**UNITED
            STATES**
 **SECURITIES
            AND EXCHANGE COMMISSION**
 **Washington,
            D.C. 20549**
 **_____________**
  **FORM
            10-QSB**
  ý
                  
                  **QUARTERLY
                      REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES**
                    **EXCHANGE
                      ACT********OF
                      1934**FOR
                      THE QUARTERLY PERIOD ENDED:MARCH
                      31, 2007**o**
                  
                  **TRANSITION
                      REPORT UNDER SECTION 13 OR 15(d) OF THE**
                    **SECURITIES
                      EXCHANGE ACT OF 1934**Forthe
                      transition period from ________to
                      ________
  Commission
            file number: 000-23819
 **———————————**
  **WILSON
                      HOLDINGS,
                      INC.**(Name
                      of small business issuer in its charter)
  **Nevada**
                  
                  **76-0547762**(State
                      or other jurisdiction of
                    Incorporation
                      or organization)
                  
                  (I.R.S
                      Employer Identification No.)**8121
                      Bee Caves Rd., Austin, TX 78746**(Address
                      of Principal Executive Offices)
  **512-732-0932**(Issuer's
                      Telephone Number)
 Check
            whether the issuer: (1) filed all reports required to be filed by Section
            13 or
            15(d) of the Exchange Act during the past 12 months (or for such shorter
            time
            period that the registrant was required to file such reports), and (2)
            has been
            subject to such filing requirements for past 90 days.
  Yes ý No o
  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
  **State
            the number of shares outstanding of each of the issuer’s classes of common
            equity as of the latest practicable date:**  **As
            of May 4, 2007, the registrant had 18,055,538 shares of common stock,
            par value
            $0.001, outstanding.**
  Transitional
            Small Business Issuer Disclosure Format: Yes o No ý
  
 
   **Index****ITEM****PART
                          I - FINANCIAL INFORMATION**Item
                          1.
                      Financial
                          Statements
                      1Item
                          2.
                      Management’s
                          Discussion and Analysis or Plan of Operation
                      20Item
                          3.
                      Controls
                          and Procedures
                      24**PART
                          II - OTHER INFORMATION**Item
                          1.
                      Legal
                          Proceedings
                      25Item
                          2.
                      Unregistered
                          Sales of Equity Securities and Use of Proceeds
                      25Item
                          3.
                      Defaults
                          Upon Senior Securities
                      25Item
                          4.
                      Submission
                          of Matters to a Vote of Security Holders
                      25Item
                          5.
                      Other
                          Information
                      25Item
                          6.
                      Exhibits
                      26
   
 INTRODUCTORY
            NOTE
  This
            Report on Form 10-QSB for Wilson Holdings, Inc. (“we,” “us,” or the “Company”)
            may contain forward-looking statements. You can identify these statements
            by forward-looking words such as “may,” “will,” “expect,” “intend,”
“anticipate,” “believe,” “estimate,” and “continue” or similar words.
            Forward-looking statements include information concerning possible or
            assumed
            future business success or financial results. You should read statements
            that contain these words carefully because they discuss future expectations
            and
            plans, which contain projections of future results of operations or financial
            condition or state other forward-looking information. We believe that
            it is
            important to communicate future expectations to investors. However, there
            may be
            events in the future that we are not able to accurately predict or
            control. Accordingly, we do not undertake any obligation to update any
            forward-looking statements for any reason, even if new information becomes
            available or other events occur in the future.
  The
            forward-looking statements included herein are based on current expectations
            that involve a number of risks and uncertainties set forth under “Risk Factors”
in our Form 10-KSB, as well as in our Registration Statement on Form
            S-1 (File
            No. 333-140747) and any other periodic reports filed with the Securities
            and
            Exchange Commission. Accordingly, to the extent that this Quarterly Report
            contains forward-looking statements regarding the financial condition,
            operating
            results, business prospects or any other aspect of the Company, please
            be
            advised that the Company’s actual financial condition, operating results and
            business performance may differ materially from that projected or estimated
            by
            the Company in forward-looking statements.
  *Whenever
            we refer in this report to “Wilson Holdings,” “the Company,” “we,” “us,” or
“our,” we mean Wilson Holdings, Inc., a Nevada corporation, and, unless the
            context indicates otherwise, its predecessors and subsidiaries, including
            its
            wholly-owned subsidiary, Wilson Family Communities, Inc., a Delaware
            corporation.*
 
 i
  It em
            1.Financial
            Statements
 **WILSON
                      HOLDINGS, INC.**Consolidated
                      Balance SheetsAs
                      of March 31, 2007 and December 31, 2006(Unaudited)March
                      31,
                  
                  December
                      31,ASSETSCash
                      and cash equivalents
                  
                  $
                  4,410,427
                  
                  
                  2,673,056Restricted
                      cash
                  
                  
                  -
                  
                  
                  2,192,226InventoryLand
                  
                  
                  21,018,435
                  
                  
                  20,735,131Construction
                      in progress
                  
                  
                  10,655,470
                  
                  
                  10,020,847Total
                      inventory
                  
                  
                  31,673,905
                  
                  
                  30,755,978Other
                      assets
                  
                  
                  393,842
                  
                  
                  196,195Issuance
                      costs
                  
                  
                  1,700,357
                  
                  
                  1,458,050Equipment
                      and software, net of accumulated depreciation and amortization
                      of
                      $57,366 and $46,538, respectively
                  
                  
                  96,827
                  
                  
                  97,956Total
                      assets
                  
                  
                  38,275,358
                  
                  
                  37,373,461LIABILITIES
                      AND STOCKHOLDERS' EQUITYAccounts
                      payable
                  
                  
                  391,326
                  
                  
                  1,376,117Accrued
                      real estate taxes payable
                  
                  
                  567,023
                  
                  
                  454,764Accrued
                      liabilities and expenses
                  
                  
                  550,179
                  
                  
                  529,090Accrued
                      interest
                  
                  
                  361,984
                  
                  
                  302,555Deferred
                      revenue
                  
                  
                  11,223
                  
                  
                  11,223Lines
                      of credit
                  
                  
                  1,962,102
                  
                  
                  6,436,706Notes
                      payable
                  
                  
                  16,807,243
                  
                  
                  9,466,621Notes
                      payable, related party
                  
                  
                  279,800
                  
                  
                  279,800Subordinated
                      convertible debt, net of $3,638,966 and $8,196,014 discount,
                      respectively
                  
                  
                  13,111,034
                  
                  
                  8,395,876Derivative
                      liability, convertible note compound embedded derivative
                  
                  
                  -
                  
                  
                  7,462,659Derivative
                      liability, contingent warrants issued to subordinated convertible
                      debt
                      holders
                  
                  
                  -
                  
                  
                  1,883,252Total
                      liabilities
                  
                  
                  34,041,914
                  
                  
                  36,598,663STOCKHOLDERS'
                      EQUITYCommon
                      stock, $0.001 par value, 100,000,000 and 80,000,000 shares
                      authorized,
                      18,055,538 shares issued and outstanding at March 31,
                      2007 and
                      December 31, 2006, respectively
                  
                  
                  18,056
                  
                  
                  18,056Additional
                      paid in capital
                  
                  
                  12,271,497
                  
                  
                  16,809,885Retained
                      deficit
                  
                  
                  (8,056,109
                  )
                  
                  (16,053,143
                  )Total
                      stockholders' equity
                  
                  
                  4,233,444
                  
                  
                  774,798Total
                      liabilities and stockholders' equity
                  
                  $
                  38,275,358
                  
                  $
                  37,373,461
 
  See
            accompanying notes to the consolidated financial statements.
   1
  **WILSON
                      HOLDINGS, INC.**Consolidated
                      Statements of OperationsFor
                      the Three Months Ended March 31, 2007 and 2006(Unaudited)2007
                  
                  2006Revenues:Homebuilding
                      and related services
                  
                  $
                  797,506
                  
                  $
                  417,000Land
                      sales
                  
                  
                  969,729
                  
                  
                  616,000Total
                      revenues
                  
                  
                  1,767,235
                  
                  
                  1,033,000Cost
                      of revenues:Homebuilding
                      and related services
                  
                  
                  636,139
                  
                  
                  331,790Land
                      sales
                  
                  
                  842,154
                  
                  
                  327,296Total
                      cost of revenues
                  
                  
                  1,478,293
                  
                  
                  659,086Gross
                      profit:Homebuilding
                      and related services
                  
                  
                  161,367
                  
                  
                  85,210Land
                      sales
                  
                  
                  127,575
                  
                  
                  288,704Total
                      gross profit
                  
                  
                  288,942
                  
                  
                  373,914Costs
                      and expenses:Corporate
                      general and administration
                  
                  
                  998,332
                  
                  
                  990,226Sales
                      and marketing
                  
                  
                  73,593
                  
                  
                  129,082Total
                      costs and expenses
                  
                  
                  1,071,925
                  
                  
                  1,119,308Operating
                      loss
                  
                  
                  (782,983
                  )
                  
                  (745,394
                  )Other
                      income (expense):Loss
                      on fair value of derivatives
                  
                  
                  -
                  
                  
                  (345,000
                  )Interest
                      and other income
                  
                  
                  47,857
                  
                  
                  96,955Interest
                      expense
                  
                  
                  (619,015
                  )
                  
                  (514,471
                  )Total
                      other expense
                  
                  
                  (571,158
                  )
                  
                  (762,516
                  )Net
                      loss
                  
                  $
                  (1,354,141
                  )
                  $
                  (1,507,910
                  )Basic
                      and diluted loss per share
                  
                  $
                  (0.07
                  )
                  $
                  (0.09
                  )Basic
                      and diluted weighted average common shares outstanding
                  
                  
                  18,055,538
                  
                  
                  17,706,625
 
 See
            accompanying notes to the consolidated financial statements.
   2
  **WILSON
                      HOLDINGS, INC.**Consolidated
                      Statements of Cash FlowsFor
                      the Three Months Ended March 31, 2007 and 2006(Unaudited)2007
                  
                  2006Cash
                      flows from operating activities:Net
                      loss
                  
                  $
                  (1,354,141
                  )
                  $
                  (1,507,910
                  )Non
                      cash adjustments:Loss
                      on fair value of derivatives
                  
                  
                  -
                  
                  
                  345,000Amortization
                      of convertible debt discount
                  
                  
                  142,484
                  
                  
                  178,661Amortization
                      of debt issuance costs
                  
                  
                  59,076
                  
                  
                  53,051Stock-based
                      compensation expense
                  
                  
                  39,550
                  
                  
                  81,816Depreciation
                      and amortization
                  
                  
                  57,366
                  
                  
                  12,665Adjustments
                      to reconcile net loss to net cash used in operating
                      activities:Increase
                      in total inventory
                  
