UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
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ý
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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For the Quarter Ended September 30, 2011
OR
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¨
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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For the Transition Period from ________ to ________
Woodstock Holdings, Inc.
(Exact name of registrant as specified in its charter)
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Georgia
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6211
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58-2161804
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(State of Jurisdiction of Incorporation or organization)
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(Primary Standard Industrial Classification Code Number)
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(I.R.S. Employer Identification No.)
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117 Towne Lake Pkwy, Ste 200
Woodstock, Georgia
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30188
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(Address of principal executive offices)
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(Zip Code)
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770-516-6996
(Telephone Number)
Woodstock Financial Group, Inc.
(Former name)
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
ý
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.
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Large accelerated filer
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¨
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Accelerated filer
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¨
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Non-accelerated filer
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¨
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Smaller reporting company
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ý
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(Do not check if smaller reporting company)
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Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
¨
Yes
ý
No
APPLICABLE ONLY TO CORPORATE ISSUERS
State the number of shares outstanding of each of the issuers classes of common equity, as of the latest practicable date: 18,044,028 shares of common stock, $.01 par value per share, outstanding as of November 8, 2011.
WOODSTOCK HOLDINGS, INC.
(formerly Woodstock Financial Group, Inc.)
INDEX
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Page No.
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PART I
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FINANCIAL STATEMENTS
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Item 1.
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Consolidated Financial Statements
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3
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Consolidated Balance Sheets (unaudited) at September 30, 2011 and (audited) at
December 31, 2010
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3
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Consolidated Statements of Operations (unaudited) for the Three Months and the Nine Months Ended September 30, 2011 and 2010
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4
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Consolidated Statements of Shareholders Equity (unaudited) for the Nine Months Ended September 30, 2011 and 2010
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5
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Consolidated Statements of Cash Flows (unaudited) for the Nine Months Ended
September 30, 2011 and 2010
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6
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Notes to Consolidated Financial Statements (unaudited)
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7
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Item 2.
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Managements Discussion and Analysis of Financial Condition and
Results of Operations
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14
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Item 3.
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Quantitative and Qualitative Disclosures About Market Risk
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17
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Item 4.
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Controls and Procedures
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18
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PART II
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OTHER INFORMATION
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Item 1.
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Legal Proceedings
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19
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Item 1A.
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Risk Factors
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19
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Item 2.
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Unregistered Sales of Equity Securities and Use of Proceeds
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19
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Item 3.
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Defaults Upon Senior Securities
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19
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Item 4.
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Submission of Matters to a Vote of Security Holders
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19
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Item 5.
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Other Information
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19
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Item 6.
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Exhibits
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19
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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 Companys financing plans; (2) trends affecting the Companys financial condition or results of operations; (3) the Companys 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 Companys filings with the Securities and Exchange Commission.
-2-
PART I. FINANCIAL INFORMATION
Item 1. Consolidated Financial Statements
WOODSTOCK HOLDINGS, INC.
(formerly Woodstock Financial Group, Inc.)
Consolidated Balance Sheets
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September 30, 2011
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December 31, 2010
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(unaudited)
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(audited)
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ASSETS
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Cash and cash equivalents
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$
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864,889
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$
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968,716
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Clearing deposit
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181,184
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161,182
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Securities inventory, at fair value
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754,266
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1,116,222
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Realized trading profit and interest receivables
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11,836
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20,642
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Commissions receivable
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1,060,982
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1,247,324
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Furniture, fixtures, and equipment, at cost, net of accumulated depreciation of $97,850 and $90,679, respectively
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24,787
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20,283
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Building, at cost, net of accumulated depreciation of $197,889 and $172,636, respectively
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1,079,399
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1,104,652
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Other assets
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162,536
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131,049
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Total assets
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$
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4,139,879
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$
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4,770,070
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LIABILITIES AND SHAREHOLDERS' EQUITY
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Liabilities:
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Accounts payable
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$
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65,561
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$
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98,798
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Commissions payable
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866,995
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1,007,161
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Preferred dividends payable
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15,050
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30,274
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Liability for securities inventory
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737,789
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1,079,377
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Mortgage note
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927,143
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939,000
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Deferred revenue
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375,000
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375,000
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Other liabilities
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34,281
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4,245
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Total liabilities
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3,021,819
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3,533,855
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Commitments and contingencies
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Shareholders' equity:
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Series A preferred stock, $.01 par value; 5,000,000 shares authorized,
86,500 and 86,500 shares issued and outstanding at September 30, 2011 and
December 31, 2010, respectively (redemption value of $865,000 and
$865,000 at September 30, 2011 and December 31, 2010, respectively)
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865
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865
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Common stock, $.01 par value; 50,000,000 shares authorized;
18,366,772 shares issued; 18,044,028 shares outstanding
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183,668
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180,668
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Additional paid-in capital
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3,697,032
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3,698,528
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Accumulated deficit
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(2,607,545
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)
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(2,487,891
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)
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Treasury stock, 323,244 shares and 322,744 shares at September 30, 2011
and December 31, 2010, respectively, carried at cost
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(155,960
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)
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(155,955
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)
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Total shareholders' equity
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1,118,060
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1,236,215
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Total liabilities and shareholders' equity
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$
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4,139,879
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$
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4,770,070
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See accompanying notes to unaudited consolidated financial statements.
-3-
WOODSTOCK HOLDINGS, INC.
(formerly Woodstock Financial Group, Inc.)
