*Table
        of Contents*







**UNITED
      STATES**


**SECURITIES
      AND EXCHANGE COMMISSION**


**WASHINGTON,
      D.C. 20549**




**FORM
      10-Q**




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





For
      the
      quarterly period ended **March
      31, 2008**





or





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





For
      the
      transition period from _____to______





Commission
      File Number 1-4436





**THE
      STEPHAN CO.**


(Exact
      name of registrant as specified in its charter)




Florida
            59-0676812(State
                or other jurisdiction of incorporation or organization)
            (IRS
                Employer Identification No.)








1850
      West
      McNab Road, Fort Lauderdale, Florida 33309


(Address
      of principal executive offices)(Zip Code)





Registrant’s
      telephone number, including area code: (954) 971-0600





Former
      name, former address and former fiscal year, if changed since last report:
      not
      applicable.




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 o




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




Large
      accelerated filer o Accelerated
      filer o Non-accelerated
      filer o Smaller
      reporting
      company x


( Do
      not
      check if a smaller reporting company )




Indicate
      by check mark whether the registrant is a shell company (as defined in Rule
      12b-2 of the Exchange Act). YES o     NO x




Indicate
      the number of shares outstanding of each of the registrant’s classes of common
      stock, as of the latest practicable date:




4,389,779
      shares of common stock, $0.01 par value, as of May 15, 2008












*Table
        of Contents*




THE
      STEPHAN CO. AND SUBSIDIARIES


INDEX
      TO
      QUARTERLY REPORT


ON
      FORM 10-Q




Page**PART
                I - FINANCIAL INFORMATION**Item
                1:
            Financial
                Statements
            3Item
                2:
            Management's
                Discussion and Analysis of Financial Condition
                and Results of Operations
            12Item
                3:
            Quantitative
                and Qualitative Disclosures about Market Risk
            13Item
                4T:
            Controls
                and Procedures
            13**PART
                II - OTHER INFORMATION**Item
                1:
            Legal
                Proceedings
            15Item
                1A:
            Risk
                Factors
            15Item
                2:
            Unregistered
                Sales of Equity Securities and Use of
                Proceeds
            15Item
                3:
            Defaults
                Upon Senior Securities
            15Item
                4:
            Submission
                of Matters to a Vote of Security
                Holders
            15Item
                5:
            Other
                Information
            15Item
                6:
            Exhibits
            15Signatures
            
            17








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**PART
      I - FINANCIAL INFORMATION**





**Item
      1 - Financial Statements**





Certain
      statements in this Quarterly Report on Form 10-Q ("Form 10-Q"), in particular
      under "Item 1. Financial Statements” and "Item 2. Management’s Discussion and
      Analysis of Financial Condition and Results of Operations," constitute
      "forward-looking statements" within the meaning of the Private Securities
      Litigation Reform Act of 1995 (the "Reform Act"). Such forward-looking
      statements involve known and unknown risks, uncertainties and other factors
      which may cause our actual results, condition (financial or otherwise),
      performance or achievements to be materially different from any future results,
      performance, condition or achievements expressed or implied by such
      forward-looking statements.





Words
      such as "projects," "believe," "anticipates," "estimate," "plans," "expect,"
      "intends," and similar words and expressions are intended to identify
      forward-looking statements and are based on our current expectations,
      assumptions, and estimates about us and our industry. In addition, any
      statements that refer to expectations, projections or other characterizations
      of
      future events or circumstances are forward-looking statements. Although we
      believe that such forward-looking statements are reasonable, we cannot assure
      you that such expectations will prove to be correct.





Our
      actual results could differ materially from those anticipated in such
      forward-looking statements as a result of several factors, risks and
      uncertainties. These factors, risks and uncertainties include, without
      limitation, our ability to satisfactorily address any material weakness in
      our
      financial controls; general economic and business conditions; competition;
      the
      relative success of our operating initiatives; our development and operating
      costs; our advertising and promotional efforts; brand awareness for our product
      offerings; the existence or absence of adverse publicity; acceptance of any
      new
      product offerings; changing trends in customer tastes; the success of any
      multi-branding efforts; changes in our business strategy or development plans;
      the quality of our management team; the availability, terms and deployment
      of
      capital; the business abilities and judgment of our personnel; the availability
      of qualified personnel; our labor and employee benefit costs; the availability
      and cost of raw materials and supplies; changes in or newly-adopted accounting
      principles; changes in, or our failure to comply with, applicable laws and
      regulations; changes in our product mix and associated gross profit margins,
      as
      well as management’s response to these factors, and other factors that may be
      more fully described in the The Stephan Co.’s literature, press releases and
      publicly-filed documents with the Securities and Exchange Commission. You are
      urged to carefully review and consider these disclosures, which describe certain
      factors that affect our business.





We
      do not
      undertake, subject to applicable law, any obligation to publicly release the
      results of any revisions, which may be made to any forward-looking statements
      to
      reflect events or circumstances occurring after the date of such statements
      or
      to reflect the occurrence of anticipated or unanticipated events. Therefore,
      we
      caution each reader of this report to carefully consider the specific factors
      and qualifications discussed herein with respect to such forward-looking
      statements, as such factors and qualifications could affect our ability to
      achieve our objectives and may cause actual results to differ materially from
      those projected, anticipated or implied herein.








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The
      Stephan Co.


Condensed
      Consolidated Balance Sheets


(in
      thousands, except share data)




**March
                    31, 2008**
                
                December
                    31, 2007CURRENT
                    ASSETSCash
                    and cash equivalents
                
                **$**
                **4,772**
                
                $
                4,977Short-term
                    investments
                
                
                **3,950**
                
                
                3,950Restricted
                    cash
                
                
                **833**
                
                
                1,110Accounts
                    receivable, net
                
                
                **1,112**
                
                
                1,430Inventories
                
                
                **4,478**
                
                
                4,240Prepaid
                    expenses and other current assets
                
                
                **274**
                
                
                306TOTAL
                    CURRENT ASSETS
                
                
                **15,419**
                
                
                16,013Property,
                    plant and equipment, net
                
                
                **1,396**
                
                
                1,419Deferred
                    income taxes
                
                
                **181**
                
                
                277Goodwill,
                    net
                
                
                **2,603**
                
                
                2,603Trademarks,
                    net
                
                
                **3,070**
                
                
                3,070Other
                    intangible assets, net
                
                
                **76**
                
                
                76Other
                    assets
                
                
                **2,845**
                
                
                2,846**TOTAL
                    ASSETS**
                
                **$**
                **25,590**
                
                $
                26,304CURRENT
                    LIABILITIESCurrent
                    portion of long-term debt
                