                  
                  (917,927
                  )
                  
                  (5,197,115
                  )Increase
                      (decrease) in other assets
                  
                  
                  (197,647
                  )
                  
                  13,753(Decrease)
                      increase in accounts payable
                  
                  
                  (984,791
                  )
                  
                  1,659,104Increase
                      in real estate taxes payable
                  
                  
                  112,259
                  
                  
                  -Increase
                      in accrued liabilities and expenses
                  
                  
                  21,089
                  
                  
                  152,554Increase
                      in accrued interest
                  
                  
                  59,429
                  
                  
                  213,402Net
                      cash used in operating activities
                  
                  
                  (2,963,253
                  )
                  
                  (3,995,019
                  )Cash
                      flows from investing activities:Purchase
                      of fixed assets
                  
                  
                  (56,237
                  )
                  
                  (151,119
                  )Net
                      cash (used) in investing activities
                  
                  
                  (56,237
                  )
                  
                  (151,119
                  )Cash
                      flows from financing activities:Decrease
                      in restricted cash
                  
                  
                  2,192,226
                  
                  
                  -Issuances
                      (repayments) of notes payable, net
                  
                  
                  7,340,622
                  
                  
                  (687,014
                  )(Repayments)
                      advances on lines of credit, net
                  
                  
                  (4,474,604
                  )
                  
                  2,413,317Cash
                      paid issuance costs
                  
                  
                  (301,383
                  )
                  
                  (47,065
                  )Net
                      cash provided by financing activities
                  
                  
                  4,756,861
                  
                  
                  1,679,238Net
                      increase (decrease) in cash and cash equivalents
                  
                  
                  1,737,371
                  
                  
                  (2,466,900
                  )Cash
                      and cash equivalents at beginning of period
                  
                  
                  2,673,056
                  
                  
                  10,019,816Cash
                      and cash equivalents at end of period
                  
                  $
                  4,410,427
                  
                  $
                  7,552,916Cash
                      paid for interest
                  
                  $
                  562,689
                  
                  $
                  90,165Cash
                      paid for income taxes
                  
                  $
                  -
                  
                  $
                  -
  See
            accompanying notes to the consolidated financial statements.
  3
  **WILSON
            HOLDINGS, INC.**
 Consolidated
            Statement of Stockholders’ Equity
 For
            the
            Three Months Ended March 31, 2007
  (Unaudited)**Common
                      Stock**Shares
                  
                  Amount
                  
                  Additional
                      Paid In Capital
                  
                  Accumulated
                      Deficit
                  
                  Total**Balances
                      at December 31, 2006**
                  
                  
                  18,055,538
                  
                  $
                  18,056
                  
                  $
                  16,809,885
                  
                  $
                  (16,053,143
                  )
                  $
                  774,798Cumulative
                      adjustment for the adoption of new accounting method
                  
                  
                  -
                  
                  
                  -
                  
                  $
                  (4,577,938
                  )
                  $
                  9,351,175
                  
                  
                  4,773,237Stock-based
                      compensation expense
                  
                  
                  -
                  
                  
                  -
                  
                  
                  39,550
                  
                  
                  -
                  
                  
                  39,550Net
                      loss
                  
                  
                  -
                  
                  
                  -
                  
                  
                  -
                  
                  
                  (1,354,141
                  )
                  
                  (1,354,141
                  )**Balances
                      at March 31, 2007**
                  
                  
                  18,055,538
                  
                  $
                  18,056
                  
                  $
                  12,271,497
                  
                  $
                  (8,056,109
                  )
                  $
                  4,233,444
  See
            accompanying notes to the consolidated financial statements.
  
 4
 WILSON
                HOLDINGS, INC.
 Notes
                to
                Consolidated Financial Statements
 For
                the
                Three Months Ended March 31, 2007 and as of December 31,
                2006
  **(1)**  **Organization
            and Business Activity**
  Wilson
            Holdings, Inc., (the “Company”) is a Nevada corporation formerly known as Cole
            Computer Corporation, a Nevada corporation. Effective October 11, 2005
            pursuant to an Agreement and Plan of Reorganization dated as of
            September 2, 2005 by and among Wilson Holdings, Inc., a Delaware
            corporation and a majority of its stockholders, Wilson Acquisition Corp.,
            a
            Delaware corporation and now, a Subsidiary of the Company and Wilson
            Family
            Communities, Inc., a Delaware corporation (“WFC”), Wilson Acquisition Corp. and
            WFC merged and WFC became a wholly-owned Subsidiary of the Company.
  The
            consolidated financial statements and the notes of the Company as of
            March 31,
            2007 and for the three months ending March 31, 2007 and 2006 have been
            prepared
            by management without audit, pursuant to rules and regulations of the
            Securities
            Exchange Commission and should be read in conjunction with the December
            31, 2006
            audited financials statements contained in the Company’s Form 10-KSB, filed
            February 16, 2007. In the opinion of management, all normal, recurring
            adjustments necessary for the fair presentation of such financial information
            have been included. The preparation of financials statements in conformity
            with
            accounting principles generally accepted in the United States of America
            requires management to make estimates and assumptions that affect the
            amounts
            reported in the financial statements and accompanying notes. Certain
            information
            and footnote disclosures normally included in the annual financial statements
            prepared in accordance with accounting principles generally accepted
            in the
            United States of America have been condensed or omitted.
  **(2)**  **Summary
            of Significant Accounting Policies** ****
  ***(a)***  ***Revenue
            Recognition***
  Revenues
            from property sales are recognized in accordance with SFAS No. 66, “Accounting
            for Sales of Real Estate.” Revenues from land development services to builders
            are recognized when the properties associated with the services are sold,
            when
            the risks and rewards of ownership are transferred to the buyer and when
            the
            consideration has been received, or the title company has processed payment.
            For
            projects that are consolidated, homebuilding revenues and services will
            be
            categorized as homebuilding revenues and revenues from property sales
            or options
            will be categorized as land sales.
  ***(b)***  ***Use
            of Estimates***
  The
            preparation of financial statements in conformity with accounting principles
            generally accepted in the United States of America 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 financial statements and the reported amounts of revenues and expenses
            during the reporting period. Accordingly, actual results could differ
            from those
            estimates.
  The
            Company has estimated and accrued liabilities for real estate property
            taxes on
            its purchased land in anticipation of development, and other liabilities
            including the beneficial conversion liability, the fair value of warrants
            and
            options. To the extent that the estimates are dramatically different
            to the
            actual amounts, it could have a material effect on the financial statements.
  The
            Company has three of its properties that are in Municipal Utility Districts
            (MUDs). The Company incurs development costs for water, sewage lines
            and
            associated treatment plants and other development costs and fees for
            these
            properties. Under the agreement with the MUDs, the Company expects to
            be
            reimbursed partially for the above developments costs. The MUDs will
            issue bonds
            to repay the Company, once there is enough assessed value on the property
            for
            the MUD taxes to repay the bonds. As homes are sold within the MUD, the
            assessed
            value increases. It can take several years before there is enough assessed
            value
            to recapture the costs. The Company has estimated that it will recover
            approximately 50% to 70% of eligible costs spent. In some circumstances,
            the
            MUDs will pay for property set aside for the preservation of endangered
            species,
            greenbelts and similar uses. To the extent that the estimates are dramatically
            different to the actual amounts, it could have a material effect on the
            financial statements.
   5
 WILSON
              HOLDINGS, INC.
 Notes
              to
              Consolidated Financial Statements
 For
              the
              Three Months Ended March 31, 2007 and as of December 31, 2006
  ** **(2)**  **Summary
            of Significant Accounting Policies (Continued)**
  ***(c)***  ***Adoption
            of New Accounting Pronouncements***
  In
            January 2007, the Company adopted FASB Staff Position (FSP) No. EITF
            00-19-2,
            (“FSP EITF 00-19-2”), Accounting for Registration Payment Arrangements. This
            addresses an issuer’s accounting for registration payment arrangements and
            specifies that the contingent obligation to make future payments or otherwise
            transfer consideration under a registration payment arrangement, whether
            issued
            as a separate agreement or included as a provision of a financial instrument
            or
            other agreement, should be separately recognized and measured in accordance
            with
            FASB Statement No. 5, Accounting for Contingencies. The guidance in No.
            EITF
            00-19-2 amends FASB Statements No. 133, Accounting for Derivative Instruments
            and Hedging Activities, and No. 150, Accounting for Certain Financial
            Instruments with Characteristics of both Liabilities and Equity, and
            FASB
            Interpretation No. 45, Guarantor’s Accounting and Disclosure Requirements for
            Guarantees, Including Indirect Guarantees of Indebtedness of Others,
            to include
            scope exceptions for registration payment arrangements. EITF 00-19-2
            further clarifies that a financial instrument subject to a registration
            payment
            arrangement should be accounted for in accordance with other applicable
            generally accepted accounting principles (GAAP) without regard to the
            contingent
            obligation to transfer consideration pursuant to the registration payment
            arrangement. This pronouncement shall be effective immediately for registration
            payment arrangements and the financial instruments subject to those arrangements
            that are entered into or modified subsequent to the date of issuance
            of this
            pronouncement, or for financial statements issued for fiscal years beginning
            after December 15, 2006, and interim periods within those fiscal years.
  The
            cumulative effect of the re-characterization of the derivative liabilities
            is
            shown in the table below:
 As
                      filed
                    December
                      31, 2006
                  
                  Cumulative
                      effect of re-characterization of derivative liabilities
                  
                  Net
                      effect of re-characterizationLIABILITY
                      ACCOUNTSSubordinated
                      convertible debt, net of discount, respectively
                  
                  $
                  8,395,876
                  
                  
                  4,572,674
                  
                  
                  12,968,550Derivative
                      liability, convertible note compound embedded derivative
                  
                  
                  7,462,659
                  
                  
                  (7,462,659
                  )
                  
                  -Derivative
                      liability, contingent warrants issued to subordinated convertible
                      debt
                      holders
                  
                  
                  1,883,252
                  
                  
                  (1,883,252
                  )
                  
                  -Total
                      debt, net of discount and derivative liabilities
                  
                  
                  17,741,787
                  
                  
                  (4,773,237
                  )
                  
                  12,968,550STOCKHOLDERS'
                      EQUITY ACCOUNTSCommon
                      stock
                  
                  
                  18,056
                  
                  
                  -
                  
                  
                  18,056Additional
                      paid in capital
                  
                  
                  16,809,885
                  
                  
                  (4,577,938
                  )
                  
