##### Table of Contents





UNITED STATES SECURITIES AND
    EXCHANGE COMMISSION
 Washington, D.C.
    20549
    Form 10-K
  þ

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
    SECURITIES EXCHANGE ACT OF 1934For the fiscal year ended
    December 31, 2007oro

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
    SECURITIES EXCHANGE ACT OF 1934For the transition period
    from          to          ,          .   Commission file
    no. 1-10024
  BKF Capital Group,
    Inc.
 (Exact name of registrant as
    specified in its charter)
  DELAWARE

36-0767530(State or other jurisdiction of
    incorporation or organization)

(I.R.S. Employer Identification
    No.)   One Rockefeller Plaza
 New York, New York 10020
 (Address of principal executive
    offices)
  Telephone Number:
    (212) 332-8400
 (Registrants telephone
    number, including area code)
  Securities registered pursuant to Section 12(b) of the
    Act:
    None
  Securities registered pursuant to Section 12(g) of the
    Act:
    Common Stock, par value $1.00 per share
  o þ
  o þ
  þ o
  Regulation S-K Form 10-K Form 10-K. o
  Rule 12b-2
  o o þ o
 (Do not check if a smaller
    reporting company)
  Rule 12b-2 þ o
      DOCUMENTS INCORPORATED BY REFERENCE:
  Form 10-K Form 10-K




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##### Table of Contents





Special
    Note Regarding Forward-Looking Statements
  Form 10-K, and/or and/or
  PART I
  Item 1.
    Business  Summary
    Background
        
    Merging with, acquiring or commencing a business potentially
    being funded by a capital raising event; or
    Liquidating the Company and distributing a portion of the
    Companys remaining cash to stockholders.      Introduction
   1




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##### Table of Contents



broker-dealer,
  (212) 332-8400.
  Services
        Employees
    Regulation
      Item 1B.
    Unresolved
    Staff Comments    Item 2.
    Properties   2




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##### Table of Contents



Item 3.
    Legal
    Procedures    Item 4.
    Submission
    of Matters to a Vote of Security Holders    PART II
  Item 5.
    Market
    for the Registrants Common Equity, Related Stockholders
    Matters and Issuer Purchases of Equity Securities    mark-up,
  Stock Price Ranges/Bid InformationHigh


Low2007First quarter

$
3.43


$
3.02Second quarter

$
3.25


$
2.26Third quarter

$
2.75


$
2.25Fourth quarter

$
2.37


$
2.062006First quarter

$
19.01


$
12.55Second quarter

$
10.94


$
5.96Third quarter

$
6.20


$
3.90Fourth quarter

$
4.10


$
3.30        3




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##### Table of Contents



ISSUER
    PURCHASES OF EQUITY SECURITIES
  (a)


(b)


(c)


(d)Total Number of


Maximum Number (orShares (or Units)


Approximate Dollar Value)Purchased as Part


of Shares (or Units) ThatTotal Number of





of Publicly


May Yet Be PurchasedShares (or Units)


Average Price


Announced Plans


Under the Plans orPeriod

Purchased


Paid Per Share


Or Programs


Program1/1/07 - 12/31/07


8,406


$
3.35



Not Applicable



Not ApplicableTotal


8,406


$
3.35  4




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##### Table of Contents



Item 7.
    Managements
    Discussion and Analysis of Financial Condition and Results of
    Operations  Summary
    Background
        
    Merging with, acquiring or commencing a business potentially
    being funded by a capital raising event; or
    Liquidating the Company and distributing a portion of the
    Companys remaining cash to stockholders.    Recent
    History
         5




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Results
    of Operations
  Year
    Ended December 31, 2007 as Compared to Year Ended
    December 31, 2006
  Revenues
    Expenses
         6




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##### Table of Contents



Year
    Ended December 31, 2006 as Compared to Year Ended
    December 31, 2005
  Revenues
        Expenses
          10-year
  Liquidity
    and Capital Resources
   7




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##### Table of Contents



Off
    Balance Sheet Risk
    Item 8.
    Financial
    Statements and Supplemental Data  Form 10-K. page F-1.
  Item 9.
    Changes
    in and Disagreements with Accountants on Accounting and
    Financial Disclosure    Item 9A.
    Controls
    and Procedures  Evaluation
    of Disclosure Controls and Procedures
  Rules 13a-15(f) 15d-(f) under
  all
  Internal
    ControlIntegrated Framework Internal
    ControlIntegrated Framework
     8




