for the overall business, and significant negative industry trends. When management determines that the carrying value of long-lived and intangible assets may not be recoverable, impairment is measured based on the excess of the assets' carrying value over the estimated fair value.

Share-Based Compensation

Under the fair value recognition provisions of Financial Accounting Standards Board Statement No. 123R (SFAS 123R), “Share-Based Payment,” our share-based compensation cost is measured at the grant date based on the value of the award and is recognized as expense based on the applicable vesting schedule. Determining the fair value of share-based awards at grant date requires judgment, which includes estimating the amount of share-based awards expected to be forfeited. The Black-Scholes option pricing model (using estimated value of the Company) is used to measure fair value for stock option grants.

During 2007, we granted 1,600,000 shares of restricted stock options and warrants to certain of our employees and non-employees. There were 11 recipients of these grants. These options and warrants vested upon the successful completion of the Merger on December 31, 2007. We estimated that the grant date fair market value of these restricted options and warrants totaled $864,000 ($0.54 per share) at the time of issuance. The market price of our common stock on November 29, 2007 (the date of issuance) was $1.80, and the exercise price for all of those options and warrants was $0.01 per share. During 2007, we also granted warrants to a Company adviser for the purchase of up to 400,000 common shares at $0.01 per share. These warrants vested upon the successful completion of the merger on December 31, 2007. We estimated that the grant date fair market value of these restricted warrants totaled $216,000 at the time of issuance ($0.54 per share). These warrants were not exercised as of May 15, 2008.

The table below summarizes information about the above-referenced grants of options and warrants:

Recipient (security type)	Date	Share-Based Compensation Expense
Steven Staehr (option)	11/29/2007	$297,000
David Stueve (option)	11/29/2007	$135,000
Rich Horner (option)	11/29/2007	$54,000
Ted Dunham (option)	11/29/2007	$54,000
Rose Piel (option)	11/29/2007	$13,500
Brian Chaney (option)	11/29/2007	$13,500
John Quandahl (option)	11/29/2007	$216,000
John Richards (option) *	11/29/2007	$54,000
Tom Griffith (option) *	11/29/2007	$13,500
Lantern Advisers, LLC (warrant)	11/29/2007	$216,000
Donna Mendez (warrant)	11/29/2007	$8,100
Robert Jorgenson (warrant)	11/29/2007	$5,400

* Option was later cancelled.

Results of Operations - Three Months Ended March 31, 2008 Compared to Three Months Ended March 31, 2007

For the three month period ended March 31, 2008, net loss was $95,429 compared to net income of $268,914 for the three months ended March 31, 2007. During the three months ended March 31, 2008, loss before income taxes was $122,871 compared to income before income taxes of $429,914 for the three months ended March 31, 2007. The major components of each of revenues, store expenses, general and administrative expenses, total operating expenses and income tax expense, are discussed below.

Revenues

Revenues totaled $2.78 million for the three months ended March 31, 2008 compared to $2.87 million for the three months ended March 31, 2007. This decrease resulted from a decrease in both check cashing fees and, as anticipated, Guaranteed phone/Cricket fees. During the three-month period ended March 31, 2008 we originated approximately $15.4 million in cash advance loans compared to $14.4 million during the 2007 interim period. Our average loan (including fee) totaled approximately $341 during the period ended March 31, 2008 versus $336 in the 2007 interim period. Our average fee rate for the three months ended March 31, 2008 was $50 compared to $49 for the 2007 interim period. Revenues from check cashing, guaranteed phone/Cricket phone fees, and other sources totaled $576,000 and $721,000 for the three month periods ended March 31, 2008 and 2007, respectively.

The following table summarizes our revenues for the three months ended March 31, 2008 and 2007, respectively:

	Three Months Ended March 31,						Three Months Ended March 31,
	2008			2007			2008			2007
							(percentage of revenues)
Loan Fees		$	2,203,980		$	2,150,306		79.3	%		74.9	%
Check cashing fees			346,091			406,445		12.5	%		14.2	%
Guaranteed phone/Cricket fees			168,351			267,396		6.0	%		9.3	%
Other fees			61,969			47,526		2.2	%		1.6	%
Total		$	2,780,391		$	2,871,673		100.0	%		100.0	%

Store Expenses

Total expenses associated with store operations for the three months ended March 31, 2008 were $1.92 million compared to $1.96 million for the three months ended March 31, 2007. The most significant components of these expenses were salaries and benefits, provisions for loan losses, guaranteed phone/Cricket costs of sales, occupancy costs, advertising expenses, depreciation of store equipment, amortization of intangible assets and other expenses associated with store operations.

