WSFL Woodstock Holdings Inc (CE)

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-Q

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

OR

[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d)OF THE
SECURITIES EXCHANGE ACT OF 1934

For the Transition Period from __________ to __________

 Georgia 6211 58-2161804
---------------------- ------------------------- -------------------
(State of Jurisdiction (Primary Standard (I.R.S. Employer
 of Incorporation Industrial Classification Identification No.)
 or organization) Code Number)

 117 Towne Lake Pkwy, Ste 200
 Woodstock, Georgia 30188
---------------------------------------- -------------------
(Address of principal executive offices) (Zip Code)

Check whether the issuer: (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act 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 [X] NO [ ]

Indicate by check mark whether registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or small reporting company in Rule 12b-2 of the Exchange Act.

Large accelerated filer __ Accelerated filer __ Non-accelerated filer __ Smaller reporting Company [X]

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes [ ] No [X]

APPLICABLE ONLY TO CORPORATE ISSUERS

State the number of shares outstanding of each of the issuer's classes of common equity, as of the latest practicable date:
17,619,028 shares of common stock, $.01 par value per share, issued and outstanding as of May 9, 2008.

WOODSTOCK FINANCIAL GROUP, INC.

INDEX

 Page No.
 --------

PART I FINANCIAL STATEMENTS

Item 1. Financial Statements 3

 Balance Sheets (unaudited) at March 31, 2008
 and (audited) at December 31, 2007 3

 Statements of Operations (unaudited) for the
 Three Months Ended March 31, 2008 and 2007 4

 Statements of Cash Flows (unaudited) for the
 Three Months Ended March 2008 and 2007 5

 Notes to Financial Statements (unaudited) 6

Item 2. Management's Discussion and Analysis of
 Financial Condition and Results of Operations 8

Item 3. Quantitative and Qualitative Disclosures About
 Market Risk 10

Item 4. Controls and Procedures 10


PART II. OTHER INFORMATION

Item 1. Legal Proceedings 11

Item 1A. Risk Factors 11

Item 2. Unregistered Sales of Equity Securities and
 Use of Proceeds 11

Item 3. Defaults Upon Senior Securities 11

Item 4. Submission of Matters to a Vote of Security
 Holders 11

Item 5. Other Information 11

Item 6. Exhibits 11

This Report contains statements which constitute forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. These statements appear in a number of places in this Report and include all statements regarding the intent, belief or current expectations of the Company, its directors or its officers with respect to, among other things: (1) the Company's financing plans;
(2) trends affecting the Company's financial condition or results of operations; (3) the Company's growth strategy and operating strategy; and (4) the declaration and payment of dividends. Investors are cautioned that any such forward-looking statements are not guarantees of future performance and involve risks and uncertainties, and that actual results may differ materially from those projected in the forward-looking statements as a result of various factors discussed herein and those factors discussed in detail in the Company's filings with the Securities and Exchange Commission.

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

WOODSTOCK FINANCIAL GROUP, INC.

Balance Sheets

 March 31, December 31,
 2008 2007
 ------------ ------------
 (unaudited) (audited)
 ------------ ------------
 Assets
 ------

Cash and cash equivalents $ 1,057,542 1,118,542
Clearing deposit 129,929 128,968
Commissions receivable 465,805 522,658
Furniture, fixtures, and equipment, at cost,
 net of accumulated depreciation of $144,920
 and $139,980, respectively 36,455 38,909
Building, net of accumulated depreciation of
 $76,919 and $67,813 respectively 1,200,368 1,209,479
Other assets 2,672 12,604
 ------------ ------------

 $ 2,892,771 3,031,160
 ============ ============

 Liabilities and Shareholders' Equity
 ------------------------------------

Liabilities:
 Accounts payable $ 31,275 40,958
 Commissions payable 375,150 450,930
 Preferred dividends payable 15,137 30,274
 Other liabilities 3,288 3,564
 Long term mortgage payable 977,483 980,848
 ------------ ------------

