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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549





FORM 10-Q





(Mark One)

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

For the quarterly period ended March 31, 2011

OR



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

For the transition period from  to

Commission file number:
000-18188





PAULSON CAPITAL CORP.

(Exact name of registrant as specified in its charter)







|                                                               |  |                                     
|-------------------------------------------------------------- |  | ------------------------------------
|Oregon                                                         |  | 93-0589534                          
|(State or other jurisdiction of
incorporation or organization) |  | (I.R.S. Employer Identification No.)
|                                                               | 
|811 SW Naito Parkway, Portland, Oregon                         |  | 97204                               
|(Address of principal executive offices)                       |  | (Zip Code)                          

Registrants telephone number, including area code: 503-243-6000





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 has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule
405 of Regulation S-T (§ 229.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    Yes   ̈    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

Indicate
the number of shares outstanding of each of the issuers classes of common stock, as of the latest practicable date.



|                           |  |                              
|-------------------------- |  | -----------------------------
|Common stock, no par value |  | 5,767,985                    
|(Class)                    |  | (Outstanding at May 12, 2011)









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PAULSON CAPITAL CORP. AND SUBSIDIARIES

FORM 10-Q

INDEX



|                               |  |                                                                                                |    |  |    | 
|------------------------------ |  | ---------------------------------------------------------------------------------------------- | -- |  | -- | 
|                               |  | Page                                                                                           |   
|PART I - FINANCIAL INFORMATION |  |                                                                                                |    | 
|                               |  |                                                                                               
|Item 1.                        |  | Financial Statements                                                                           |    |  |    | 
|                               |  |                                                                                               
|                               |  | Consolidated Balance Sheets  March 31, 2011 and December 31, 2010 (unaudited)                 |    |  | 2  | 
|                               |  |                                                                                               
|                               |  | Consolidated Statements of Operations - Three Months Ended March 31, 2011 and 2010 (unaudited) |    |  | 3  | 
|                               |  |                                                                                               
|                               |  | Consolidated Statements of Cash Flows - Three Months Ended March 31, 2011 and 2010 (unaudited) |    |  | 4  | 
|                               |  |                                                                                               
|                               |  | Notes to Consolidated Financial Statements (unaudited)                                         |    |  | 5  | 
|                               |  |                                                                                               
|Item 2.                        |  | Managements Discussion and Analysis of Financial Condition and Results of Operations          |    |  | 7  | 
|                               |  |                                                                                               
|Item 3.                        |  | Quantitative and Qualitative Disclosures About Market Risk                                     |    |  | 13 | 
|                               |  |                                                                                               
|Item 4.                        |  | Controls and Procedures                                                                        |    |  | 13 | 
|                               | 
|PART II - OTHER INFORMATION    |  |                                                                                                |    | 
|                               |  |                                                                                               
|Item 2.                        |  | Unregistered Sales of Equity Securities and Use of Proceeds                                    |    |  | 13 | 
|                               |  |                                                                                               
|Item 6.                        |  | Exhibits                                                                                       |    |  | 13 | 
|                               | 
|Signatures                     |  |                                                                                                | 14 | 



1



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PART I - FINANCIAL INFORMATION

Item 1. Financial Statements

Paulson Capital Corp. and Subsidiaries

Consolidated Balance Sheets

(Unaudited)



|                                                                                                            |  |               |            |  |                  |   |            | 
|----------------------------------------------------------------------------------------------------------- |  | ------------- | ---------- |  | ---------------- | - | ---------- | 
|                                                                                                            |  | March 31,2011 |            |  | December 31,2010 |  
|Assets                                                                                                      |  |               |            |  |                  |   |            | 
|Cash                                                                                                        |  | $             | 345,239    |  |                  | $ | 375,649    | 
|Receivable from clearing organization                                                                       |  |               | 7,776,285  |  |                  |   | 8,076,637  | 
|Notes and other receivables, net of allowances for doubtful accounts of $100,000 and $100,000               |  |               | 964,768    |  |                  |   | 767,842    | 
|Income taxes receivable                                                                                     |  |               | 130,957    |  |                  |   | 126,451    | 
|Trading and investment securities owned, at fair value                                                      |  |               | 8,811,124  |  |                  |   | 8,648,123  | 
|Underwriter warrants, at fair value                                                                         |  |               | 1,040,000  |  |                  |   | 1,122,000  | 
|Prepaid and deferred expenses                                                                               |  |               | 397,950    |  |                  |   | 539,181    | 
|Furniture and equipment, at cost, net of accumulated depreciation and amortization of $917,156 and $918,443 |  |               | 52,662     |  |                  |   | 25,398     | 
|                                                                                                            |  |               |            |  |                  |   |            | 
|Total Assets                                                                                                |  | $             | 19,518,985 |  |                  | $ | 19,681,281 | 
|                                                                                                            |  |               |            |  |                  |   |            | 
|Liabilities and Shareholders Equity                                                                        |  |               |            |  |                  |   |            | 
|Accounts payable and accrued liabilities                                                                    |  | $             | 350,775    |  |                  | $ | 319,433    | 
|Payable to clearing organization                                                                            |  |               | 437,629    |  |                  |   | 318,782    | 
|Compensation, employee benefits and payroll taxes                                                           |  |               | 1,128,535  |  |                  |   | 1,014,579  | 
|Trading securities sold, not yet purchased, at fair value                                                   |  |               |           |  |                  |   | 5,565      | 
|Income taxes payableuncertain tax positions                                                                |  |               | 145,075    |  |                  |   | 144,075    | 
|Deferred revenue                                                                                            |  |               | 344,384    |  |                  |   | 382,650    | 
|                                                                                                            |  |               |            |  |                  |   |            | 
|Total Liabilities                                                                                           |  |               | 2,406,398  |  |                  |   | 2,185,084  | 
|                                                                                                            |  |              
|Commitments and Contingencies                                                                               |  |               |           |  |                  |   |           | 
|                                                                                                            |  |              
|Shareholders Equity                                                                                        |  |               |            |  |                  |   |            | 
|Preferred stock, no par value; 500,000 shares authorized; none issued                                       |  |               |           |  |                  |   |           | 
|Common stock, no par value; 10,000,000 shares authorized; shares issued and outstanding:                    |  |               |            |  |                  |   |            | 
|5,767,985 and 5,769,985                                                                                     |  |               | 2,163,941  |  |                  |   | 2,164,401  | 
|Retained earnings                                                                                           |  |               | 14,948,646 |  |                  |   | 15,331,796 | 
|                                                                                                            |  |               |            |  |                  |   |            | 
|Total Shareholders Equity                                                                                  |  |               | 17,112,587 |  |                  |   | 17,496,197 | 
|                                                                                                            |  |               |            |  |                  |   |            | 
|Total Liabilities and Shareholders Equity                                                                  |  | $             | 19,518,985 |  |                  | $ | 19,681,281 | 
|                                                                                                            |  |               |            |  |                  |   |            | 