                  12,231,947Retained
                      deficit
                  
                  
                  (16,053,143
                  )
                  
                  9,351,175
                  
                  
                  (6,701,968
                  )Total
                      stockholders' equity
                  
                  $
                  774,798
                  
                  
                  4,773,237
                  
                  
                  5,548,035
  ***(d)*** **Subordinated
            Convertible Debt**
  The
            subordinated convertible debt and the related warrants have been accounted
            for
            in accordance with Emerging Issues Task Force (EITF) No. 98-5, “Accounting for
            Convertible Securities with Beneficial Conversion Features or Contingently
            Adjustable Conversion Ratios”, EITF No. 00-19, “Accounting for Derivative
            Financial Instruments Indexed to, and Potentially Settled in, a Company’s Own
            Stock,” EITF 00-27, “Application of issue 98-5 to Certain Convertible
            Instruments”, EITF 05-02 “Meaning of ‘Conventional Convertible Debt Instrument’
in Issue No. 00-19”, and EITF 05-04 “The Effect of a Liquidated Damages Clause
            on a Freestanding Financial Instrument Subject to Issue No. 00-19” updated with
            FSP EITF 00-19-2”, Accounting for Registration Payment
            Arrangements.
   6
 WILSON
              HOLDINGS, INC.
 Notes
              to
              Consolidated Financial Statements
 For
              the
              Three Months Ended March 31, 2007 and as of December 31, 2006
 **(2)**  **Summary
            of Significant Accounting Policies (Continued)**
  ***(e)***  ***Loss
            per Common Share***
  Earnings
            per share is accounted for in accordance with SFAS No. 128, “Earnings per
            Share,” which require a dual presentation of basic and diluted earnings per
            share on the face of the statements of earnings. Basic loss per share
            is based
            on the weighted effect of common shares issued and outstanding, and is
            calculated by dividing net loss by the weighted average shares outstanding
            during the period. Diluted loss per share is calculated by dividing net
            loss by
            the weighted average number of common shares used in the basic loss per
            share
            calculation plus the number of common shares that would be issued assuming
            exercise or conversion of all potentially dilutive common shares outstanding.
  The
            Company has issued stock options, warrants convertible into shares of
            common
            stock. These shares and warrants have been excluded from loss per share
            at
            March 31, 2007 and 2006 because the effect would be anti-dilutive as
            summarized in the table below:
  2007
                  
                  2006Stock
                      options
                  
                  
                  735,000
                  
                  
                  910,000Common
                      stock warrants
                  
                  
                  1,157,187
                  
                  
                  750,000Subordinated
                      convertible debt warrants
                  
                  
                  1,892,187
                  
                  
                  750,000Total
                  
                  
                  3,784,374
                  
                  
                  2,410,000
  **(3)**  **Liquidity
            and Capital Resources**
  *Liquidity*
  At
            March
            31, 2007 the Company had approximately $4.4 million in cash and cash
            equivalents. The Company plans on investing approximately $23 million
            for the
            purchase of land, installment payments, options fees and development
            costs over
            the next twelve months. This includes the development of land including
            the
            installation of water and wastewater infrastructure, streets and common
            areas.
            It intends to and expects to purchase or obtain options to purchase additional
            acreage for development and additional finished lots for sale. The Company
            is
            actively seeking additional debt financing and expects to finance approximately
            $16 million of the $23 million. The Company intends to repay the loans
            through a
            combination of cash generated from lot and land sales.
  The
            Company plans to exercise a land option on the Bohl’s tract of approximately
            $7.2 million in May 2007. Additionally the Company plans to enter the
            homebuilding business effective June 2007.
  The
            Company’s growth will require substantial amounts of cash for earnest money
            deposits, land purchases, development costs, interest payments and to
            enter the
            homebuilding business. Until it begins to sell an adequate number of
            lots and
            homes to cover monthly operating expenses, sales, marketing, general
            and
            administrative costs will deplete cash.
  To
            maintain its liquidity, the Company has financed the majority of its
            land and
            development activities with debt and equity, and believes it can continue
            to do
            so in the future, through a combination of conventional and subordinated
            convertible debt, joint venture financing, sales of selected lot positions,
            sales of land and lot options, and by raising additional equity.
  Land
            comprises the majority of the Company’s assets, which could suffer devaluation
            if the housing and real estate market suffers a significant downturn,
            due to
            interest rate increases or other reasons. The Company’s debt might then be
            called, requiring liquidation of assets to satisfy its debt obligations
            or the
            use of its cash. A significant downturn could also make it more difficult
            for
            the Company to liquidate assets, to raise cash and pay off debts, which
            could
            have a material adverse effect upon it.
  *Capital
            Resources*
  The
            Company has raised approximately $16.8 million of subordinated convertible
            debt.
            At March 31, 2007, the Company had $10 million line of credit for land
            and
            homebuilding that is unused. It had outstanding notes payable and lines
            of
            credit of approximately $19 million. The Company has filed a Registration
            Statement on Form S-1 for the public offering of 5,000,000 shares of
            its common
            stock at $3.25 per share. The Registration statement has not yet been
            declared
            effective by the Securities and Exchange Commission and there is no guarantee
            that the Company will consummate the transaction.
   7
 WILSON
            HOLDINGS, INC. Notes
              to
              Consolidated Financial Statements
 For
              the
              Three Months Ended March 31, 2007 and as of December 31, 2006
 **(4)**  **Inventory**
  The
            Company’s land inventory includes real estate held for sale or under development
            and earnest money on land purchase options. Construction in progress
            includes
            development costs, prepaid development costs, and development costs on
            land
            under option but not yet owned.
  Earnest
            money deposits for land costs and development costs on land under option,
            not
            owned, totaled $451 thousand at March 31, 2007 and December 31, 2006, all
            of which is non-refundable if the Company does not exercise the option
            and
            purchase the land.
  As
            of
            March 31, 2007 it had approximately 2,442 acres of land with approximately
            731
            acres under development and construction in Hays County, Travis County
            and
            Williamson County, Texas.
  Below
            is
            a summary of the property that is owned or under contract by the Company
            at
            March 31, 2007 :
 Property
                  Approximate
                      Acreage
                  Approximate
                      Owned Acreage
                  Approximate
                      Acreage Under Option
                  Land
                      and Project Costs at March 31, 2007
                    In
                      thousands
                  Approximate
                      Acreage under Development
                  Texas
                      CountyRutherford
                      West
                  682
                  682
                  n/a
                  $12,100
                  682
                  HaysHighway
                      183
                  15
                  15
                  n/a
                  379
                  -
                  TravisGeorgetown
                      Village
                  692
                  79
                  583
                  5,749
                  49
                  WilliamsonVillages
                      of New Sweden
                  534
                  534
                  -
                  10,093
                  -
                  TravisElm
                      Grove
                  91
                  30
                  61
                  1,810
                  -
                  HaysBohls
                      Ranch
                  428
                  -
                  428
                  1,113
                  -
                  TravisOther
                      land projects
                  -
                  -
                  -
                  52
                  -Sub-total
                      land
                  2,442
                  1,340
                  1,072
                  31,296
                  731Homebuilding
                      inventory
                  -
                  -
                  -
                  378
                  -Total
                      inventory
                  2,442
                  1,340
                  1,072
                  $31,674
                  731
  At
            December 31, 2006, it had approximately 2,430 acres of land under contract,
            including 749 acres under development and construction in Hays County,
            Travis
            County and Williamson County, Texas.
  Below
            is
            a summary of the property that is owned or under contract by the Company
            at
            December 31, 2006:
 Property
                  Approximate
                      Acreage
                  Approximate
                      Owned Acreage
                  Approximate
                      Acreage Under Option
                  Land
                      and Project Costs at December 31, 2006
                    In
                      thousands
                  Approximate
                      Acreage under Development
                  Texas
                      CountyRutherford
                      West
                  697
                  697
                  n/a
                  $11,251
                  697
                  HaysHighway
                      183
                  15
                  15
                  n/a
                  377
                  -
                  TravisGeorgetown
                      Village
                  665
                  52
                  613
                  5,342
                  52
                  WilliamsonVillages
                      of New Sweden
                  534
                  534
                  -
                  10,120
                  -
                  TravisElm
                      Grove
                  91
                  30
                  61
                  1,755
                  -
                  HaysBohls
                      Ranch
                  428
                  -
                  428
                  1,011
                  -
                  TravisOther
                      land projects
                  -
                  -
                  -
                  52Sub-total
                      land
                  2,430
                  1,328
                  1,102
                  29,908
                  749Homebuilding
                      inventory
                  -
                  -
                  -
                  848
                  -Total
                      inventory
                  2,430
                  1,328
                  1,102
                  $30,756
                  749
  The
            land
            costs in the above projects are Rutherford West, approximately $9.3 million,
            Highway 183 is all land, Georgetown Village, approximately $1.5 million
            and Elm
            Grove, approximately $1.3 million. All other land and project costs for
            listed
            properties are associated with earnest money deposits, feasibility and
            development.
  Other
            land projects in the above table are associated with earnest money, feasibility
            and development.
   8
 WILSON
            HOLDINGS, INC. Notes
              to
              Consolidated Financial Statements
 For
              the
              Three Months Ended March 31, 2007 and as of December 31,
              2006
 **(5)**  **Consolidation
            of Variable Interest Entities**
  The
            Company exercises significant influence over, but holds no controlling
            interest
            in our homebuilder clients. It bears the majority of the rewards and
            risk of
            loss. At December 31, 2006 and March 31, 2007, the Company determined it
            was the primary beneficiary in certain homebuilder agreements as defined
            under
            FASB Interpretation No. 46(R) (“FIN 46(R)”), “Consolidation of Variable Interest
            Entities” (VIEs), that it has a significant, but less than controlling, interest
            in the entities. The results of these clients have been consolidated
            into its
            financial statements.
  Below
            is
            a summary of the effect of the consolidation of these entities for the
            three
            months ended March 31, 2007:
  Three
                      Months Ended March 31, 2007WFC
                  
                  VIEs
                  
                  Consolidating
                      entries
                  
                  ConsolidatedRevenues
                  
                  1,033,540
                  
                  797,506
                  (a)
                  (63,811)
                  
                  1,767,235ExpensesCost
                      of Revenues
                  
                  842,154
                  
                  699,950
                  (a)
                  (63,811)
                  
                  1,478,293General,
                      administrative, sales and marketing
                  991,724
                  
                  80,201
                  
                  
                  
                  1,071,925Costs
                      and expenses before interest
                  
                  1,833,878
                  
                  780,151
                  
                  (63,811)
                  
                  2,550,218Operating
                      income/(loss)
                  
                  (800,338)
                  
                  17,355
                  
                  -
                  
                  (782,983)
 
 (a)
            Eliminates WFC revenues in VIE expenses, eliminates VIE expenses in
            WFC.
  Below
            is
            a summary of the effect of the consolidation of these entities for the
            three
            months ended March 31, 2006:
  Three
                      Months Ended March 31, 2006WFC
                  
                  VIEs
                  
                  Consolidating
                      entries
                  
                  ConsolidatedRevenues
                  
                  797,962
                  
                  417,000
                  (a)
                  (181,962)
                  
                  1,033,000ExpensesCost
                      of revenues
                  
                  472,807
                  
                  368,241
                  (a)
                  (181,962)
                  
                  659,086General,
                      administrative, sales and marketing
                  1,008,149
                  
                  72,341
                  (b)
                  38,818
                  
                  1,119,308Costs
                      and expenses before interest
                  
                  1,480,956
                  
                  440,582
                  
                  (143,144)
                  
                  1,778,394Operating
                      income/(loss)
                  
                  (682,994)
                  
                  (23,582)
                  
                  (38,818)
                  
                  (745,394)
 
 (a)
            Eliminates WFC revenues in VIE expenses, eliminates VIE expenses in
            WFC.
 (b)
            Loss
            of VIEs.
 