 Total Liabilities 1,402,333 1,506,574

Shareholders' Equity:
 Series A preferred stock of $.01 par value;
 5,000,000 shares authorized, 86,500 shares
 issued and outstanding (liquidation value
 of $865,000) 865 865
 Common stock of $.01 par value; 50,000,000
 shares authorized; 17,941,772 shares
 issued 179,418 179,418
 Additional paid-in capital 3,689,778 3,689,778
 Accumulated deficit (2,223,668) (2,189,520)
 Treasury stock 322,744 shares, carried
 at cost (155,955) (155,955)
 ------------ ------------

 Total Shareholders' Equity 1,490,438 1,524,586
 ------------ ------------

 $ 2,892,771 3,031,160
 ============ ============

See accompanying notes to unaudited financial statements.

WOODSTOCK FINANCIAL GROUP, INC.

Statements of Operations
(unaudited)

For the Three Months Ended March 31, 2008 and 2007

 2008 2007
 ------------ ------------
Operating income:
 Commissions $ 1,860,494 1,671,691
 Interest income 41,471 106,648
 Other fees 197,482 160,202
 ------------ ------------

 Total operating income 2,099,447 1,938,541
 ------------ ------------

Operating expenses:
 Commissions to brokers 1,560,199 1,469,915
 Clearing costs 41,625 64,305
 Selling, general and administrative expenses 516,634 508,903
 ------------ ------------

 Total operating expenses 2,118,458 2,043,123
 ------------ ------------

 Net loss $ (19,011) (104,582)
 ============ ============

Basic and diluted earnings per share $ (0.00) (0.01)
 ============ ============

See accompanying notes to unaudited financial statements.

WOODSTOCK FINANCIAL GROUP, INC.

Statements of Cash Flows
(unaudited)

For the Three Months Ended March 31, 2008 and 2007

 2008 2007
 ------------ ------------

Cash flows from operating activities:
 Net loss $ (19,011) (104,582)
 Adjustments to reconcile net earnings to
 net cash used by operating activities:
 Depreciation 13,277 15,974
 Change in commissions and fees receivable 56,853 (50,464)
 Change in other assets 8,971 (2,609)
 Change in accounts payable (9,683) (2,799)
 Change in commissions payable (75,780) 72,370
 Change in other liabilities (276) 1,115
 ------------ ------------

 Net cash used by operating activities (25,649) (70,995)
 ------------ ------------

Cash flows used by investing activities
 consisting of purchases of furniture,
 fixtures and equipment (1,712) -

Cash flows used by financing activities:
 Cash dividends paid on preferred stock (30,274) (30,274)
 Repayment of borrowings (3,365) (3,328)
 ------------ ------------

 Net cash used by financing activities (33,639) (33,602)
 ------------ ------------

 Net change in cash (61,000) (104,597)

Cash at beginning of period 1,118,542 1,048,952
 ------------ ------------

Cash at end of period $ 1,057,542 944,355
 ============ ============

Supplemental cash flow information:
 Cash paid for interest $ 21,031 21,069
 ============ ============

See accompanying notes to unaudited financial statements.

WOODSTOCK FINANCIAL GROUP, INC.

Notes to Financial Statements

Woodstock Financial Group, Inc. (the "Company") is a full service securities brokerage firm, which has been in business since 1995. During 2006, the Company changed its name from Raike Financial Group, Inc. to Woodstock Financial Group, Inc. The Company is registered as a broker-dealer with the Financial Industry Regulatory Authority ("FINRA") in 49 states, Puerto Rico, Washington D.C. and also as a municipal securities dealer with the Municipal Securities Regulation Board ("MSRB"). The Company is subject to net capital and other regulations of the U.S. Securities and Exchange Commission ("SEC"). The Company offers full service commission and fee-based money management services to individual and institutional investors. The Company maintains a custody-clearing relationship with Southwest Securities, Inc. In 2005, the Company, as a registered investment advisor, created a managed account program named "RFG Stars". Through the RFG Stars Program, the Company provides investment advisory services to clients. All RFG Stars Program client accounts are maintained with Fidelity Registered Investment Advisor Group ("FRIAG"), an arm of Fidelity Investments. FRIAG provides brokerage, custody, and clearing services to RFG Stars Program clients.