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##### Table of Contents



Part III
  Item 10, 11,
    12, 13 and 14
   9




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##### Table of Contents



PART IV
  Item 15.
    Exhibits
    and Financial Statement Schedules  The following documents are filed as part of this
    Form 10-K:
  Financial Statements
  Item 8-Financial
  PageNumberReport of Independent Registered Public Accounting
    Firm  Holtz Rubenstein Reminick LLP


F-2Reports of Independent Registered Public Accounting
    Firm  Grant Thornton LLP


F-3Consolidated Statements of Financial Condition at
    December 31, 2007 and 2006


F-4Consolidated Statements of Operations for the years ended
    December 31, 2007 and 2006


F-5Consolidated Statements of Cash Flows for the years ended
    December 31, 2007 and 2006


F-6Consolidated Statements of Changes in Stockholders Equity
    for the years ended December 31, 2007 and 2006


F-7Notes to Consolidated Financial Statements


F-8   Exhibits
  ExhibitNumber



Description3
.1



Restated Certificate of Incorporation of Registrant, as amended
    (incorporated by reference Exhibit 3.1 to Registrants
    Quarterly Reports on
    Form 10-Q
    for the periods ended June 30, 2000 June 30, 2001 and
    the December 31, 2005 10K.3
.2



Amended and Restated Bylaws of Registrant dated March 5,
    2008*4
.1



Specimen of Common Stock Certificate (incorporated by reference
    to Exhibit 4.1 of Registrants Annual Report on
    Form 10-K/A
    for the period ended December 31, 2000).10
.1



Amendment to Lease dated October 10, 2003 between
    Rockefeller Center Properties and John A. Levin, Inc.
    (incorporated by reference to Exhibit 10.1 of
    Registrants Annual Report on
    Form 10-K/A
    for the period ended December 31, 2003).10
.2



Lease dated December 20, 1993 between Rockefeller Center
    Properties and John A. Levin & Co., Inc., as amended
    (incorporated by reference to Exhibit 10.1 of
    Registrants Annual Report on
    Form 10-K/A
    for the period ended December 31, 2000, Exhibit 10.2
    to Registrants Quarterly Report on
    Form 10-Q
    for the period ended June 30, 2001, and Exhibit 10.2
    to Registrants Quarterly Report on
    Form 10-Q
    for the period ended September 30, 2001).10
.4



Registrants 1998 Incentive Compensation Plan, as amended
    (incorporated by reference to Exhibit 10.1 to
    Registrants Quarterly Report on
    Form 10-Q
    for the period ended June 30, 2001).10
.6



Form of Stock Option Award Agreement (incorporated by reference
    to Exhibit 10.5 to Registrants Annual Report on
    Form 10-K/A
    for the period ended December 31, 2001).10
.8



Form of Restricted Stock Award Agreement (incorporated by
    reference to Exhibit 10.10 to the Registrants Annual
    Report on Form 10-K for the period ended December 31,
    2005).10
.14



Transition/Separation Agreement between BKF and John A. Levin
    dated as of August 23, 2005 (incorporated by reference to
    Exhibit 10.1 of Registrants Report on
    Form 8-K
    dated August 24, 2005).10
.15



First Amendment to Transition/Separation Agreement between BKF
    and John A. Levin dated December 21, 2005 (incorporated by
    reference to Exhibit 10.1 of Registrants Report on
    Form 8-K
    dated December 28, 2005). 10




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##### Table of Contents



ExhibitNumber



Description10
.24



Sublease Agreement between BKF and Daylight Forensics and
    Advisory LLC dated May 16, 2006 (incorporated by reference
    to Exhibit 10.2 to Registrants Quarterly Report on
    Form 10-Q
    for the period ended June 30, 2006).10
.25



First Amendment to the Sublease Agreement between BKF and
    Daylight Forensics and Advisory LLC dated May 16, 2006
    (incorporated by reference to Exhibit 10.1 of the
    Registrants Quarterly Report on
    Form 10-Q
    for the period September 30, 2006).10
.26



Partial Surrender Agreement and Amendment between BKF and RCPI
    Landmark Properties, LLC dated November 22, 2006
    (incorporated by reference to Exhibit 10.26 to Registrants
    Annual Report on Form 10k for the period ended December 31,
    2006).10
.27



Form of Indemnification Agreement (incorporated by reference to
    Exhibit 10.1 of the Companys Current Report on
    Form 8-K
    dated May 18, 2006).10
.28