 **(6)**  **Operating
            and Reporting Segments**
  The
            Company has two reporting segments: Homebuilding and Related Services,
            and Land
            Sales. The Company’s reporting segments are strategic business units that offer
            different products and services. The homebuilding and related services
            segment
            includes home sales and services provided to homebuilders. The Company
            does not
            build or sell homes but is required to consolidate its homebuilder services
            clients per FIN 46(R), (Note 5). The Company identifies the clients it
            consolidates as “VIEs”. Land sales consist of land in various stages of
            development sold, including finished lots. The Company eliminates land
            sales to
            its homebuilder clients. The Company charges identifiable direct expenses
            and
            interest to each segment and allocates corporate expenses and interest
            based on
            an estimate of each segment’s relative use of those expenses. Depreciation
            expense is included in selling, general and administrative and is
            immaterial.
   9
 WILSON HOLDINGS, INC. Notes
            to
            Consolidated Financial Statements
 For
            the
            Three Months Ended March 31, 2007 and as of December 31, 2006
  **(6)**  **Operating
            and Reporting Segments (Continued)**
  The
            following table presents segment operating results before taxes for the
            three
            months ended March 31, 2007 and 2006:
  **2007**
                  
                  **2006****Homebuilding
                      and Related Services**
                  
                  **Land
                      Sales**
                  
                  **Total**
                  
                  **Homebuilding
                      and Related Services**
                  
                  **Land
                      Sales**
                  
                  **Total**Revenues
                      from external customers
                  
                  $
                  797,506
                  
                  
                  969,729
                  
                  
                  1,767,235
                  
                  
                  417,000
                  
                  
                  616,000
                  
                  
                  1,033,000Costs
                      and expenses:Cost
                      of revenues
                  
                  
                  636,139
                  
                  
                  842,154
                  
                  
                  1,478,293
                  
                  
                  331,790
                  
                  
                  327,296
                  
                  
                  659,086Selling,
                      general and administrative
                  
                  
                  637,574
                  
                  
                  434,351
                  
                  
                  1,071,925
                  
                  
                  781,985
                  
                  
                  337,323
                  
                  
                  1,119,308Loss
                      on fair value of derivatives
                  
                  
                  -
                  
                  
                  -
                  
                  
                  -
                  
                  
                  -
                  
                  
                  345,000
                  
                  
                  345,000Interest
                      & other income
                  
                  
                  (25,911
                  )
                  
                  (21,946
                  )
                  
                  (47,857
                  )
                  
                  (53,330
                  )
                  
                  (43,625
                  )
                  
                  (96,955
                  )Interest
                      expense
                  
                  
                  172,129
                  
                  
                  446,886
                  
                  
                  619,015
                  
                  
                  294,514
                  
                  
                  219,957
                  
                  
                  514,471Total
                      costs and expenses
                  
                  
                  1,419,931
                  
                  
                  1,701,445
                  
                  
                  3,121,376
                  
                  
                  1,354,959
                  
                  
                  1,185,951
                  
                  
                  2,540,910Loss
                      before taxes
                  
                  $
                  (622,425
                  )
                  
                  (731,716
                  )
                  
                  (1,354,141
                  )
                  
                  (937,959
                  )
                  
                  (569,951
                  )
                  
                  (1,507,910
                  )Segment
                      Assets
                  
                  $
                  3,908,727
                  
                  
                  34,366,631
                  
                  
                  38,275,358
                  
                  
                  6,327,285
                  
                  
                  19,621,397
                  
                  
                  25,948,682Capital
                      expenditures
                  
                  $
                  56,237
                  
                  
                  -
                  
                  
                  56,237
                  
                  
                  151,119
                  
                  
                  -
                  
                  
                  151,119
 
 **** **(7)**  **Related
            Party Transactions**
  In
            March
            of 2005, some of the trusts belonging to the Wilson family purchased
            a note for
            approximately $280 thousand from a third party that is secured by approximately
            15 acres of land. At the time of purchase, the terms of the note payable
            to the
            trusts belonging to family members of Clark Wilson remained the same
            at 8% per
            annum but the maturity date was changed from October 7, 2005 to
            April 4, 2006 when the entire principal and interest would be due and
            payable. On March 29, 2006, the note was extended for two years, changing
            the maturity date to April 4, 2008 (Note 10).
  In
            2005,
            WFC obtained a line of credit of $2 million that was personally guaranteed
            by
            Mr. Wilson. The personal guarantee was released during May
            2006.
  During
            the twelve months ended December 31, 2006, Mr. Wilson’s brother
            provided services to the Company for which he was paid approximately
            $20
            thousand. These services were primarily related to the development of
            information systems for the Company. Management believes that these services
            were provided at fair market value.
  *Issuance
            of Convertible Debt*
  As
            part
            of the December 2005 subordinated convertible debt issuance discussed in
            Note 10, an existing common stock investor purchased $800 thousand of
            the $10
            million of subordinated convertible debt that was issued. As part of
            the
            subordinated convertible debt 2006 discussed in Note 10, existing common
            stock
            investors purchased $1.0 million of the $6.75 million subordinated convertible
            debt that was issued.
  In
            connection with the placement of an additional $6.75 million of the Company’s
            convertible promissory notes in September 2006, it entered into an additional
            agreement with Tejas Securities Group, Inc. pursuant to which Tejas served
            as
            the Company’s Placement Agent in connection with the offering. Pursuant to this
            agreement, the Company paid Tejas commissions of $70 thousand and reimbursed
            the
            Placement Agent for its expenses. John J. Gorman is the Chairman of the
            Board of
            the Placement Agent and of Tejas Incorporated (Tejas), the parent company
            of the
            Placement Agent. Mr. Gorman is the beneficial owner of 4,088,963 shares of
            our common stock. Clark N. Wilson,  who
            serves as our President and Chief Executive Officer and is a director
            of the
            Company, has served on the board of directors of Tejas Incorporated,
            since
            October 1999, and is compensated for such service. Mr. Wilson owns 1,000
            shares of Tejas Incorporated common stock and options to purchase an
            additional
            60,000 shares of common stock. Our largest stockholder, who is also our
            President and Chief Executive Officer, will continue to control our
            company.
   10
 WILSON HOLDINGS, INC. Notes
            to
            Consolidated Financial Statements
 For
            the
            Three Months Ended March 31, 2007 and as of December 31, 2006
  **(7)**  **Related
            Party Transactions (Continued)**
  Barry A.
            Williamson is a member of our Board of Directors and, until January 31,
            2006 was a member of the Board of Directors of Tejas Incorporated, the
            parent
            company of our Placement Agent for the sale of our convertible notes.
            Mr. Williamson was re-appointed to the Board of Directors of Tejas
            Incorporated in November 2006.
  In
            September 2006, the Company entered into an agreement to lease approximately
            5,000 square feet for its corporate offices, which it began occupying
            on
            October 1, 2006. The lease requires monthly payments of approximately
            $6,042 per month for 36 months. The lease is with an affiliate of Tejas
            Incorporated. The Company believes that the lease is at fair market value
            for
            similar space in the Austin, TX commercial real estate market.
  In
            September 2006, the Company’s CEO purchased $250 thousand of subordinated
            convertible debt under the same terms and conditions as the others participating
            in the issuance (Note 10).
  In
            December 2006, Tejas Securities Group, Inc. exercised 535,000 warrants
            that were
            exercisable at $2.00 per share, in a cashless exercise netting the warrant
            holder 348,913 shares of common stock.
  **** **(8)** **Commitments
            and Contingencies**
  *Options
            Purchase Agreements*
  In
            order
            to ensure the future availability of land for development and homebuilding,
            the
            Company plans to enter into lot-option purchase agreements with unaffiliated
            third parties. Under the proposed option agreements, the Company pays
            a stated
            deposit in consideration for the right to purchase land at a future time,
            usually at predetermined prices or a percentage of proceeds as homes
            are sold.
            These options generally do not contain performance requirements from
            the Company
            nor obligate the Company to purchase the land. In order for the Company
            to start
            or continue the development process on optioned land, it may incur development
            costs on land it does not own, before it exercises its option agreement.
            At
            March 31, 2007 and December 31, 2006, the Company had capitalized
            development costs of $1.1 million and $2.5 million, respectively, all
            of which
            is non-refundable if the Company does not exercise the option and purchase
            the
            underlying land.
  In
            December 2006, the Company made a non-refundable payment of $15 thousand
            and
            entered into an option to purchase Green Builders, Inc. Under the purchase
            option agreement, the Company has a two year exclusive right to purchase
            Green
            Builders, Inc. at the fair market value on the date of the exercise of
            the
            option by the Company or, if the parties are unable to agree on the fair
            market
            value, at a price that will be based on an independent valuation of Green
            Builders, Inc. as of the date of exercise of the option by the
            Company.
  During
            the three months ended March 31, 2007 and the year ended December 31, 2006,
            Green Builders, Inc. was a homebuilding services customer of the company.
            There
            was no revenue from homebuilding related services during the three months
            ended
            March 31, 2007, and $1.8 million for the year ended December 31, 2006. The
            pro forma results of the acquisition of Green Builders, Inc. are not
            expected to
            be material as the financial results of Green Builders, Inc. are already
            consolidated under FIN 46(R) as the Company is deemed to be a primary
            beneficiary.
  *Non-Compete*
  Clark
            Wilson, the Company’s chief executive officer, served as the President and Chief
            Executive Officer of Clark Wilson Homes, Inc., a subsidiary of Capital
            Pacific
            Holdings, from 1992 to 2002. Pursuant to an agreement executed in connection
            with the sale of Clark Wilson Homes to J.M. Peters Company in 1994,
            Mr. Wilson agreed not to engage in the businesses of acquisition,
            ownership, development, construction or sale of dwelling units in certain
            portions of the United States in which the Company plan to do business,
            including the Central Texas region, as well as in any other county in
            the United
            States in which J.M. Peters Company conducts business.
  The
            stated term of the covenant not to compete is five years from the date
            his
            employment terminated, for certain enumerated counties in Texas, including
            the
            counties in and around Austin, Dallas, Houston and San Antonio, Texas,
            and for
            three years for certain other counties in the United States, beginning
            on the
            date Mr. Wilson’s employment with Capital Pacific terminated, which
            occurred in 2002. The covenant not to compete relates to the business
            of
            building homes and not the purchase and sale of real estate as contemplated
            by
            us. In the Company’s opinion, its current activities do not violate the terms of
            the covenant and it does not intend to engage in
   11
 WILSON HOLDINGS, INC. Notes
            to
            Consolidated Financial Statements
 For
            the
            Three Months Ended March 31, 2007 and as of December 31, 2006
  **(8)**  **Commitments
            and Contingencies (Continued)**
  *Options
            Purchase Agreements (continued)*
  homebuilding
            activities  until
            the
            covenant terminates in June of 2007. The Company’s consolidation of its
            homebuilding clients required under certain reporting requirements, specifically
            FIN 46(R) should not be construed as a legal merger of the entities.
            If J. M.
            Peters determines that these activities do violate the covenant, and
            if that
            determination results in a claim, the Company will likely incur material
            legal
            costs as a result.
  The
            Company is not aware of any material pending legal proceedings, or other
            litigation incidental to our business, which would have a material adverse
            affect, to which the Company or any of its subsidiaries is a party or
            of which
            any of their property is the subject.
  *Lease
            Obligations*
  In
            September 2006, the Company entered into an agreement to lease approximately
            5,000 square feet for its corporate offices, which it began occupying
            on
            October 1, 2006. The lease requires monthly payments of approximately
            $6,042 per month for 36 months. The Company also has other office equipment
            leases. The Company’s future minimum lease payments are as follows:
  2007
                  