The interim financial statements included herein are unaudited but reflect all adjustments which, in the opinion of management, are necessary for a fair presentation of the financial position and results of operations for the interim period presented. All such adjustments are of a normal recurring nature. The results of operations for the period ended March 31, 2008 are not necessarily indicative of the results of a full year's operations.

The accounting principles followed by the Company and the methods of applying these principles conform with accounting principles generally accepted in the United States of America (GAAP). In preparing financial statements in conformity with GAAP, management is required to make estimates and assumptions that affect the reported amounts in the financial statements. Actual results could differ significantly from those estimates.

The Company sponsors a stock-based incentive compensation plan for the benefit of certain employees.

The Company did not grant any options during the first quarter of 2008 and did not recognize any related expense during the period.

During July 2007, the Company granted a total of 2,257,000 options to certain brokers with a strike price of $.01 where the market value of the Company's stock was $.15 per share at the time of grant. These options vested immediately, and the Company recognized expense related to these options of $338,550. The fair value of these options, using the Black-Scholes pricing model was $.15 per share.

On January 1, 2008, we adopted the Financial Accounting Standards Board ("FASB") Statement of Financial Accounting Standards No. 157 (SFAS No. 157), "Fair Value Measurements"(SFAS 157). SFAS 157 defines fair value, establishes a framework for measuring fair value in generally accepted accounting principles (GAAP), and expands the disclosures about fair value measurements. This statement is effective as of the beginning of an entity's first fiscal year that begins after November 15, 2007. The Company elected not to adopt the Statement of Financial Accounting Standards No. 159 (SFAS No. 159), Fair Value Option for Financial Assets and Financial Liabilities including an amendment of FASB Statement No. 115.

WOODSTOCK FINANCIAL GROUP, INC.
Notes to Financial Statements, continued

Under SFAS 157, the Company values assets and liabilities recorded or disclosed at fair value in three levels, based on the markets in which the assets and liabilities are traded and the reliability of the assumptions used to determine fair value. These levels are:

Level 1 Valuation is based upon quoted prices for identical
 instruments traded in active markets.

Level 2 Valuation is based upon quoted prices for similar
 instruments in active markets, quoted prices for
 identical or similar instruments in markets that
 are not active, and model-based valuation techniques
 for which all significant assumptions are observable
 in the market.

Level 3 Valuation is generated from model-based techniques
 that use at least one significant assumption not
 observable in the market. These unobservable
 assumptions reflect estimates of assumptions that
 market participants would use in pricing the asset
 or liability. Valuation techniques include use of
 option pricing models, discounted cash flow models
 and similar techniques.

Because the Company has no assets or liabilities recorded or disclosed based on their fair values, the adoption of SFAS No 157 had no impact on the Company's financial statements as of March 31, 2008.

Item 2.

WOODSTOCK FINANCIAL GROUP, INC.

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS

For the Three Months Ended March 31, 2008 and 2007

OVERVIEW

The following discussion should be read in conjunction with the Financial Statements of the Company and the Notes thereto appearing elsewhere herein.

FORWARD-LOOKING STATEMENTS

The following is our discussion and analysis of certain significant factors that have affected our financial position and operating results during the periods included in the accompanying financial statements. This commentary should be read in conjunction with the financial statements and the related notes and the other statistical information included in this report.

