UNITED
      STATES


SECURITIES
      AND EXCHANGE COMMISSION


Washington,
      D.C. 20549





**FORM
      10-Q**




x
            QUARTERLY
                REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIESEXCHANGE ACT OF
                1934




For
      the
      quarterly period ended March
      31, 2008




o
            TRANSITION
                REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIESEXCHANGE ACT OF
                1934




Commission
      file number 000-29315


Rubicon logo




**RUBICON
      FINANCIAL INCORPORATED**





(Exact
      name of registrant as specified in its charter)





**Delaware**
            **13-3349556**(State
                or other jurisdiction of incorporation or organization)
            (I.R.S.
                Employer Identification No.)





**19200
      Von Karman Avenue**  **Suite
      350**  **Irvine,
      California 92612**





(Address
      of principal executive offices)





**(949)
      798-7220**





(Registrant’s
      telephone number, including area code)





Copies
      of
      Communications to:


Stoecklein
      Law Group


4695
      MacArthur Court, 11 th Floor


Newport
      Beach, CA 92660


(949)
      798-5541


Fax
      (949)
      258-5112





Indicate
      by check mark whether the registrant (1) has filed all reports required to
      be
      filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
      the
      preceding 12 months (or for such shorter period that the registrant was required
      to file such reports), and (2) has been subject to such filing requirements
      for
      the past 90 days. Yes x No  ̈









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




Large
              accelerated filer  ̈
            Accelerated filer  ̈Non-accelerated filer  ̈(Do not check if a smaller reporting company)
            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





The
      number of shares of Common Stock, $0.001 par value, outstanding on April 30,
      2008, was 11,360,662 shares, which includes 501,389 shares authorized but
      unissued.









**PART
      1 – FINANCIAL INFORMATION**





**Item
      1. Financial Statements**





**Rubicon
      Financial Incorporated**


**Condensed
      Consolidated Balance Sheets**





March
                31,
            
            December
                31,2008
            
            2007(Unaudited)
            
            AuditedAssetsCurrent
                assets:Cash
            
            $
            947,560
            
            $
            1,892,541Marketable
                securities
            
            
            846,000
            
            
            956,000Accounts
                receivable
            
            
            178,440
            
            
            -Prepaid
                expenses
            
            
            82,975
            
            
            90,999Notes
                receivable – related party
            
            
            28,024
            
            
            5,192Other
                current assets
            
            
            6,900
            
            
            800Total
                current assets
            
            
            2,089,899
            
            
            2,945,532Fixed
                assets, net of accumulated depreciation of$21,463
                and $14,633, respectively
            
            
            104,791
            
            
            59,104Investments
            
            
            515,078
            
            
            175,000Total
                assets
            
            $
            2,709,768
            
            $
            3,179,636Liabilities
                and Stockholders’ EquityCurrent
                liabilities:Accounts
                payable
            
            $
            91,114
            
            $
            79,775Accrued
                expenses
            
            
            34,306
            
            
            23,352Investment
                obligation
            
            
            87,500
            
            
            104,000Deferred
                revenue
            
            
            52,093
            
            
            35,109Accrued
                interest payable – related party
            
            
            58,394
            
            
            54,493Notes
                payable – related party
            
            
            160,539
            
            
            160,539Total
                current liabilities
            
            
            483,946
            
            
            457,268Stockholders’
                equityPreferred
                stock, $0.001 par value, 10,000,000 sharesauthorized,
                no shares issued and outstandingas
                of March 31, 2008 and December 31, 2007, respectively
            
            
            -
            
            
            -Common
                stock, $0.001 par value, 50,000,000 sharesauthorized,
                10,724,273 and 10,724,273 shares issuedand
                outstanding as of March 31, 2008 andDecember
                31, 2007, respectively
            
            
            10,724
            
            
            10,724Common
                stock owed but not issued, 636,389 and 559,790as
                of March 31, 2008 and December 31, 2008, respectively
            
            
            636
            
            
            559Additional
                paid in capital
            
            
            15,360,931
            
            
            15,077,094Unamortized
                shares and options issued for services
            
            
            (2,530,313
            )
            
            (2,878,413
            )Other
                comprehensive losses
            
            
            (154,000
            )
            
            (359,000
            )Accumulated
                (deficit)
            
            
            (10,462,156
            )
            
            (9,128,556
            )Total
                stockholders’ equity
            
            
            2,225,822
            
            
            2,722,368Total
                liabilities and stockholders’ equity
            
            $
            2,709,768
            
            $
            3,179,636


The
      accompanying notes are an integral part of the condensed consolidated financial
      statements.




1




Rubicon
                Financial IncorporatedCondensed
                Consolidated Statements of Operations(Unaudited)




For the Three Months EndedMarch
                31,2008
            
            2007Revenue
            
            $
            95,220
            
            $
            20,798Expenses:Direct
                costs
            
            
            13,950
            
            
            1,354Consulting
            
            
            49,710
            
            
            73,087Professional
                fees
            
            
            115,934
            
            
            156,000Executive
                compensation
            
            
            442,929
            
            
            351,528General
                and administrative expenses
            
            
            325,985
            
            
            73,201Depreciation
            
            
            6,830
            
            
            2,962Impairment
                of goodwill
            
            
            -
            
            
            122,500Total
                operating expenses
            
            
            955,338
            
            
            780,632Net
                operating (loss)
            
            
            (860,118
            )
            
            (759,834
            )Other
                income (expense):Interest
                expense
            
            
            (1,530
            )
            
            (179
            )Interest
                expense – related party
            
            
            (3,900
            )
            
            (5,526
            )Interest
                income
            
            
            13,195
            
            
            17,095Minority
                interest (loss)
            
            
            (59,923
            )
            
            -Total
                other income (expense)
            
            
            (52,158
            )
            
            11,390Net
                (loss)
            
            
            (912,276
            )
            
            (748,444
            )Other
                comprehensive (loss)
            
            
            (315,000
            )
            
            -Total
                comprehensive (loss)
            
            $
            (1,227,276
            )
            **$**
            (748,444
            )Weighted
                average number of common sharesOutstanding
                – basic and fully diluted
            
            
            11,323,253
            
            
            12,627,412Net
                (loss) per share – basic and fully diluted
            
            $
            (0.11
            )
            $
            (0.06
            )




The
      accompanying notes are an integral part of these condensed consolidated
      financial statements.




2







Rubicon
                Financial IncorporatedCondensed
                Consolidated Statements of Cash Flows(Unaudited)




For
                the Three Months EndedMarch
                31,2008
            
            2007**Cash
                flows from operating activities**
            
            $
            (912,276
            )
            $
            (748,444
            )Adjustments
                to reconcile net (loss) to net cash (used) in operating
                activities:Depreciation
            
            
            6,830
            
            
            2,962Impairment
                of goodwill
            
            
            -
            
            
            122,500Minority
                interest losses
            
            
            59,923
            
            
            -Amortization
                of prepaid share-based compensation
            
            
            348,100
            
            
            186,465Shares
                and options issued for services
            
            
            10,000
            
            
            232,208Changes
                in operating assets and liabilitiesAccounts
                receivable
            
            
            (208,770
            )
            
            1,095Prepaid
                expenses
            
            
            8,024
            
            
            (190,590
            )Interest
                receivable
            
            
            (976
            )
            
            (477
            )Accounts
                payable
            
            
            11,339
            
            
            (73,646
            )Accrued
                liabilities
            
            
            10,954
            
            
            (7,726
            )Investment
                obligation
            
            
            (16,500
            )
            
            -Deferred
                revenue
            
            
            16,984
            
            
            (4,137
            )Interest
                payable
            
            
            -
            
            
            (496
            )Interest
                payable – related party
            
            
            3,901
            
            
            4,056Net
                cash (used) by operating activities
            
            
            (662,467
            )
            
            (476,230
            )Cash
                flows from investing activitiesProceeds
                for notes receivable
            
            
            -
            
            
            (51,674
            )Purchase
                of fixed assets
            
            
            (52,515
            )
            
            (4,251
            )Purchase
                of investments
            
            
            (400,000
            )
            
            -Net
                cash (used) in investing activities
            
            
            (452,515
            )
            
            (55,925
            )Cash
                flows from financing activitiesCash
                acquired with merger
            
            
            -
            
            
            9,670Proceeds
                from notes payable
            
            
            -
            
            
            219Payments
                on notes payable
            
            
            -
            
            
            (2,389
            )Sale
                of common stock
            
            
            170,000
            
            
            -Net
                cash provided by financing activities
            
            
            170,000
            
            
            7,500Net
                (decrease) in cash
            
            
            (944,981
            )
            
            (524,655
            )Cash –
                beginning
            
            
            1,892,541
            
            
            1,901,124Cash –
                ending
            
            $
            947,560
            
            $
            1,376,479Supplemental
                disclosureInterest
                paid
            
            $
            1,530
            
            $
            1,568Income
                taxes paid
            
            $
            -
            
            $
            -Shares
                and options issued for services
            
            $
            10,000
            
            $
            418,673





The
      accompanying notes are an integral part of the condensed consolidated financial
      statements.