Our most significant increases in store expenses from the two interim periods related to salaries and benefits for our store employees, provisions for loan losses, and our costs of occupancy. As with our fiscal year-end results, guaranteed phone/Cricket phone costs of sales showed continued reductions in expense resulting from slowing guaranteed phone/Cricket phone sales overall. In the three months ending March 31, 2008 we also modestly decreased advertising expenses. A discussion of the various components of our store expenses for the three months ended March 31, 2008 appears below.

Salaries and Benefits. Payroll and related costs at the store level were $735,000 compared to $684,000 for the periods ended March 31, 2008 and 2007, respectively. Increased salaries and benefits expense resulted from of our addition of several store locations. We expect that, with anticipated continued store growth, these salaries and benefits expenses will continue to increase.

Provisions for Loan Losses. For the three months ended March 31, 2008 our provisions for loan losses were $341,000. For the three months ended March 31, 2007 such provisions were $273,000. Our provisions for loan losses represented approximately 15.5% and 12.7% of our loan fee revenue for the three months ended March 31, 2008 and 2007, respectively. We are currently experiencing a more challenging collections environment mainly reflected by increased bankruptcy filings, higher energy and other prices. Presently, we do not foresee any certain end to the current economic downturn and as a result we expect higher loan losses during fiscal 2008 than those we experienced during 2007.

Guaranteed phone/Cricket. Guaranteed phone/Cricket costs (reflecting costs of sales of such items) increased from $153,000 for the three months ended March 31, 2007 to $107,000 for the three months ended March 31, 2008, a decrease of $46,000. This decrease has followed our expectations that our guaranteed phone/Cricket phone line of business will become increasingly less significant to our overall revenues as consumers move away from home phones in general (which is where the guaranteed phone/Cricket phone product is used) toward cell phones. By the end of fiscal 2008, we do not expect that this line of business will be significant.

Occupancy Costs. Occupancy expenses, comprised mainly of store leases, were $193,000 for the three months ended March 31, 2008 versus $186,000 for the three months ended March 31, 2007. The increase in our occupancy expenses relates to our acquisitions and operation of more stores during the most recent three-month period. In general, as we pursue a growth by small acquisitions strategy, we expect this trend to continue for the foreseeable future.

Advertising. Advertising and marketing expenses were $86,000 during the three-month period ended March 31, 2008 as compared to $126,000 during the three month period ended March 31, 2007. In general, we expect that our marketing and advertising expenses for fiscal 2008 will remain relatively stable but will increase overall, as compared to fiscal 2007, if we are successful in implementing our acquisition strategy during the year.

Depreciation. Depreciation, relating to store equipment and capital expenditures for stores, decreased from $35,000 for the three months ended March 31, 2007 to $27,000 for the three months ended March 31, 2008.

Amortization of Intangible Assets. Amortization of intangible assets were higher for the two interim periods, being $102,000 for the three months ended March 31, 2008 versus $209,000 for the three months ended March 31, 2007. The significant increase in amortization in 2008 was due to the change in customer relationships recorded as an intangible asset rather than goodwill.

Other. Other expenses were $332,000 for the three months ended March 31, 2008 versus $290,000 for the three months ended March 31, 2007 primarily due higher costs associated with operating a higher number of stores on a year over year basis.

General and Administrative Expenses

Total general and administrative costs for the three months ended March 31, 2008 were $981,000 compared to $485,000 for the period ended March 31, 2007. For the three-month period ended March 31, 2008, the major components of these costs were salaries and benefits for our corporate headquarters operations and executive management, depreciation of certain headquarters-related equipment, and utilities, office supplies and other minor costs, professional fees for accounting and legal services (collectively grouped as “other” costs). A discussion of the various components of our general and administrative costs for the three months ended March 31, 2008 and 2007 appears below:

Salaries and Benefits. Salaries and benefits expenses for the three months ended March 31, 2008 were $300,000, and $378,000, a decrease of $78,000 in such expenses during period ended March 31, 2007.

Depreciation. Depreciation for the period ended March 31, 2008 compared to March 31, 2007 remained consistent at $10,000. Depreciation relates primarily to equipment and capital improvements at the Company’s corporate headquarters.

Other General and Administrative Expenses. Other general and administrative expenses, which includes professional fees for accounting and legal services, consulting services related to Sarbanes-Oxley compliance, utilities, office supplies, collection costs and other minor costs associated with corporate headquarters activities, aggregated to $671,000 for the three months ended March 31, 2008 versus $97,000 for the three months ended March 31, 2007. We do not expect these types of costs to decrease to their fiscal 2007 levels, as most of them are attributed to efforts to comply with various rules and regulations applicable to public reporting companies.

Total Operating Expenses

Our total operating expenses for the three months ended March 31, 2008 were $2.90 million compared to $2.44 million for the comparable period for 2007. Overall, the $460,000 decrease in operating expenses relates to our discontinued operations.