See accompanying Notes to Consolidated Financial Statements.



2



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Paulson Capital Corp. and Subsidiaries

Consolidated Statements of Operations

(Unaudited)



|                                                        |  |                                      |           |   |      |   |           |  
|------------------------------------------------------- |  | ------------------------------------ | --------- | - | ---- | - | --------- | -
|                                                        |  | For the Three Months Ended March 31, |          
|                                                        |  | 2011                                 |           |   | 2010 |  
|Revenues                                                |  |                                      |           |   |      |   |           |  
|Commissions                                             |  | $                                    | 4,394,030 |   |      | $ | 4,141,589 |  
|Corporate finance                                       |  |                                      | 69,137    |   |      |   | 1,193,879 |  
|Investment loss                                         |  |                                      | (102,682  | ) |      |   | (614,822  | )
|Trading income                                          |  |                                      | 385,409   |   |      |   | 10,921    |  
|Interest and dividends                                  |  |                                      | 131,375   |   |      |   | 4,648     |  
|Other                                                   |  |                                      | 44,698    |   |      |   | 35,640    |  
|                                                        |  |                                      |           |   |      |   |           |  
|                                                        |  |                                      | 4,921,967 |   |      |   | 4,771,855 |  
|                                                        |  |                                     
|Expenses                                                |  |                                      |           |   |      |   |           |  
|Commissions and salaries                                |  |                                      | 4,359,624 |   |      |   | 3,911,509 |  
|Underwriting expenses                                   |  |                                      | 10,214    |   |      |   | 113,653   |  
|Rent and utilities                                      |  |                                      | 141,338   |   |      |   | 141,047   |  
|Communication and quotation services                    |  |                                      | 130,608   |   |      |   | 140,247   |  
|Professional fees                                       |  |                                      | 209,323   |   |      |   | 362,402   |  
|Travel and entertainment                                |  |                                      | 29,922    |   |      |   | 29,662    |  
|Advertising and promotion                               |  |                                      | 10,922    |   |      |   | 47,699    |  
|Bad debt expense                                        |  |                                      |          |   |      |   | 337       |  
|Depreciation and amortization                           |  |                                      | 4,482     |   |      |   | 8,311     |  
|Licenses, taxes and insurance                           |  |                                      | 129,411   |   |      |   | 51,474    |  
|Other                                                   |  |                                      | 276,333   |   |      |   | 200,578   |  
|                                                        |  |                                      |           |   |      |   |           |  
|                                                        |  |                                      | 5,302,177 |   |      |   | 5,006,919 |  
|                                                        |  |                                      |           |   |      |   |           |  
|Loss before income taxes                                |  |                                      | (380,210  | ) |      |   | (235,064  | )
|                                                        |  |                                     
|Income tax expense                                      |  |                                      |           |   |      |   |           |  
|Current                                                 |  |                                      | 1,000     |   |      |   | 5,000     |  
|Deferred                                                |  |                                      |          |   |      |   |          |  
|                                                        |  |                                      |           |   |      |   |           |  
|                                                        |  |                                      | 1,000     |   |      |   | 5,000     |  
|                                                        |  |                                      |           |   |      |   |           |  
|Net loss                                                |  | $                                    | (381,210  | ) |      | $ | (240,064  | )
|                                                        |  |                                      |           |   |      |   |           |  
|Basic and diluted net loss per share                    |  | $                                    | (0.07     | ) |      | $ | (0.04     | )
|                                                        |  |                                      |           |   |      |   |           |  
|Shares used in basic and diluted per share calculations |  |                                      | 5,768,852 |   |      |   | 5,892,078 |  
|                                                        |  |                                      |           |   |      |   |           |  

See accompanying Notes to Consolidated Financial Statements.



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Paulson Capital Corp. and Subsidiaries

Consolidated Statements of Cash Flows

(Unaudited)