Consolidated Statements of Operations
(unaudited)
For the Three and Nine Months Ended September 30, 2011 and 2010
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Three Months Ended
September 30,
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Nine Months Ended
September 30,
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2011
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2010
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2011
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2010
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OPERATING INCOME
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Commission revenue
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$
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2,833,552
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$
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2,436,310
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$
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9,234,753
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$
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6,916,047
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Interest income
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87,322
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81,577
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298,465
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212,685
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Net realized gain on securities
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171,178
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-
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574,748
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-
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Other fees
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192,880
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252,765
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659,302
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687,983
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Total operating income
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3,284,932
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2,770,652
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10,767,268
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7,816,715
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OPERATING EXPENSES
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Commissions to brokers
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2,522,858
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2,090,205
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8,575,651
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5,924,766
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Compensation on trading profit
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145,304
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-
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145,304
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-
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Clearing costs
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38,023
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41,607
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113,184
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113,606
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Selling, general, and administrative expenses
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625,995
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518,199
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1,863,351
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1,537,012
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Interest expense
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33,279
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16,679
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104,762
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44,211
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Unrealized loss on securities
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6,906
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-
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20,368
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-
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Total operating expenses
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3,372,365
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2,666,690
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10,822,620
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7,619,595
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Net income (loss)
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$
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(87,433
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)
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$
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103,962
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$
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(55,352
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)
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$
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197,120
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Basic and diluted earnings (loss) per common share
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$
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(0.00
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)
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$
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0.01
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$
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(0.00
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)
|
$
|
0.01
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|
See accompanying notes to unaudited consolidated financial statements.
-4-
WOODSTOCK HOLDINGS, INC.
(formerly Woodstock Financial Group, Inc.)
Consolidated Statements of Shareholders Equity
(unaudited)
For the Nine Months Ended September 30, 2011 and 2010
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Preferred
Stock
|
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Common
Stock
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Additional
Paid-in
Capital
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Accumulated
Deficit
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Treasury
Stock
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Total
Shareholders
Equity
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Balance at December 31, 2010
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$
|
865
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$
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180,668
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$
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3,698,528
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$
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(2,487,891
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)
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$
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(155,955
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)
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$
|
1,236,215
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Common stock dividends
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|
-
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|
-
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-
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(19,008
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)
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-
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(19,008
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)
|
Preferred stock dividends
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|
-
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|
-
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-
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(45,294
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)
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-
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|
(45,294
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)
|
Redemption of preferred stock
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|
-
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|
-
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|
(1,496
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)
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-
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|
(5
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)
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|
(1,501
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)
|
Exercise of stock options
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|
-
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|
3,000
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|
-
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|
|
-
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|
|
-
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|
|
3,000
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|
Net earnings
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|
-
|
|
|
-
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|
-
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|
|
(55,352
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)
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|
-
|
|
|
(55,352
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at September 30, 2011
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|
$
|
865
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|
$
|
183,668
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|
$
|
3,697,032
|
|
$
|
(2,607,545
|
)
|
$
|
(155,960
|
)
|
$
|
1,118,060
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
|
|
|
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
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|
|
|
|
|
|
|
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|
|
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|
|
Preferred
Stock
|
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Common
Stock
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Additional
Paid-in
Capital
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|
Accumulated
Deficit
|
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Treasury
Stock
|
|
Total
Shareholders
Equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
|
Balance at December 31, 2009
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|
$
|
865
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|
$
|
179,418
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|
$
|
3,697,278
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|
$
|
(2,548,481
|
)
|
$
|
(155,955
|
)
|
$
|
1,173,125
|
|
Preferred stock dividends
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
(45,412
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)
|
|
-
|
|
|
(45,412
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)
|
Net earnings
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
197,120
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|
|
-
|
|
|
197,120
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at September 30, 2010
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|
$
|
865
|
|
$
|
179,418
|
|
$
|
3,697,278
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|
$
|
(2,396,773
|
)
|
$
|
(155,955
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)
|
$
|
1,324,833
|
|
See accompanying notes to unaudited consolidated financial statements.
-5-
WOODSTOCK HOLDINGS, INC.
(formerly Woodstock Financial Group, Inc.)