3




**RUBICON
      FINANCIAL INCORPORATED**


**NOTES
      TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**





**Note
      1- Basis of Presentation**





The
      unaudited condensed consolidated financial statements have been prepared in
      accordance with United States generally accepted accounting principles for
      interim financial information and with the instructions to Form 10-Q and reflect
      all adjustments which, in the opinion of management, are necessary for a fair
      presentation. All such adjustments are of a normal recurring nature. The results
      of operations for the interim period are not necessarily indicative of the
      results to be expected for a full year. Certain amounts in the prior year
      statements have been reclassified to conform to the current year presentations.
      The statements should be read in conjunction with the financial statements
      and
      footnotes thereto included in our audit for the year ended December 31, 2007.





We
      were
      originally incorporated in the State of Delaware on April 28, 1986 (“Inception”)
      and formerly known as Art World Industries (“AWI”). On August 6, 2002, we
      changed our name to ISSG, Inc. In addition, on March 9, 2004, we completed
      the
      acquisition of a wholly-owned subsidiary, Dial-A-Cup, Inc., a Nevada
      Corporation. Further, on June 2, 2005, we completed a merger with Rub
      Investments Ltd., (“Rub”) on September 6, 2006 we changed our name to Rubicon
      Financial Incorporated. Effective February 1, 2007, we completed a merger with
      Rubicon Financial Insurance Services, Inc. a Nevada corporation (“RFIS”),
      pursuant to an agreement and plan of merger. The agreement and plan of merger
      provided that ISSG Sub, Inc. our wholly owned subsidiary, merged with and into
      RFIS, with RFIS as the surviving corporation and new wholly owned subsidiary.
      We
      issued 50,000 shares of our common stock in exchange for 100% of the outstanding
      shares of RFIS. On February 13, 2007, we formed a wholly owned subsidiary,
      Rubicon Securities, Inc., a Nevada corporation. Effective May 11, 2007, we
      acquired Rubicon Real Estate and Mortgages, Inc., a California corporation
      (“RREM”), pursuant to an agreement and plan of merger. The agreement and plan of
      merger provided that DeeSound, Inc. our wholly owned subsidiary, merged with
      and
      into RREM, with RREM as the surviving corporation and new wholly owned
      subsidiary. We issued 1,159,000 shares of our common stock in exchange for
      100%
      of the outstanding shares of RREM.





**Note
      2**–**Summary of significant accounting
      policies**




Concentration
      of credit risk for cash deposits


Financial
      instruments that potentially subject us to credit risk consist principally
      of
      cash deposits. Accounts at each institution are insured by the Federal Deposit
      Insurance Corporation (FDIC) up to $100,000. At March 31, 2008, we had
      approximately $700,791 in excess of FDIC insured limits.




Reclassifications


Certain
      reclassifications have been made to the prior years’ financial statements to
      conform to the current year presentation. These reclassifications had no effect
      on previously reported results of operations or retained earnings.




4




**Note
      3**–**Marketable Securities**





On
      November 27, 2007, we entered into a Share Purchase Agreement with American
      International Industries, Inc. (“AMIN”) whereby we agreed to issue 1,000,000
      shares of our common stock in exchange for 200,000 shares of AIMN and $1,000,000
      in cash. We recorded marketable securities of $1,000,000 representing the fair
      market value of $5 per share on the date of agreement. On March 31, 2008, we
      evaluated the fair value of the securities and recorded other comprehensive
      loss
      in the amount of $154,000 to adjust the recorded value to the market value
      at
      the balance sheet date.




**Note
      4**–**Notes receivable**





On
      April
      18, 2008, we amended a note receivable in the amount of $20,000 with our
      subsidiary, Rubicon Real Estate and Mortgage (“RREM”), whereby Joel Newman, the
      former President of RREM accepted full liability for the principal balance
      of
      $20,000. The amended terms require principal and interest payments monthly
      in
      the amount of $898. The amended note bears interest at a rate of 6% per annum
      and matures on April 18, 2009. On March 18, 2008, we received the initial
      payment of $898 representing principal in the amount of $798 and interest of
      $100. The outstanding principal balance as of March 31, 2008 was $19,202. On
      April 3, 2008, we revised the loan agreement to extend the initial one-year
      term
      an additional twelve months (See Note 9).





In
      addition, Mr. Newman owes us $5,000 in the form of a demand note, which accrues
      interest at a rate of 6% per annum. As of March 31, 2008, the principal balance
      owed was $5,000 and accrued interest receivable was $267.





**Note
      5 - Investments**





We
      maintain a 24.9% interest in Maximum Financial Investment Group, Inc. (“MFIG”),
      and AIS Financial (“AIS”), private brokerage firms. We have recorded our
      investment in accordance with the equity method whereby the carrying value
      of
      the investment is adjusted based on the net income or losses and any dividends
      paid. As of March 31, 2008 we recorded minority interest losses totaling $16,519
      representing a loss of $16,757 from MFIG and income of $238 from AIS. The
      adjusted value of our investment was $33,243 and $80,238, respectively.





Previously,
      we owned a 15% interest in Grant Bettingen, Inc. (“GBI”) a private brokerage
      firm. We had accounted for our investment as “Available for Sale” as required by
      FAS 115. On January 23, 2008, we entered into Amendment No. 2 to the Merger
      Agreement with GBI. Pursuant to the amendment, the termination date was extended
      from March 31, 2008 to June 30, 2008. In addition, we agreed to deposit an
      additional $200,000 with GBI.





On
      March
      7, 2008, we entered into Amendment No. 3 to the Merger Agreement whereby GBI
      agreed to sell us an additional 6% of its outstanding shares prior to the
      closing for a purchase price of $400,000. Pursuant to the amendment, we agreed
      to apply the $200,000 previously advanced pursuant to Amendment No. 2 towards
      the additional purchase. On February 29, 2008, we paid $100,000 towards the
      remaining balance of $200,000 with the remaining $100,000 to be paid to GBI
      in
      such increments as may be agreed to by and between the Parties. As of March
      31,
      2008, our investment in GBI was $401,597 and we had a remaining investment
      obligation in the amount of $87,500.




5


Due
      to
      our increase in ownership from 15% to 21%, we have adjusted accounting treatment
      of our investment in GBI from “Available for Sale” to the equity method. As a
      result, we have expensed $315,000 of previously unrecognized other comprehensive
      losses and recorded minority interest losses in the amount of $43,403 as of
      March 31, 2008.





**Note
      6**–**Notes payable**–**related
      party**




Previously,
      our operations have been funded by the founder of Dial-A-Cup, our wholly owned
      subsidiary. As of March 31, 2008, total amounts loaned to the Company by this
      officer were $156,014. The proceeds loaned have been used to fund operations
      and
      for the development of a prototype of Dial-A-Cup’s beverage dispenser. The note
      bears interest of 10% per annum and is due on demand. During the three months
      ended March 31, 2008 and 2007, we recorded $3,901 and $5,529, respectively,
      of
      interest expense related to the note.




**Note
      7**–**Stockholders’ equity**





During
      the three months ended March 31, 2008, we sold subscriptions to purchase 85,000
      shares of our par value common stock for cash totaling $170,000 or $2 per share.
      We paid fees in connection with the sale of our common stock, totaling $26,000
      which was deducted from the proceeds. As of March 31, 2008 the shares were
      un-issued.




On
      March
      26, 2008, we authorized the issuance of 5,000 shares of our common stock to
      an
      employee as a bonus for past services. The fair value of the shares on the
      date
      of grant was $10,000 which was expensed as additional compensation. At March
      31,
      2008 the shares were un-issued.





On
      March
      31, 2008, we cancelled 13,401 shares previously authorized and unissued pursuant
      to an agreement with our former Chief Financial Officer.





**Note
      8**–**Warrants and options**





During
      the three months ended March 31, 2008, we cancelled 200,000 options previously
      granted to the former President of RREM, upon his resignation. The options
      had
      not vested.





A
      summary
      of outstanding stock options and warrants as of March 31, 2008 is as
      follows:





Options
            
            
            
            WarrantsOutstanding
                01/01/08
            
            
            1,500,000
            
            $
            1.79
            
            
            100,000
            
            $
            3.00Granted
            
            
            -
            
            
            -
            
            
            -
            
            
            -Cancelled
            
            
            (200,000
            )
            
            1.00
            
            
            -
            
            
            -Exercised
            
            
            -
            
            
            -
            
            
            -
            
            
            -Outstanding
                3/31/08
            
            
            1,300,000
            
            $
            1.91
            
            
            100,000
            
            $
            3.00Vested
                as of 03/31/08
            
            
            1,000,000
            
            $
            1.75
            
            
            100,000
            
            $
            3.00




6




**Note
      9**–**Commitments**





On
      March
      27, 2008, we entered into an employment agreement with our President, Mr.
      Terence Davis. Pursuant to the agreement, Mr. Davis shall receive annual
      compensation in the amount of $96,000 commencing on April 1, 2008 and expiring
      on March 31, 2009. Mr. Davis salary will be paid in accordance with normal
      company policy.





**Note
      10**–**Subsequent events**





On
      April
      2, 2008, we sold 45,000 shares of our common stock for cash totaling $90,000
      and
      we issued these shares and 85,000 additional shares (130,000 in total) of our
      common stock pursuant to previously received subscription
      agreements.





On
      April
      2, 2008, we issued 5,000 shares previously authorized to an employee of the
      Company.





On
      April
      3, 2008, we entered into an agreement with our former Chief Financial Officer,
      Michael Sederoff, for the lock-up of 25,000 shares of our common stock currently
      held by Mr. Sederoff. Pursuant to the agreement, Mr. Sederoff has agreed not
      to
      sell, pledge or hedge the aforementioned securities for a period expiring on
      February 1, 2010.