|                                                                                      |  |                                      |          |   |      |   |          |  
|------------------------------------------------------------------------------------- |  | ------------------------------------ | -------- | - | ---- | - | -------- | -
|                                                                                      |  | For the Three Months Ended March 31, |         
|                                                                                      |  | 2011                                 |          |   | 2010 |  
|Cash flows from operating activities:                                                 |  |                                      |          |   |      |   |          |  
|Net loss                                                                              |  | $                                    | (381,210 | ) |      | $ | (240,064 | )
|Adjustments to reconcile net loss to net cash flows provided by operating activities: |  |                                      |          |   |      |   |          |  
|Receipt of underwriter warrants                                                       |  |                                      | (7,000   | ) |      |   | (709,000 | )
|Unrealized depreciation/expiration of underwriter warrants                            |  |                                      | 89,000   |   |      |   | 594,000  |  
|Unrealized depreciation of underwriter warrants - employee and independent contractor |  |                                      |         |   |      |   | 10,000   |  
|Depreciation and amortization                                                         |  |                                      | 4,482    |   |      |   | 8,311    |  
|Loss on asset disposition                                                             |  |                                      |         |   |      |   | 433      |  
|Change in assets and liabilities:                                                     |  |                                      |          |   |      |   |          |  
|Receivable from/payable to clearing organization                                      |  |                                      | 419,199  |   |      |   | 473,651  |  
|Notes and other receivables                                                           |  |                                      | (196,926 | ) |      |   | (247,718 | )
|Income taxes receivable                                                               |  |                                      | (4,506   | ) |      |   | 9,769    |  
|Trading and investment securities owned                                               |  |                                      | (163,001 | ) |      |   | (306,932 | )
|Prepaid and deferred expenses                                                         |  |                                      | 141,231  |   |      |   | 168,183  |  
|Deferred revenue                                                                      |  |                                      | (38,266  | ) |      |   | 221,511  |  
|Accounts payable, accrued liabilities and compensation payables                       |  |                                      | 145,298  |   |      |   | 24,437   |  
|Trading securities sold, not yet purchased                                            |  |                                      | (5,565   | ) |      |   | (284     | )
|Income taxes payable - uncertain tax positions                                        |  |                                      | 1,000    |   |      |   | 5,000    |  
|                                                                                      |  |                                      |          |   |      |   |          |  
|Net cash provided by operating activities                                             |  |                                      | 3,736    |   |      |   | 11,297   |  
|                                                                                      |  |                                     
|Cash flows from investing activities:                                                 |  |                                      |          |   |      |   |          |  
|Additions to furniture and equipment                                                  |  |                                      | (31,746  | ) |      |   | (1,217   | )
|                                                                                      |  |                                      |          |   |      |   |          |  
|Net cash used in investing activities                                                 |  |                                      | (31,746  | ) |      |   | (1,217   | )
|                                                                                      |  |                                     
|Cash flows from financing activities:                                                 |  |                                      |          |   |      |   |          |  
|Proceeds from stock option exercise and related tax benefit                           |  |                                      |         |   |      |   | 2,486    |  
|Payments to retire common stock                                                       |  |                                      | (2,400   | ) |      |   |         |  
|                                                                                      |  |                                      |          |   |      |   |          |  
|Net cash provided by (used in) financing activities                                   |  |                                      | (2,400   | ) |      |   | 2,486    |  
|                                                                                      |  |                                      |          |   |      |   |          |  
|Increase (decrease) in cash                                                           |  |                                      | (30,410  | ) |      |   | 12,566   |  
|Cash:                                                                                 |  |                                      |          |   |      |   |          |  
|Beginning of period                                                                   |  |                                      | 375,649  |   |      |   | 245,292  |  
|                                                                                      |  |                                      |          |   |      |   |          |  
|End of period                                                                         |  | $                                    | 345,239  |   |      | $ | 257,858  |  
|                                                                                      |  |                                      |          |   |      |   |          |  
|Supplemental cash flow information:                                                   |  |                                      |          |   |      |   |          |  
|Cash paid during the period for income taxes, net                                     |  | $                                    | 4,505    |   |      | $ | 12,731   |  

See accompanying Notes
to Consolidated Financial Statements.



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PAULSON CAPITAL CORP. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Note 1. Basis of Presentation

The financial information for Paulson Capital Corp. and its wholly-owned subsidiaries, Paulson Investment Company and Paulson Capital Properties, LLC,
included herein as of March 31, 2011 and December 31, 2010 and for the three-month periods ended March 31, 2011 and 2010 is unaudited; however, such information reflects all adjustments, consisting only of normal recurring
adjustments, which, in the opinion of management, are necessary for a fair presentation of the financial position, results of operations and cash flows for the interim periods. The financial information as of December 31, 2010 is derived from
the audited consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2010. The interim consolidated financial statements should be read in conjunction with the consolidated financial
statements and the notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2010. The results of operations for the interim periods presented are not necessarily indicative of the results to be expected for the
full year.

Note 2. Earnings Per Share

Since we were in a loss position, the number of shares used for our basic net loss per share and diluted net loss per share was the same for both periods presented. For the three-month period ended
March 31, 2011, we had 411,000 anti-dilutive stock options outstanding and, for the three-month period ended March 31, 2010, we had 473,800 anti-dilutive stock options outstanding.

Note 3. Fair Value Measurements

Various inputs are used in determining the fair
value of our assets and liabilities carried at fair value and are summarized into three broad categories:



| |  |  | Level 1  unadjusted quoted prices in active markets for identical securities;
| | - |  | ------------------------------------------------------------------------------



| |  |  | Level 2  other significant observable inputs, including quoted prices for similar securities, interest rates, prepayment speeds, credit risk,
etc.; and
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Level 3  significant unobservable inputs, including our own assumptions in determining fair value.
| | - |  | ---------------------------------------------------------------------------------------------------

The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities.

Following are the disclosures related to our financial assets and (liabilities) (in thousands):



|                                            |  |                |       |  |                   |  |         |            |  |   |             |   |  |  |         | 
|------------------------------------------- |  | -------------- | ----- |  | ----------------- |  | ------- | ---------- |  | - | ----------- | - |  |  | ------- | 
|                                            |  | March 31, 2011 |       |  | December 31, 2010 | 
|                                            |  | Fair Value     |       |  | Input Level       |  |         | Fair Value |  |   | Input Level |  
|Trading and investment securities owned:    |  |                |       |  |                   |  |         |            |  |   |             |   |  |  |         | 
|Corporate equities, marketable              |  | $              | 5,636 |  |                   |  | Level 1 |            |  | $ | 5,471       |   |  |  | Level 1 | 
|Corporate equities, not readily marketable  |  |                | 3,045 |  |                   |  | Level 3 |            |  |   | 2,945       |   |  |  | Level 3 | 
|Corporate options/warrants, marketable      |  |                | 130   |  |                   |  | Level 1 |            |  |   | 232         |   |  |  | Level 1 | 
|Underwriter warrants                        |  |                | 1,040 |  |                   |  | Level 3 |            |  |   | 1,122       |   |  |  | Level 3 | 
|Trading securities sold, not yet purchased: |  |                |       |  |                   |  |         |            |  |   |             |   |  |  |         | 
|Corporate equities, marketable              |  |                |      |  |                   |  |        |            |  |   | (6          | ) |  |  | Level 1 | 