Consolidated Statements of Cash Flows
(unaudited)
For the Nine Months Ended September 30, 2011 and 2010
|
|
|
|
|
|
|
|
|
|
2011
|
|
2010
|
|
|
|
|
|
|
|
|
|
CASH FLOWS FROM OPERATING ACTIVITIES
|
|
|
|
|
|
|
|
Net income
|
|
$
|
(55,352
|
)
|
$
|
197,120
|
|
Adjustments to reconcile net income to net cash flows from operating activities
|
|
|
|
|
|
|
|
Depreciation
|
|
|
32,424
|
|
|
30,708
|
|
Unrealized loss on investments
|
|
|
20,368
|
|
|
-
|
|
Changes in operating assets and liabilities
|
|
|
|
|
|
|
|
Realized trading profit and interest receivable
|
|
|
8,806
|
|
|
-
|
|
Commissions receivable
|
|
|
186,342
|
|
|
(294,081
|
)
|
Clearing deposit
|
|
|
(20,002
|
)
|
|
(500,081
|
)
|
Other assets
|
|
|
(31,487
|
)
|
|
(114,934
|
)
|
Accounts payable
|
|
|
(33,237
|
)
|
|
(34,129
|
)
|
Commissions payable
|
|
|
(140,166
|
)
|
|
216,175
|
|
Deferred revenue
|
|
|
-
|
|
|
500,000
|
|
Other liabilities
|
|
|
30,036
|
|
|
1,289
|
|
Net cash flows from operating activities
|
|
|
(2,268
|
)
|
|
2,067
|
|
|
|
|
|
|
|
|
|
CASH FLOWS FROM INVESTING ACTIVITIES
|
|
|
|
|
|
|
|
Purchases of furniture, fixtures and equipment
|
|
|
(11,675
|
)
|
|
(3,889
|
)
|
|
|
|
|
|
|
|
|
CASH FLOWS FROM FINANCING ACTIVITIES
|
|
|
|
|
|
|
|
Proceeds from exercise of options
|
|
|
3,000
|
|
|
-
|
|
Principal payments on mortgage note
|
|
|
(11,857
|
)
|
|
(11,053
|
)
|
Redemption of preferred stock
|
|
|
(1,501
|
)
|
|
-
|
|
Dividends paid on common stock
|
|
|
(19,008
|
)
|
|
-
|
|
Dividends paid on preferred stock
|
|
|
(60,518
|
)
|
|
(60,548
|
)
|
Net cash flows from financing activities
|
|
|
(89,884
|
)
|
|
(71,601
|
)
|
|
|
|
|
|
|
|
|
NET CHANGE IN CASH AND CASH EQUIVALENTS
|
|
|
(103,827
|
)
|
|
(73,423
|
)
|
CASH AND CASH EQUIVALENTS,
beginning of year
|
|
|
968,716
|
|
|
633,674
|
|
CASH AND CASH EQUIVALENTS,
end of period
|
|
$
|
864,889
|
|
$
|
560,251
|
|
|
|
|
|
|
|
|
|
SUPPLEMENTAL DISCLOSURE OF NON-CASH TRANSACTIONS
|
|
|
|
|
|
|
|
Securities inventory obtained via financing through Southwest Securities, Inc.
|
|
$
|
32,294,078
|
|
$
|
-
|
|
Satisfaction of liability for securities inventory sold via Southwest Securities, Inc.
|
|
$
|
32,635,666
|
|
$
|
-
|
|
|
|
|
|
|
|
|
|
SUPPLEMENTAL DISCLOSURE OF CASH PAID
|
|
|
|
|
|
|
|
FOR INTEREST
|
|
$
|
104,762
|
|
$
|
44,211
|
|
See accompanying notes to unaudited consolidated financial statements.
-6-
WOODSTOCK HOLDINGS, INC.
(formerly Woodstock Financial Group, Inc.)
(unaudited)
Notes to Consolidated Financial Statements
(1)
Description of Business and Summary of Significant Accounting Policies
Business
Woodstock Holdings, Inc. (the Company) is a holdings company, engaged through a subsidiary in full service securities brokerage and investment banking since 1995. Effective January 20, 2010, it reorganized into a holding company and changed its name, transferring the name Woodstock Financial Group, Inc. (WFG) to a newly established 100% owned broker-dealer subsidiary.
The Company reports its financial position and results of operations for 2009 and earlier periods on a pre-reorganization basis. For reporting periods beginning February 2010, it reports its financial position and results of operations on a consolidated basis.
WFG is a full service securities brokerage firm, which was incorporated in January 2010. WFG is registered as a broker-dealer with the Financial Industry Regulatory Authority (FINRA) in 50 states, Puerto Rico, Washington D.C. and also as a municipal securities dealer with the Municipal Securities Regulation Board. WFG is also a United States Securities and Exchange Commission (SEC) Registered Investment Advisor and maintains advisory accounts through Fidelity Registered Investment Advisor Group (FRIAG), an arm of Fidelity Investments and IMG (Investment Management Group, a division of Southwest Securities.). WFG is subject to net capital and other regulations of the SEC. WFG offers full service commission and fee-based money management services to individual and institutional investors.
WFG maintains a custody-clearing relationship with Southwest Securities, Inc. (Southwest) and these accounts are introduced to Southwest on a fully disclosed basis.
Basis of Presentation
The accounting and reporting policies of the Company conform to accounting principles generally accepted in the United States of America (GAAP) and to generally accepted practices within the broker-dealer industry. The preparation of financial statements in conformity with GAAP requires the Companys management to make estimates and assumptions that affect the amounts reported in the financial statements. Actual results could differ from these estimates.
Concentrations of Credit Risk
Financial instruments, which potentially subject the Company to significant concentrations of credit risk, consist principally of cash and cash equivalents, clearing deposit, securities inventory and commissions receivable.
Cash and cash equivalents and the clearing deposit are deposited in various financial institutions. At times, amounts on deposit may be in excess of the FDIC insurance limit. From December 31, 2010, to December 31, 2012, all noninterest-bearing transaction accounts are fully insured, regardless of the balance of the accounts, at all FDIC insured institutions. At September 30, 2011, all cash deposits were covered under the FDIC insurance limits.
At September 30, 2011 and December 31, 2010, commissions receivable were approximately $1,061,000 and $1,247,000, and of that approximately $1,052,000 and $1,234,000 were due from Southwest, respectively.
Revenue Recognition and Commissions Receivable
WFG charges commissions and/or fees for customer transactions. These commissions and/or fees are charged within the guidelines of industry standards. Commissions are recorded on a trade date basis, which does not differ materially from the settlement date basis.
Advertising
The Company recognizes advertising costs as incurred in selling, general and administrative expenses in the statement of operations.
-7-
WOODSTOCK HOLDINGS, INC.
(formerly Woodstock Financial Group, Inc.)