On
      April
      3, 2008, we entered into an agreement with our former President of RREM, Joel
      Newman, whereby we agreed to extend Mr. Newman’s amended note for an additional
      one year period in exchange for a lock-up agreement on 284,000 shares of our
      common stock currently held by Mr. Newman for a period expiring on March 15,
      2010.




7


**FORWARD-LOOKING
      STATEMENTS**





This
      document contains “forward-looking statements” within the meaning of the Private
      Securities Litigation Reform Act of 1995. All statements other than statements
      of historical fact are “forward-looking statements” for purposes of federal and
      state securities laws, including, but not limited to, any projections of
      earnings, revenue or other financial items; any statements of the plans,
      strategies and objections of management for future operations; any statements
      concerning proposed new services or developments; any statements regarding
      future economic conditions or performance; any statements or belief; and any
      statements of assumptions underlying any of the foregoing.





Forward-looking
      statements may include the words “may,” “could,” “estimate,” “intend,”
“continue,” “believe,” “expect” or “anticipate” or other similar words. These
      forward-looking statements present our estimates and assumptions only as of
      the
      date of this report. Accordingly, readers are cautioned not to place undue
      reliance on forward-looking statements, which speak only as of the dates on
      which they are made. We do not undertake to update forward-looking statements
      to
      reflect the impact of circumstances or events that arise after the dates they
      are made. You should, however, consult further disclosures we make in future
      filings of our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and
      Current Reports on Form 8-K.





Although
      we believe that the expectations reflected in any of our forward-looking
      statements are reasonable, actual results could differ materially from those
      projected or assumed in any of our forward-looking statements. Our future
      financial condition and results of operations, as well as any forward-looking
      statements, are subject to change and inherent risks and uncertainties. The
      factors impacting these risks and uncertainties include, but are not limited
      to:





·
            inability
                to raise additional financing for working
                capital;


·
            our
                ability to successfully compete in the financial services
                industry;


·
            actions
                and initiatives taken by both current and potential
                competitors;


·
            inability
                to locate potential mergers and acquisitions within the financial
                services
                industry and integrate acquired companies into our
                organization;


·
            deterioration
                in general or regional (especially Southern California) economic,
                market
                and political conditions;


·
            deterioration
                in both the lending markets and the real estate markets in
                general;


·
            the
                level of volatility of interest rates as well as the shape of the
                yield
                curve;


·
            the
                fact that our accounting policies and methods are fundamental to
                how we
                report our financial condition and results of operations, and they
                may
                require management to make estimates about matters that are inherently
                uncertain;


·
            adverse
                state or federal legislation or regulation that increases the costs
                of
                compliance, or adverse findings by a regulator with respect to existing
                operations;


·
            changes
                in U.S. GAAP or in the legal, regulatory and legislative environments
                in
                the markets in which we operate;


·
            inability
                to efficiently manage our
                operations;


·
            inability
                to achieve future operating
                results;


·
            the
                unavailability of funds for capital expenditures;






8




·
            our
                ability to recruit and hire key employees;


·
            the
                inability of management to effectively implement our strategies and
                business plans; and


·
            the
                other risks and uncertainties detailed in this
                report.





For
      a
      detailed description of these and other factors that could cause actual results
      to differ materially from those expressed in any forward-looking statement,
      please see “Risk Factors” in this document and in our Annual Report on Form 10-K
      for the year ended December 31, 2007.





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





**Overview
      of Current Operations**





We
      are a
      publicly-traded financial service holding company with three wholly-owned
      operating subsidiaries: (i) Rubicon Financial Insurance Services, Inc. (“RFIS”),
      a full service insurance agency offering personal lines, life and commercial
      insurance products to individuals and companies primarily in the State of
      California; (ii) Rubicon Real Estate and Mortgages, Inc. (“RREM”), which
      provides professional assistance in the fields of residential and commercial
      real estate and mortgage loans in California; and (iii) Dial-A-Cup, which has
      developed a hot-water dispensing system that will brew one fresh cup of coffee,
      tea, hot chocolate, soup, etc. on demand.





On
      July
      31, 2007, we entered into a Separation and Distribution Agreement with our
      wholly-owned subsidiary, Dial-A-Cup, whereby we agreed to spin-out at least
      50%
      of the shares of Dial-A-Cup common stock owned by us to our shareholders on
      a
      one for ten basis. The Separation and Distribution Agreement also provides
      that
      Dial-A-Cup will take all of the businesses, assets and liabilities relating
      to
      the Dial-A-Cup business previously held by us. Dial-A-Cup intends to file a
      registration statement on Form S-1 to register the shares of Dial-A-Cup common
      stock to be distributed and the record date will be set as the 10 th day
      following effectiveness of the registration statement. As of the date of this
      filing, the Form S-1 has not been filed.





Overview
      of Financial Services





We
      have
      established our headquarters in Orange County, California to capitalize on
      the
      perceived large and affluent demographic base for our products in the financial
      services industry. The types of financial services we offer are: insurance,
      both
      personal and commercial; mortgage loan and real estate services, both
      residential and commercial; and in the future we intend to offer retail
      brokerage services; securities market making; on-line trading; as well as
      investment banking services for small to mid-sized companies. Each subsidiary
      providing these services will be an individually licensed corporation doing
      business under the parent holding company and is intended to allow us to become
      a unique, single-source, financial services provider.




9




In
      addition to our operating subsidiaries, we entered into a merger agreement
      with
      Grant Bettingen, Inc. (“GBI”), a licensed firm providing diversified investment
      banking and securities transaction services.  The merger with GBI is
      subject to closing conditions, including approval by the Financial Industry
      Regulatory Authority (“FINRA”) of GBI’s change in management/ownership. Upon
      closing of the merger, GBI will become another of our wholly-owned subsidiaries.
      Additionally, on September 7, 2007, we executed a share purchase agreement
      for
      the purchase of 16 shares of GBI, which represented approximately 15% of the
      issued and outstanding equity shares of GBI. On March 18, 2008, the share
      purchase agreement was amended and we agreed to purchase an additional 9 shares
      of GBI common stock (which represented approximately 6% of the outstanding
      securities of GBI following completion of this additional purchase, bringing
      our
      total equity ownership in GBI to approximately 21%) for an additional $400,000,
      payable in the following increments: conversion of the $200,000 net capital
      deposit previously deposited with GBI in January 2008; $100,000 that was
      advanced to GBI on February 29, 2008; and an additional $100,000 in three equal
      installments over the 90 days following execution of the amendment to the share
      purchase agreement. In the event the merger is not consummated, GBI has the
      right to repurchase the initial 16 shares from us upon certain conditions for
      a
      period of 24 months from the termination date of the merger.





We
      have
      also acquired 24.9% interest in two FINRA licensed broker/dealers; Maximum
      Financial Investment Group, Inc. (“Maximum”) and AIS Financial, Inc.
      (“AIS”).  Maximum focuses on wholesale and online trading and AIS focuses
      on retail and institutional business.  Additionally, we have the right to
      purchase the remaining 75.1% of AIS upon certain conditions, mainly the approval
      by FINRA of AIS’ change in ownership, which we anticipate satisfying during
      fiscal 2008.





As
      we
      continue to expand our operations into a new line of business of an independent
      boutique firm offering multiple financial services, we intend to continue to
      acquire other financial service companies to eventually become a single-source
      provider of financial services to our clientele, with Rubicon being the holding
      company of these various financial services entities. We intend to utilize
      a
      cross-marketing strategy between all of the acquired companies to provide
      various product offerings to clients with the ability to gather all the assets
      and financial services of clients specific and customized to their needs.





**Results
      of Operations for the three months ended March 31, 2008 and 2007
      compared.**





The
      following tables summarize selected items from the statement of operations
      for
      the three months ended March 31, 2008 compared to the three months ended March
      31, 2007.





**Revenue:**





**Three months ended****March 31,2008**
            
            **March 31,2007**
            
            **Increase / (Decrease)****$**
            
            **%**Revenues
            
            $
            95,220
            
            $
            20,798
            
            $
            74,422
            
            
            358
            %




10




Revenues
      for the three months ended March 31, 2008 were $95,220 compared to revenues
      of
      $20,798 for the comparable three months ended March 31, 2007. This resulted
      in
      an increase in revenues of $74,422, from the previous year. During 2007 we
      acquired our wholly owned subsidiaries RFIS and RREM. Our increased revenues
      are
      directly attributable to the revenue derived from these two subsidiaries. At
      March 31, 2007, RFIS had earned commissions of $20,798 compared to $70,052
      at
      March 31, 2008. RREM was acquired on May 4, 2007 and therefore had no reported
      earnings at March 31, 2007. During the three months ended March 31, 2008, RREM
      had commissions and fees earned in the amount of $25,168.