This report contains "forward-looking statements" relating to, without limitation, future economic performance, plans and objectives of management for future operations, and projections of revenues and other financial items that are based on the beliefs of management, as well as assumptions made by and information currently available to management. The words "may," "will," "anticipate," "should," "would," "believe," "contemplate," "expect," "estimate," "continue," and "intend," as well as other similar words and expressions of the future, are intended to identify forward-looking statements. Our actual results may differ materially from the results discussed in the forward-looking statements, and our operating performance each quarter is subject to various risks and uncertainties that are discussed in detail in our filings with the Securities and Exchange Commission, including, without limitation:

* significant increases in competitive pressure in the financial services industries;

* changes in political conditions or the legislative or regulatory environment;

* general economic conditions, either nationally or regionally and especially in our primary service area, becoming less favorable than expected;

* changes occurring in business conditions and inflation;

* changes in technology;

* changes in monetary and tax policies;

* changes in the securities markets; and

* other risks and uncertainties detailed from time to time in our filings with the Securities and Exchange Commission.

OVERVIEW AND GENERAL INDUSTRY CONDITIONS

Our primary sources of revenue are commissions earned from brokerage services. Our principal business activities are, by their nature, affected by many factors, including general economic and financial conditions, movement of interest rates, security valuations in the marketplace, regulatory changes, competitive conditions, transaction volume and market liquidity. Consequently, brokerage commission revenue and investment banking fees can be volatile. While we seek to maintain cost controls, a significant portion of our expenses is fixed and does not vary with market activity. As a result, substantial fluctuations can occur in our revenue and net income from period to period.

The Company is a licensed insurance broker and we receive commission revenue as a result of our insurance operations. The Company continues to grow this business; however does not regard insurance revenue as material at this time.

Item 2.

WOODSTOCK FINANCIAL GROUP, INC.

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS, continued

For the Quarters Ended March 31, 2008 and 2007

RESULTS OF OPERATIONS - QUARTERS ENDED MARCH 31, 2008 AND 2007

Total revenue for the quarter ended March 31, 2008 increased by $160,906 or by 8% to $2,099,447 from $1,938,541 for the comparable period in 2007.

Commission revenue increased by $188,803 or 11% to $1,860,494 from $1,671,691 for the comparable period in 2007. This increase was principally due to an increase in insurance and mutual fund business in the first quarter of 2008.

Interest income decreased by $65,177 or 61% during the quarter ended March 31, 2008 compared to the same period in 2007. This decrease in interest earned from margin accounts and customer accounts held by our clearing agent is due primarily to a decrease in the Company's marginal rate received on these accounts and the overall declining short-term rates in the market place.

Fees from clearing transaction charges and other income increased by $37,280 or 24% for the quarter ended March 31, 2008 compared to the same period in 2007. This increase is also due to the increase in transactional fees.

Total operating expenses for the quarter ended March 31, 2008 increased by $75,335 or 4% to $2,118,458 from $2,043,123 for the same period in 2007. The increased expense was due primarily to the increase in commissions paid to brokers, which is due to an increase in transactional business. This increase was partially offset by a decrease in clearing costs.

Commissions to brokers increased by $90,284 or 6% to $1,560,199 for the quarter ended March 31, 2008 from $1,469,915 in the prior year. This increase coincides with the increase in commission revenue during the quarter.

Clearing costs decreased by $22,680 or 35% to $41,625 for the quarter ended March 31, 2008 from $64,305 in the prior year. As a percentage of commission income clearing costs were 2.2% in 2008 compared to 3.8% in 2007. This decrease is due to the change in the mix of commissions, with an increase in commissions primarily from the insurance business.

Selling, general and administrative expense increased $11,856 or 2% to $516,634 for the quarter ended March 31, 2008 from $504,778 in the prior year. This slight increase was due to primarily increases in salaries, consultant fees, legal and professional fees, and marketing.

Net loss was $19,011 for the quarter ended March 31, 2008 compared to net loss of $104,582 for the comparable period in prior year.