(unaudited)
Notes to Consolidated Financial Statements
Cash and Cash Equivalents
Cash and cash equivalents include short-term deposits and highly liquid investments that have original maturities of three months or less when purchased and are stated at cost.
Building and Furniture, Fixtures and Equipment
Building and furniture, fixtures and equipment are reported at cost, less accumulated depreciation. Depreciation of furniture, fixtures and equipment is computed using the double declining balance method over the estimated useful life of five years. Depreciation of the building is computed using the straight-line method over the estimated useful life of 39 years. For assets that are purchased after January 1, 2011, the straight line depreciation method replaced the double declining balance depreciation method.
The cost of maintenance and repairs, which do not improve or extend the useful life of the respective asset, is charged to earnings as incurred, whereas significant renewals and improvements are capitalized.
Income Taxes
Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Additionally, the recognition of future tax benefits, such as net operating loss carryforwards, is required to the extent that realization of such benefits is more likely than not. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which the assets and liabilities are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income tax expense in the period that includes the enactment date.
In the event the future tax consequences of differences between the financial reporting bases and the tax bases of the Companys assets and liabilities result in deferred tax assets, an evaluation of the probability of being able to realize the future benefits indicated by such asset is required. A valuation allowance is provided for the portion of the deferred tax asset when it is more likely than not that some or all of the deferred tax asset will not be realized. In assessing the realizability of the deferred tax assets, management considers the scheduled reversals of deferred tax liabilities, projected future taxable income, and tax planning strategies.
The Company files income tax returns in the United States and Georgia, which are subject to examination by the tax authorities in these jurisdictions. Generally, the statute of limitations related to the Companys federal and state income tax return is three years. The state impact of any federal changes for prior years remains subject to examination for a period up to five years after formal notification to the states.
On July 13, 2006, the Financial Accounting Standards Board (FASB) released FASB Interpretation No. 48 Accounting for Uncertainty in Income Taxes (primarily codified by Accounting Standard Codification ASC Topic 740). ASC Topic 740 provides guidance for how uncertain tax provisions should be recognized, measured, presented and disclosed in the financial statements. ASC Topic 740 requires the evaluation of tax positions taken or expected to be taken in the course of preparing the Companys tax returns to determine whether the tax positions would more-likely-than-not be sustained if challenged by the applicable tax authority. Tax positions not deemed to meet the more-likely-than-not threshold would be recorded as a tax benefit or expense in the current year.
The Company follows ASC Topic 740. ASC Topic 740 specifies the way companies are to account for uncertainties in income tax reporting, and prescribes a methodology for recognizing, reversing, and measuring the tax benefits of a tax position taken, or expected to be taken, in a tax return. The adoption of ASC Topic 740 did not have a material effect on the financial statements of the Company. Management is unaware of any material tax positions that do not meet the more-likely-than-not threshold as of September 30, 2011 and December 31, 2010.
Treasury Stock
Treasury stock is accounted for by the cost method. Subsequent reissuances are accounted for at average cost.
-8-
WOODSTOCK HOLDINGS, INC.
(formerly Woodstock Financial Group, Inc.)
(unaudited)
Notes to Consolidated Financial Statements
Net Earnings Per Share
During the nine months ended September 30, 2011 and 2010, the Company had potential common stock issuances outstanding totaling 86,500 and 86,500 shares related to preferred stock. The effect of the convertible preferred stock issuances would be antidilutive because the exercise price is more than the fair value of the stock. The effect of these potential common stock issuances has been excluded from the computation of net earnings per share for each year. Additionally, as of September 30, 2011, the Company had options outstanding. The effect of these options was also not considered due to their antidilutive effect.
Presented below is a summary of earnings (loss) per common share for the three and nine months ended September 30, 2011 and 2010:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
September 30,
|
|
Nine Months Ended
September 30,
|
|
|
|
2011
|
|
2010
|
|
2011
|
|
2010
|
|
Weighted average common shares outstanding
|
|
|
17,944,028
|
|
|
17,619,028
|
|
|
17,810,695
|
|
|
17,619,028
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net earnings (loss)
|
|
$
|
(87,433
|
)
|
$
|
103,962
|
|
$
|
(55,352
|
)
|
$
|
197,120
|
|
Preferred stock dividends
|
|
|
(15,050
|
)
|
|
(15,137
|
)
|
|
(45,294
|
)
|
|
(45,412
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net earnings (loss) attributable to common shareholders
|
|
$
|
(102,483
|
)
|
$
|
88,825
|
|
$
|
(100,646
|
)
|
$
|
151,708
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net earnings (loss) per common share
|
|
$
|
(0.01
|
)
|
$
|
0.01
|
|
$
|
(0.01
|
)
|
$
|
0.01
|
|
Stock-Based Compensation
The Company sponsors a stock-based incentive compensation plan for the benefit of certain employees. The Company accounts for this plan under the recognition and measurement principles of ASC 718
, Compensation-Stock Compensation.
Fair Value of Financial Instruments
ASC 820,
Fair Value Measurements and Disclosures
, establishes a framework for measuring fair value. The framework provides a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurement) and the lowest priority to unobservable inputs (Level 3 measurements). The three levels of the fair value hierarchy under ASC 820 are described below.
Level 1
Inputs to the valuation methodology are unadjusted quoted prices for identical assets or liabilities in active markets that the Company has the ability to access.
Level 2
Inputs to the valuation methodology including quoted prices for similar or identical assets or liabilities in active or inactive markets. Inputs other than quoted prices that are observable for the asset or liability, and inputs that are derived from observable market data. If the asset or liability has a specified term, the Level 2 input must be observable for substantially the full term of the asset or liability.