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Following is a summary of activity related to our Level 3 financial assets and liabilities (in thousands):



|                                                                                                                |  |                     |       |   |                                           |   |       | 
|--------------------------------------------------------------------------------------------------------------- |  | ------------------- | ----- | - | ----------------------------------------- | - | ----- | 
|                                                                                                                |  | UnderwriterWarrants |       |   | Not ReadilyMarketableInvestmentSecurities |  
|Balance, December 31, 2010                                                                                      |  | $                   | 1,122 |   |                                           | $ | 2,945 | 
|Fair value of underwriter warrants received included as a component of corporate finance income                 |  |                     | 7     |   |                                           |   |      | 
|Investment in privately-held company                                                                            |  |                     |      |   |                                           |   | 100   | 
|Net unrealized loss, included as a component of investment loss related to securities held at December 31,
2010 |  |                     | (89   | ) |                                           |   |      | 
|                                                                                                                |  |                     |       |   |                                           |   |       | 
|Balance, March 31, 2011                                                                                         |  | $                   | 1,040 |   |                                           | $ | 3,045 | 
|                                                                                                                |  |                     |       |   |                                           |   |       | 



|                                                                                                                         |  |                     |       |   |                                                        |   |     |                                           |  |   |       | 
|------------------------------------------------------------------------------------------------------------------------ |  | ------------------- | ----- | - | ------------------------------------------------------ | - | --- | ----------------------------------------- |  | - | ----- | 
|                                                                                                                         |  | UnderwriterWarrants |       |   | UnderwriterWarrants Employee andIndependentContractor |   |     | Not ReadilyMarketableInvestmentSecurities | 
|Balance, December 31, 2009                                                                                               |  | $                   | 1,290 |   |                                                        | $ | (10 | )                                         |  | $ | 2,776 | 
|Fair value of underwriter warrants received included as a component of corporate finance income                          |  |                     | 709   |   |                                                        |   |    |                                           |  |   |      | 
|Net unrealized loss, included as a component of investment income (loss) related to securities held at December 31,
2009 |  |                     | (594  | ) |                                                        |   | (10 | )                                         |  |   |      | 
|                                                                                                                         |  |                     |       |   |                                                        |   |     |                                           |  |   |       | 
|Balance, March 31, 2010                                                                                                  |  | $                   | 1,405 |   |                                                        | $ | (20 | )                                         |  | $ | 2,776 | 
|                                                                                                                         |  |                     |       |   |                                                        |   |     |                                           |  |   |       | 

Valuation of Marketable Trading and Investment Securities Owned

The fair value of marketable trading and investment securities owned is determined based on quoted market prices. Securities traded on a national exchange
are stated at the last reported sales price on the day of valuation; other securities traded in the over-the-counter market and listed securities for which no sale was reported on that date are stated at the last quoted bid price.

Valuation of Not Readily Marketable Investment Securities

Securities not readily marketable include investment securities (a) for which there is no market on a securities exchange or no independent publicly quoted market, (b) that cannot be publicly
offered or sold unless registration has been effected under the Securities Act of 1933, or (c) that cannot be offered or sold because of other arrangements, restrictions or conditions applicable to the securities or to us. The fair value
of not readily marketable securities is estimated by management using available information including the following: quoted market prices of similar securities (i.e., unrestricted shares of the same company); price of recent known trades of the same
or similar securities; the cost of the security, if recently purchased, adjusted for changes in the financial condition of the issuer; all other information available from review of available documents related to the issuer or discussions with
management of the issuer.

Valuation of Underwriter Warrants

We estimate the fair value of our underwriter warrants using the Black-Scholes Option Pricing Model. The warrants generally have a five-year expiration date and vest immediately. The warrants are
generally subject to a restriction period of six months to one-year in which we cannot exercise the warrants. The Black-Scholes model requires us to use five inputs including: stock price, risk free rate, exercise price, time remaining on the
warrant and price volatility. After stock price, the most influential factor in this model is price volatility, which we calculate for each companys warrants based on each companys own historical closing stock prices as well as an index
of historical prices for comparable companies. When we initially receive a new underwriter warrant from an initial public offering, its calculated volatility factor is entirely based on the volatility of an index of comparable companies, since there
is no price history for a new publicly traded company. As each underwriter warrant approaches its expiration date, its volatility factor is derived primarily from the historical prices of its underlying common stock. We have no assurance that we
will ultimately be able to exercise any of our warrants in a way that will realize the value that we attribute to them in our financial statements based on this model.



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Valuation of Trading Securities Sold, Not Yet Purchased

As a securities broker-dealer, we are engaged in various securities trading and brokerage activities as principal. In the normal course of business,
we sometimes sell securities that we do not currently own and will therefore be obligated to purchase such securities at a future date. This obligation is recorded on our balance sheet at the fair value based on quoted market prices of the
related securities and will result in a trading loss on the securities if the fair value increases and a trading gain if the fair value decreases between the balance sheet date and the purchase date.

There were no changes to our valuation methods or techniques during the first quarter of 2011 or 2010.

Note 4. Repurchase of Common Stock

In February 2011, we repurchased 2,000 shares of our common stock for $2,400, or $1.20 per share, pursuant to our currently approved repurchase plan.
Following this repurchase, 69,011 shares remained available for repurchase.

Note 5. New Accounting Guidance

Management has reviewed the new accounting guidance and determined that there is not a material impact on our financial statements.