                  2008
                  
                  2009
                  
                  2010
                  
                  2011
                  
                  ThereafterLease
                      obligations
                  
                  $
                  105,106
                  
                  
                  134,676
                  
                  
                  81,287
                  
                  
                  3,548
                  
                  
                  240
                  
                  
                  -
  *Severance
            Agreement*
  During
            2006, the Company entered into an employment agreement with Mr. Daniel
            Allen, Chief Financial Officer. The employment agreement provided for
            payment of
            severance benefits where the termination is without “cause”. The severance
            benefits included payment of one year of base salary; continue to provide
            health
            benefits for a period of twelve months, and acceleration of vesting of
            stock
            options issued to him. Mr. Allen involuntarily resigned from the Company
            effective November 9, 2006. Effective November 9, 2006 the Company has
            continued to pay for Mr. Allen’s salary and benefits. At March 31, 2007 and
            December 31, 2006, the Company had approximately $130 thousand and
            approximately $180 thousand, respectively, accrued for this
            contingency.
  *Employment
            Agreements with Executive Officers*
  On
            February 14, 2007, the Company entered into an employment agreement with
            Clark
            N. Wilson, its President and Chief Executive Officer. In the event of
            the
            involuntary termination of Mr. Wilson’s service with the Company, the
            agreement provides for monthly payments equal to Mr. Wilson’s monthly
            salary payments to continue for 12 months. The agreement contains a provision
            whereby Mr. Wilson is not permitted to be employed in any position in which
            his duties and responsibilities comprise residential land development
            and
            homebuilding in Texas or in areas within 200 miles of any city in which
            the
            Company is conducting land development or homebuilding operations at
            the time of
            such termination of employment for a period of one year from the termination
            of
            his employment, if such termination is voluntary or for cause, or involuntary
            and in connection with a corporate transaction.
  On
            February 14, 2007, the Company entered into an employment agreement with
            Arun
            Khurana, its Chief Financial Officer. The agreement contains a
            provision whereby Mr. Khurana is not permitted to be employed in any
            position in which his duties and responsibilities comprise residential
            land
            development and homebuilding in Texas or in areas within 200 miles of
            any city
            in which the Company is conducting land development or homebuilding operations
            at the time of such termination of employment for a period of one year
            from the
            termination of his employment, if such termination is voluntary or for
            cause, or
            involuntary and in connection with a corporate transaction. Mr. Khurana’s
            employment is not restricted as to the provision of financial and accounting
            services. In the event of the involuntary termination of Mr. Khurana’s
            service with the Company, the agreement provides for monthly payments
            equal to
            Mr. Khurana’s monthly salary payments to continue for twelve months, the
            continuation of his benefits (including health insurance) for twelve
            months, and
            the immediate vesting of Mr. Khurana’s options to purchase our common
            stock.
  12
 WILSON
            HOLDINGS, INC. Notes
              to
              Consolidated Financial Statements
 For
              the
              Three Months Ended March 31, 2007 and as of December 31, 2006
 **** **(9)**  **Indebtedness**
  The
            following schedule lists the Company’s notes payable and lines of credit
            balances at March 31, 2007 and December 31, 2006:
 In
                      Thousands
                  
                  Rate
                  Maturity
                      Date
                  
                  2007
                  2006Line
                      of Credit, $3 million, development
                  a
                  Prime+.50%
                  Mar-1-08
                  $
                  1,635
                  2,250Line
                      of Credit, $15.5 million, purchase and development
                  b
                  Prime+2.00%
                  Oct-1-08
                  
                  -
                  3,587Notes
                      payable, land
                  e
                  12.50%
                  Mar-1-09
                  
                  4,700
                  n/aNotes
                      payable, seller financed
                  d
                  7.0%
                  Oct.
                      2009/10
                  
                  2,474
                  2,474Line
                      of Credit, $5 million / $10 million, land and construction
                  e
                  Prime+.50%
                  Feb-6-08
                  
                  328
                  600Notes
                      payable, land
                  f
                  Prime+.75%
                  Jun-1-08
                  
                  -
                  6,200Notes
                      payable, land
                  g
                  12.50%
                  Mar-1-09
                  
                  7,300
                  n/aNotes
                      payable, development
                  h
                  Prime+.50%
                  Feb-1-10
                  
                  1,770
                  n/aNotes
                      payable, family trust
                  i
                  8.0%
                  Apr-1-08
                  
                  280
                  280Notes
                      payable, land, due
                  j
                  Prime+.75%
                  Dec-1-09
                  
                  -
                  792Notes
                      payable, land and development
                  k
                  Prime+3.00%
                  Feb-1-09
                  
                  562
                  n/a2005
                      $10 million, Subordinated convertible notes, net of discount
                      of $503
                      thousand and $4,288 thousand, respectively
                  
                  5.0%
                  Dec-1-12
                  
                  9,497
                  5,7122006
                      $6.75 million, Subordinated convertible notes, net of discount
                      of $3,136
                      and $4,066 thousand respectively
                  