Level 3
Inputs to the valuation methodology are unobservable and significant to the fair value measurement.
Reclassifications
Certain reclassifications have been made to the prior period balances in order to conform to the current period presentation.
-9-
WOODSTOCK HOLDINGS, INC.
(formerly Woodstock Financial Group, Inc.)
(unaudited)
Notes to Consolidated Financial Statements
(2)
Related Party Transactions
During the quarters ended September 30, 2011 and 2010, a company owned by the Chief Executive Officer (CEO) received consulting fees from WFG in the amount of approximately $41,000 each quarter. In addition, WFG pays an override equal to 2.5% of revenues to a company owned by the CEO. During the quarters ended September 30, 2011 and 2010, the earned override bonus was approximately $80,000 and $68,000, respectively. Of the override bonus earned during the quarters ended September 30, 2011 and 2010, approximately $57,000 and $44,000 was paid, respectively. The unpaid portion of the 2011 override bonus of approximately $23,000 was included in accounts payable at September 30, 2011.
During the nine month periods ended September 30, 2011 and 2010, a company owned by the Chief Executive Officer (CEO) received consulting fees from WFG in the amount of approximately $124,000 each period. A company owned by the CEOs spouse also receives consulting fees of $120,000 annually and a bonus of $25,000 was also received for the nine months ended 9/30/2011. In addition, WFG pays an override equal to 2.5% of revenues to a company owned by the CEO. During the nine months ended September 30, 2011 and 2010, the earned override bonus was approximately $265,000 and $194,000, respectively. Of the override bonus earned during the nine months ended September 30, 2011 and 2010, approximately $279,000 and $200,000 was paid, respectively. Included in the paid override bonus is approximately $37,000 and $30,000 from payments that were earned in 2010 and 2009, respectively. The unpaid portion of the 2011 override bonus of approximately $23,000 was included in accounts payable at September 30, 2011.
Registered representatives licensed with WFG sold interests in Raike Real Estate Income Fund (RRIF) and received approximately $2,500 and $26,000 in commissions during the nine months ended September 30, 2011 and 2010, respectively. RRIF is managed by a company owned by the CEO of WHI.
Pursuant to Exchange Act Rules 17a-3(a) and (a)(2), WFG and WHI have an expense sharing agreement in place.
(3)
Net Capital Requirements
The Company is subject to the SEC Uniform Net Capital Rule (SEC Rule 15c3-1), which requires the maintenance of minimum net capital and requires that the ratio of aggregate indebtedness to net capital, both as defined, shall not exceed 15 to 1 (and the rule of the applicable exchange also provides that equity capital may not be withdrawn or cash dividends paid if the resulting net capital ratio would exceed 10 to 1). At September 30, 2011, the Company had net capital of $663,788, which was $563,788 in excess of its required net capital of $100,000. The Companys net capital ratio was 2.02 to 1.
(4)
Off-Balance Sheet Risk
Customer transactions are introduced and cleared through the Companys clearing agent on a fully disclosed basis. Under the terms of its clearing agreement, the Company is obligated to make sure that its customers pay for all transactions and meet all maintenance requirements, if applicable, in a timely manner under Regulation-T of the Federal Reserve Board.
The Company engages in inter-dealer activity with various broker-dealers and qualified institutional buyers. These transactions are affirmed/compared in a timely fashion to make sure all such counterparties fulfill their settlement obligations.
(5)
Income Taxes
The Company has recorded $0 income tax expense in the nine months ended September 30, 2011 and 2010 due to the Company recording a 100% valuation allowance on the net deferred tax asset as the realization of the deferred tax asset is dependent on future taxable income.
The major components of the deferred tax asset at September 30, 2011 and December 31, 2010 are operating loss carryforwards, deferred revenue and stock based compensation expense.
At December 31, 2010, the Company had net operating loss carryforwards for tax purposes of approximately $1.2 million which will expire beginning in 2016, if not previously utilized.
-10-
WOODSTOCK HOLDINGS, INC.
(formerly Woodstock Financial Group, Inc.)
(unaudited)
Notes to Consolidated Financial Statements
(6)
Mortgage Note
In September 2009, the Company refinanced the mortgage note on the current office space in Woodstock, Georgia. The new note has a 5-year balloon payment and matures September 2014. It is amortized on a 25-year basis at a fixed rate of interest at 7.00%, and is collateralized by the building.
The Company paid a monthly condo association fee of approximately $41,000 for the nine months ended September 30, 2011 and 2010, respectively.
Scheduled principal payments due on the mortgage note as of December 31, 2010 are as follows:
|
|
Years ending December 31:
|
|
2011
|
$
16,021
|
2012
|
16,993
|
2013
|
18,407
|
2014
|
887,579
|
|
$
939,000
|
(7)
Selling, General and Administrative Expenses
Components of selling, general and administrative expenses which are greater than 1% of total revenues for the three and nine months ended September 30, 2011 and 2010 are as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
September 30,
|
|
Nine Months Ended
September 30,
|
|
|
|
2011
|
|
2010
|
|
2011
|
|
2010
|
|
Consultant fees
|
|
$
|
189,699
|
|
$
|
243,957
|
|
$
|
567,372
|
|
$
|
545,664
|
|
Compensation
|
|
|
157,992
|
|
|
126,446
|
|
|
467,631
|
|
|
371,670
|
|
Legal and professional fees
|
|
|
51,778
|
|
|
19,930
|
|
|
177,951
|
|
|
80,403
|
|
(8)
Securities Inventory and Liability for Securities Inventory
The Company maintains an investment grade municipal bond inventory account for the purpose of inter-dealer trading. This inventory account is monitored on a daily basis for credit risk, market risk and collateralization purposes. This inventory is held in a segregated margin account at Southwest, the Companys clearing firm. This segregated margin account is cross collateralized by the Companys clearing deposit account at Southwest. From time to time the Company may deposit cash into or withdraw cash from this account when needed. The current interest rate environment has produced a fluctuating negative/positive carry on this trading account.