Separation Agreement between BKF and John C. Siciliano dated
    October 31, 2006 (incorporated by reference to Exhibit
    10.28 to Registrants Annual Report on Form 10k for the
    period ended December 31, 2006).10
.29



Separation Agreement between BKF and J. Clarke Gray dated
    October 31, 2006 (incorporated by reference to Exhibit
    10.29 to Registrants Annual Report on Form 10k for the
    period ended December 31, 2006).10
.30



Employment agreement with Marvin Olshan dated November 12,
    2007 (incorporated by reference to Exhibit 10.1 of the
    Companys Current Report on
    Form 10-Q
    for the period ended September 30, 2007).10
.31



Employment agreement with Harvey J. Bazaar dated
    November 12, 2007 (incorporated by reference to
    Exhibit 10.2 of the Companys Current Report on
    Form 10-Q
    for the period ended September 30, 2007).10
.32



Employment agreement with J. Clarke Gray dated
    November 12, 2007 (incorporated by reference to
    Exhibit 10.3 of the Companys Current Report on
    Form 10-Q
    for the period ended September 30, 2007).10
.33



Employment agreement with J. Clarke Gray dated
    March 7, 2007*14
.1



Registrants Code of Ethics revised as of December 31, 2007*21
.1



Subsidiaries of the Registrant (incorporated by reference to
    Exhibit 21.1 to the Registrants Annual Report on
    Form 10-K/A
    for the period ended December 31, 2000).23
.1



Consent of Grant Thornton LLP*23
.3



Consent of Holtz  Rubenstein Reminick LLP*24
.1



Powers of Attorney (included on the Signature Pages hereto).*31
.1



Section 302 Certification of Chief Executive Officer*31
.2



Section 302 Certification of Chief Financial Officer*32
.1



Section 906 Certification of Chief Executive Officer*32
.2



Section 906 Certification of Chief Financial Officer*     *
    
    Filed herewith 11




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##### Table of Contents



SIGNATURES
    BKF Capital Group, Inc.
  By:
    /s/  J.
    Clarke Gray   Senior Vice President
 and Chief Financial Officer
    attorney-in-fact Form 10-K, attorney-in-fact
  Signature

Title

Date/s/  MARVIN
    OLSHANMarvin
    Olshan

Director, Chairman of the Board

March 7, 2008/s/  HARVEY
    J. BAZAARHarvey
    J. Bazaar

Director, Chief Executive Officer

March 7, 2008/s/  J.
    CLARKE GRAYJ.
    Clarke Gray

Senior Vice President and Chief Financial Officer (Principal
    Financial and Accounting Officer)

March 7, 2008/s/  RONALD
    LABOWRonald
    Labow

Director

March 7, 2008/s/  DAVID
    S. SCHECHTERDavid
    S. Schechter

Director

March 7, 2008/s/  KURT
    N. SCHACHTKurt
    N. Schacht

Director

March 7, 2008  12




---



##### 



INDEX TO
    CONSOLIDATED FINANCIAL STATEMENTS
  PageNumberReport of Independent Registered Public
    Accounting Firm  Holtz Rubenstein
    Reminick LLP


F-2Reports of Independent Registered Public
    Accounting Firm  Grant Thornton LLP


F-3Consolidated Statements of Financial Condition at
    December 31, 2007 and 2006


F-4Consolidated Statements of Operations for the
    years ended December 31, 2007 and 2006


F-5Consolidated Statements of Cash Flows for the
    years ended December 31, 2007 and 2006


F-6Consolidated Statements of Changes in
    Stockholders Equity for the years ended December 31,
    2007 and 2006


F-7Notes to Consolidated Financial Statements


F-8EX-3.2: AMENDED AND RESTATED BY-LAWSEX-10.33: EMPLOYMENT AGREEMENT-GRAYEX-14.1: CODE OF ETHICSEX-23.1: CONSENT OF GRANT THORNTON LLPEX-23.3: CONSENT OF HOLTZ RUBENSTEIN REMINICK LLPEX-31.1: CERTIFICATIONEX-31.2: CERTIFICATIONEX-32.1: CERTIFICATIONEX-32.2: CERTIFICATION   F-1




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##### Table of Contents



REPORT OF
    INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM             HOLTZ
    RUBENSTEIN REMINICK LLP
    F-2




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##### Table of Contents



REPORT OF
    INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM             GRANT
    THORNTON LLP
    F-3