Note 6. Reclassifications

Certain amounts in the prior period financial statements have been reclassified to conform to the current period presentation.



|Item 2. | Managements Discussion and Analysis of Financial Condition and Results of Operations
|------- | -------------------------------------------------------------------------------------

FORWARD-LOOKING STATEMENTS AND RISK FACTORS

This report, including, without limitation, Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations, contains or incorporates both historical
and forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Words such as anticipates,
believes, expects, intends, future and similar expressions identify forward-looking statements. Any such forward-looking statements in this report reflect our current views with respect to future
events and financial performance and are subject to a variety of factors that could cause our actual results to differ materially from historical results or from anticipated results expressed or implied by such forward-looking statements. Because of
such factors, we cannot assure you that the results anticipated in this report will be realized. As noted elsewhere in this report, various aspects of our business are subject to extreme volatility, often as a result of factors beyond our ability to
anticipate or control. In particular, factors, such as the condition of the securities markets, which are in turn based on popular perceptions of the health of the economy generally, can be expected to affect the volume of our business as well as
the value of the securities maintained in our trading and investment accounts. Other factors that may affect our future financial condition or results of operations include the following:



| |  |  | Aspects of our business are volatile and affected by factors beyond our control.
| | - |  | --------------------------------------------------------------------------------



| |  |  | Our ability to attract and retain customers may be affected by our reputation.
| | - |  | ------------------------------------------------------------------------------



| |  |  | We are subject to extensive regulation that could result in investigations, fines or other penalties.
| | - |  | -----------------------------------------------------------------------------------------------------



| |  |  | We face intense competition in our industry.
| | - |  | --------------------------------------------



| |  |  | Our future success depends on retaining existing management and hiring and assimilating new key employees, and our inability to attract or retain key
personnel would materially harm our business and results of operations.
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | We are subject to an increased risk of legal proceedings, which may result in significant losses to us that we cannot recover. Claimants in these
proceedings may be customers, employees, investors or regulatory agencies, among others, seeking damages for mistakes, errors, negligence or acts of fraud by our employees.
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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| |  |  | As a public company, we are subject to complex legal and accounting requirements that require us to incur substantial expense and expose us to risk of
non-compliance.
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Our directors control approximately 60% of our common stock and may have interests differing from those of other stockholders.
| | - |  | ------------------------------------------------------------------------------------------------------------------------------

OVERVIEW

Substantially all of our business consists of the securities brokerage and corporate finance activities of our wholly-owned subsidiary, Paulson Investment
Company, Inc., which has operations in four principal categories, all of them in the financial services industry. These categories are:



| |  |  | securities brokerage activities for which we earn commission revenues;
| | - |  | ----------------------------------------------------------------------



| |  |  | corporate finance revenues consisting principally of underwriting discounts and underwriter warrants;
| | - |  | -----------------------------------------------------------------------------------------------------



| |  |  | securities trading from which we record profit or loss, depending on trading results; and
| | - |  | -----------------------------------------------------------------------------------------



| |  |  | investment income resulting from earnings on, and increases or decreases in the value of, our investment portfolio.
| | - |  | -------------------------------------------------------------------------------------------------------------------

In addition, Paulson Capital Properties, LLC, a 100% owned subsidiary, was established for the purpose of purchasing, improving and remarketing
underappreciated real estate. Through March 31, 2011, we had not purchased any real estate.

Because we operate in the financial services
industry, our revenues and earnings are substantially affected by general conditions in financial markets. Further, past performance is not necessarily indicative of results to be expected in future periods. In our securities brokerage business, the
amount of our revenues depends on levels of market activity requiring the services we provide. Our corporate finance activity, which consists of acting as the managing underwriter of initial and follow-on public offerings, private investments in
public equity (PIPEs) and private placements for smaller companies, is similarly affected by the strength of the market for new equity offerings, which has historically experienced substantial cyclical fluctuation. Global IPO volume
pulled back in the first quarter of 2011, particularly in the Asia Pacific region, as turmoil in the Middle East and the crisis in Japan contributed to equity market volatility. Global IPO proceeds decreased 25% in the first quarter year-over-year
to $25 billion. U.S. IPOs, however, increased 22% in the first quarter year-over-year, with 33 companies raising $13.5 billion. The outlook for the remainder of 2011 is strong. Although we attempt to match operating costs with activity
levels, many of our expenses are either fixed or difficult to change on short notice. Accordingly, fluctuations in brokerage and corporate finance revenues tend to result in sharper fluctuations, on a percentage basis, in net income or loss.

Our investment and trading income or loss is affected by changes in market valuation of securities generally and, in particular, by changes
in valuation of the equity securities of microcap companies in which our investments and trading activities tend to be concentrated. Equity markets in general, and microcap equity markets in particular, have always experienced significant volatility
and this volatility has, in recent years, been extreme. As a result, the value of our investment portfolio and securities held in connection with our trading and investment activities has experienced large quarterly fluctuations in income or loss,
and our net worth has substantially increased or decreased as our securities holdings are marked to market.

A substantial portion of our
corporate finance business consists of acting as managing underwriter of initial and follow-on public offerings for microcap and smallcap companies. As a part of our compensation for these activities, we typically receive warrants exercisable
to purchase securities similar to those that we offer and sell to the public. The warrants generally have a five-year expiration date and are subject to a restricted period of six months to one-year during which we cannot exercise. The exercise
price is typically 120% of the price at which the securities were initially sold to the public. Accordingly, unless there is at least a 20% increase in the price of these securities at some time more than six months and less than five years after
the offering, the warrants will remain under water and will ultimately expire unexercised. We also receive warrants in connection with PIPEs, which have varying terms and conditions.



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CRITICAL ACCOUNTING POLICIES AND USE OF ESTIMATES

We reaffirm the critical accounting policies and estimates as reported in our Annual Report on Form 10-K for the year ended December 31, 2010, which
was filed with the Securities and Exchange Commission on March 10, 2011.