LIQUIDITY AND CAPITAL RESOURCES

Our assets are reasonably liquid with a substantial majority consisting of cash and cash equivalents, and receivables from other broker-dealers and our clearing agent, all of which fluctuate depending upon the levels of customer business and trading activity. Receivables from broker-dealers and our clearing agent turn over rapidly. Both our total assets as well as the individual components as a percentage of total assets may vary significantly from period to period because of changes relating to customer demand, economic, market conditions and proprietary trading strategies. Our total net assets at March 31, 2008 were $1,490,438 of which $1,057,542 is cash.

As a broker-dealer, we are subject to the Securities and Exchange Commission Uniform Net Capital Rule (Rule15c3-1). The Rule requires maintenance of minimum net capital and that we maintain a ratio of aggregate indebtedness (as defined) to net capital (as defined) not to exceed 15 to 1. Our minimum net capital requirement is $100,000. Under the Rule we are subject to certain restrictions on the use of capital and its related liquidity. Our net capital position at March 31, 2008 was $1,228,375 and our ratio of aggregate indebtedness to net capital was .35 to 1.

Historically, we have financed our operations through cash flow from operations and the private placement of equity securities. We have not employed any significant leverage or debt to fund operating needs.

We believe that our capital structure is adequate for our current operations. We continually review our overall capital and funding needs to ensure that our capital base can support the estimated needs of the business. These reviews take into account business needs as well as the Company's regulatory capital requirements. Based upon these reviews, to take advantage of strong market conditions and to fully implement our expansion strategy, we will continue to pursue avenues to decrease costs and increase our capital position.

The Company's cash and cash equivalents decreased by $61,000 to $1,057,542 as of March 31, 2008, from $1,118,542 as of December 31, 2007. This overall decrease was due to net cash used by operating activities of $25,649, cash used in investing activities of $1,712, and cash used by financing activities of $33,640.

EFFECTS OF INFLATION AND OTHER ECONOMIC FACTORS

Market prices of securities are generally influenced by changes in rates of inflation, changes in interest rates and economic activity generally. Our revenues and net income are, in turn, principally affected by changes in market prices and levels of market activity. Moreover, the rate of inflation affects our expenses, such as employee compensation, occupancy expenses and communications costs, which may not be readily recoverable in the prices of services offered to our customers. To the extent inflation, interest rates or levels of economic activity adversely affect market prices of securities, our financial condition and results of operations will also be adversely affected.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

Not Applicable

Item 4. Controls and Procedures

As of the end of the period covered by this report, we carried out an evaluation, under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, of the effectiveness of our disclosure controls and procedures as defined in Exchange Act Rule 13a-15(e). Based upon that evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that our current disclosure controls and procedures are effective in timely alerting them to material information relating to the Company that is required to be included in the Company's periodic filings with the Securities and Exchange Commission. There have been no significant changes in the Company's internal controls over financial reporting during the quarter ended March 31, 2008 that have materially affected, or are reasonably likely to materially affect, the Company's internal control over financial reporting.

PART II. OTHER INFORMATION

Item 1. Legal Proceedings

Currently, the Company has no pending claims by retail customers. We are the subject of routine examinations by self regulatory organizations including the SEC, FINRA and individual states and are not aware of any regulatory examinations at this time that would have a material impact on the company's financial position.

Item 1A. Risk Factors

None

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

Not applicable.

Item 3. Defaults Upon Senior Securities

Not applicable.

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

None.

Item 5. Other Information

None.

Item 6. Exhibits

31.1 Certification of Chief Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to
Section 302 of the Sarbanes-Oxley Act of 2002

31.2 Certification of Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to
Section 302 of the Sarbanes-Oxley Act of 2002

32 Certification of the Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

SIGNATURES

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.

WOODSTOCK FINANCIAL GROUP, INC.

Date: May 14, 2008 By: /S/WILLIAM J. RAIKE, III
 ------------------------------
 William J. Raike, III
 President, Chief Executive
 Officer and Director




Date: May 14, 2008 By: /S/MELISSA L. WHITLEY
 ------------------------------
 Melissa L. Whitley
 Chief Financial and Accounting
 Officer

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