                **$**
                **833**
                
                $
                1,110Accounts
                    payable and accrued expenses
                
                
                **1,627**
                
                
                2,156TOTAL
                    CURRENT LIABILITIES
                
                
                **2,460**
                
                
                3,266Long-term
                    debt, less current portion
                
                
                **—**
                
                
                —TOTAL
                    LIABILITIES
                
                
                **2,460**
                
                
                3,266COMMITMENTS
                    AND CONTINGENCIESSTOCKHOLDERS'
                    EQUITYPreferred
                    stock, $.01 par value; 1,000,000 shares authorized; none
                    issued.Common
                    stock, $.01 par value; 25,000,000 shares authorized;4,389,779
                    shares issued and outstanding at March 31, 2008 andDecember
                    31, 2007.
                
                
                **44**
                
                
                44Additional
                    paid-in capital
                
                
                **17,756**
                
                
                17,736Retained
                    earnings
                
                
                **5,330**
                
                
                5,258TOTAL
                    STOCKHOLDERS' EQUITY
                
                
                **23,130**
                
                
                23,038**TOTAL
                    LIABILITIES & STOCKHOLDERS' EQUITY**
                
                **$**
                **25,590**
                
                $
                26,304


See
      Notes
      to Consolidated Financial Statements.




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            of Contents*




The
        Stephan Co.
 Condensed
        Consolidated Statements of Operations
 (in
        thousands, except share data)


**First
                    Quarter**
                
                First
                    Quarter**2008**
                
                2007Revenue
                
                **$**
                **4,420**
                
                $
                5,129Cost
                    of revenue
                
                
                **2,299**
                
                
                2,858Gross
                    profit
                
                
                **2,121**
                
                
                2,271Selling,
                    general and administrative expenses
                
                
                **1,941**
                
                
                2,257Operating
                    income
                
                
                **180**
                
                
                14Interest
                    income
                
                
                **90**
                
                
                90Interest
                    expense
                
                
                **(4**
                **)**
                
                (7
                )Income
                    before income taxes
                
                
                **266**
                
                
                97Income
                    tax expense
                
                
                **106**
                
                
                40NET
                    INCOME
                
                **$**
                **160**
                
                $
                57Basic
                    income per share
                
                **$**
                **0.04**
                
                $
                0.01Diluted
                    income per share
                
                **$**
                **0.04**
                
                $
                0.01Dividends
                    per share
                
                **$**
                **0.02**
                
                $
                0.02
 See
        Notes
        to Consolidated Financial Statements.




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The
      Stephan Co.


Condensed
          Consolidated Statements of Cash Flow
 (in
          thousands, except share data)
  **First
                        Quarter**
                    
                    First
                        Quarter**2008**
                    
                    2007CASH
                        FLOWS FROM OPERATING ACTIVITIESNET
                        INCOME
                    
                    **$**
                    **160**
                    
                    $
                    57Adjustments
                        to reconcile net income to net cash flowsprovided
                        (used) by operating activities:Depreciation
                        and amortization
                    
                    
                    **31**
                    
                    
                    51Stock
                        option compensation
                    
                    
                    **20**
                    
                    
                    22Deferred
                        income tax expense
                    
                    
                    **96**
                    
                    
                    20Changes
                        in operating assets & liabilitiesRestricted
                        cash
                    
                    
                    **277**
                    
                    
                    —Accounts
                        receivable
                    
                    
                    **318**
                    
                    
                    38Inventories
                    
                    
                    **(238**
                    **)**
                    
                    (371
                    )Prepaid
                        expenses and other current assets
                    
                    
                    **33**
                    
                    
                    176Other
                        assets
                    
                    
                    **1**
                    
                    
                    (38
                    )Accounts
                        payable and accrued expenses
                    
                    
                    **(529**
                    **)**
                    
                    644Total
                        adjustments to net income
                    
                    
                    **9**
                    
                    
                    542**NET
                        CASH FLOWS PROVIDED BY OPERATING ACTIVITIES**
                    
                    
                    **169**
                    
                    
                    599CASH
                        FLOWS FROM INVESTING ACTIVITIESDecrease
                        in non-current restricted cash
                    
                    
                    **—**
                    
                    
                    370Purchases
                        of property, plant and equipment
                    
                    
                    **(8**
                    **)**
                    
                    (1
                    )**NET
                        CASH FLOWS (USED) PROVIDED BY INVESTING
                        ACTIVITIES**
                    
                    
                    **(8**
                    **)**
                    
                    369CASH
                        FLOWS FROM FINANCING ACTIVITIESRepayment
                        of long-term debt
                    
                    
                    **(278**
                    **)**
                    
                    (278
                    )Dividends
                    
                    
                    **(88**
                    **)**
                    
                    (88
                    )**NET
                        CASH FLOWS (USED FOR) FINANCING ACTIVITIES**
                    
                    
                    **(366**
                    **)**
                    
                    (366
                    )**NET
                        (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS**
                    
                    
                    **(205**
                    **)**
                    
                    602CASH
                        AND CASH EQUIVALENTS AT BEGINNING OF YEAR
                    
                    
                    **4,977**
                    
                    
                    7,064CASH
                        AND CASH EQUIVALENTS AT END OF FIRST QUARTER
                    
                    **$**
                    **4,772**
                    
                    $
                    7,666SUPPLEMENTAL
                        DISCLOSURES OF CASH FLOW INFORMATION:Interest
                        paid
                    
                    **$**
                    **4**
                    
                    $
                    8Income
                        taxes paid
                    
                    **$**
                    **19**
                    
                    $
                    22
 See
            Notes
            to Consolidated Financial Statements.




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The
      Stephan Co. and Subsidiaries


Notes
      To Condensed Consolidated Financial Statements


Quarters
      ended March 31, 2008 and 2007





NOTE
      1:
      SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES





NATURE
      OF
      OPERATIONS: The Company (or equivalent terms such as “we” or “our”) is engaged
      in the manufacture, sale, and distribution of hair grooming and personal care
      products principally throughout the United States and has allocated
      substantially all of its business into two segments: brands and
      distributors.