**Expenses:**




**Three months ended****March 31,2008**
            
            **March 31,2007**
            
            **Increase / (Decrease)****$**
            
            **%**Direct
                Costs
            
            $
            13,950
            
            $
            1,354
            
            $
            12,596
            
            
            930
            %Consulting
            
            
            49,710
            
            
            73,087
            
            
            (23,377
            )
            
            (32
            )%Professional
                fees
            
            
            115,934
            
            
            156,000
            
            
            (40,066
            )
            
            (26
            )%Executive
                compensation
            
            
            442,929
            
            
            351,528
            
            
            91,401
            
            
            26
            %General
                and administrative expenses
            
            
            325,985
            
            
            73,201
            
            
            252,784
            
            
            345
            %Depreciation
            
            
            6,830
            
            
            2,962
            
            
            3,868
            
            
            131
            %Impairment
                expense
            
            
            -
            
            
            122,500
            
            
            (122,500
            )
            
            -Total
                operating expenses
            
            
            955,338
            
            
            780,632
            
            
            174,706
            
            
            22
            %Other
                income (expenses)
            
            
            (52,158
            )
            
            11,390
            
            
            (63,548
            )
            
            (558
            )%Net
                (loss)
            
            $
            (912,276
            )
            $
            (748,444
            )
            $
            163,832
            
            
            22
            %





**Direct
      Costs**





Our
      direct costs are comprised of commissions paid to associates and miscellaneous
      fees related directly to the sale of our insurance products and mortgage
      services. These costs have a direct relationship to our revenue and will
      increase or decrease as revenue increases or decreases. As of March 31, 2008,
      we
      had direct costs of $13,950 compared to $1,354 for the three months ended March
      31, 2007. During the first quarter of 2008, our revenue increased 358% while
      our
      direct costs increased 930% or $12,596. The substantial increase is primarily
      the result of the inclusion of direct costs attributable to our mortgage
      services activities.





**Consulting**





During
      the three months ended March 31, 2008, we incurred $49,710 in consulting
      expenses compared to $73,087 in consulting expenses for the three months ended
      March 31, 2007, a decrease of $23,377 or 32%. As we have completed our initial
      acquisitions, our need for outside services has declined due to our increase
      in
      employees. Though we anticipate a continued need for specialized outside
      consulting services, it is our goal to employ sufficient internal staff to
      meet
      the majority of our operational needs.




11


**Professional
      fees**





Our
      professional fees decreased $40,066 from $156,000 for the three months ended
      March 31, 2007 to $115,934 for the three months ended March 31, 2008. During
      the
      three month period ended March 31, 2007, our legal and accounting fees were
      elevated due to our acquisition of RFIS on February 1, 2007. Our current quarter
      decline was anticipated and we further anticipate lower professional fees
      through the remainder of the year.




**Executive
      compensation**





Executive
      compensation consists of salaries paid to our officers as well as equity
      compensation. During the three months ended March 31, 2008 our executive
      compensation was $442,929 , of which $348,100 (approximately 79%) represented
      the amortization of prepaid equity-based compensation. This is compared to
      $351,528, of which $186,465 represented the amortization of prepaid equity-based
      for the three months ended March 31, 2007. Our increase of $91,401 was due
      to
      the additional officers employed subsequent to March 31, 2007. Through our
      acquisitions, we have added two additional officers, one each in RFIS and RREM.
      Further, our overall growth has created the need for a full-time operations
      officer, which was filled during the three months ended March 31,
      2008.





**General
      and administrative expenses**





General
      and administrative expenses were $325,985 for the three months ended March
      31,
      2008 versus $73,201 for the comparable period of three months ended March 31,
      2007, which resulted in an increase of $252,784. As we acquired our wholly
      owned
      subsidiaries, RFIS and RREM, we also acquired the overhead expenses required
      to
      operate each business. During fiscal 2007, we had just emerged from a
      development stage status and had not yet commenced the full operations of our
      insurance and mortgage service businesses. It is our expectation these cost
      will
      remain consistent throughout the remainder of this year.





**Depreciation
      expense**





We
      will
      incur normal depreciation expense calculated on a straight-line basis for all
      assets in service. Our depreciation for the three months ended March 31, 2008
      was $6,830 compared to $2,962 for the three months ended March 31, 2007. As
      we
      develop our current business plan, we anticipate continued capital expenditures
      which will result in an increase in our depreciation expense until such point
      we
      have met our depreciable capital asset needs.




**Total
      operating expenses**





Our
      overall operating expenses were $955,338 for the three months ended March 31,
      2008 versus $780,632 for the three months ended March 31, 2007, which resulted
      in an increase of $174,706 or 22%. We had anticipated an increase due to our
      prior year acquisitions and our emergence from a development stage status with
      the full commencement of operations. We experienced the most significant
      increase in our general and administrative expenses which was to be expected
      as
      we acquired the fully operational businesses of RFIS and RREM.




12




**Other
      income (expenses)**




Other
      income is currently comprised of interest earned on our deposit accounts with
      our financial institution and totaled $13,195 for the three months ended March
      31, 2008 compared to $17,095 for the three months ended March 31, 2007. The
      decrease was due to our lower cash balance during the first quarter of
      2008.





Our
      other
      expenses include interest expense, minority interest losses and recognition
      of
      other comprehensive losses from our available for sale investments. Interest
      expense was $5,430 compared to $5,705 for the three months ended March 31,
      2008
      and 2007, respectively. Losses from our minority interest investments were
      $59,923 for the three months ended March 31, 2008. At March 31, 2007, we had
      not
      yet acquired our minority interests and therefore no minority interest earnings
      or losses were recognized.





**Net
      loss**





Our
      net
      loss for the three months ended March 31, 2008 was $912,276 compared to $748,444
      for the three months ended March 31, 2007, an increase in net loss of $163,832
      or 22%. The increase in net loss is directly attributable to our increases
      in
      executive compensation, general and administrative expenses and losses
      attributable to our minority interest investments.





**Other
      comprehensive losses**





On
      March
      7, 2008, we acquired an additional 6% interest in Grant Bettingen, Inc. (“GBI”),
      a private brokerage firm, bringing our total minority ownership interest to
      21%.
      We have accounted for the transfer of category as a result of our increased
      ownership interest, pursuant to the guidance of FAS 115 whereby all previous
      comprehensive losses were immediately recognized through earnings and all
      current earnings, losses and dividends, where applicable, have been recognized
      based on our pro rata ownership. We have recorded other comprehensive losses
      in
      the amount of $315,000 in connection with our investment in GBI.





**OPERATION
      PLAN**





During
      the next twelve months we plan to seek financing opportunities to enhance our
      growth plan that will include the acquisition of private companies in the
      financial services industry beyond our current acquisitions or interests in
      financial services entities.





We
      are
      continually evaluating our development opportunities and financing opportunities
      in order to maintain our overall development plan. To accelerate the development
      program we plan to enhance our business relationships by building our client
      base through cross referrals. This economic strategy may allow us to utilize
      our
      own financial assets toward the growth of our current holdings, pursue the
      acquisition of strategic assets or companies and generally expand our existing
      operations.




13




Because
      of our limited operating history we have yet to generate any significant
      revenues from our financial service platform (only $95,220 during the quarter
      ended March 31, 2008). Our activities have been limited to the development
      of
      insurance services, development of residential and commercial real estate sales
      and mortgage loans and the negotiation of various acquisitions. Consequently,
      we
      have incurred the expenses of a start-up.





Our
      future financial results will depend primarily on: (i) the ability to continue
      to source and screen potential acquisitions; (ii) the ability to develop
      existing services; (iii) the ability to complete the GBI merger; (iv) the
      ability to purchase the remaining equity interests in AIS; and (v) the ability
      to fully implement our development program, which is dependent on the
      availability of capital resources. There can be no assurance that we will be
      successful in any of these respects, or that we will be able to obtain
      additional funding to increase our current capital resources.





***Satisfaction
      of our cash obligations for the next 12 months.***





Historically,
      our plan of operation has been stalled by a lack of adequate working capital.
      During the first quarter of 2008, we raised an additional $170,000 through
      a
      private placement and as of March 31, 2008, we had available cash of $947,560.
      We believe these funds will help progress our move into the financial services
      industry and will assist in potential mergers and acquisitions of financial
      services entities. However, if and when our funding requirements increase,
      we
      may raise additional funds through either equity or debt financing.





***Summary
      of any product research and development that we will perform for the term of
      our
      plan of operation.***





We
      do not
      anticipate performing any additional significant product research and
      development under our plan of operation with Dial-A-Cup, RFIS, RREM or in the
      financial services industry.





***Expected
      purchase or sale of plant and significant equipment.***





We
      do not
      anticipate the purchase or sale of any plant or significant equipment; as such
      items are not required by us at this time.





***Significant
      changes in the number of employees.***





Currently
      we have full-time employment agreements in place with three of our executive
      officers; Joseph Mangiapane, Jr. (CEO), Terence Davis (President) and Thomas
      Jandt (EVP of Business Development). The parent company has a total of 5 full
      time employees including the officers listed above.





In
      conjunction with the RFIS merger, RFIS entered into an employment agreement
      with
      Todd Torneo, to serve as its President. Currently, RFIS has 4 full time agents
      and 1 administrative person.




14




As
      a
      result of the merger with RREM, RREM entered into an employment agreement with
      Joel Newman, to serve as its President, which was subsequently terminated upon
      the resignation of Mr. Newman in March of 2008. On March 13, 2008, RREM entered
      into an employment agreement with its new president, Craig Triance, one of
      our
      directors. A copy of Mr. Triance’s employment agreement is attached hereto as
      Exhibit 10.14. Additionally, RREM has 5 full time personnel assisting in the
      mortgage and real estate units of RREM.