Income Tax Expense

Income tax benefit for the period ended March 31, 2008 was $30,100 compared to income tax expense of $161,000 for the period ended March 31, 2007, which decreased primarily as a result of our net loss before taxes for the 2008 period of $123,000 versus net income before taxes for the 2007 period of $430,000.

Discontinued Operations

Loss from discontinued operations was $2,658 for the three months ended March 31, 2008.

Liquidity and Capital Resources

Summary cash flow data is as follows:

	Three Months Ended March 31,
	2008				2007
Cash flows provided (used) by :
Operating activities		$	(1,039,833	)		$	1,183,361
Investing activities			(393,960	)			(47,851	)
Financing activities			4,437,050				(935,395	)
Net increase in cash			3,003,257				200,115
Cash, beginning of period			984,625				1,265,460
Cash, end of period		$	3,987,882			$	1,465,575

At March 31, 2008 we had cash, from continuing operations, of $3.84 million compared to cash of $984,000 on December 31, 2007. The increase results mainly from our receipt of cash in the private placement transaction that closed simultaneously with the Merger. For fiscal year 2008, we believe that our available cash, combined with expected cash flows from operations, will be sufficient to fund our liquidity and capital expenditure requirements during fiscal 2008. Our expected short-term uses of cash include funding of operating activities, anticipated increases in payday loans, dividend payments on our Series A preferred stock (to the extent approved by the Board of Directors), and the financing of expansion activities, including new store openings and store acquisitions.

Off-Balance Sheet Arrangements

The Company had no off-balance sheet arrangements as of March 31, 2008.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

Not applicable.

Item 4T. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

On March 31, 2008, our Chief Executive Officer and Chief Financial Officer carried out an evaluation of the effectiveness of the design and operation of its disclosure controls and procedures (as defined in Exchange Rule 13a-15(e)). Based upon that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that, except for the item noted below, our disclosure controls and procedures were effective.

During the course of their audit of our consolidated financial statements for fiscal 2007, our independent registered public accounting firm, Lurie Besikof Lapidus & Company, LLP, advised management and the audit committee of our Board of Directors that they had identified a material weakness. The material weakness relates to the lack of segregation of duties within the financial processes in the Company.

The Company periodically assesses the cost versus benefit of adding the resources that would remedy or mitigate this situation, and currently does not consider the benefits to outweigh the costs of adding additional staff in light of the limited number of transactions related to the Company's operations.

In addition, subsequent to the fiscal quarter covered by this report, but prior to the filing of this Form 10-Q/A, several remedial measures were identified and implemented in response to the conclusion reached by our Chief Executive and Chief Financial Officer that, as of December 31, 2008, our disclosure controls and procedures were not effective. For further information relating to our assessment of disclosure controls and procedures generally, and our internal control over financial reporting more particularly, including our remediation plan, see our Annual Report on Form 10-K for fiscal year ended December 31, 2008 filed contemporaneously with this Form 10-Q/A.

Changes in Internal Control over Financial Reporting

There were no changes in our internal controls over financial reporting that occurred during the fiscal quarter covered by this report that materially affected, or were reasonably likely to materially affect such controls.

PART II. OTHER INFORMATION

Item 1. Legal Proceedings

None.

Item 1A. Risk Factors

Not applicable.

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

None.

Item 3. Defaults upon Senior Securities

None.

Item 4. Submission of Matters to a Vote of Security Holders

The Company held a special meeting of shareholders on March 17, 2008. The shareholders voted on the following matters:

An increase in the total number of authorized shares of capital stock of the Company to a total of 250,000,000.

The ratification of the appointment of Lurie Besikof Lapidus & Company, LLP, as the Company’s independent registered public accountants for fiscal 2008.

The following results were certified by the Inspector of Elections on March 17, 2008:

Increase in Authorized Shares . The proposal to increase the total number of authorized shares of capital stock of the Company to a total of 250,000,000 was approved by the following vote:

For		Against		Abstain
13,292,878		20,347		356

Ratification of Auditor Appointment . The proposal to ratify the appointment of Lurie Besikof Lapidus & Company, LLP, as the Company’s independent registered public accountants for fiscal 2008 was approved by the following vote:

For		Against		Abstain
13,313,510		15		56

Item 5. Other Information

None.

Item 6. Exhibits

Exhibit		Description

2.2		Exchange Agreement with National Cash & Credit, LLC and the members of National Cash & Credit, LLC, dated February 26, 2008 (incorporated by reference to Exhibit 2.2 to the registrant’s Annual Report on Form 10-K filed on April 7, 2008).

31.1		Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 ( filed herewith ).

31.2		Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 ( filed herewith ).

32		Certification pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 ( filed herewith ).

SIGNATURES

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

Dated: May 4, 2009	Western Capital Resources, Inc.
	(Registrant)

	By:	/s/ John Quandahl
		John Quandahl
		Chief Executive Officer, Chief Operating Officer and Interim Chief Financial Officer