BASIS
      OF
      PRESENTATION: In the opinion of management, the accompanying unaudited, interim
      financial statements have been prepared by the Company pursuant to the rules
      and
      regulations of the Securities and Exchange Commission. These interim financial
      statements do not include all of the information and footnotes required by
      generally accepted accounting principles for complete financial statements
      and
      should be read in conjunction with the Company’s annual financial statements as
      of December 31, 2007. These interim financial statements have not been audited.
      However, management believes the accompanying unaudited, interim financial
      statements contain all adjustments, consisting of only normal recurring
      adjustments, necessary to present fairly the consolidated financial position
      of
      The Stephan Co. and subsidiaries as of March 31, 2008 and the results of their
      operations and cash flows for the three months ended March 31, 2008. The results
      of operations and cash flows for the interim period are not necessarily
      indicative of the results of operations or cash flows that can be expected
      for
      the year ending December 31, 2008.





USE
      OF
      ESTIMATES: The preparation of consolidated financial statements in conformity
      with U.S. GAAP requires management to make estimates and assumptions that affect
      the reported amounts of assets and liabilities and disclosure of contingent
      assets and liabilities at the date of the consolidated financial statements
      and
      the reported amounts of revenue and expenses during the reporting period. Actual
      results could differ significantly from those estimates if different assumptions
      were used or different events ultimately transpire. We believe that the
      following are the most critical accounting policies that require management
      to
      make difficult, subjective and/or complex judgments, often due to a need to
      make
      estimates about matters that are inherently uncertain:





PRINCIPLES
      OF CONSOLIDATION: The condensed consolidated financial statements include the
      accounts of The Stephan Co. and its wholly owned subsidiaries: Foxy Products,
      Inc., Old 97 Company, Williamsport Barber and Beauty Supply Corp., Stephan
&
Co., Scientific Research Products, Inc. of Delaware, Sorbie Distributing
      Corporation, Stephan Distributing, Inc., Morris Flamingo-Stephan, Inc., American
      Manicure, Inc. and Lee Stafford Beauty Group, Inc. (collectively, the
      "Company"). All signifi-cant inter-Company balances and transactions have been
      eliminated in consolidation. Certain reclassifications (having no net profit
      or
      loss impact) have been made to the previously reported amounts in the 2007
      financial statements to effect comparability with the 2008
      presentation.





IMPAIRMENT
      OF LONG-LIVED ASSETS AND GOODWILL: The Company periodically evaluates whether
      events or circumstances have occurred that would indicate that long-lived assets
      might not be recoverable or that their remaining useful lives may be impaired.
      When such events or circumstances are present, the Company assesses the
      recoverability of long-lived assets by determining whether the carrying value
      will be recovered through the expected future cash flows resulting from the
      use
      of the asset. If the results of this testing indicates an impairment of the
      carrying value of the asset, an impairment loss equal to the excess of the
      asset's carrying value over its fair value is recorded. The long-term nature
      of
      these assets requires the projection of their associated cash flows and then
      the
      discounting of these projected cash flows to their present value.





In
      accordance with SFAS No. 142, "Goodwill and Other Intangible Assets," goodwill
      and other indefinite-lived intangible assets are to be evaluated for impairment
      on an annual basis and, between annual tests, whenever events or circumstances
      indicate that the carrying value of an asset may exceed its fair value. The
      Company has less than $6.0 million of intangibles subject to future impairment
      testing. No events or circumstances occurred that indicated a possible
      impairment of intangible assets during the quarter ended March 31,
      2008.





MAJOR
      CUSTOMERS: There were no sales to any single customer in excess of 10% of
      revenue in 2008 or 2007. The Company performs ongoing credit evaluations of
      its
      customers' financial condition and, generally, requires no collateral. The
      Company does not believe that its customers' credit risk represents a material
      risk of loss.





STOCK-BASED
      COMPENSATION: Effective January 1, 2006, the Company adopted Statement of
      Financial Accounting Standards No. 123 (revised), “Share-Based Payment”
(“SFAS 123(R)”), and chose to utilize the modified prospective transition
      method. Under this method, compensation costs recognized in 2008 and 2007 relate
      to the estimated fair value at the grant date of 50,000 stock options granted
      in
      each year subsequent to January 1, 2006 in accordance with SFAS 123(R).
      Prior to the adoption of SFAS 123(R) the Company accounted for stock options
      in
      accordance with APB Opinion No. 25, “Accounting for Stock Issued to
      Employees,” and,


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using
      the
      intrinsic value of the grant to determine stock option value, recognized no
      compensation expense in net income for stock options granted and elected the
      “disclosure only” provisions of SFAS 123. In accordance with the provisions of
      SFAS 123(R), options granted prior to January 1, 2006 have not been
      restated to reflect the adoption of SFAS 123(R). The required services for
      awards prior to January 1, 2006 had been rendered prior to December 31, 2005.





As
      a
      result of adopting SFAS 123(R) on January 1, 2006, the Company’s net income
      for the quarters ended March 31, 2008 and 2007 was reduced as a result of the
      Company's recognition of approximately $20,000 and $22,000 (net of income tax
      benefit), respectively, of compensation expense (included in Selling, General
      and Administrative Expenses). The impact on basic and diluted earnings per
      share
      for the years ended December 31, 2007 and 2006 amounted to approximately $.005
      per share in each year. The Company employed the Black-Scholes option pricing
      model to estimate the fair value of stock options using assumptions consistent
      with past practices.





FAIR
      VALUE OF FINANCIAL INSTRUMENTS: the Company, using available market information
      and recognized valuation methodologies, has determined the estimated fair values
      of financial instruments that are presented herein. However, considerable
      judgment is required in interpreting market data to develop estimates of fair
      value. Accordingly, the estimates presented herein are not necessarily
      indicative of amounts the Company could realize in a current market sale of
      such
      instruments.





The
      following methods and assumptions were used to estimate fair value: 1) the
      carrying amounts of cash and cash equivalents, short-term investments, accounts
      receivable and accounts payable were assumed to approximate fair value due
      to
      their short-term nature; 2) debt service cash flows were discounted using
      current interest rates for financial instruments with similar characteristics
      and maturity to determine the fair value of bank debt. As of March 31, 2008
      and
      December 31, 2007 there were no significant differences in the carrying values
      and fair market values of financial instruments.