During
      the year ended December 31, 2007, we entered into a consulting agreement with
      Kathleen McPherson whereby she agreed to provide consulting services in the
      area
      of corporate structure, marketing, strategic alliances, and other matters
      relating to our management and growth. The consulting agreement expires on
      August 30, 2008 or upon a formal employment agreement being executed with Ms.
      McPherson.





In
      the
      interim, we intend to use the services of independent consultants and
      contractors to perform various professional services when appropriate. We
      believe the use of third-party service providers may enhance our ability to
      contain general and administrative expenses.





**Liquidity
      and Capital Resources**





A
      critical component of our operating plan impacting our continued existence
      is
      the ability to obtain additional capital through additional equity and/or debt
      financing. We do not anticipate generating sufficient positive internal
      operating cash flow until such time as we can deliver our product to market,
      complete additional financial service company acquisitions and generate
      substantial revenues, which may take the next few years to fully realize. In
      the
      event we cannot obtain the necessary capital to pursue our strategic plan,
      we
      may have to cease or significantly curtail our operations. This would materially
      impact our ability to continue operations.





The
      following table summarizes our current assets, liabilities and working capital
      at March 31, 2008 compared to December 31, 2007.


**March 31,**
              
              **December 31,**
              
              **Increase / (Decrease)****2008**
              
              **2007**
              
              **$**
              
              **%**Current
                  Assets
              
              $
              2,089,899
              
              $
              2,945,532
              
              $
              (855,633
              )
              
              (29
              )%Current
                  Liabilities
              
              
              483,946
              
              
              457,268
              
              
              26,681
              
              
              6
              %Working
                  Capital
              
              $
              1,605,953
              
              $
              2,488,264
              
              $
              882,311
              
              
              35
              %




Prior
      to
      the private placements at the end of 2006 and during fiscal 2007, the inventor
      of Dial-A-Cup’s product primarily funded our operations. As of March 31, 2008,
      total amounts owed in principal and interest to this individual was $214,433.
      The proceeds loaned have been used to fund operations and for the development
      of
      a prototype of our beverage dispenser. The note bears interest at 10% per annum
      and is due on demand. For the three months ended March 31, 2008, we recorded
      $3,901 of interest expense related to the note. As we expand our activities,
      we
      may continue to experience net negative cash flows from operations, pending
      receipt of additional revenues.




15




During
      fiscal 2007 we completed a private placement for $2 million and during the
      three
      months ended March 31, 2008 we raised an additional $170,000. We believe the
      $947,560 in cash on hand at March 31, 2008 will be sufficient to sustain
      operations through the third quarter of fiscal 2008. However, we may need to
      seek additional funding for operations through equity offerings and may need
      to
      further do so in the future through additional financing, acquisitions, joint
      ventures or other means available to us. There can be no assurance that we
      will
      be able to complete a transaction or complete a transaction on terms favorable
      to our shareholders or us.





As
      we
      continue to expand in the financial services industry, we anticipate incurring
      operating losses over the next twelve months. Our lack of operating history
      makes predictions of future operating results difficult to ascertain. Our
      prospects must be considered in light of the risks, expenses and difficulties
      frequently encountered by companies in their early stage of development.




**Off-Balance
      Sheet Arrangements**





We
      do not
      have any off-balance sheet arrangements that have or are reasonably likely
      to
      have a current or future effect on our financial condition, changes in financial
      condition, revenues or expenses, results or operations, liquidity, capital
      expenditures or capital resources that is material to investors.





**Critical
      Accounting Policies and Estimates**





*Revenue
      Recognition* :
      We
      recognize revenue from product sales once all of the following criteria for
      revenue recognition have been met: pervasive evidence that an agreement exists;
      the services have been rendered; the fee is fixed and determinable and not
      subject to refund or adjustment; and collection of the amount due is reasonably
      assured. We will primarily derive our revenues from anticipated financial
      service related fees, such as commissions.





RFIS
      currently earns commissions paid by insurance companies which are based on
      a
      percentage of the premium charged to the policyholder and considered earned
      over
      the term of the policy. Deferred commissions are related to the unexpired terms
      of the policies in force. The Company recognizes revenue net of expected
      cancellations in accordance with Staff Accounting Bulletin (“SAB”) 13A.





*Concentration
      of credit risk for cash deposits:* Financial
      instruments that potentially subject the Company to credit risk consist
      principally of cash deposits. Accounts at each institution are insured by the
      Federal Deposit Insurance Corporation (FDIC) up to $100,000. At March 31, 2008,
      we had approximately $700,791 in excess of FDIC insured limits.





**Recent
      Accounting** **Developments**





In
      February 2007, the FASB issued SFAS No. 159, “The Fair Value Option for
      Financial Assets and Financial Liabilities” (“SFAS No. 159”). SFAS
      No. 159 allows the company to choose to measure many financial assets and
      financial liabilities at fair value. Unrealized gains and losses on items for
      which the fair value option has been elected are reported in earnings. SFAS
      159
      is effective for fiscal years beginning after November 15, 2007. The adoption
      of
      SFAS 159 is not expected to have a material impact on the Company’s financial
      position, results of operation or cash flows.




16




In
      December 2007, the FASB issued SFAS No. 160, “Non-controlling Interests in
      Consolidated Financial Statements”. This statement amends ARB 51 to establish
      accounting and reporting standards for the non-controlling (minority) interest
      in a subsidiary and for the de-consolidation of a subsidiary. It clarifies
      that
      a non-controlling interest in a subsidiary is equity in the consolidated
      financial statements. SFAS No. 160 is effective for fiscal years and interim
      periods beginning after December 15, 2008. The adoption of SFAS 160 is not
      expected to have a material impact on the Company’s financial position, results
      of operation or cash flows.





**Item
      3.** **** **Quantitative
      and Qualitative Disclosures about Market Risk.**





Not
      applicable.




**Item
      4T. Controls and Procedures.**





Our
      Chief
      Executive Officer, Joseph Mangiapane, Jr., and Principal Financial Officer,
      Terence Davis, have evaluated the effectiveness of our disclosure controls
      and
      procedures (as defined in Rule 13a-15(e) under the Securities Exchange Act
      of
      1934, as amended) as of the end of the period covered by this Report. Based
      on
      the evaluation, Messrs. Mangiapane and Davis concluded that our disclosure
      controls and procedures are effective in timely altering them to material
      information relating to us (including our consolidated subsidiaries) required
      to
      be included in our periodic SEC filings.





There
      were no changes in our internal control over financial reporting that occurred
      during our most recent fiscal quarter that have materially affected, or are
      reasonably likely to materially affect, our internal control over financial
      reporting.





**PART
      II—OTHER INFORMATION**





**Item
      1. Legal Proceedings.**





From
      time
      to time, we may become involved in various lawsuits and legal proceedings,
      which
      arise in the ordinary course of business. However, litigation is subject to
      inherent uncertainties, and an adverse result in these or other matters may
      arise from time to time that may harm our business. We are not presently a
      party
      to any material litigation, nor to the knowledge of management is any litigation
      threatened against us, which may materially affect us.




17




**Item
      1A. Risk Factors.**




Risks
      Relating To Our Business and Marketplace





***We
      will need additional capital in the future to finance our operations, which
      we
      may not be able to raise or it may only be available on terms unfavorable to
      us
      and or our shareholders. This may result in our inability to fund our working
      capital requirements and harm our operational results.***





We
      have
      and expect to continue to have substantial capital expenditure and working
      capital needs. We believe that current cash on hand and the other sources of
      liquidity may not be sufficient enough to fund our operations beyond the third
      quarter of fiscal 2008. Therefore, we may need to raise additional funds to
      continue our operations. Furthermore, additional funds will be needed to pursue
      our intentions of acquiring private companies in the financial services
      industry.





Additional
      financing might not be available on terms favorable to us, or at all. If
      adequate funds were not available or were not available on acceptable terms,
      our
      ability to fund our operations, take advantage of unanticipated opportunities,
      develop or enhance our business or otherwise respond to competitive pressures
      would be significantly limited.





***An
      inability to access capital readily or on terms favorable to us could impair
      our
      ability to fund operations and could jeopardize our financial condition.***





Access
      to
      funds is essential to our anticipated business of financial services. In the
      future we may need to incur debt or issue equity in order to fund our working
      capital requirements, as well as to make acquisitions and other investments.
      Our
      access to funding sources could be hindered by many factors. Those factors
      that
      are specific to our anticipated line of business include the possibility that
      lenders could develop a negative perception of our long-term or short-term
      financial prospects if we incur large trading losses or legal liabilities or
      if
      the level of our business activity decreases due to a market downturn.
      Similarly, our access may be impaired if regulatory authorities take significant
      action against us, or if our employees engage in material unauthorized or
      illegal activity.





***The
      U.S. credit markets have been dealing with the effects of numerous defaults
      by
      homeowners on “subprime” mortgage loans, which may materially impact our real
      estate and mortgage subsidiary.***





“Subprime”
      mortgage loan defaults could adversely impact the operations of our real estate
      and mortgage division. In addition, subprime mortgage loan defaults began to
      increase with respect to mortgages considered to be less credit risk than
“subprime” mortgages. It is expected that mortgage default rates will continue
      to increase through the first half of 2008. These defaults have not only had
      a
      materially adverse impact on the spending power of the borrowers of such
      defaulted mortgage loans, but have also reduced the ability of buyers of
      residential properties to acquire single family residences, in addition to
      reductions in the value of investment portfolios containing securities affected
      by such mortgages. Because the real estate and mortgage division is highly
      dependent upon fees and commissions based upon sales and financings related
      to
      residential and investment properties, the downward trend in “subprime”
mortgages may materially impact our results of operations on a consolidated
      basis.