RESULTS OF OPERATIONS

Our revenues and operating results are influenced by fluctuations in the equity markets as well as general economic and market conditions, particularly
conditions in the NASDAQ and over-the-counter markets, where our investment and trading positions and the underlying stock for the underwriter warrants are heavily concentrated. Significant fluctuations can occur in our revenues and operating
results from one period to another. Our results of operations depend upon many factors, such as the number of companies that are seeking financing, the quality and financial condition of those companies, market conditions in general, the performance
of our previous underwritings and interest in certain industries by investors. As a result, revenues and income derived from these activities may vary significantly from period to period. Our revenues include the following:



| |  |  | Commissions, which represent amounts earned from our retail securities brokerage activities;
| | - |  | --------------------------------------------------------------------------------------------



| |  |  | Corporate finance revenues, which are a function of total proceeds from offerings done during the period, compensation per offering and the fair value
of underwriter warrants received;
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Investment income (loss), which includes (i) the unrealized appreciation and depreciation of securities held based on quoted market prices,
(ii) the unrealized appreciation and depreciation of securities held that are not readily marketable, based upon our estimate of their fair value, (iii) realized gains and losses on the sale of securities with quoted market prices and
securities that are not readily marketable, (iv) income on the exercise of underwriter warrants, and (v) the unrealized appreciation and depreciation of underwriter warrants held; and
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Trading income (loss), which is the gain or loss from trading positions before commissions paid to the representatives in the trading department.
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------



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The following table sets forth the changes in our operating results in the first quarter of 2011 compared to
the first quarter of 2010 (dollars in thousands):



|                                     |  |                              |       |   |                               |   |       |                  |  |   |        |   |  |  |        |   
|------------------------------------ |  | ---------------------------- | ----- | - | ----------------------------- | - | ----- | ---------------- |  | - | ------ | - |  |  | ------ | --
|                                     |  | Three Months EndedMarch 
31, |       |   | Favorable(Unfavorable)
Change |   |       | PercentageChange | 
|                                     |  | 2011                         |       |   | 2010                          |   |       |                 
|Revenues:                            |  |                              |       |   |                               |   |       |                  |  |   |        |   |  |  |        |   
|Commissions                          |  | $                            | 4,394 |   |                               | $ | 4,142 |                  |  | $ | 252    |   |  |  | 6.1    | % 
|Corporate finance                    |  |                              | 69    |   |                               |   | 1,194 |                  |  |   | (1,125 | ) |  |  | (94.2  | ) 
|Investment loss                      |  |                              | (103  | ) |                               |   | (615  | )                |  |   | 512    |   |  |  | 83.3   |   
|Trading income                       |  |                              | 386   |   |                               |   | 11    |                  |  |   | 375    |   |  |  | *      |   
|Interest and dividends               |  |                              | 131   |   |                               |   | 5     |                  |  |   | 126    |   |  |  | *      |   
|Other                                |  |                              | 45    |   |                               |   | 35    |                  |  |   | 10     |   |  |  | 28.6   |   
|                                     |  |                              |       |   |                               |   |       |                  |  |   |        |   |  |  |        |   
|Total revenues                       |  |                              | 4,922 |   |                               |   | 4,772 |                  |  |   | 150    |   |  |  | 3.1    |   
|Expenses:                            |  |                              |       |   |                               |   |       |                  |  |   |        |   |  |  |        |   
|Commissions and salaries             |  |                              | 4,360 |   |                               |   | 3,912 |                  |  |   | (448   | ) |  |  | (11.5  | ) 
|Underwriting expenses                |  |                              | 10    |   |                               |   | 114   |                  |  |   | 104    |   |  |  | 91.2   |   
|Rent and utilities                   |  |                              | 141   |   |                               |   | 141   |                  |  |   |       |   |  |  |       |   
|Communication and quotation services |  |                              | 130   |   |                               |   | 140   |                  |  |   | 10     |   |  |  | 7.1    |   
|Professional fees                    |  |                              | 209   |   |                               |   | 362   |                  |  |   | 153    |   |  |  | 42.3   |   
|Travel and entertainment             |  |                              | 30    |   |                               |   | 30    |                  |  |   |       |   |  |  |       |   
|Advertising and promotion            |  |                              | 11    |   |                               |   | 48    |                  |  |   | 37     |   |  |  | 77.1   |   
|Depreciation and amortization        |  |                              | 5     |   |                               |   | 8     |                  |  |   | 3      |   |  |  | 37.5   |   
|Licenses, taxes and insurance        |  |                              | 130   |   |                               |   | 52    |                  |  |   | (78    | ) |  |  | (150.0 | ) 
|Other                                |  |                              | 276   |   |                               |   | 200   |                  |  |   | (76    | ) |  |  | (38.0  | ) 
|                                     |  |                              |       |   |                               |   |       |                  |  |   |        |   |  |  |        |   
|Total expenses                       |  |                              | 5,302 |   |                               |   | 5,007 |                  |  |   | (295   | ) |  |  | (5.9   | ) 
|                                     |  |                              |       |   |                               |   |       |                  |  |   |        |   |  |  |        |   
|Loss before income taxes             |  | $                            | (380  | ) |                               | $ | (235  | )                |  | $ | (145   | ) |  |  | (61.7  | )%
|                                     |  |                              |       |   |                               |   |       |                  |  |   |        |   |  |  |        |   



|* | Not meaningful.
|- | ---------------

Revenues

The continued improvement in the global economy had a positive effect on our results of operations in the first quarter of 2011. For
the period from December 31, 2010 to March 31, 2011, the Dow Jones Industrial average and the NASDAQ composite indices increased 6.4% and 4.8%, respectively.

Commissions increased 6.1% in the first quarter of 2011 compared to the first quarter of 2010, primarily due to improving market conditions. We had 98 registered representatives at March 31, 2011
compared to 104 at March 31, 2010.

Corporate finance income in the first quarter of 2011 included underwriting discounts earned from a
private placement, as well as the Black-Scholes value of underwriter warrants received in connection with a separate private placement.