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##### Table of Contents



BKF
    CAPITAL GROUP, INC. AND SUBSIDIARIES
  CONSOLIDATED
    STATEMENTS OF FINANCIAL CONDITION
 (Dollar
    amounts in thousands)
  December 31,


December 31,2007


2006AssetsCash and cash equivalents

$
1,161


$
3,689U.S. Treasury bills


22,954



27,430Investment advisory, incentive fees and other receivables


405



3,979Prepaid expenses and other assets


2,814



1,698Fixed assets (net of accumulated depreciation of $314 and $254,
    respectively)


28



88Total assets

$
27,362


$
36,884Liabilities and stockholders equityAccrued expenses

$
1,127


$
1,444Accrued commissions and profit sharing






640Accrued restructuring expense


2,996



5,217Accrued lease amendment expense


2,443



2,956Total liabilities


6,566



10,257Commitments and ContingenciesStockholders equityCommon stock, $1 par value, authorized 
    15,000,000 shares, issued and outstanding 
    7,973,216 and 7,976,341 shares, respectively

$
7,973


$
7,976Additional paid-in capital


76,243



75,883Accumulated deficit


(63,420
)


(57,184
)Unearned compensation  restricted stock and
    restricted stock units






(48
)Total stockholders equity


20,796



26,627Total liabilities and stockholders equity

$
27,362


$
36,884    F-4




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##### Table of Contents



BKF
    CAPITAL GROUP, INC. AND SUBSIDIARIES
  CONSOLIDATED
    STATEMENTS OF OPERATIONS
 (Dollar
    amounts in thousands, except per share data)
  Year Ended December 31,2007


2006Revenues:Investment advisory fees

$



$
9,248Incentive fees and allocations






10,078Commission income (net) and other


1,471



1,588Net realized and unrealized gain on investments


568



1,410Interest income


1,562



1,705From consolidated affiliated partnerships:Net realized and unrealized gain on investments






192Interest and dividend income






297Total revenues


3,601



24,518Expenses:Employee compensation and benefits (including equity grants
    (redemption) of $405 and ($689) respectively)


1,777



24,142Occupancy and equipment rental


829



4,574Other operating expenses


4,664



8,441Amortization of intangibles






1,107Interest expense


711



303Other operating expenses from consolidated affiliated
    partnerships






58Restructuring expenses


1,294



32,778Total expenses


9,275



71,403Operating (loss)


(5,674
)


(46,885
)Minority interest in consolidated affiliated partnerships






(131
)(Loss) before taxes


(5,674
)


(47,016
)Income tax expense






Net (loss)

$
(5,674
)

$
(47,016
)(Loss) per share:Basic and diluted

$
(0.71
)

$
(5.71
)Weighted average shares outstanding basic and diluted


7,974,766



8,233,175    F-5




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##### Table of Contents



BKF
    CAPITAL GROUP, INC. AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF CASH FLOWS(Dollar amounts in
    thousands)
    (Unaudited)
  Year Ended December 31,2007


2006Cash flows from operating activities:Net (loss)

$
(5,674
)

$
(47,016
)Adjustments to reconcile net (loss) to net cash provided by
    (used in) operations:Depreciation and amortization


60



2,361Losses resulting from restructuring expenses






18,462Expense for vesting of restricted stock, stock units and stock
    options


405



(675
)Decrease in U.S. treasury bills


4,476



14,954Decrease in investment advisory and incentive fees receivable


3,574



17,826(Increase) Decrease in prepaid expenses and other assets


(1,116
)


675Decrease in investments in affiliated investment partnerships






7,696Decrease in investments in securities






7,685(Decrease) in accrued expenses


(879
)


(4,194
)(Decrease) in accrued commissions and profit sharing


(640
)


(42,380
)(Decrease) Increase in accrued restructuring expenses


(2,221
)


5,217(Decrease) in accrued lease amendment expense


(513
)


(464
)Changes in operating assets and liabilities from consolidated
    affiliated partnerships:Minority interest in income






131Increase in due from broker






16,783Increase in securities






14,578(Decrease) in securities sold short






(7,084
)Net cash (used in) provided by operating activities


(2,528
)


4,555Cash flows from investing activities:Fixed asset additions






(225
)Net cash (used in) investing activities






(225
)Cash flows from financing activities:Issuance of common stock






(1,274
)Consolidated affiliated partnerships:(Decrease) in partner contributions received in advance