18


***We
      have limited operating history in the financial services industry and there
      can
      be no assurance that we will be successful in this industry.***





Our
      proposed operations are subject to all of the risks inherent in the
      establishment of a new business, including licensing risks, insufficient
      capital, unforeseen problems, and expenses and complications encountered with
      the early phases of operations in a business. Moreover, our lack of an operating
      history in the financial services industry makes it impossible to predict
      whether or not we will operate profitably in the industry. While we have brought
      on management that is familiar with this industry, there can be no assurances
      that we will be able to locate, hire and retain the necessary personnel to
      initiate, manage and operate this new line of business, develop and implement
      necessary systems, obtain contracts and obtain financing as contemplated in
      our
      business strategy.





***We
      may not complete all of our proposed acquisitions, and even if we do, these
      acquired companies have not operated as a combined entity and are not fully
      integrated, and we may not be able to integrate them successfully.***





During
      the first six months of 2007, we completed two mergers with (i) Rubicon
      Financial Insurance Services, Inc. and (ii) Rubicon Real Estate and Mortgages,
      Inc. At the end of the second quarter we also entered into an agreement and
      plan
      of merger with Grant Bettingen, Inc., and then subsequently acquired
      approximately 21% of GBI. Additionally, we have acquired minority interests
      in
      two FINRA broker/dealers. We have also entered into additional non-binding
      letters of intent to acquire more businesses involved in the financial services
      industry. Each acquisition is subject to customary closing conditions; including
      the completion of due diligence reasonably satisfactory to us, the negotiation
      and execution of a definitive agreement, required regulatory approvals, and
      the
      acquired company providing audited financial statements as required by SEC
      rules
      and regulations. We may not be able to complete all of these acquisitions if
      we
      are not satisfied with our due diligence investigation, if we are unable to
      negotiate definitive agreements, if we cannot obtain the required regulatory
      approvals, or if the companies to be acquired cannot provide the required
      audited financial statements.





Further,
      even if we are able to successfully complete all of these proposed acquisitions,
      the companies to be acquired have been operated as separate independent entities
      to date, and we may not be able to integrate the operations of these businesses
      successfully or institute the necessary systems and procedures, including
      accounting and financial reporting systems, to manage the combined enterprise
      on
      a profitable basis. Our management group has only recently been assembled and
      may not be able to manage the combined entity effectively or to successfully
      implement our operating strategies. Any inability to integrate acquired
      companies successfully would have a material adverse effect on our business,
      financial condition and results of operations.




19


***We
      may not be able to retain our key personnel or hire the personnel we need to
      sustain and grow our business.***





We
      face
      intense competition for qualified employees from businesses in the financial
      services industry. Our performance is highly dependent upon our ability to
      attract, retain, and motivate highly skilled, talented employees. These
      professionals are regularly recruited by other firms and may choose to change
      firms, in which case their clients may choose to move their assets. Given our
      relatively small size compared to some of our anticipated competitors, the
      performance of our business may be more adversely affected than our competitors
      would be if we lose well-performing employees and are unable to attract new
      ones.





***Regulatory
      capital requirements and our holding company structure may adversely affect
      our
      ability to expand or maintain present levels of our business or impair our
      ability to meet our financial obligations.***





We
      have
      executed definitive agreements to acquire two broker / dealers (i) Grant
      Bettingen, Inc. and (ii) AIS Financial, Inc. Upon consummation of these
      acquisitions, each will become our wholly owned subsidiary. Each of these
      broker-dealers is subject to the SEC’s uniform net capital rule,
      Rule 15c3-1, which sets the minimum level of net capital a broker-dealer
      must maintain and also requires that a portion of its assets be relatively
      liquid. As we are a holding company, we will depend on dividends and other
      payments from our subsidiaries to fund all payments on our obligations,
      including any debt obligations, and potential working capital requirements.
      These regulatory restrictions may impede our access to funds. In addition,
      underwriting commitments require a charge against net capital and, accordingly,
      our broker/dealer subsidiaries, when acquired, ability to make underwriting
      commitments may be limited by the requirement that it must at all times be
      in
      compliance with the applicable net capital regulations. Each of our
      broker-dealer subsidiaries will also be subject to certain notification
      requirements related to withdrawals of excess net capital.





***We
      are subject to strict government regulations and the failure to comply could
      result in disciplinary actions.***





The
      securities industry in the United States is subject to extensive regulations
      under both Federal and State laws. Broker-dealers, such as GBI and AIS, and
      investment advisors are subject to regulations covering all aspects of their
      business. Recently, the securities industry has experienced a great deal of
      negative exposure due to alleged underwriting negligence, conflicts of interest,
      research improprieties and mutual fund trading improprieties. As a result,
      regulatory agencies and the U.S. government have intervened in an attempt to
      resolve these various issues. In addition, the SEC, FINRA, other self-regulatory
      organizations, and state securities commissions can censure, fine, issue
      cease-and-desist orders, or suspend or expel a broker-dealer or any of its
      officers or employees.





Our
      ability to comply with all applicable laws and rules is largely dependent on
      our
      establishment and maintenance of a system to ensure compliance with these laws
      and rules, as well as our ability to attract and retain qualified compliance
      personnel. The demands placed upon our personnel and financial resources may
      be
      too significant for us to quickly adapt to a changing regulatory environment
      and
      may impact our ability to provide or expand our services. Any disciplinary
      or
      other action imposed upon us due to claimed noncompliance in the future could
      have a material adverse effect on our business, financial condition and
      operating results.




20





In
      addition, our operations and profitability may be affected by additional
      legislation, changes in rules promulgated by the SEC, FINRA, other
      self-regulatory organizations, and state securities commissions, or changes
      in
      the interpretation or enforcement of existing laws and rules including, but
      not
      limited to, existing regulations which restrict communications between our
      research analysts and our other departments. We cannot assure you that such
      future regulations will not require us to implement additional compliance
      policies and that such policies will not materially increase our compliance
      expenses or otherwise adversely affect our business, financial condition and
      operating results.





***We
      engage in the securities business that subjects us to the specific risks of
      that
      business.***





The
      securities business is by its nature subject to various risks, particularly
      in
      volatile or illiquid markets, including the risk of losses resulting from the
      underwriting or ownership of securities, customer fraud, employee errors and
      misconduct, failures in connection with the execution of securities
      transactions, and litigation. Our business and profitability are affected by
      many other factors, including:


· Volume,
        size and timing of securities transactions;
 ·Demand
        for
        investment banking services;
 · Level
        and
        volatility of interest rates;
 ·Availability
        of
        credit;
 ·Volatility
        of equity
        and debt securities held in inventory;
 ·Legislation
        affecting the business and financial communities; and
 ·T he
        economy in general.





Conditions
      in the financial markets and the economy generally have a direct and material
      impact on our results of operations and financial condition. For example, our
      investment banking revenue, in the form of underwriting discounts, placement
      agent fees, and financial advisory fees, is directly related to the volume
      and
      value of the transactions in which we are involved. When uncertain or
      unfavorable market or economic conditions exist, the volume and size of
      capital-raising transactions and acquisitions and dispositions typically
      decrease, thereby reducing the demand for our investment banking services and
      increasing price competition.





A
      downturn in the financial markets may also result in a decline in the volume
      and
      value of trading transactions. This could lead to a decline in the revenue
      we
      receive from commissions on the execution of trading transactions and a
      reduction in the value of our trading positions, commissions and spreads. Sudden
      sharp declines in market values of securities can result in illiquid markets,
      making it more difficult to resell securities we own and decreasing our trading
      activities generally, and the failure of counterparties to perform their
      obligations, as well as increases in claims and litigation, including
      arbitration claims from clients.




21


***We
      may not be able to compete successfully with other companies in the securities
      industry.***





The
      securities industry is extremely competitive and our overall business will
      be
      adversely affected if we are unable to compete successfully. In recent years,
      significant price competition in many areas of our business, including pressure
      on trading spreads and commissions have reduced financial service firms’ profit
      margins. We believe that price competition in these and other areas will
      continue as some of our competitors seek to obtain market share by reducing
      fees, commissions, or spreads. Many of these companies are larger than we are,
      have greater financial resources and may be more willing to lend money to
      businesses in connection with providing them with financial advisory services.
      In our proposed capital markets and investment banking businesses, we would
      compete against larger national and international firms with much larger capital
      bases that allow them to underwrite larger offerings and hold much larger
      trading positions.





Further,
      consolidation in the securities industry fostered in part by changes in the
      regulatory framework in the U.S. has also increased competition, bolstering
      the
      capital base, product diversification, and geographic reach of some of our
      competitors. Finally, the emergence of alternative securities and futures
      trading systems via the internet and other media has offered a potentially
      less
      expensive alternative to our services. If this trend toward using alternative
      trading systems continues to grow, it may adversely affect our commission and
      trading revenue, reduce our participation in the trading markets and our ability
      to access market information, and result in the creation of new and stronger
      competitors.