                  5.0%
                  Sep-1-13
                  
                  3,614
                  2,684Total
                  
                  $
                  32,160
                  24,579
  (a)  In
            March
            2006, the Company secured a $3.0 million line of credit, development
            loan,
            maturing on March 30, 2008, at prime plus 0.50% with a minimum floor of
            7.00%, and interest payable monthly. The loan is secured by property
            being
            developed into single-family home lots, totaling approximately 32.6 acres
            located in Williamson County, Texas. Each of the lots will be released
            upon
            payment to the bank of either 125% of the loan basis or 90% of the net
            sales
            proceeds for each lot to be released. The Company must make cumulative
            principal
            reductions in the aggregate amount of approximately $494 thousand every
            three
            months in the calendar year beginning at the end of the first calendar
            month in
            which the completion date occurs, which was during July 2006. At March
            31, 2007,
            the Company had drawn approximately $3 million against the line of credit
            and
            repaid approximately $1.4 million with a balance owed of approximately
            $1.6
            million.
  (b)  During
            October 2006, the Company secured a $15.5 million line of credit for
            the
            purchase and development of approximately 534 acres located in eastern
            Travis
            County and subsequently closed on the purchase of the property. The first
            phase
            of the loan is $10.2 million and covers the purchase, a portion of the
            first two
            phases of construction, offsite utilities and provides letters of credit
            totaling $4.3 million, required for the development of municipal utility
            facilities, at the bank’s prime rate plus 0.50%, and is secured by the
            underlying property. Loan origination fees were 1% of the $10.2 million.
            The
            debt has financial covenants which (1) require the Company to keep a
            debt to
            equity ratio of 2:1, and (2) keep liquid assets in excess of $7 million,
            except
            for 2006 and first and second quarters of 2007 in which it is required
            to
            maintain $4 million in liquid assets, which includes $2.2 million of
            restricted
            cash, in the financial institution. During February 2007, the Company
            obtained a
            release from the bank whereby its restricted cash was released, except
            for $315
            thousand, and financial covenants for the third quarter of 2007 were
            modified
            requiring the Company to keep liquid assets of only $4 million. Interest
            is
            payable quarterly,
   13
 WILSON HOLDINGS, INC. Notes
            to
            Consolidated Financial Statements
 For
            the
            Three Months Ended March 31, 2007 and as of December 31, 2006
 **(9)**  **Indebtedness
            (Continued)**
  commencing
            January 2007. Principal is payable in quarterly installments commencing
            90 days
            after completion of construction which is projected to be during 2007.
            The
            required pay down amount under the loan is equal to 75% of gross sales
            price as
            set forth in the Company’s contracts for sales of lots. Its current projects
            require pay down amounts of approximately $600 thousand per quarter.
            The
            purchase price of the property was approximately $8.5 million, with $2.5
            million
            of owner financing, $3.6 million from the bank loan and cash from us
            of
            approximately $2.4 million. The Company has invested an additional amount
            for
            development of the property of approximately $1.9 million. This note
            was
            refinanced and paid off in March 2007 (c). Also, as part of the purchase
            of 534
            acres in Travis County, the Company entered into four notes payable,
            seller
            financed due 2009 and 2010, with a cumulative balance of approximately
            $2.5
            million.
  (c)  In
            March
            2007, the company replaced the $15.5 million line of credit (b) with
            a $4.7
            million term loan maturing March 2009. The interest rate on the loan
            is 12.5%,
            with interest payable monthly. The loan has no financial covenants and
            is
            secured by the underlying property described above.
  (d)  As
            part
            of the purchase of 534 acres in Travis County described above, the Company
            entered into four notes payable, seller financed, due 2009 and 2010,
            with a
            cumulative balance of approximately $2.5 million. The notes payable have
            a
            maturity date of October 12, 2010. Three of the notes payable with a
            cumulative balance of $1.9 million are at an interest rate of 7.0% and
            the
            fourth note payable issued for approximately $600 thousand is at an interest
            rate of the Wall Street Journal’s prime rate plus 2.0%. The terms of the notes
            payable call for annual principal repayments of $1.1 million in 2007,
            $0.3
            million in 2008, $500 thousand in 2009 and $500 thousand in 2010, payable
            on
            October 12. The notes can be prepaid at anytime without penalty and are
            secured by the real estate purchased.
  (e)  The
            Company had a $5 million master construction line of credit that matured
            on
            January 11, 2007, used by one of its homebuilding clients. Under the
            agreement, the Company, as Guarantor, is subject to certain covenants.
            Among
            others, the Company must maintain a minimum tangible net worth of $2.5
            million,
            its debt to equity ratio shall not exceed 7.5 to 1 as of the end of any
            calendar
            quarter, and Mr. Clark Wilson must remain active in the day to day business
            management affairs of the Company. At March 31, 2007 and December 31, 2006,
            there was approximately $600 thousand and $328 thousand, respectively,
            drawn
            against the line and the Company was in compliance with the above loan
            covenants. During February 2007, the line of credit was replaced by a
            $10
            million line of credit for land and home construction under the same
            terms with
            a maturity date of February 6, 2008.
  (f)  In
            June
            2005, the Company issued notes payable of approximately $6.9 million
            with a
            maturity date of June 30, 2006 at an escalating interest rate for
            approximately 74% of 736 acres of land. These notes had a total balance
            of
            approximately $6.7 million at December 31, 2005. The Company reduced the
            principal balance through sales of acreage tracts to approximately $6.2
            million
            and during June 2006, it refinanced the notes payable, land, with a new
            lender.
            The terms of the new loan include a $6.2 million principal balance, an
            interest
            rate indexed to the New York prime rate plus 0.75% per annum with a floor
            of
            7.0%, a term not to exceed 24 months or June 2008, and required principal
            reductions of $800 thousand per quarter beginning June 12, 2007. Principal
            reductions from sales of the real estate are credited towards the $800
            thousand
            per quarter requirement. This
            loan was refinanced in February 2007.
  (g)  On
            February 13, 2007 the Company refinanced its land obligation on a land loan
            of approximately $6.2 million and obtained a new loan of approximately
            $7.2
            million to finance approximately 538 acres. The interest rate is 12.5%
            annually
            and requires monthly interest payments, with a maturity of two years
            and is
            renewable for an additional year for a 1% loan fee. The loan is secured
            by the
            underlying land.
  (h)  On
            February 9, 2007, the Company obtained a development loan of approximately
            $4.6
            million. The loan matures on February 1, 2010 and requires quarterly
            interest
            payments and principal pay downs as lots are sold. The loan is secured
            by the
            property being developed at an interest rate of prime plus 0.50%.
  (i)  In
            October 2003, a predecessor entity of the Company exchanged notes payable
            of
            approximately $280 thousand and approximately $95 thousand in cash for
            approximately 15 acres of land in Travis County, Texas. Interest on the
            note was
            8% per annum, payable quarterly with a maturity date of October 7, 2008. In
            March of 2005, the note was purchased by trusts belonging to some members
            of
            Clark Wilson’s family. The interest rate remained the same at 8% per annum but
            the maturity date changed to April 4, 2006. In March 2006, the Company
            renegotiated an extension on the notes payable, family trust, 8%, due
            April
            2008. All other terms remained the same.
  14
 WILSON
            HOLDINGS, INC. Notes
              to
              Consolidated Financial Statements
 For
              the
              Three Months Ended March 31, 2007 and as of December 31, 2006
 **(9)**  **Indebtedness
            (Continued)**
  (j)  In
            December of 2006, the Company paid cash and issued notes payable, land, due
            2009, a long-term note payable of $792 thousand with a maturity date
            of
            December 21, 2007 at an interest rate of the bank’s prime rate plus 0.5%
            (currently 8.75%) for the purchase of approximately 30 acres of land.
            The terms
            of the note payable called for interest only payable quarterly, and the
            balance
            of the principal and accrued interest due and payable upon maturity.
            It is
            secured by the real estate purchased. This note was replaced in February
            2007.
  (k)  This
            property was refinanced in February 2007 with a land purchase and development
            loan of approximately $3.1 million. The loan matures in February 2009,
            with two
            six-month extensions, at an interest rate of prime plus 3.00%, with interest
            payable monthly.
  In
            September 2005, the Company secured a $2 million one-year line of credit
            master
            construction loan that provides for draws and repayments for construction
            and
            lots. Interest is payable monthly and each draw must be repaid within
            one year.
            At December 31, the interest rate on borrowings was 7.25% per annum. Loans
            made on specific lots and construction is collateralized by such property
            and
            construction with interest due monthly. Mr. Wilson personally guaranteed
            the Loan. The Company had drawn approximately $254 thousand against the
            loan at
            December 31, 2005 which was the balance owed. During May 2006, the lending
            institution released Mr. Wilson’s personal guarantee and extended the
            maturity date to April 2007. As of March 31, 2007 the balance owed on the
            line is zero and the Company does not intend to replace the line at this
            time.
  *Subordinated
            Convertible Debt*
  The
            Company accounts for all derivative financial instruments in accordance
            with
            SFAS No. 133. Prior to 2007, derivative financial instruments were recorded
            as
            liabilities in the consolidated balance sheet and measured at fair value.
            The
            Company accounted for the various embedded derivative features as bundled
            together as a single, compound embedded derivative instrument that was
            bifurcated from the debt host contract, referred to as the “single compound
            embedded derivatives.” The single compound embedded derivative features include
            the conversion feature within the convertible note, the early redemption
            option
            and the fixed price conversion adjustment. The initial value of the single
            compound embedded derivative liability was bifurcated from the debt host
            contract and recorded as a derivative liability, which resulted in a
            reduction
            of the initial carrying amount (as unamortized discount) of the convertible
            notes. The unamortized discount was amortized using the straight-line
            method
            over the life of the convertible note, or 7 years. The penalty warrants
            were
            valued based on the fair value of the Company’s common stock on the issuance
            date using a Black-Scholes valuation model and the unamortized discount
            was to
            be amortized as interest expense over the 7-year life of the notes using
            the
            straight-line method.
  In
            January 2007, the Company adopted “FSP EITF 00-19-2” as discussed in Note 2.
  Prior
            to
            adoption of FSP EITF 00-19-2, the uncertainty of a successful registration
            of
            the shares underlying the subordinated convertible debt, required that
            the
            freestanding and embedded derivatives be characterized as derivative
            liabilities. FSP EITF 00-19-2 specifically addressed the accounting for
            a
            registration rights agreement and the requirement to classify derivative
            instruments subject to registration rights agreements as liabilities
            was
            withdrawn. The Company re-evaluated it’s accounting for the subordinated debt
            transaction and determined that the liability for the penalty warrants
            be
            included in the allocation of the proceeds to the various components
            of the
            transaction according to paragraph 16 of APB Opinion No. 14, *Accounting
            for Convertible Debt and Debt issued with Stock Purchase Warrants.* The
            Company also determined the notes contained a beneficial conversion feature
            under Issues 98-5 and 00-27, and used the effective conversion price
            based on
            the proceeds allocated to the convertible instrument to compute the intrinsic
            value of the embedded conversion option. The Company recalculated the
            discount
            on the convertible debt at its intrinsic value and re-characterized the
            freestanding and embedded derivatives as equity. The previous valuation
            adjustments of the derivative liabilities were reversed and the amortization
            of
            the discounts were adjusted based upon the recalculation. Per FSP EITF
            00-19-2,
            the Company was permitted to adjust the previous amounts as a cumulative
            accounting adjustment.
  The
            net
            effect of the change increased the net carrying amount of the subordinated
            convertible debt, eliminated the derivative liabilities, There was also
            an
            increase of $4.8 million in total stockholders’ equity. During the year ended
            December 31, 2006, the Company recognized approximately $8.5 million
            of loss on
            fair value of derivatives related to the subordinated convertible debt.
            Under
            the new FSP EITF 00-19-2 the derivatives were eliminated and hence there
            will no
            longer be gains and losses related to the current subordinated convertible
            debt.
  