(506
)Partner subscriptions






1,100Partner redemptions






(14,393
)Net cash (used in) financing activities






(15,073
)Net (decrease) in cash and cash equivalents


(2,528
)


(10,743
)Cash and cash equivalents at the beginning of the year


3,689



14,432Cash and cash equivalents at the end of the year

$
1,161


$
3,689Supplemental disclosure of cash flow information:Cash paid for interest

$
127


$
15Cash paid for taxes

$
731


$
155    F-6




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##### Table of Contents



BKF
    CAPITAL GROUP, INC. AND SUBSIDIARIES
  CONSOLIDATED
    STATEMENTS OF CHANGES IN STOCKHOLDERS EQUITY
 Years Ended
    December 31, 2007 and 2006
 (Amounts in thousands)
  AdditionalCommon


Paid-In


Retained


UnearnedStock


Capital


Earnings


Compensation


TotalBalance at January 1, 2006

$
8,180


$
88,887


$
(10,168
)

$
(11,306
)

$
75,593Grants of restricted stock units and restricted
    stock  net of forfeitures(1)


(277
)


(9,309
)






10,856



1,270Issuance of common stock


73



(4,499
)






402



(4,024
)Grants of stock options






804











804Net (loss)










(47,016
)






(47,016
)Balance at December 31, 2006

$
7,976


$
75,883


$
(57,184
)

$
(48
)

$
26,627Cumulative effect of applying the provisions of FIN 48










(562
)






(562
)Forfeitures of restricted stock


(3
)


(40
)






48



5Grants of stock options






400











400Net (loss)










(5,674
)






(5,674
)Balance at December 31, 2007

$
7,973


$
76,243


$
(63,420
)

$



$
20,796      (1)
    
    includes grants of $162 and forfeitures of $(439). F-7




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##### Table of Contents



BKF
    CAPITAL GROUP, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
  1.
    Organization
    and Summary of Significant Accounting Policies  Organization
    and Basis of Presentation
      not-for-profit
  Going
    Concern
    Consolidation
    Accounting Policies
   F-8




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##### Table of Contents



BKF
    CAPITAL GROUP, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   Use of
    Estimates
    Revenue
    Recognition
        Cash,
    Cash Equivalents and United States Treasury Bills
    Investments
    in Affiliated Investment Partnerships
    Income
    Taxes
  Accounting for Uncertainty in Income Taxes, an Interpretation
    of FASB Statement No. 109, Accounting for Income Taxes
   F-9




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##### Table of Contents



BKF
    CAPITAL GROUP, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
        Long-Lived
    Assets
      Fixed
    Assets
  98-1,
    Leasehold ImprovementsFurniture, Fixtures

Term of Lease Greater

Term of Lease Less

Certain Internal Useand Equipment

Than Useful Life

Than Useful Life

Software CostsPlaced in service prior to
    January 1, 2004

Accelerated cost recovery over the useful life of the asset.

Straight-line over the useful life of the asset

Straight-line over the term of the lease

Accelerated cost recovery over the useful life of the assetPlaced in service
    on or after January 1, 2004

Straight-line over the useful life of the asset

Straight-line over the useful life of the asset

Straight-line over the term of the lease

Straight-line over the useful life of the asset    F-10




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##### Table of Contents



BKF
    CAPITAL GROUP, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   Intangible
    Assets
    Earnings
    Per Share
      Year Ended December 31,2007


2006Net (loss)

$
(5,674
)

$
(47,016
)Basic weighted-average shares outstanding


7,974,766



8,233,175Diluted weighted-average shares outstanding


7,974,766



8,233,175Basic and diluted (loss) per share:Net (loss)

$
(0.71
)

$
(5.71
)     Fair
    Values of Financial Instruments
    Business
    Segments
    Stock-Based
    Compensation
   F-11




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##### Table of Contents



BKF
    CAPITAL GROUP, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
      2007


2006Expected dividend yield


0.00
%


0.00
%Expected volatility


33.36
%


38.20
%Risk-free interest


3.84
%


4.51
%Expected term


5 years



10 yearsFair value

$
0.81


$
10.86   Recent
    Accounting Developments
  Fair Value
    Measurements
  Accounting for Uncertainty in Income Taxes, an Interpretation
    of FASB Statement No. 109
  The Fair
    Value Option for Financial Assets and Financial Liabilities
 F-12