Risks
      Relating To Our Common Stock





***Because
      our common stock is deemed a low-priced “Penny” stock, an investment in our
      common stock should be considered high risk and subject to marketability
      restrictions.***





Since
      our
      common stock is a penny stock, as defined in Rule 3a51-1 under the Securities
      Exchange Act, it will be more difficult for investors to liquidate their
      investment even if and when a market develops for the common stock. Until the
      trading price of the common stock rises above $5.00 per share, if ever, trading
      in the common stock is subject to the penny stock rules of the Securities
      Exchange Act specified in rules 15g-1 through 15g-10. Those rules require
      broker-dealers, before effecting transactions in any penny stock,
      to:





·
            Deliver
                to the customer, and obtain a written receipt for, a disclosure
                document;


·
            Disclose
                certain price information about the
                stock;


·
            Disclose
                the amount of compensation received by the broker-dealer or any associated
                person of the broker-dealer;


·
            Send
                monthly statements to customers with market and price information
                about
                the penny stock; and


·
            In
                some circumstances, approve the purchaser’s account under certain
                standards and deliver written statements to the customer with information
                specified in the rules.




22




Consequently,
      the penny stock rules may restrict the ability or willingness of broker-dealers
      to sell the common stock and may affect the ability of holders to sell their
      common stock in the secondary market and the price at which such holders can
      sell any such securities. These
      additional procedures could also limit our ability to raise additional capital
      in the future.





***If
      we fail to remain current on our reporting requirements, we could be removed
      from the OTC Bulletin Board, which would limit the ability of broker-dealers
      to
      sell our securities and the ability of shareholders to sell their securities
      in
      the secondary market.***





Companies
      trading on the OTC Bulletin Board, such as us, must be reporting issuers under
      Section 12 of the Securities Exchange Act of 1934, as amended, and must be
      current in their reports under Section 13, in order to maintain price quotation
      privileges on the OTC Bulletin Board.  More specifically, FINRA has enacted
      Rule 6530, which determines eligibility of issuers quoted on the OTC Bulletin
      Board by requiring an issuer to be current in its filings with the
      Commission.  Pursuant to Rule 6530(e), if we file our reports late with the
      Commission three times in a two-year period or our securities are removed from
      the OTC Bulletin Board for failure to timely file twice in a two-year period
      then we will be ineligible for quotation on the OTC Bulletin Board. As a result,
      the market liquidity for our securities could be severely adversely affected
      by
      limiting the ability of broker-dealers to sell our securities and the ability
      of
      shareholders to sell their securities in the secondary market. We have not
      been
      late in any of our SEC reports through March 31, 2008.





***We
      have the ability to issue additional shares of our common stock and shares
      of
      preferred stock without asking for stockholder approval, which could cause
      your
      investment to be diluted.***





Our
      Certificate of Incorporation authorizes the Board of Directors to issue up
      to
      50,000,000 shares of common stock and on July 31, 2007 we received shareholder
      approval of an amendment to our Certificate of Incorporation to allow for
      10,000,000 shares of preferred stock. The power of the Board of Directors to
      issue shares of common stock, preferred stock or warrants or options to purchase
      shares of common stock or preferred stock is generally not subject to
      shareholder approval. Accordingly, any additional issuance of our common stock,
      or preferred stock that may be convertible into common stock, may have the
      effect of diluting one’s investment.





***By
      issuing preferred stock, we may be able to delay, defer or prevent a change
      of
      control.***





Our
      board
      of directors and shareholders have approved an amendment to our Certificate
      of
      Incorporation to provide for “blank check preferred” which will permit us to
      issue, without approval from our shareholders, a total of 10,000,000 shares
      of
      preferred stock. Our Board of Directors can determine the rights, preferences,
      privileges and restrictions granted to, or imposed upon, the shares of preferred
      stock and to fix the number of shares constituting any series and the
      designation of such series. It is possible that our Board of Directors, in
      determining the rights, preferences and privileges to be granted when the
      preferred stock is issued, may include provisions that have the effect of
      delaying, deferring or preventing a change in control, discouraging bids for
      our
      common stock at a premium over the market price, or that adversely affect the
      market price of and the voting and other rights of the holders of our common
      stock.




23


***FINRA
      sales practice requirements may also limit a stockholder's ability to buy and
      sell our stock.***





In
      addition to the “penny stock” rules described above, FINRA has adopted rules
      that require that in recommending an investment to a customer, a broker-dealer
      must have reasonable grounds for believing that the investment is suitable
      for
      that customer. Prior to recommending speculative low priced securities to their
      non-institutional customers, broker-dealers must make reasonable efforts to
      obtain information about the customer's financial status, tax status, investment
      objectives and other information. Under interpretations of these rules, the
      FINRA believes that there is a high probability that speculative low priced
      securities will not be suitable for at least some customers. The FINRA
      requirements make it more difficult for broker-dealers to recommend that their
      customers buy our common stock, which may limit your ability to buy and sell
      our
      stock and have an adverse effect on the market for our shares.





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





On
      February 29, 2008, we completed a private placement wherein we sold a total
      of
      130,000 shares of our restricted common stock at $2.00 per share to 7 accredited
      investors for a total purchase price of $260,000, all of which was paid in
      cash.
      $170,000 was sold during the year ended December 31, 2007, with an additional
      $90,000 sold during the first quarter. The shares were issued on April 2, 2008.
      We believe that the issuance and sale of the shares was exempt from the
      registration and prospectus delivery requirements of the Securities Act of
      1933
      by virtue of Section 4(2) and Regulation D, Rule 506. The shares were sold
      through registered broker/dealers and did not involve a public offering or
      general solicitation. The recipients of the shares were afforded an opportunity
      for effective access to our files and records that contained the relevant
      information needed to make their investment decision, including the financial
      statements and 34 Act reports. We reasonably believed that the recipients,
      immediately prior to the sale of the shares, had such knowledge and experience
      in their financial and business matters that they were capable of evaluating
      the
      merits and risks of their investment. We paid $26,000 in commissions and fees
      to
      Grant Bettingen, Inc. on the issuance and sale of the shares.





In
      March
      of 2008, Joel Newman, the president of RREM, resigned from all of his positions
      with RREM, which terminated his employment agreement and cancelled his 200,000
      common stock options. As of the date of cancellation, the options had not fully
      vested.





Subsequent
      Issuances





On
      April
      2, 2008, we issued 5,000 shares of our common stock to an employee for services.
      We believe that the issuance of shares described above was exempt from
      registration and prospectus delivery requirements of the Securities Act of
      1933
      by virtue of Section 4(2). The shares were issued directly by us and did not
      involve a public offering or general solicitation. The recipient of the shares
      was afforded an opportunity for effective access to files and records of our
      company that contained the relevant information needed to make his investment
      decision, including our financial statements and 34 Act reports. We reasonably
      believed that the recipient, immediately prior to receiving the shares, had
      such
      knowledge and experience in our financial and business matters that he was
      capable of evaluating the merits and risks of his investment. The recipient
      had
      the opportunity to speak with our management on several occasions prior to
      his
      investment decision.




24




On
      April
      3, 2008, Michael Sederoff, our former chief financial officer, executed a two
      year lock-up agreement with us wherein Mr. Sederoff agreed not to sell his
      25,000 shares of common stock, received as part of his prior employment
      agreement with us, for a period of two years and Mr. Sederoff waived all rights
      to receive the additional 13,401 shares of our common stock that had accrued
      under the employment agreement and were authorized for issuance as of December
      31, 2007. Therefore, the 13,401 shares will not be issued and the authorization
      for issuance was revoked. A copy of the lock-up agreement is attached hereto
      as
      Exhibit 10.15.





**Issuer
      Purchases of Equity Securities**





We
      did
      not repurchase any of our equity securities during the quarter ended March
      31,
      2008.





**Item
      3. Defaults Upon Senior Securities.**





None.





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





We
      did
      not submit any matters to a vote of our security holders during the first
      quarter of 2008.





**Item
      5. Other Information.**





Davis
      Employment Agreement





On
      March
      27, 2008, we entered into an employment agreement with Terence Davis, our
      president. The Employment Agreement provides for a one year term commencing
      on
      April 1, 2008 and expiring on March 31, 2009, with an automatic one year renewal
      unless otherwise terminated as described in the agreement. A copy of the
      agreement was filed as Exhibit 10.13 to the 10-K filed on March 31, 2008. Mr.
      Davis is entitled to the following compensation pursuant to the Employment
      Agreement.





·
            We
                have agreed to pay Mr. Davis a base salary of $8,000 per month with
                yearly
                adjustments being determined by specified criteria and our board
                of
                directors.


·
            Mr.
                Davis will be eligible to participate in our Stock Option Plan and
                Stock
                Purchase Plan during the term of his employment.


·
            In
                the event we terminate Mr. Davis’ employment agreement without “cause” (as
                defined in the Employment Agreement) or Mr. Davis resigns with “good
                reason” (as defined in the Employment Agreement), Mr. Davis shall be
                entitled to receive, through the end of the term his base salary
                and
                incentive compensation.






25




·
            If
                the Employment Agreement is terminated for “cause” (as defined in the
                Employment Agreement), Mr. Davis shall receive his base salary and
                incentive compensation through the date of termination. However,
                if a
                dispute arises between us and Mr. Davis that is not resolved within
                60
                days and neither party initiates arbitration, we have the option
                to pay
                Mr. Davis a lump sum of 6 months base salary as “severance payment” rather
                than pay Mr. Davis’ salary and incentive compensation, if any, through the
                date of termination.