REVENUE
      RECOGNITION: Revenue is recognized when all significant contractual obligations,
      which involve the delivery of the products sold and reasonable assurance as
      to
      the collectibility of the resulting account receivable, have been satisfied.
      We
      do not sell on a consignment basis; returns are permitted for damaged or
      unsaleable items only. Revenue is shown after deductions for payment and volume
      discounts and returns. We estimate that these discounts and returns will
      approximate between 1% and 2% of gross revenue, and we accrue for these costs
      accordingly. The Company participates in various promotional activities in
      conjunction with its retailers and distributors, primarily through the use
      of
      discounts, new warehouse allowances, slotting allowances, co-op advertising
      and
      periodic price reduction programs. These costs have been subtracted from revenue
      and approximated $76,000 in each quarter ended March 31, 2008 and 2007,
      respectively. The allowances for sales returns and consumer and trade promotion
      liabilities are established based on the Company’s estimate of the amounts
      necessary to settle future and existing obligations for such items on products
      sold as of the balance sheet date.




COST
      OF
      GOODS SOLD: This item includes the costs of raw materials, packaging, inbound
      freight, direct labor and depreciation. Other manufacturing-related overhead,
      including purchasing, receiving, inspection, internal transfer costs,
      warehousing and manufacturing center costs (principally rent, real estate taxes
      and insurance, related to product manufacturing and warehousing but co-mingled
      to facilitate historical comparison and for more efficient administration)
      are
      classified in Selling,
      General and Administrative Expenses in the Consolidated Statements of
      Operations. For the quarters ended March 31, 2008 and 2007, the
      manufacturing-related overhead included in Selling, General and Administrative
      Expenses was approximately $233,000 and $285,000, respectively.




SHIPPING
      AND HANDLING FEES AND COSTS: Expenses for the shipping and delivery of products
      sold to customers were approximately $395,000 and $405,000 in 2008 and 2007,
      respectively, and were included in Selling, General and Administrative Expenses
      in the Consolidated Statements of Operations.





CASH
      AND
      CASH EQUIVALENTS: Cash and cash equivalents include cash, money market funds,
      repurchase agreements and similar highly liquid investments having maturities
      of
      90 days or less when acquired. The Company maintains cash deposits at certain
      financial institutions in amounts in excess of federally insured limits of
      $100,000. Cash and cash equivalents exclude restricted cash of $0.8 million
      pledged for the repayment of bank debt.





SHORT-TERM
      INVESTMENTS: We have $4.0 million in government backed, highly rated auction
      rate securities that have been subject recently to market illiquidity due to
      the
      effects of the sub-prime lending crisis and other factors. These bonds continue
      to pay us interest as due. We believe, based on discussion with investment
      professionals, that there is little or no credit risk associated with these
      investments and that the illiquidity in the market will eventually abate as
      the
      issuers refinance the auction rate securities in favor of long-term issuances.
      The Company has been unable to liquidate its auction rate securities since
      February 2008 due to failed auctions. We believe that, due to our present cash
      position and projected cash flow, this market illiquidity will not affect
      day-to-day operations of the Company.





However,
      in the event that the Company needs to access the funds related to the affected
      securities, it may be unable to do so without a potential loss of principal
      unless future auctions on these securities are successful. If the issuers are
      unable to successfully close future auctions or refinance their obligations
      and
      their credit ratings deteriorate, the Company may be required to adjust the
      carrying


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value
      of
      these securities and recognize an impairment charge for an other-than-temporary
      decline in the fair values. We have not reduced the carrying value of these
      investments, as we believe that these securities will ultimately be refinanced
      by their issuers.





ALLOWANCE
      FOR DOUBTFUL ACCOUNTS: The allowance is based upon specific identification
      of
      customer balances that are unlikely to be collected plus an estimated amount
      for
      potentially uncollectible amounts.





INVENTORIES:
      Inventories are stated at the lower of cost (determined on the first-in,
      first-out basis) or market. Other manufacturing -related costs (See COST OF
      GOODS SOLD.) classified in Selling, General and Administrative expenses, are
      allocated to finished goods inventory. The amount of these allocations to
      inventory was approximately $540,000 at both March 31, 2008 and December 31,
      2007. We periodically evaluate our inventory composition, giving consideration
      to factors such as the probability and timing of anticipated usage and the
      physical condition of the items, and then estimate an allowance (reducing the
      inventory) to be provided for slow moving, obsolete or damaged inventory. These
      estimates could vary significantly, either favorably or unfavorably, from actual
      requirements based upon future economic conditions, customer inventory levels
      or
      competitive factors that were not foreseen or did not exist when the inventory
      write-downs were established.





At
      March
      31, 2008 and December 31, 2007 we classified as Other Assets approximately
      $4.8
      million of slow moving and potentially obsolete inventories. From these amounts
      we have subtracted obsolescence reserves of $2.0 million for 2008 and 2007.
      The
      net long-term inventory amounts in Other Assets were $2.8 million at March
      31,
      2008 and December 31,2007.





PROPERTY,
      PLANT AND EQUIPMENT: Property, plant and equipment are recorded at cost. Routine
      repairs and maintenance are expensed as incurred. Depreciation is provided
      on a
      straight-line basis over the estimated useful lives of the assets as
      follows:





Buildings
      and improvements 15-30
      years


Machinery
      and
      equipment 5-10
      years


Furniture
      and office equipment 3-5
      years





INCOME
      TAXES: Income taxes are calculated under the asset and liability method of
      accounting. Deferred income taxes are recognized by applying the enacted
      statutory rates applicable to estimated future year differences between the
      financial statement (“book basis”) and tax basis carrying amounts. Our tax basis
      exceeds our book basis because our future tax benefits have already been
      recorded for book purposes; therefore, we have recorded a deferred tax asset.
      A
      valuation allowance (reducing the deferred tax asset) is recorded when it is
      more likely than not that some portion, or all, of the deferred tax asset will
      not be realized.




BASIC
      AND
      DILUTED EARNINGS PER SHARE: Basic and diluted earnings per share are computed
      by
      dividing net income (loss) by the weighted average number of shares of common
      stock outstanding. At March 31, 2008, the Company had 400,000 options
      outstanding of which an insignificant amount had exercise prices that were
      less
      than the Company’s stock price at year-end. Consequently, no additional shares
      were assumed to be outstanding for purposes of calculating earnings per
      share.