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##### Table of Contents



BKF
    CAPITAL GROUP, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Business
    Combinations
  SFAS 160. Noncontrolling Interest in
    Consolidated Financial Statements
  2.
    Off-Balance
    Sheet Risk    3.
    Fixed
    Assets    EstimatedUseful

December 31,Life  in Years

2007


2006Furniture and fixtures

5-7

$
28


$
28Computer hardware, software and other

3-5


314



314342



342Less accumulated depreciation and amortization




314



254Fixed assets, net



$
28


$
88      F-13




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##### Table of Contents



BKF
    CAPITAL GROUP, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   4.
    Intangible
    Assets    5.
    Significant
    Customers    6.
    Related
    Party Transactions  Investments
    in Affiliated Investment Partnerships and Related
    Revenue
      Commission
    Revenues
    7.
    Lease
    Commitment     F-14




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##### Table of Contents



BKF
    CAPITAL GROUP, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    MinimumAnnualRental


SubleasePayments


Income


Net2008

$
2,356


$
(1,581
)

$
7752009


2,325



(1,658
)


6672010


2,325



(1,658
)


6672011


1,674



(1,246
)


428Total minimum payments required

$
8,680


$
6,143


$
2,537     8.
    Employee
    Benefit Plans    9.
    Stock-Based
    Compensation Plans    A.
    Restricted
    Stock Units    RSUOutstanding balance at:January 1, 2006


183,411Delivered


(183,411
)Forfeited


0December 31, 2006


0      F-15




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##### Table of Contents



BKF
    CAPITAL GROUP, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   B.
    Restricted
    Stock    RestrictedStockOutstanding balance at:January 1, 2006


378,167Granted  Employees


145,000Granted  Directors


4,592Granted  Other


12,500Delivered


(81,648
)Forfeited


(438,495
)December 31, 2006


20,116Delivered


(16,991
)Forfeited


(3,125
)December 31, 2007


0       C.
    Non-Qualified
    Stock Options    SharesUnder


Weighted-Avg.Option


Exercise PriceOutstanding balance at:January 1, 2006


273,396


$
18.61Granted


50,000



13.75Forfeited


(23,396
)


(15.01
)December 31, 2006


300,000


$
18.08Granted


450,000



2.74Forfeited


(300,000
)


(18.08
)December 31, 2007


450,000


$
2.74     Weighted-Avg.Shares





RemainingUnder


Weighted-Avg.


ContractualOption


Exercise Price


Life250,000


$
2.25



9.9200,000



3.35



9.0450,000


$
2.74



9.5  F-16




---



##### Table of Contents



BKF
    CAPITAL GROUP, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    10.
    Non-Cash
    Transactions      11.
    Income
    Taxes    Year Ended December 31,2007


2006Current:Federal

$



$
State and local






Total current






Deferred:Federal






State and local






Total deferred






Total provision (benefit)

$



$
   S
 F-17




---



##### Table of Contents



BKF
    CAPITAL GROUP, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
     Year EndedDecember 31,2007


2006Deferred tax assets:Compensation


541


$
360Lease reserve


2,447



3,199Net operating loss carryforward


20,211



17,151Gross deferred tax asset


23,199


$
20,710Deferred tax liabilities:Deferred state income taxes


(275
)


(319
)Gross deferred tax liabilities


(275
)


(319
)Net deferred tax asset


22,924



20,391Valuation reserve


(22,924
)


(20,391
)$



$
         Year Ended December 31,2007


2006Expected income tax (benefit)

$
(1,986
)

$
(16,456
)Increase in income tax resulting from:State and local taxes, net


(547
)


(4,321
)Non-deductible amortization






7,201Valuation reserve


2,533



13,576Income tax expense

$



$
   12.
    Restructuring
    Expenses    F-18




---



##### Table of Contents



BKF
    CAPITAL GROUP, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Charged


Paid or


Remainingto Expense


Settled


LiabilityEmployee termination costs

$
6.8


$
5.7


$
1.1Lease and fixed asset costs


11.2



7.1



4.1Goodwill impairment


14.8



14.8



Year ended December 31, 2006

$
32.8


$
27.6


$
5.2Employee termination costs

$
.5


$
1.6


$
Lease and fixed asset costs


.4



1.5



3.0Termination of long term equipment leases


.4



.4



Year ended December 31, 2007

$
1.3


$
3.5


$
3.0     13.
    Commitments
    and Contingencies      four-quarter non-recurring
 F-19