 15
 WILSON
            HOLDINGS, INC. Notes
              to
              Consolidated Financial Statements
 For
              the
              Three Months Ended March 31, 2007 and as of December 31, 2006
 **(9)**  **Indebtedness
            (Continued)**
  *2005,
            $10 Million, 5%, Subordinated Convertible Debt.*
  On
            December 19, 2005, the Company issued $10 million in aggregate principal
            amount of 5% subordinated convertible debt due December 1, 2012 to certain
            purchasers. The following are the key features of the subordinated convertible
            debt: Interest accrues on the principal amount of the subordinated convertible
            debt at a rate of 5% per annum, the debt is payable semi-annually on
            May 1
            and December 1 of each year, with interest payments beginning on
            June 1, 2006. The subordinated convertible debt is due on December 1,
            2012 and is convertible, at the option of the holder, into shares of
            our common
            stock at a conversion price of $2.00 per share. The conversion price
            is subject
            to adjustment for stock splits, reverse stock splits, recapitalizations
            and
            similar corporate actions. An adjustment in the conversion price is also
            triggered upon the issuance of certain equity or equity-linked securities
            with a
            conversion price, exercise price, or share price less than $2.00 per
            share. The
            anti-dilution provisions state the conversion price cannot be lower than
            $1.00
            per share.
  The
            Company may redeem all or a portion of the subordinated convertible debt
            after
            December 1, 2008 at a redemption price that incorporates a premium that
            ranges from 3% to 10% during the period beginning December 1, 2008 and
            ending on the due date. In addition, the redemption price will include
            any
            accrued but unpaid interest on the subordinated convertible debt. Upon
            a change
            in control event, each holder of the subordinated convertible debt may
            require
            us to repurchase some or all of its subordinated convertible debt at
            a purchase
            price equal to 100% of the principal amount of the subordinated convertible
            debt
            plus accrued and unpaid interest. The due date may accelerate in the
            event the
            Company commences any case relating to bankruptcy or insolvency, or related
            events of default. The Company’s assets will be available to pay obligations on
            the subordinated convertible debt only after all senior indebtedness
            has been
            paid.
  The
            subordinated convertible debt has a registration rights agreement whereby
            the
            Company must use its best efforts to have its associated registration
            statement
            effective not later than 120 days after the closing (December 19, 2005).
            Further, the Company must maintain the registration statement in an effective
            status until the earlier to occur of (i) the date after which all the
            registrable shares registered thereunder shall have been sold and (ii)
            the
            second anniversary of the later to occur of (a) the closing date, and
            (b) the
            date on which each warrant has been exercised in full and after which
            by the
            terms of such Warrant there are no additional warrant shares as to which
            the
            warrant may become exercisable; provided that in either case, such date
            shall be
            extended by the amount of time of any suspension period. Thereafter the
            Company
            shall be entitled to withdraw the registration statement, and upon such
            withdrawal and notice to the investors, the investors shall have no further
            right to offer or sell any of the registrable shares pursuant to the
            registration statement. The registration statement filed pursuant to
            the
            registration rights agreement was declared effective by the SEC on
            August 1, 2006.
  The
            Company also issued warrants to purchase an aggregate of 750,000 shares
            of
            common stock to the purchasers of the subordinated convertible debt,
            562,500
            shares of which were vested on June 30, 2006. The warrants were exercisable
            only upon the occurrence of certain events and then only in the amount
            specified
            as follows: (i) with respect to 25% of the warrant shares, on February 3,
            2006 if the registration statement shall not have been filed with the
            SEC by
            such date (the Company filed a Form SB-2 registration statement on
            February 2, 2006); (ii) with respect to an additional 25% of the warrant
            shares, on April 19, 2006 if the registration statement shall not have been
            declared effective by the SEC by such date; (iii) with respect to an
            additional
            25% of the warrant shares, on May 19, 2006 if the registration statement
            shall not have been declared effective by the SEC by such date; and (iv)
            with
            respect to the final 25% of the warrant shares, on June 18, 2006 if the
            registration statement shall not have been declared effective by the
            SEC by such
            date. Management has recorded the fair value of these warrants due to
            the
            uncertainty surrounding the timeline of getting the registration statement
            effected and the high probability that these warrants would be issued.
            The
            Company received notice that the shelf registration relating to these
            warrants
            was declared effective on August 1, 2006 and 562,500 of these warrants have
            vested and the remaining 187,500 warrants will never vest.
  The
            penalty warrants were valued were based on the fair value of the Company’s
            common stock on the issuance date of $1.60, using a Black-Scholes approach,
            risk
            free interest rate of 4.25%; dividend yield of 0%; weighted-average expected
            life of the warrants of 10 years; and a 60% volatility factor, resulting
            in an
            allocated value of approximately $613 thousand. The penalty warrants
            are
            recorded as part of the debt discount and an increase in additional paid
            in
            capital, and amortized over the 7-year life of the notes using the straight-line
            rate method.
   16
 WILSON HOLDINGS, INC. Notes
            to
            Consolidated Financial Statements
 For
            the
            Three Months Ended March 31, 2007 and as of December 31, 2006
 **(9)**  **Indebtedness
            (Continued)**
  *2005,
            $10 Millon, 5%, Subordinated Convertible Debt (continued)*
  The
            Company also incurred closing costs of $588 thousand which included placement
            agent fees of $450 thousand, plus, reimbursement of expenses to the placement
            agent of $125 thousand, plus 750,000 fully vested warrants to purchase
            the
            Company’s common stock at $2.00 per share with a 10 year exercise period, valued
            at $829 thousand, for a total of $1.4 million, recorded as debt issuance
            costs,
            to be amortized over the 7-year life of the notes using the straight
            line
            method. These warrants were valued based on the fair value of the Company’s
            common stock of $1.60, using a Black-Scholes valuation model, at a $2.00
            exercise price, risk free interest rate of 4.25%; dividend yield of 0%;
            weighted-average expected life of warrants of 10 years; and a 60% volatility
            factor.
  *Subordinated
            Convertible Note at March 31, 2007 and at December 31, 2006*
 2007
                  
                  2006Notional
                      balance
                  
                  $
                  10,000,000
                  
                  
                  10,000,000Unamortized
                      discount
                  
                  
                  (503,152
                  )
                  
                  (4,287,857
                  )Subordinated
                      convertible debt balance, net of unamortized discount
                  
                  $
                  9,496,848
                  
                  
                  5,712,143
 
 *2006,
            $6.75 Milllion, 5%, Subordinated Convertible Debt*
  On
            September 29, 2006, the Company raised capital of $6.75 million in
            aggregate principal amount of 5% subordinated convertible debt due
            September 1, 2013, to certain purchasers. As of December 31, 2006,
            $6.75 million had been received in cash, the remaining $250 thousand
            is a
            receivable from an owner of land that the Company has under option to
            purchase.
            The Company has delayed the closing of the parcel and does not expect
            to receive
            the additional $250 thousand. The following are the key features of the
            subordinated convertible debt: Interest accrues on the principal amount
            of the
            subordinated convertible debt at a rate of 5% per annum, the interest
            is payable
            semi-annually on February 1 and September 1 of each year, with
            interest payments beginning on February 1, 2006. The subordinated
            convertible debt is due on September 1, 2013 and is convertible, at the
            option of the holder, into shares of common stock at a conversion price
            of $2.00
            per share. The conversion price is subject to adjustment for stock splits,
            reverse stock splits, recapitalizations and similar corporate actions.
            An
            adjustment in the conversion price is also triggered upon the issuance
            of
            certain equity or equity-linked securities with a conversion price, exercise
            price, or share price less than $2.00 per share. The anti-dilution provisions
            state the conversion price cannot be lower than $1.00 per share.
  The
            Company may redeem all or a portion of the subordinated convertible debt
            after
            September 1, 2009 at a redemption price that incorporates a premium that
            ranges from 3% to 10% during the period beginning September 1, 2009 and
            ending on the due date. In addition, the redemption price will include
            any
            accrued but unpaid interest on the subordinated convertible debt. Upon
            a change
            in control event, each holder of the subordinated convertible debt may
            require
            us to repurchase some or all of its subordinated convertible debt at
            a purchase
            price equal to 100% of the principal amount of the subordinated convertible
            debt
            plus accrued and unpaid interest. The due date may accelerate in the
            event the
            Company commences any case relating to bankruptcy or insolvency, or related
            events of default. The Company’s assets will be available to pay obligations on
            the subordinated convertible debt only after all senior indebtedness
            has been
            paid.
  The
            subordinated convertible debt has a registration rights agreements (RRA),
            whereby the Company must use its best efforts to have its associated
            registration statement effective not later than 120 days after the closing
            (i.e., January 27, 2007). Further, the Company must maintain the
            registration statement in an effective status until the earlier to occur
            of (i)
            the date after which all the registrable shares registered thereunder
            shall have
            been sold and (ii) the second anniversary of the later to occur of (a)
            the
            closing date, and (b) the date on which each warrant has been exercised
            in full
            and after which by the terms of such warrant there are no additional
            warrant
            shares as to which the warrant may become exercisable; provided that
            in either
            case, such date shall be extended by the amount of time of any suspension
            period. Thereafter the Company shall be entitled to withdraw the registration
            statement, and upon such withdrawal and notice to the investors, the
            investors
            shall have no further right to offer or sell any of the registrable shares
            pursuant to the registration statement.
  17
 WILSON HOLDINGS, INC. Notes
            to
            Consolidated Financial Statements
 For
            the
            Three Months Ended March 31, 2007 and as of December 31, 2006
 **(9)**  **Indebtedness
            (Continued)**
  *2006,
            $6.75 Million, 5%, Subordinated Convertible Debt (continued)*
  The
            Company also issued warrants to purchase an aggregate of 506,250 shares
            of
            common stock to the purchasers of the subordinated convertible debt.
            The
            warrants are exercisable only upon the occurrence of certain events and
            then
            only in the amount specified as follows: (i) with respect to 25% of the
            warrant
            shares, on November 13, 2006 if the registration statement shall not have
            been filed with the SEC by such date (the Company filed a Form SB-2 registration
            statement on October 16, 2006); (ii) with respect to an additional 25% of
            the warrant shares, on January 27, 2007 if the registration statement shall
            not have been declared effective by the SEC by such date; (iii) with
            respect to
            an additional 25% of the warrant shares, on February 26, 2007 if the
            registration statement shall not have been declared effective by the
            SEC by such
            date; and (iv) with respect to the final 25% of the warrant shares, on
            March 28, 2007 if the registration statement shall not have been declared
            effective by the SEC by such date. Management has recorded 75% of the
            fair value
            of these warrants since it has filed the initial registration in (i)
            above so
            the first 25% of the warrants don’t vest, and due to the uncertainty surrounding
            the timeline of getting the registration statement effected and the high
            probability that the remaining warrants would be issued.
  The
            Company also incurred closing costs of $140 thousand, including placement
            agent
            fees of approximately $70 thousand, plus, reimbursement of expenses to
            the
            placement agent of $25 thousand, for a total of $95 thousand to the placement
            agent, recorded as debt issuance costs, to be amortized over the 7-year
            life of
            the notes using the straight-line rate method.
  The
            issuance of the debt resulted in an embedded beneficial conversion feature
            valued at approximately $2.5 million, which will be recorded as part
            of the debt
            discount and an increase in additional paid in capital, and amortized
            over the
            7-year life of the notes using the straight-line rate method.
  The
            penalty warrants were valued were based on the fair value of the Company’s
            common stock on the issuance date of $1.91, using a Black-Scholes approach,
            risk
            free interest rate of 4.64%; dividend yield of 0%; weighted-average expected
            life of the warrants of 10 years; and a 60% volatility factor. The
            allocated value of the penalty warrants totaled approximately $846 thousand
            and
            are recorded as part of the debt discount and an increase in additional
            paid in
            capital, and amortized over the 7-year life of the notes using the straight-line
            rate method.
  *Convertible
            Note at March 31, 2007 and December 31, 2006:*
  2007
                  
                  2006Notional
                      balance
                  
                  $
                  6,750,000
                  
                  
                  6,750,000Unamortized
                      discount
                  
                  
                  (3,135,814
                  )
                  
                  (4,066,267
                  )Subordinated
                      convertible debt balance, net of unamortized discount
                  