(9)
Shareholders Equity
Stock Option Plan
The Company sponsors an incentive stock option plan for the benefit of certain employees. The Board of Directors approved a total of 7.6 million shares to be available for potential future option grants. There were no stock options granted during the nine months ended September 30, 2011.
During October 2010, the Company granted a total of 125,000 options for a certain employee with a strike price of $.01 where the market value of the Companys stock was $.05 per share at the time of grant. These options vested immediately, and the Company recognized $1,250 of expense related to these options. The fair value of these options, calculated using the Black-Scholes pricing model was $.04 per share.
During October 2009, the Company granted a total of 500,000 options as part of an employment and compensation package with a strike price of $.01. The market value of the Companys stock was $.015 per share at the time of grant. These options will vest 100,000 shares at a time, over 5 years starting in 2009. The fair value of these options, using the Black-Scholes pricing model was $.015 per share. The Company previously recognized expense related to these options of $7,500 in the fourth quarter of 2009.
-11-
WOODSTOCK HOLDINGS, INC.
(formerly Woodstock Financial Group, Inc.)
(unaudited)
Notes to Consolidated Financial Statements
The Company used the following assumptions in estimating the fair value of the option awards:
|
|
Assumptions in estimating the fair value of options awarded:
|
Expected volatility
|
.5%
|
Risk-free interest rate
|
4.99%
|
Expected life
|
10 years
|
Dividend yield
|
0%
|
A summary of activity in the stock option plan is presented below:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine Months Ended
September 30, 2011
|
|
Year Ended
December 31, 2010
|
|
|
|
Shares
|
|
Weighted
Average
Price
Per Share
|
|
Shares
|
|
Weighted
Average
Price
Per Share
|
|
Outstanding and exercisable, Beginning of period
|
|
|
2,457,000
|
|
$
|
0.01
|
|
|
2,357,000
|
|
$
|
0.01
|
|
Vested during the period
|
|
|
100,000
|
|
$
|
0.01
|
|
|
225,000
|
|
$
|
0.01
|
|
Exercised
|
|
|
(300,000
|
)
|
$
|
0.01
|
|
|
(125,000
|
)
|
$
|
0.01
|
|
Outstanding and exercisable, end of period
|
|
|
2,257,000
|
|
$
|
0.01
|
|
|
2,457,000
|
|
$
|
0.01
|
|
The total intrinsic value of options outstanding and exercisable as of September 30, 2011 and December 31, 2010 was not considered material to the financial statements.
If stock options are exercised in the future, management plans to issue additional shares of common stock to redeem the options.
Perpetual Preferred Stock
The Preferred Stock pays a cumulative annual dividend of $.70 per share. Each share of Preferred Stock is convertible into five shares of common stock at the option of the holder. Each share of Preferred Stock is mandatorily convertible into five shares of common stock upon the filing of a public offering registration statement or a change in control (as defined). The Company may redeem the Preferred Stock by giving 30-days notice to the preferred stockholders for a redemption price of $10.00 per share, plus unpaid dividends through the redemption date. Upon voluntary or involuntary dissolution of the Company, the preferred stockholders will receive $10.00 per share prior to the distribution of any amounts to common shareholders. The Preferred Stock has no voting rights. As of September 30, 2011 and December 31, 2010, there were no preferred dividends in arrears.
(10)
Employee Retirement Plan
The Company has established a Savings Incentive Match Plan for Employees of Small Employers (SIMPLE IRA). Employees who receive at least $5,000 of compensation for the calendar year are eligible to participate. The Company matches employee contributions dollar for dollar up to three percent of the employees compensation. Total contributions for any employee are limited by certain regulations.
-12-
WOODSTOCK HOLDINGS, INC.
(formerly Woodstock Financial Group, Inc.)
(unaudited)
Notes to Consolidated Financial Statements
(11)
Fair Value
The following table presents the Companys fair value hierarchy for those assets measured at fair value on a recurring basis as of September 30, 2011:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
$
|
864,889
|
|
$
|
-
|
|
$
|
-
|
|
$
|
864,889
|
|
Clearing deposit
|
|
|
181,184
|
|
|
-
|
|
|
-
|
|
|
181,184
|
|
Securities inventory
|
|
|
-
|
|
|
754,266
|
|
|
-
|
|
|
754,266
|
|
Total
|
|
$
|
1,046,073
|
|
$
|
754,266
|
|
$
|
-
|
|
$
|
1,800,339
|
|
The following table presents the Companys fair value hierarchy for those assets measured at fair value on a recurring basis as of December 31, 2010:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
$
|
968,716
|
|
$
|
-
|
|
$
|
-
|
|
$
|
968,716
|
|
Clearing deposit
|
|
|
161,182
|
|
|
-
|
|
|
-
|
|
|
161,182
|
|
Securities inventory
|
|
|
-
|
|
|
1,116,222
|
|
|
-
|
|
|
1,116,222
|
|
Total
|
|
$
|
1,129,898
|
|
$
|
1,116,222
|
|
$
|
-
|
|
$
|
2,246,120
|
|
There were no transfers between levels from December 31, 2010 to September 30, 2011.