Corporate finance income in the first quarter of 2010 included underwriting discounts earned from a follow-on public offering in which we, together with
a co-underwriter, raised $6.0 million for BioCurex, Inc., as well as the Black-Scholes value of the underwriter warrants received in connection with that offering.

Investment loss included the following (in thousands):



|                                                                                                                                                                    |  |                              |      |   |      |   |      |  
|------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ---------------------------- | ---- | - | ---- | - | ---- | -
|                                                                                                                                                                    |  | Three Months Ended March 31, |     
|                                                                                                                                                                    |  | 2011                         |      |   | 2010 |  
|Net unrealized depreciation related to underwriter warrants                                                                                                         |  | $                            | (89  | ) |      | $ | (594 | )
|Net unrealized appreciation of underwriter warrants  employee and independent contractor                                                                           |  |                              |     |   |      |   | (10  | )
|Net unrealized (depreciation) of securities held based on quoted market prices or, for securities that are not readily
marketable, our estimate of their fair value |  |                              | (14  | ) |      |   | (38  | )
|Net realized gains on the sale of securities with quoted market prices and securities that are not readily
marketable                                               |  |                              |     |   |      |   | 27   |  
|                                                                                                                                                                    |  |                              |      |   |      |   |      |  
|                                                                                                                                                                    |  | $                            | (103 | ) |      | $ | (615 | )
|                                                                                                                                                                    |  |                              |      |   |      |   |      |  



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We did not exercise any underwriter warrants in the first quarter of 2011 or 2010. Generally, when we
exercise a warrant to obtain the underlying common stock, the common stock is subsequently sold in the near term and the related gain is reflected as a component of investment income.

Investment income (loss) is volatile from period to period due to the fact that it is driven by the fair value of the securities and underwriter warrants held. In addition, the performance of the
securities in which we have a concentration can significantly affect our investment income from period to period.

Trading income increased to
$0.4 million in the first quarter of 2011 compared to $11,000 in the first quarter of 2010. In the first quarter of 2011, trading income was positively affected by the market value of certain securities in which we make a market. Our focus is on
very small capitalization issues, especially those tied to our corporate finance clients.

Expenses

Total expenses increased $0.3 million in the first quarter of 2011 compared to the first quarter of 2010 primarily due to increased retail activity and
higher insurance costs, partially offset by lower professional fees and underwriting expenses as described in more detail below.

Commissions
and salaries increased $0.4 million in the first quarter of 2011 compared to the first quarter of 2010. The increase was primarily due to higher commissions earned on higher commission revenue and higher recruiting expenses.

Underwriting expenses decreased $0.1 million in the first quarter of 2011 compared to the first quarter of 2010, consistent with the change in corporate
finance income.

LIQUIDITY AND CAPITAL RESOURCES

Our primary sources of liquidity include our cash and receivables from our clearing organization, offset by payables to our clearing organization.

In addition, our sources of liquidity include, to a certain extent, our trading positions, borrowings on those positions and profits realized upon the sale of the securities underlying underwriter
warrants exercised. The liquidity of the market for many of our securities holdings, however, varies with trends in the stock market. Since many of the securities we hold are thinly traded, and we are, in many cases, a primary market maker in the
issues held, any significant sales of our positions could adversely affect the liquidity of the issues held. In general, falling prices in NASDAQ and over-the-counter securities (which make up most of our trading positions) lead to decreased
liquidity in the market for these issues, while rising prices in NASDAQ and over-the-counter issues tend to increase the liquidity of the market for these securities.

We believe our cash and receivables from our clearing organization at March 31, 2011 are sufficient to meet our cash and regulatory net capital needs for at least the next twelve-month period from
March 31, 2011. Our liquidity could be negatively affected by protracted unfavorable market conditions.

As a securities broker-dealer,
we are required by SEC regulations to meet certain liquidity and capital standards. We believe we were in compliance with these standards at March 31, 2011.

Following the lapse of restrictions upon issuance, capital available from the sale of the underlying securities of underwriter warrants exercised can fluctuate significantly from period to period as the
value of the underlying securities fluctuates with overall market and individual company financial condition or performance. There is no public market for the underwriter warrants. The securities receivable upon exercise of the underwriter warrants
cannot be resold unless the issuer has registered these securities with the SEC and with the states in which the securities will be sold unless exemptions are available. Any delay or other problem in the registration of these securities would have
an adverse impact upon our ability to obtain funds from the exercise of the underwriter warrants and the resale of the underlying securities.



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At March 31, 2011, we owned 11 underwriter warrants from 10 issuers, all but 3 of which were
exercisable. None of the warrants had an exercise price below the March 31, 2011 market price of the securities receivable upon exercise. There is little or no direct relationship between the intrinsic value of our underwriter warrants at the
end of any given period and the fair value calculated using the Black-Scholes option pricing model. The prices of the securities underlying the underwriter warrants are very volatile, and substantial fluctuations in their fair value can be expected
in the future.

Cash provided by operating activities totaled $4,000 in the first quarter of 2011, primarily due to our net loss of $381,000
offset by net non-cash expense items of $86,000 and changes in our operating assets and liabilities as discussed in more detail below.

Our
net receivable from our clearing organization totaled $7.3 million at March 31, 2011 and $7.8 million at December 31, 2010. Our net receivable from our clearing organization is affected by the results of the activity in our trading and
investment accounts, as well as the timing of general corporate expenditures and cash flow requirements.

Notes and other receivables
increased $0.2 million to $1.0 million at March 31, 2011 from $0.8 million at December 31, 2010, primarily due to loans to our registered representatives.

Changes in our trading and investment securities owned are dependent on the purchase and sale of securities during the period, as well as changes in their fair values during the period.