·
            In
                the event Mr. Davis becomes incapacitated by reason of accident,
                illness,
                or other disability whereby he is unable to carry on substantially
                all of
                his normal duties for a continuous period of 120 days, the Employment
                Agreement will terminate and Mr. Davis will receive (1) through the
                end of
                the fiscal year his incentive compensation and (2) his base salary
                for a 6
                month period reduced by the amount of any payment received from disability
                insurance proceeds.


·
            In
                the event Mr. Davis dies during the term of the Employment Agreement,
                we
                will pay to the estate of Mr. Davis his incentive compensation and
                his
                base salary for a period of 6 months.





Further,
      Mr. Davis’ employment agreement allows for him to resign for good reason upon a
      change in control of us. Upon his resignation for good reason, Mr. Davis would
      continue to receive, through the end of the Term of this Agreement (up to 1
      year), his incentive compensation in accordance with the terms and conditions
      of
      his agreement and his salary at the rate then in effect.





For
      purposes of Mr. Davis’ agreement, a change in control is defined as:





(i)
            a
                merger or consolidation in which securities possessing more than
                fifty
                percent (50%) of the total combined voting power of our outstanding
                securities are transferred to a person or persons different from
                the
                persons holding those securities immediately prior to such transaction
                in
                a transaction approved by the stockholders, or the sale, transfer,
                or
                other disposition of more than fifty percent (50%) of the total combined
                voting power of our outstanding securities to a person or persons
                different from the persons holding those securities immediately prior
                to
                such transaction; or





(ii)
            the
                sale, transfer or other disposition of all or substantially all of
                the our
                assets in complete liquidation or dissolution of us other than in
                connection with a transaction described in (i)
                above.





Triance
      Employment Agreement





On
      March
      13, 2008, RREM entered into an employment agreement with Craig Triance, one
      of
      our directors, to serve as its President. The agreement is for a term commencing
      on March 15, 2008 and expiring on March 31, 2009, with the option to renew
      by
      mutual written agreement unless otherwise terminated as described in the
      agreement. Mr. Triance will be paid a salary of $8,000 a month. A copy of Mr.
      Triance’s agreement is attached hereto as Exhibit 10.14.




26




Newman
      Lock-Up Agreement





On
      April
      3, 2008, we entered into a lock-up agreement with Joel Newman, the former
      president of RREM, whereby Mr. Newman agreed to lock-up 284,000 shares owned
      by
      him until he repays certain promissory notes, which are scheduled to be repaid
      on or before March 2010. A copy of Mr. Newman’s lock-up agreement is attached
      hereto as Exhibit 10.16.





**Item
      6. Exhibits.**





**Incorporated
                by reference****Exhibit**
            
            **Exhibit
                Description**
            
            **Filedherewith**
            
            **Form**
            
            **Periodending**
            
            **Exhibit**
            
            **Filingdate**2.1
            
            Agreement
                and Plan of Merger Between ISSG, Inc. and Rub Investments,
                Inc.
            
            
            
            8-K
            
            
            
            2.1
            
            05/17/052.2
            
            Delaware
                Certificate of Merger
            
            
            
            8-K
            
            
            
            2.2
            
            06/13/052.3
            
            Nevada
                Articles of Merger
            
            
            
            8-K
            
            
            
            2.3
            
            06/13/052.4
            
            Merger
                Agreement between Rubicon Financial Incorporated, ISSG Sub, Inc.
                and
                Rubicon Financial Insurance Services
            
            
            
            8-K
            
            
            
            2.4
            
            02/23/072.7
            
            Merger
                Agreement among Rubicon Financial Incorporated, RFI Sub, Inc. and
                Grant
                Bettingen, Inc.
            
            
            
            8-K
            
            
            
            2.7
            
            07/05/072.7(b)
            
            Amendment
                No. 1 to the Merger Agreement among Rubicon Financial Incorporated,
                RFI
                Sub, Inc. and Grant Bettingen, Inc.
            
            
            
            8-K
            
            
            
            2.7(b)
            
            09/14/072.7(c)
            
            Amendment
                No.2 to the Merger Agreement among Rubicon Financial Incorporated,
                RFI
                Sub, Inc. and Grant Bettingen, Inc., dated January 23,
                2007
            
            
            
            8-K
            
            
            
            2.7(c)
            
            01/24/082.7(d)
            
            Amendment
                No. 3 to the Merger Agreement among Rubicon Financial Incorporated,
                RFI
                Sub, Inc. and Grant Bettingen, Inc., dated March 18, 2008
            
            
            
            
            
            
            
            2.7(d)
            
            03/21/082.8
            
            Separation
                and Distribution Agreement by and between Rubicon Financial Incorporated
                and Dial-A-Cup, Inc.
            
            
            
            8-K
            
            
            
            2.8
            
            08/06/073.1(i)(a)
            
            ISSG,
                Inc. Articles of Incorporation
            
            
            
            10-KSB
            
            12/31/05
            
            3.1(i)(a)
            
            04/05/063.1(i)(b)
            
            ISSG,
                Inc. Certificate of Correction of Articles of Incorporation
            
            
            
            10-KSB
            
            12/31/05
            
            3.1(i)(b)
            
            04/05/063.1(i)(c)
            
            ISSG,
                Inc. Amendment to Articles of Incorporation
            
            
            
            10-KSB
            
            12/31/05
            
            3.1(i)(c)
            
            04/05/06




27




3.1(i)(d)
            
            Amendment
                to Certificate of Incorporation changing name from ISSG, Inc. to
                Rubicon
                Financial Incorporated
            
            
            
            8-K
            
            
            
            3.1(i)(d)
            
            09/08/063.1(i)(g)
            
            Amendment
                to Certificate of Incorporation authorizing “blank check” Preferred
                Stock
            
            
            
            8-K
            
            
            
            3.1(i)(g)
            
            08/01/073.1(ii)
            
            ISSG,
                Inc. Bylaws
            
            
            
            10-KSB
            
            12/31/05
            
            3.1(ii)
            
            04/05/0610.1
            
            Agreement
                and Plan of Merger between ISSG, Inc. and Advantage Investment Strategies,
                Inc.
            
            
            
            8-K
            
            
            
            10.1
            
            04/18/0610.2
            
            Termination
                Agreement between ISSG, Inc. and Advantage Investment
                Strategies
            
            
            
            8-K
            
            
            
            10.2
            
            07/20/0610.3
            
            Employment
                Agreement with Joseph Mangiapane, Jr.
            
            
            
            8-K
            
            
            
            10.3
            
            01/17/0710.4
            
            Employment
                Agreement with Todd Torneo
            
            
            
            8-K
            
            
            
            10.4
            
            02/23/0710.5
            
            Employment
                Agreement with Michael Sederoff
            
            
            
            8-K
            
            
            
            10.5
            
            02/23/0710.6
            
            Employment
                Agreement with Thomas Jandt
            
            
            
            8-K
            
            
            
            10.610.7
            
            Employment
                Agreement with Joel Newman
            
            
            
            10-QSB
            
            06/30/07
            
            10.7
            
            08/17/0710.8
            
            Stock
                Cancellation Agreement
            
            
            
            8-K
            
            
            
            10.8
            
            08/06/0710.9
            
            Share
                Purchase Agreement between Rubicon Financial Incorporated and Grant
                Bettingen, Inc.
            
            
            
            8-K
            
            
            
            10.9
            
            09/14/0710.10
            
            Consulting
                Agreement with Ms. Kathleen McPherson
            
            
            
            8-K
            
            
            
            10.10
            
            09/14/0710.11
            
            Employment
                Agreement with Mr. Tom Collier
            
            
            
            10-QSB
            
            09/30/07
            
            10.11
            
            11/13/0710.12
            
            Amendment
                No. 1 to GBI Stock Purchase Agreement dated March 18, 2008
            
            
            
            8-K
            
            
            
            10.12
            
            03/21/0810.13
            
            Employment
                Agreement with Terence Davis
            
            
            
            10-K
            
            12/31/07
            
            10.13
            
            03/31/0810.14
            
            Employment
                Agreement with Craig Triance
            
            X10.15
            
            Sederoff
                Lock-Up Agreement
            
            X10.16
            
            Newman
                Lock-Up Agreement
            
            X31.1
            
            Certification
                of Joseph Mangiapane, Jr., Chief Executive Officer, pursuant to Section
                302 of the Sarbanes-Oxley Act
            
            X31.2
            
            Certification
                of Terence Davis, Principal Financial Officer, pursuant to Section
                302 of
                the Sarbanes-Oxley Act
            
            X32.1
            
            Certification
                of Joseph Mangiapane, Jr., Chief Executive Officer, pursuant to Section
                906 of the Sarbanes-Oxley Act
            
            X32.2
            
            Certification
                of Terence Davis, Principal Financial Officer, pursuant to Section
                906 of
                the Sarbanes-Oxley Act
            
            X




28




**SIGNATURES**




In
      accordance with the requirements of the Exchange Act, the registrant caused
      this
      report to be signed on its behalf by the undersigned, thereunto duly
      authorized.





RUBICON
      FINANCIAL INCORPORATED


(Registrant)


By:
              /s/
                  Terence DavisTerence
                  Davis, President(On
                  behalf of the Registrant and as Principal FinancialOfficer)




Date:
      May
      13, 2008




29