NOTE
      2:
      NEW FINANCIAL ACCOUNTING STANDARDS:





In
      March
      2008, the FASB issued SFAS No. 161 “Disclosures about Derivative Instruments and
      Hedging Activities, an Amendment of FASB Statement No. 133” (“SFAS 161”), which
      is effective for fiscal years and interim periods beginning after November
      15,
      2008, with earlier adoption encouraged. This statement is intended to improve
      transparency in financial reporting by requiring enhanced disclosures of an
      entity’s derivative instruments and hedging activities and their effects on the
      entity’s financial position, financial performance and cash flows. SFAS 161
      applies to all derivative instruments within the scope of SFAS 133, “Accounting
      for Derivative Instruments and Hedging Activities” (‘SFAS 133”) as well as
      related hedged items, bifurcated derivatives and nonderivative instruments
      that
      are designed and qualify as hedging instruments. We do not expect SFAS 161
      to
      have a material impact on our consolidated financial statements and plan to
      adopt it effective January 1, 2009.





In
      December 2007, the FASB issued SFAS No. 141 R, “Business Combinations.” SFAS No.
      141 R amends the principles and requirements for how an acquirer recognizes
      and
      measures in its financial statements the identifiable assets acquired, the
      liabilities assumed, any noncontrolling interest in the acquiree and the
      goodwill acquired. SFAS No. 141 R also establishes disclosure requirements
      to
      enable the evaluation of the nature and financial effects of the business
      combination. SFAS No. 141 R is effective for us on January 1, 2009, and we
      will
      apply its provisions prospectively to all business combinations after that
      time.





In
      December 2007, the FASB issued SFAS No. 160, “Noncontrolling Interests in
      Consolidated Financial Statements - an amendment of Accounting Research Bulletin
      No. 51.” SFAS No. 160 establishes accounting and reporting standards for the
      noncontrolling interest in a subsidiary and for the deconsolidation of a
      subsidiary. SFAS No. 160 also establishes disclosure requirements that clearly
      identify and distinguish between controlling and noncontrolling interests and
      requires the separate disclosure of income attributable to controlling and
      noncontrolling interests. SFAS No. 160 is effective for fiscal years beginning
      after December 15, 2008. The Company is currently evaluating the impact that
      the
      adoption of SFAS No. 160 may have on our consolidated financial
      statements.


-
          9 -
 *Table
          of Contents*


On
      February 15, 2007, the FASB issued SFAS No. 159, *The
      Fair Value Option for Financial Assets and Financial
      Liabilities* (SFAS No. 159). Under SFAS No. 159, the Company may elect to report
      financial instruments and certain other items at fair value on a
      contract-by-contract basis with changes in value reported in earnings. This
      election is irrevocable. SFAS No. 159 provides an opportunity to mitigate
      volatility in reported earnings that is caused by measuring hedged assets and
      liabilities that were previously required to use a different accounting method
      than the related hedging contracts when the complex provisions of SFAS
      No. 133, *Accounting for Derivative Instruments and Hedging Activities,* applicable to hedge accounting are not met. The Company adopted SFAS
      No. 159 on January 1, 2008. The Company chose not to elect the fair
      value option for its financial assets and liabilities existing at
      January 1, 2008 and did not elect the fair value option on financial assets
      and liabilities transacted in the three months ended March 31, 2008.
      Therefore, the adoption of SFAS No. 159 had no impact on the Company’s
      interim condensed consolidated financial statements.




In
      September 2006 the FASB issued SFAS 157 “Fair Value Measurements.” SFAS 157 does
      not expand the use of fair value measurements in financial statements but
      standardizes their definition and guidance by defining fair value as used in
      numerous accounting pronouncements, establishes a framework for measuring fair
      value and expands disclosure related to the use of fair value measures. SFAS
      157
      did not have a material impact on our consolidated financial statements for
      the
      first quarter of 2008.




NOTE
      3:
      INVENTORIES




Inventories
      at March 31, 2008 and December 31, 2007 consisted of the following:




(in
                  thousands)
              
              2008
              
              2007Raw
                  materials
              
              $
              1,358
              
              $
              1,380Packaging
                  and components
              
              
              2,059
              
              
              1,995Work-in-process
              
              
              444
              
              
              437Finished
                  goods
              
              
              5,420
              
              
              5,231Total
                  inventory
              
              
              9,281
              
              
              9,043Less:
                  amount included in Other Assets
              
              
              (4,803
              )
              
              (4,803
              )Inventory
                  included in Current Assets
              
              $
              4,478
              
              $
              4,240


Raw
      materials include surfactants, chemicals and fragrances used in the production
      process. Packaging materials include cartons, inner sleeves and boxes used
      in
      the actual product, as well as outer boxes and cartons used for shipping
      purposes. Components are bottles or containers (plastic or glass), jars, caps,
      pumps and similar materials that will become part of the finished product.
      Finished goods also include hair dryers, electric clippers, lather machines,
      scissors and salon furniture.




Included
      in Other Assets is long-term inventory not anticipated to be utilized within
      one
      year based on estimation methods established by the Company. We reduce the
      carrying value of this slower moving inventory to provide for an estimated
      amount that may ultimately become unusable or obsolete. See Note 1 to the
      Condensed Consolidated Financial Statements.




NOTE
      4:
      SEGMENT INFORMATION




The
      Company has identified two reportable operating segments based upon how
      management evaluates its business. These segments are Distributors and Brands.
      The Distributors segment generally has a customer base of distributors that
      purchase the Company's hair products and beauty and barber supplies for sale
      to
      salons and barbershops. Our sales to beauty schools are also classified in
      this
      segment. The Brands segment includes sales to mass merchandisers, chain drug
      stores and distributors. The Company conducts operations primarily in the United
      States; sales to international customers are not material to consolidated
      revenue. The following table summarizes significant items by reportable segment:








-
            10 -
 *Table
            of Contents*






**2008**(in
                    thousands)
                
                Distributors
                
                Brands
                
                TotalRevenue
                
                $
                3,362
                
                $
                1,058
                
                $
                4,420Operating
                    (loss) income
                
                $
                (53
                )
                $
                233
                
                
                180Net
                    interest income
                
                
                
                
                
                
                
                
                86Income
                    before income taxes
                
                
                
                
                
                
                
                
                266Income
                    taxes
                
                
                
                
                
                
                
                
                (106
                )Net
                    income
                
                
                
                
                
                
                