The method described above may produce a fair value calculation that may not be indicative of net realizable value or reflective of future fair values. Furthermore, while the Company believes its valuation method was appropriate and consistent with other market participants, the use of different methodologies or assumptions to determine the fair value of certain financial instruments could result in a different fair value measurement at the reporting date.
(12)
Subsequent Events
In accordance with applicable accounting standards, the Company evaluated subsequent events through November 8, 2011, the date the financial statements were available for issue.
-13-
Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
WOODSTOCK HOLDINGS, INC.
(formerly Woodstock Financial Group, Inc.)
MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
For the Nine Months Ended September 30, 2011 and 2010
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 SEC, 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 SEC.
OVERVIEW AND GENERAL INDUSTRY CONDITIONS
Our primary sources of revenue are commissions earned from brokerage transaction and related financial services. To date, there has been no significant impact from revenues derived from investment advisory and insurance businesses. 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, our revenues 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. Unless otherwise indicated, in this section, references to years are to fiscal years.
Our subsidiary, WFG, is a licensed insurance broker and receives insurance commission revenue as a result of insurance operations. Our subsidiary, WFG, is also a registered investment advisor and receives revenue from advisory fees. The Company does not regard insurance commissions and advisory fee revenue as significant at this time.
-14-
WOODSTOCK HOLDINGS, INC.
(formerly Woodstock Financial Group, Inc.)
MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS, continued
For the Nine Months Ended September 30, 2011 and 2010
RESULTS OF OPERATIONS QUARTERS ENDED September 30, 2011 AND 2010
Total operating income for the quarter ended September 30, 2011 increased by $514,280, or approximately 19%, to $3,284,932, from $2,770,652 for the comparable period in 2010.
Commission revenue for the quarter ended September 30, 2011 increased by $397,242, or approximately 16%, to $2,833,552 from $2,436,310 for the comparable period in 2010. This increase was principally derived from an addition of an OSJ branch office from late in the third quarter in 2010, along with a slight increase in transactional business for the quarter compared to the previous years.
Interest income for the quarter ended September 30, 2011 increased by $5,745, or approximately 7%, to $87,322 from $81,577 for the comparable period in 2010. This increase is primarily due to the increase in interest charged on margin accounts and customer accounts held by our clearing agent, in addition interest earned from the investment grade municipal bond inventory trading account (trading account).
Realized trading profit for the quarter ended September 30, 2011 was $171,178 in realized trading profits and $6,906 in unrealized trading loss. Of the $171,178 realized trading profit, $145,304 was paid out in the trading account.
Other fees, from clearing transaction charges and other income, for the quarter ended September 30, 2011 decreased by $59,885 or approximately 24%, to $192,880 from $252,765 compared to the comparable period in 2010. This decrease was principally due to a decrease of transactional fees for the quarter.
Total operating expenses for the quarter ended September 30, 2011 increased by $705,675, or approximately 26%, to $3,372,365 from $2,666,690 for the same period in 2010. The increased expense was due primarily to the increased commissions paid to brokers (which correlates with the increase in commission revenue during the quarter) and the increase in selling, general and administrative expenses.
Commissions to brokers for the quarter ended September 30, 2011 increased by $432,653, or approximately 21%, to $2,522,858 from $2,090,205 for the comparable period in 2010. This increase correlates with the increase in commission revenue during the quarter.
Compensation on trading profit for the quarter ended September 30, 2011 was $145,304. There was $171,178 in realized trading profits and $6,906 in unrealized trading loss. Of the $171,178 realized trading profit, $145,304 was paid out in the account.
Clearing costs for the quarter ended September 30, 2011, decreased by $3,584, or approximately 9%, to $38,023 from $41,607 for the comparable period in 2010. As a percentage of commission revenue, clearing costs were approximately 1.3% for the quarter ended September 30, 2011, compared to approximately 1.7% in 2010.
Selling, general and administrative expense for the quarter ended September 30, 2011 increased by $107,796, or approximately 21%, to $625,995 from $518,199 for the comparable period in 2010. This increase is due to increases in consultant fees, legal fees, and compensation. Consultant fees paid to the CEO are based upon revenues of the Company; therefore, these fees correlate with revenues. Legal fees increased by approximately $32,000, which was from due diligence reviews on possible new offerings as well as consultations with various SEC attorneys regarding regulatory compliance measures. Salaries increased by approximately $32,000, which was from a newly hired employee and pay increases given to various existing employees.
Net loss was $87,433 for the quarter ended September 30, 2011, compared to a net profit of $103,962 for the comparable period in 2010. The increase in selling, general and administrative expenses was the primary reason for the loss for the quarter.
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RESULTS OF OPERATIONS NINE MONTHS ENDED SEPTEMBER 30, 2011 AND 2010
Total operating income for the nine months ended September 30, 2011 increased by $2,950,553 or approximately 38%, to $10,767,268, from $7,816,715 for the comparable period in 2010.
Commission revenue for the nine months ended September 30, 2011 increased by $2,318,706, or approximately 34%, to $9,234,753 from $6,916,047 for the comparable period in 2010. This increase was principally derived from an addition of an OSJ branch office from late in the third quarter in 2010, along with an increase in transactional business for the nine months compared to the previous years.