A summary of activity related to the fair value of our underwriter warrants was as follows (in thousands):



|                                         |  |   |       |  
|---------------------------------------- |  | - | ----- | -
|Balance, December 31, 2010               |  | $ | 1,122 |  
|Receipt of underwriter warrants          |  |   | 7     |  
|Net unrealized loss on value of warrants |  |   | (89   | )
|Warrants exercised or expired            |  |   |      |  
|                                         |  |   |       |  
|Balance, March 31, 2011                  |  | $ | 1,040 |  
|                                         |  |   |       |  

Deferred revenue of $0.3 million at March 31, 2011 was related to amounts received from our clearing firm pursuant to a
five-year agreement with two, one-year extensions, and is being amortized at the rate of $12,755 per month through June 2013.

In September
2001, our Board of Directors approved a stock repurchase program pursuant to which we are authorized to repurchase up to 600,000 shares of our common stock. In June 2008, our Board of Directors approved the repurchase of up to a total of an
additional 200,000 shares of our common stock. We repurchased a total of 2,000 shares of our common stock during the first quarter of 2011 at an average price of $1.20 per share for a total of $2,400. Through March 31, 2011, 730,989 shares had
been repurchased and, as of March 31, 2011, 69,011 shares remained available for repurchase. These repurchase programs do not have expiration dates.

OFF-BALANCE SHEET ARRANGEMENTS

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

NEW ACCOUNTING GUIDANCE

See Note 5 of
Notes to Consolidated Financial Statements.



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|Item 3. | Quantitative and Qualitative Disclosures About Market Risk
|------- | ----------------------------------------------------------

Not required for Smaller Reporting Companies.



|Item 4. | Controls and Procedures
|------- | -----------------------

Disclosure Controls and Procedures

Our management has evaluated, under the supervision and with the participation of our Chief Executive Officer and our Chief Financial Officer, the
effectiveness of our disclosure controls and procedures as of the end of the period covered by this report as defined in Rule 13a-15(e) or Rule 15d-15(e) under the Securities Exchange Act of 1934 (the Exchange Act). Based on that
evaluation, our Chief Executive Officer and our Chief Financial Officer have concluded that, as of the end of the period covered by this report, our disclosure controls and procedures are effective in ensuring that information required to be
disclosed in our Exchange Act reports is (1) recorded, processed, summarized and reported in a timely manner, and (2) accumulated and communicated to our management, including our Chief Executive Officer and our Chief Financial Officer, as
appropriate, to allow timely decisions regarding required disclosure.

Changes in Internal Control Over Financial Reporting

There has been no change in our internal control over financial reporting that occurred during our last fiscal quarter that has
materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

PART II - OTHER INFORMATION



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

We repurchased the following shares of our common stock during the first quarter of 2011:



|                          |  |                                |       |  |                            |   |      |                                                                  |  |  |                                                                |  |  |  |        | 
|------------------------- |  | ------------------------------ | ----- |  | -------------------------- | - | ---- | ---------------------------------------------------------------- |  |  | -------------------------------------------------------------- |  |  |  | ------ | 
|                          |  | Total numberof sharespurchased |       |  | Averageprice paidper share |   |      | Total number ofshares purchasedas part of publiclyannounced
plan |  |  | Maximum numberof shares that mayyet be purchasedunder the plan | 
|January 1 to January 31   |  |                                |      |  |                            |   |     |                                                                  |  |  |                                                               |  |  |  | 71,011 | 
|February 1 to February 28 |  |                                | 2,000 |  |                            | $ | 1.20 |                                                                  |  |  | 2,000                                                          |  |  |  | 69,011 | 
|March 1 to March 31       |  |                                |      |  |                            |   |     |                                                                  |  |  |                                                               |  |  |  | 69,011 | 
|                          |  |                                |       |  |                            |   |      |                                                                  |  |  |                                                                |  |  |  |        | 
|Total                     |  |                                | 2,000 |  |                            |   | 1.20 |                                                                  |  |  | 2,000                                                          |  |  |  | 69,011 | 
|                          |  |                                |       |  |                            |   |      |                                                                  |  |  |                                                                |  |  |  |        | 

A plan to repurchase up to a total of 600,000 shares of our common stock was approved by our Board of Directors in
September 2001 and does not have an expiration date. In June 2008, our Board of Directors approved the repurchase of up to a total of an additional 200,000 shares of our common stock. This authorization also does not have an expiration date.



|Item 6. | Exhibits
|------- | --------

The following
exhibits are filed herewith and this list is intended to constitute the exhibit index:



|     |  |                                                                                                                                                             
|---- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------
|31.1 |  | Certification of Principal Executive Officer pursuant to Rule 13a-14(a) or Rule 15d-14(a) of the Securities Exchange Act of
1934.                           
|     | 
|31.2 |  | Certification of Chief Financial Officer pursuant to Rule 13a-14(a) or Rule 15d-14(a) of the Securities Exchange Act
of 1934.                               
|     | 
|32.1 |  | Certification of Principal Executive Officer pursuant to Rule 13a-14(b) or Rule 15d-14(b) of the Securities Exchange Act of 1934
and 18 U.S.C. Section 1350.
|     | 
|32.2 |  | Certification of Chief Financial Officer pursuant to Rule 13a-14(b) or Rule 15d-14(b) of the Securities Exchange Act of 1934
and 18 U.S.C. Section 1350.    



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SIGNATURES

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



|                   |  |  |  |                                       |  |                          
|------------------ |  |  |  | ------------------------------------- |  | -------------------------
|Date: May 12, 2011 |  |  |  | PAULSON CAPITAL CORP.                
|                   |  |  | 
|                   |  |  |  | By                                    |  | /s/ CHESTER L. F. PAULSON
|                   |  |  |  | Chester L. F. Paulson                
|                   |  |  |  | President and Chief Executive Officer
|                   |  |  |  | Principal Executive Officer          
|                   |  |  | 
|                   |  |  |  | By                                    |  | /s/ MURRAY G. SMITH      
|                   |  |  |  | Murray G. Smith                      
|                   |  |  |  | Chief Financial Officer              
|                   |  |  |  | Principal Financial Officer          



14