                $
                160Segment
                    assets:
                
                $
                5,861
                
                $
                11,250
                
                
                17,111Not
                    allocated to segments:Cash
                    and cash equivalents, short-term investments
                
                
                
                
                
                
                
                
                9,555Deferred
                    income taxes
                
                
                
                
                
                
                
                
                181Eliminations/other
                
                
                
                
                
                
                
                
                (1,257
                )Consolidated
                    assets at March 31, 2008
                
                
                
                
                
                
                
                $
                25,590Depreciation
                    and amortization
                
                $
                2
                
                $
                29
                
                $
                31Capital
                    expenditures
                
                $
                —
                
                $
                8
                
                $
                8
 
 2007(in
                    thousands)
                
                Distributors
                
                Brands
                
                TotalRevenue
                
                $
                3,452
                
                $
                1,677
                
                $
                5,129Operating
                    (loss) income
                
                $
                (109
                )
                $
                123
                
                $
                14Net
                    interest income
                
                
                
                
                
                
                
                
                83Income
                    before income taxes
                
                
                
                
                
                
                
                
                97Income
                    taxes
                
                
                
                
                
                
                
                
                (40
                )Net
                    income
                
                
                
                
                
                
                
                $
                57Segment
                    assets:
                
                $
                6,489
                
                $
                10,550
                
                
                17,039Not
                    allocated to segments:Cash
                    and cash equivalents, short-term investments
                
                
                
                
                
                
                
                
                9,613Deferred
                    income taxes
                
                
                
                
                
                
                
                
                845Eliminations/other
                
                
                
                
                
                
                
                
                (373
                )Consolidated
                    assets at March 31, 2007
                
                
                
                
                
                
                
                $
                27,124Depreciation
                    and amortization
                
                $
                2
                
                $
                49
                
                $
                51Capital
                    expenditures
                
                $
                —
                
                $
                1
                
                $
                1
  Note:
        corporate overhead was allocated to each segment based on revenues contributed
        by that
        segment.


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          11 -
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NOTE
      5:
      CONTINGENCIES AND COMMITMENTS




The
      Company has an employment agreement with its Chief Executive Officer. The
      agreement expires on December 31, 2008, but provides for the unilateral renewal
      by the CEO. The contract includes an incentive bonus award based on consolidated
      earnings per share in excess of the applicable base year, as defined in the
      employment agreement.




In
      July
      2005, the CEO took a voluntary, unilateral reduction in compensation to
      $540,000. In accordance with the terms of the employment agreement, this amended
      base compensation level is subject to an annual increase of 10% in each of
      the
      remaining years of the contract.




Also,
      the
      terms of the waiver of compensation allows the CEO to retain the right to his
      original contractual compensation level at the time of the occurrence of certain
      specified events relating to a change in control, or reasonable likelihood
      of a
      change in control of the Company, as defined in the waiver. If it were
      determined that a change in control existed, the CEO would be entitled to a
      payment of approximately $11.6 million.




The
      Company was not a party to any non-cancelable operating leases at March 31,
      2008, except for a warehouse lease in Tampa, FL that expires on July 31, 2008.
      The minimum annual rental due under this lease is approximately $92,000 for
      2008. This lease will not be renewed.




In
      addition to the matters set forth below, the Company is involved in other
      litigation arising in the normal course of business. It is our opinion that
      none
      of such matters, at March 31, 2008, would likely, if adversely determined,
      have
      a material adverse effect on the Company's financial position or results of
      operations. Additionally, there has been no material change in the status any
      pending litigation since the filing of our most recent annual report on Form
      10-K with the Securities and Exchange Commission for the year ended December
      31,
      2007.




1)
      In
      March 2006, in a case styled Trevor Sorbie International, Plc. v. Sorbie
      Acquisition Co. (CASE NO. 05-14908-09), filed in the Circuit Court of the
      17 th Judicial
      Circuit in and for Broward County, Florida, Trevor Sorbie International, Plc.
      (“TSI”) instituted efforts to collect on a judgment it has against Sorbie
      Acquisition Co. (“SAC”, a subsidiary of the Company). The judgment derives from
      an October 25, 2004, Pennsylvania arbitration award in favor of TSI and against
      SAC with respect to certain royalties and interest due. The condensed
      consolidated financial statements for the quarter ended March 31, 2008,
      reflected a liability of approximately $931,000, including interest, for payment
      of this judgment. Among other things, the Florida lawsuit alleges fraud and
      names as additional defendants The Stephan Co., Trevor Sorbie of America, Inc.
      and Sorbie Distributing Corporation, also subsidiaries of the Company. This
      matter is currently unresolved and the Company is unable, at this time, to
      determine the outcome of the litigation. The Company is vigorously defending
      this legal action against TSI. While we believe that we may ultimately prevail
      and/or settle for an amount substantially less than that accrued, due to the
      limited discovery taken and the complexities of the issues involved, the Company
      cannot predict the outcome of the litigation.




2)
      On May
      4, 2005, the Company entered into a Second Amendment of Lease Agreement (the
      "Amendment") with respect to the Danville, IL facility, Morris Flamingo -
      Stephan, Inc., extending the term of the lease to June 30, 2015, with a
      five-year renewal option, and increasing the annual rental to approximately
      $320,000. The base rent is adjustable annually, in accordance with the existing
      master lease, the terms of which, including a 90-day right of termination by
      the
      Company, remain in full force and effect. The Amendment provides a purchase
      option, effective during the term of the lease, to purchase the premises at
      the
      then fair market value of the building, or to match any bona fide third-party
      offer to purchase the premises.




On
      July
      6, 2005, the landlord, Shaheen & Co., Inc., the former owner of Morris
      Flamingo, notified the Company that its interpretation of the Amendment differed
      from that of the Company as to the existence of the 90-day right of termination.
      In October 2005, the landlord filed a lawsuit in the Circuit Court for the
      17th
      Circuit of Florida in and for Broward County, FL, styled Shaheen & Co., Inc.
      (Plaintiff) v. The Stephan Co., Case number 05-15175 seeking a declaratory
      judgment with respect to the validity of the 90-day right of termination. In
      addition, the lawsuit alleges damages with respect to costs incurred and the
      weakening marketability of the property. This matter is currently unresolved
      and
      the Company is unable, at this time, to determine the outcome of the litigation.
      However, if it is ultimately determined that the early termination provision
      has
      been eliminated with the Amendment, the Company’s minimum lease obligation would
      amount to $320,000 in each of the years 2008 through 2012 and approximately
      $800,000 thereafter, subject to Consumer Price Index adjustments. Shouky A.
      Shaheen, a minority owner of Shaheen & Co., Inc., is currently a member of
      the Board of Directors and a significant shareholder of the
      Company.