Interest income for the nine months ended September 30, 2011 increased by $85,780, or approximately 40%, to $298,465 from $212,685 for the comparable period in 2010. This increase is primarily due to the increase in interest charged on margin accounts and customer accounts held by our clearing agent. In addition interest earned from the trading account.
Realized trading profit for the nine months ended September 30, 2011 was $574,748 in realized trading profits and $20,368 in unrealized trading loss. Of the $574,748 realized trading profit, $458,567 was paid out in the Commissions to brokers account.
Other fees, from clearing transaction charges and other income, for the nine months ended September 30, 2011 decreased by $28,681, or approximately 4%, to $659,302 from $687,983 compared to the comparable period in 2010. This decrease was principally due to a decrease in transactional fees for the nine months.
Total operating expenses for the nine months ended September 30, 2011 increased by $3,203,025, or approximately 42%, to $10,822,620 from $7,619,595 for the same period in 2010. The increased expense was due primarily to the increased commissions paid to brokers (which correlates with the increase in commission revenue during the nine months) and the increase in selling, general and administrative expenses.
Commissions to brokers for the nine months ended September 30, 2011 increased by $2,650,885, or approximately 45%, to $8,575,651 from $5,924,766 for the comparable period in 2010. This increase correlates with the increase in commission revenue during the nine months.
Clearing costs for the nine months ended September 30, 2011, decreased by $422, to $113,184 from $113,606 for the comparable period in 2010. As a percentage of commission revenue, clearing costs were approximately 1.2% for the nine months ended September 30, 2011, compared to approximately 1.6% in 2010.
Selling, general and administrative expense for the nine months ended September 30, 2011 increased by $326,339, or approximately 21%, to $1,863,351 from $1,537,012 for the comparable period in 2010. This increase is due to increases in consultant fees, legal fees, and compensation. Consultant fees paid to the CEO are based upon revenues of the Company, therefore, these fees correlate with revenues. Legal fees increased by approximately $98,000, which was from due diligence reviews on possible new offerings as well as consultations with various SEC attorneys regarding regulatory compliance measures. Salaries increased by approximately $96,000, which was from a newly hired employee and pay increases given to various existing employees.
Net loss was $55,352 for the nine months ended September 30, 2011, compared to a net profit of $197,120 for the comparable period in 2010. The increase in operating expenses was primarily related to an increase in selling, general, and administrative expenses; for the quarter and the nine months. The increase comes from consultant fees, legal and salaries.
LIQUIDITY AND CAPITAL RESOURCES
Our assets are reasonably liquid with a substantial portion 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. 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 assets at September 30, 2011 were $4,139,879, of which $864,889 are cash and cash equivalents.
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WOODSTOCK HOLDINGS, INC.
(formerly Woodstock Financial Group, Inc.)
MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS, continued
For the Nine Months Ended September 30, 2011 and 2010
As a broker-dealer, WFG is subject to the Securities and Exchange Commission Uniform Net Capital Rule (Rule15c3-1). The Rule requires maintenance of minimum net capital and that WFG maintains a ratio of aggregate indebtedness (as defined) to net capital (as defined) not to exceed 15 to 1. WFGs minimum net capital requirement is $100,000. Under the Rule, WFG is subject to certain restrictions on the use of capital and its related liquidity. WFGs net capital position at September 30, 2011 was $663,788 and its ratio of aggregate indebtedness to net capital was 2.02 to 1. The calculation of the ratio only includes the balances obtained from the Broker Dealer.
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 $103,827 to $864,889 as of September 30, 2011, from $968,716 as of December 31, 2010. This overall decrease was due to net cash used in operating activities of $2,268, cash used in investing activities of $11,675 and cash used in financing activities of $89,884.
The Company holds a mortgage note on the current office space at 117 Towne Lake Parkway, Woodstock, GA 30188. The mortgage note has a 5-year balloon payment and matures in September 2014, amortized on a 25-year basis at a fixed rate of interest 7.00%, and is collateralized by the building. Mortgage payments and condo association fees of $6,770 and $4,700, respectively, are payable monthly.
SECURITIES INVENTORY AND LIABLILITY FOR SECURITIES INVENTORY
The Company maintains an investment grade municipal bond inventory account for the purpose of inter-dealer trading. This inventory account is monitored on a daily basis for credit risk, market risk and collateralization purposes. This inventory is held in a segregated margin account at Southwest, the Companys clearing firm. This segregated margin account is cross collateralized by the Companys clearing deposit account at Southwest. From time to time the Company may deposit cash into or withdraw cash from this account when needed. The current interest rate environment has produced a fluctuating negative/positive carry on this trading account.
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
The Company invests and trades investment grade municipal bonds.
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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 Companys periodic filings with the SEC. There have been no significant changes in the Companys internal controls over financial reporting during the quarter ended September 30, 2011 that have materially affected, or are reasonably likely to materially affect, the Companys internal control over financial reporting.
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PART II. OTHER INFORMATION
Item 1.
Legal Proceedings
In the normal course of business, the Company, as a regulated broker-dealer, is subject to examinations, inquiries and requests from Customers, the SEC, FINRA and state regulators. We are not aware of any matter at this time that would have material impact on the companys 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.
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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.
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WOODSTOCK HOLDINGS, INC.
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Date: November 8, 2011
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By:
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/S/ WILLIAM J. RAIKE, III
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William J. Raike, III
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President, Chief Executive Officer and Director
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Date: November 8, 2011
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By:
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/S/ MELISSA L. WHITLEY
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Melissa L. Whitley
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Chief Financial and Accounting Officer
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