-
          12 -
 *Table
          of Contents*




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




**FIRST
      QUARTER 2008 v. 2007**





**Results
      of Operations**





**Total
      Company Results**


Earnings
      per share in the first quarter of 2008 were $0.04 per common share compared
      to
      $0.01 per common share in 2007.





EBITDA
      (Earnings Before Interest income (and Interest expense), Taxes, Depreciation
      and
      Amortization) was $211,000 in 2008 compared to $65,000 in 2007. Although our
      revenue was about $700,000 less than that in the first quarter of 2007, our
      costs and expenses were lower than last year by almost $900,000. As a result,
      our net income improved in 2008 compared to that in 2007 by about $100,000.
      Our
      gross profit margin was 48% 2008 and 44% in 2007.Our cash and short-term
      investments were almost $9.0 million, slightly less than the December 31,2007;
      the decrease was due primarily to the liquidation of year-end 2007 accounts
      payable. Short-term investments include auction rate securities currently and,
      we believe, temporarily impacted by worldwide illiquidity due to effects of
      the
      sub-prime lending crisis in the U.S. We anticipate that the slowing growth
      of
      the U.S. economy may affect our business adversely, principally in the first
      half of 2008. Revenue is likely to decline from 2007 levels and profitability
      may be impacted adversely.





In
      2008
      we have seen favorable results in our Wal-mart/McClanes business, both in
      shipments and same-store sales metrics. We also believe that the volume decline
      in the brands segment in 2008 was, in part, the result of our January 1, 2008,
      price increase implemented in this segment only. The eight percent price
      increase for shipments after January 1, 2008, may have resulted in customers
      purchasing more items in the fourth quarter of 2007, rather than in 2008, to
      defer the effect of our price increase.





We
      had an
      improvement in net income in 2008, compared to the comparable period in 2007,
      because the decline in selling, general and administrative expenses was more
      than the decline in gross profit. Operating costs in 2008 were lower than those
      in 2007: freight costs were lower due to fewer shipments in the brands segment;
      payroll and related costs were less than those in the prior year; legal and
      accounting, insurance and other administrative costs were lower due to an
      emphasis on cost control throughout our Company.





**Segment
      Results**


In
      the
      distributors segment, revenue and operating income results in 2008 were about
      the same as those in 2007. Revenue in this segment was slightly lower than
      that
      in 2007; the operating loss was slightly lower in 2008 compared to that in
      2007
      despite the allocation of more corporate overhead to this segment. In the brands
      segment, revenue was approximately $600,000 less but operating income was about
      $100,000 more than last year. Revenue declined, principally, due to the effects
      1) the U.S. economic slowdown, 2) a price increase effective January 1, 2008
      that may have prompted some customers to buy larger quantities in advance of
      the
      price increase (causing more revenue in the fourth quarter of 2007 and less
      in
      2008), 3) the effects of product mix changes and 4) lower corporate overhead
      allocations, which are based on the percentage of revenue contributed by each
      segment.




**Restatement
      of interim financial statements**





As
      previously disclosed in our Form 8-K, Form 8-K/A and Form 10-QSB filings in
      the
      fourth quarter of 2007 and the first quarter of 2008, a former manager
      unilaterally and clandestinely misstated the results of operations at one our
      subsidiaries for the first six months of 2007. His actions resulted in the
      unintentional issuance of erroneous results by us for the first two quarters
      of
      2007. We detected the results of the manager’s actions and corrected the
      previously filed results in Form 10-QSB for the third quarter 2007 and in the
      subsequent filings on Form 8-K and Form 8-K/A. This subsidiary’s corrected
      results are included in financial statements in this filing. We amended
      originally reported revenue, net income and net income per share for the first
      quarter of 2007 by $262,000, $46,000 and $0.01 per share, respectively. The
      misstatements have been corrected and 2007 financial statements in this filing,
      and the filing for the second quarter of 2007, have been adjusted to reflect
      the
      proper results.




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          13 -
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          of Contents*




**Liquidity
      and Capital Resources**





As
      of
      March 31, 2008, we had cash and cash equivalents of approximately $4.8 million
      and short-term investments of $4.0 million, a total of $8.8 million. Although
      we
      have long-term debt of $833,000, this debt is fully funded by restricted cash
      that is classified separately from our cash and cash equivalents.





Cash
      and
      equivalents declined slightly during the first quarter of 2008, from the level
      at December 31, 2007, as dividends and principal
      payments were greater than cash from operations by about $200,000. Lower cash
      from operations resulted largely from the payment of accounts payable at
      December 31, 2007. Our largest use of cash was for dividends (which we have
      paid
      since mid-1995; we also paid a special dividend of $2.00 per share in 2004)
      of
      $88,000. Capital expenditures were not significant.





We
      reclassified our auction rate securities from cash and cash equivalents to
      short-term investments. The auction rate securities are currently illiquid
      as
      the bond market refinances to cash out short-term holders (such as us) with
      proceeds from long-term bondholders. The auction rate securities that we hold
      are Aaa - rated. We have adequate liquidity and do not foresee the need for
      additional capital for day-to-day operations.





Our
      cash
      balance will vary with the growth or decline in operating income and changes,
      if
      any, in dividends and non-cash working capital. Our cash flow will also benefit
      from the utilization of net operating loss carryforwards which eliminated
      federal income tax payments in 2008 and 2007. At December 31, 2007, we had
      approximately $2.9 million (before taxes) of net operating loss carryforwards
      to
      offset future taxable income. In 2004, we paid a dividend of $2.00, or about
      $9.0 million. This caused a significant, one-time, reduction in cash. Since
      2004, cash and cash equivalents and short-term investments have grown
      steadily.





Cash
      is
      driven by operating income which we endeavor to increase by 1) keeping expenses
      low, 2) competitively bidding purchases and freight costs, 3) developing new
      products, 4) searching out new markets or expanding existing markets through
      new
      product offerings to existing customers, 5) updating technology in critical
      customer service areas, 6) reducing purchases by utilizing existing inventory
      when possible, 7) increasing selling prices to the extent possible and 8)
      centralizing administrative functions.





As
      the
      overall economy expands and contracts, or as we gain or lose customers, our
      cash
      flow will vary because we have, especially in the Brands segment, high variable
      gross margin items, and an increase or decrease in this segment could be
      significant to overall results. We expect a softening of demand in 2008 and
      a
      consequent reduction in operating income for the year. Cash may also be used
      to
      acquire similar businesses. Cash and cash equivalents may be adversely impacted
      by these events.





We
      have
      no off-balance sheet financing arrangements.




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





Not
      required.





**Item
      4T:****Controls
      and Procedures**





(a)
            Evaluation
                of Disclosure Controls and
                Procedures




O ur
      Chief
      Executive Officer and Chief Financial Officer evaluated our disclosure controls
      and procedures as of the end of the period covered by this quarterly report
      within. Based upon this evaluation, the Chief Executive Officer and Chief
      Financial Officer concluded that our disclosure controls and procedures are
      effective in ensuring that the information required to be disclosed is recorded,
      processed, summarized and reported within the time periods specified in the
      Securities and Exchange Commission’s rules and forms, and is accumulated and
      communicated to management, to allow for timely decisions regarding required
      disclosure of material information required to be disclosed in the reports
      that
      we file or submit under the Exchange Act.





(b)
            Internal
                Control over Financial Reporting





There
      were no significant changes in our internal control over financial reporting
      to
      the knowledge of our management, or in other factors that have materially
      affected or are reasonably likely to materially affect these internal controls
      over financial reporting subsequent to the evaluation date.





-
            14 -
 *Table
            of Contents*




**PART
      II - OTHER INFORMATION**





**Item
      1.****Legal
      Proceedings**




In
      addition to the matters set forth below, the Company is involved in other
      litigation arising in the normal course of business. It is the opinion of
      management that none of such matters, at March 31, 2008, would likely, if
      adversely determined, have a material adverse effect on the Company's financial
      position or results of operations.




1)
      In
      March 2006, in a case styled Trevor Sorbie International, Plc. v. Sorbie
      Acquisition Co. (CASE NO. 05-14908-09), filed in the Circuit Court of the
      17 th Judicial
      Circuit in and for Broward County, Florida, Trevor Sorbie International, Plc.
      (“TSI”) instituted efforts to collect on a judgment it has against Sorbie
      Acquisition Co. (“SAC,” a subsidiary of the Company). The judgment derives from
      an October 25, 2004, Pennsylvania arbitration award in favor of TSI and against
      SAC with respect to certain royalties and interest due. The financial statements
      for the Company for the quarter ended March 31, 2008, reflect a liability of
      approximately $931,000, including interest, for payment of this judgment. Among
      other things, the Florida lawsuit alleges fraud and names as additional
      defendants The Stephan Co., Trevor Sorbie of America, Inc. and Sorbie
      Distributing Corporation, also subsidiaries of the Company. This matter is
      currently unresolved and the Company is unable, at this time, to determine
      the
      outcome of the litigation. The Company is vigorously defending this legal action
      against TSI. While we believe that we may ultimately prevail and/or settle
      for
      an amount substantially less than that accrued, due to the limited discovery
      taken and the complexities of the issues involved, the Company cannot predict
      the outcome of the litigation.




2)
      On May
      4, 2005, the Company entered into a Second Amendment of Lease Agreement (the
      "Amendment") with respect to the Danville, IL facility, Morris Flamingo -
      Stephan, Inc., extending the term of the lease to June 30, 2015, with a
      five-year renewal option, and increasing the annual rental to approximately
      $320,000. The base rent is adjustable annually, in accordance with the existing
      master lease, the terms of which, including a 90-day right of termination by
      the
      Company, remain in full force and effect. The Amendment provides a purchase
      option, effective during the term of the lease, to purchase the premises at
      the
      then fair market value of the building, or to match any bona fide third-party
      offer to purchase the premises.




On
      July
      6, 2005, the landlord, Shaheen & Co., Inc., the former owner of Morris
      Flamingo, notified the Company that its interpretation of the Amendment differed
      from that of the Company as to the existence of the 90-day right of termination.
      In October 2005, the landlord filed a lawsuit in the Circuit Court for the
      17th
      Circuit of Florida in and for Broward County, FL, styled Shaheen & Co., Inc.
      (Plaintiff) v. The Stephan Co., Case number 05-15175 seeking a declaratory
      judgment with respect to the validity of the 90-day right of termination. In
      addition, the lawsuit alleges damages with respect to costs incurred and the
      weakening marketability of the property. This matter is currently unresolved
      and
      the Company is unable, at this time, to determine the outcome of the litigation.
      However, if it is ultimately determined that the early termination provision
      has
      been eliminated with the Amendment, the Company’s minimum lease obligation would
      amount to $320,000 in each of the years 2008 through 2012 and approximately
      $800,000 thereafter. Shouky A. Shaheen, a minority owner of Shaheen & Co.,
      Inc., is currently a member of the Board of Directors and a significant
      shareholder of the Company.





**Item
      1A:****Risk
      Factors**


Not
      required.





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


None.





**Item
      3:****Defaults
      Upon Senior Securities**


None.





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


None.





**Item
      5:****Other
      Information**


None.




-
          15 -
 *Table
          of Contents*




**Item
      6:****Exhibits**




31.1
            Rule
                13a-14(a)/15d-14(a) Certification of Chief Executive
                Officer.




31.2
                Rule
                    13a-14(a)/15d-14(a) Certification of Chief Financial
                    Officer.
  32.1
                Certification
                    of Chief Executive Officer Pursuant to 18 U.S.C. Section 1350,
                    as adopted
                    pursuant to Section 906 of the Sarbanes-Oxley Act of
                    2002




32.2
            Certification
                of Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, as
                adopted
                pursuant to Section 906 of the Sarbanes-Oxley Act of
                2002.







-
          16 -
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          of Contents*




SIGNATURES





Pursuant
      to the requirements of Section 13 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.




THE
      STEPHAN CO.






By: 
      /s/ Frank F. Ferola


Frank
      F.
      Ferola


President
      and Chairman of the Board


May
      20,
      2008





By: 
      /s/ Robert C. Spindler


Robert
      C.
      Spindler


Principal
      Financial Officer


Principal
      Accounting Officer


May
      20,
      2008






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      17
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