                  $
                  3,614,186
                  
                  
                  2,683,733
  **(10)** **Common
            Stock**
  The
            Company is authorized to issue 100,000,000 shares of common stock. Each
            common
            stockholder is entitled to one vote per share of common stock owned.
  **(11)** **Common
            Stock Option / Stock Incentive Plan**
  In
            August
            2005, the Company adopted the “Wilson Family Communities, Inc. 2005 Stock
            Option/Stock Issuance Plan”, the “Stock Option Plan.” The plan contains two
            separate equity programs: 1) the Option Grant Program for eligible persons
            at
            the discretion of the plan administrator, be granted options to purchase
            shares
            of common stock and 2) the Stock Issuance Program under which eligible
            persons
            may, at the discretion of the plan administrator, be issued shares of
            common
            stock directly, either through the immediate purchase of such shares
            or as a
            bonus for services rendered to the Company or any parent or subsidiary.
            The
            market value of the shares underlying option issuance prior to the Merger
            was
            determined by the Board of Directors as of the grant date. This plan
            was assumed
            by Wilson Holdings, Inc. at the time of the merger of the Company and
            WFC. The
            fair value of the options granted under the plan was determined by the
            Board of
            Directors (“Board”) prior to the merger of the Company and WFC.
  The
            Board
            is the plan administrator and has full authority (subject to provisions
            of the
            plan) and it may delegate a committee to carry out the functions of the
            administrator. Persons eligible to participate in the plan are employees,
            non-employee members of the Board or members of the board of directors
            of any
            parent or subsidiary.
  18
 WILSON
            HOLDINGS, INC. Notes
              to
              Consolidated Financial Statements
 For
              the
              Three Months Ended March 31, 2007 and as of December 31,
              2006
 **(11)** **Common
            Stock Option / Stock Incentive Plan (Continued)**
  The
            stock
            issued under the Stock Option Plan shall not exceed 2,500,000 shares.
            Unless
            terminated at an earlier date by action of the Board of Directors, the
            Plan
            terminates upon the earlier of (1) the expiration of the ten year period
            measured from the date the Plan is adopted by the Board or (2) the date
            on which
            all shares available for issuance under the Plan shall have been issued
            as
            fully-vested shares.
  The
            Company had 1,765,000 shares of common stock available for future grants
            under
            the Plan at March 31, 2007. Compensation expense related to the Company’s
            share-based awards for the three months ended March 31, 2007 and 2006 was
            approximately $82 thousand and $40 thousand, respectively.
  Before
            January 1, 2006, options granted to non-employees were recorded at fair
            value in accordance with SFAS No. 123 and EITF 96-18. These options are
            issued
            pursuant to the Plan and are reflected in the disclosures below
  During
            the three months ended March 31, 2007, the Company issued no options.
            During the three months ended March 31, 2006, the company issued options
            to
            purchase 210,000 shares of common stock at an exercise price of $2.00
            per share.
            Using the Black-Scholes pricing model with the following weighted-average
            assumptions: risk free interest rate of 4.25%; dividend yields of 0%;
            weighted
            average expected live of options of 5 years; and a 60% volatility factor,
            management estimated the fair market value of the grants to be $1.20
            per share.
            Management estimated the volatility factor based on an average of comparable
            companies.
  A
            summary
            of activity in common stock options for the years ended December 31, 2006
            and the three months ended March 31, 2007 are as follows:
  Shares
                  Range
                      of Exercise Prices
                  Weighted-Average
                      Exercise PriceOptions
                      outstanding, December 31, 2005
                  780,000
                  $2.00
                  $2.00Options
                      granted
                  555,000
                  $2.00
                      - $2.26
                  $2.16Options
                      exercised
                  -
                  -
                  -Options
                      forfeited
                  (410,000)
                  $2.00
                      - $2.26
                  $2.03Options
                      outstanding, December 31, 2006
                  925,000
                  $2.00
                      - $2.26
                  $2.17Options
                      granted
                  -Options
                      exercised
                  -Options
                      forfeited
                  (190,000)
                  $2.00
                      - $2.26
                  $2.07Options
                      outstanding, March 31, 2007
                  735,000
                  $2.00
                      - $2.26
                  $2.17Add:
                      Available for issuance
                  1,765,000Total
                      available under plan
                  2,500,000
  The
            following is a summary of options outstanding and exercisable at March
            31,
            2007:
  Outstanding
                  Vested
                      and OutstandingNumber
                      of Shares Subject to Options Outstanding
                  Weighted
                      Average Remaining Contractual Life (in years)
                  WeightedAverage
                      Exercise Price
                  Number
                      of Vested Shares
                  Weighted
                      Average Remaining Contractual Life (in years)
                  Weighted
                      Average Exercise Price735,000
                  8.7
                  $2.07
                  317,500
                  7.7
                  $2.04
 
 At
            March
            31, 2007, there was approximately $500 thousand of unrecognized compensation
            expense related to unvested share-based awards granted under the Company’s stock
            option plan. That expense is expected to be recognized over a weighted-average
            period of 3.1 years. In
            February 2007, the Company’s Board approved a 819,522 share increase in the
            number of shares issuable pursuant to its option plan for a total of
            2,500,000
            shares issuable under the plan. This increase will be effective when
            approved by
            the Company’s shareholders.
  In
            March
            2007 the Compensation Committee approved the grant of 600,000 options
            to members
            of management pursuant to its option plan. The option grants are contingent
            upon
            the closing of our proposed public offering of shares of common stock
            and will
            be effective on the closing date thereof. The option exercise price will
            be
            based on the public offering price and will generally vest over four
            years.
  **(12)** **Subsequent
            Events**
  The
            Company has filed a Registration Statement on Form S-1 for the public
            offering
            of 5,000,000 shares of its common stock for $3.25 per share. The Registration
            statement has not yet been declared effective by the Securities and Exchange
            Commission and there is no guarantee that the Company will consummate
            the
            transaction.
 19
 **I** **tem****2.****Management’s
            Discussion and Analysis or Plan of Operations**
 
 *The
            information presented in this section should be read in conjunction with
            our
            audited financial statements and related notes for the periods ended
            December
            31, 2006 and 2005 included in our Form 10-KSB, as well as the information
            contained in the financial statements, including the notes thereto, appearing
            elsewhere in this report. This discussion contains forward-looking statements
            reflecting our current expectations that involve risks and uncertainties.
            Actual
            results and the timing of events may differ materially from those contained
            in
            these forward-looking statements due to a number of factors, including
            those
            discussed in the section entitled “Risk Factors” and in our Registration
            Statement on Form S-1 (File No. 333-140747).*
  **Overview**
  Our
            business plan focuses on the acquisition of undeveloped land that is
            strategically located based on our understanding of population growth
            patterns
            and infrastructure development. This portion of our business focus has
            required,
            and is expected to continue to require, the majority of our financial
            resources.
            In tandem with our land acquisition efforts, and based upon our strategic
            market
            analysis, we also plan to prepare land for homebuilding and to sell developed
            land. We believe that as the central Texas economy expands, our strategic
            land
            purchases, land development activities and partnering model with local
            builders
            will enable us to capitalize on the new growth centers we expect will
            be
            created.
  To
            both
            increase and accelerate lot sales, we also intend to deliver residential
            lots
            and financial support to local homebuilders who have strong technical
            skills but
            who may lack the personnel and financial resources to compete effectively
            against national homebuilding companies. Under these arrangements, we
            derive
            revenue from the sale of real estate and residential lots, as well as
            from
            services provided to clients. The payments that we receive are typically
            determined by the gross selling price of the builders’ finished homes as well as
            the specific services we provide to individual homebuilders. We currently
            have
            signed agreements to provide these services to two homebuilder clients,
            although
            we have informed one homebuilder client that we would like to phase out
            the
            program with it in 2007. We do not expect to generate significant revenues
            from
            these services. We exercise significant influence over, but hold no controlling
            interest in, homebuilder clients, but we may retain the majority of the
            risk of
            loss. At March 31, 2007 and December 31, 2006, we determined that we
            were the
            primary beneficiary in certain homebuilder agreements, as defined under
            FASB
            Interpretation No. 46(R), or FIN 46(R), entitled “Consolidation of Variable
            Interest Entities”, where we have a significant, but less than controlling,
            interest in our clients. In accordance with FIN 46(R), the results of
            these
            clients have been consolidated into our financial statements.
  We
            are
            currently not engaged in homebuilding. We expect to commence homebuilding
            in
            June 2007. We will build homes on some of our land which is currently
            under
            development. Our home designs will be selected and prepared for each
            of our
            markets based on local community tastes and preferences of homebuyers.
            Substantially all of our construction work will be performed by subcontractors.
            Subcontractors will be retained for specific subdivisions pursuant to
            contracts
            which we plan to enter into during 2007. We plan to enter into homebuilding
            under the name “Green Builders, Inc.” We currently have an option to purchase
            the local homebuilding company Green Builders, Inc. Under the terms of
            the
            option, we have an exclusive right to purchase Green Builders for a period
            of
            two years at a fair market price on the date of purchase. We paid $15
            thousand
            to Green Builders, Inc. to enter into the option. Green Builders is a
            local
            homebuilding company which built four homes in central Texas in 2006.
            Our
            strategy on homebuilding is to build homes which are environmental responsive,
            resource efficient and culturally sensitive.
  We
            merged
            with Wilson Family Communities, Inc., or WFC, in October 2005. WFC was
            formed
            early in 2005 with the intention of focusing on acquiring and developing
            residential land in the central Texas region. In May 2005, WFC merged
            with a
            limited partnership that had engaged in various land acquisition and
            development
            services.
  **Results
            of Operations**
  ***Homebuilding
            and Related Services Revenues***
  Homebuilding
            and related services consists of home sales and homebuilder services.
            All of the
            home sales are generated by our clients utilizing our homebuilder services.
            We
            consolidate these clients into our operating results based on accounting
            requirements according to FIN 46(R) and refer to these clients as Variable
            Interest Entities, or VIEs.
  20
 During
            the three months ended March 31, 2007, home sales accounted for approximately
            45% of our total revenues for the period at a gross profit margin of
            approximately 20%, as compared to approximately 40% of total revenues
            and a
            gross profit margin of approximately 20% in the three months ended March
            31,
            2006. All of the homebuilding revenues were generated by our two VIEs
            and
            consolidated into our operating results. Revenues from one homebuilder
            client
            ( *i.e.* ,
            VIE)
            was approximately $798 thousand in the three months ended March 31, 2007.
            We
            have purchased an exclusive two year option to buy the client that generated
            no
            revenues in the quarter ended March 31, 2007. Our other client which
            generated
            approximately $798 thousand of revenues for the three months ended March
            31,
            2007 has three unsold homes that it expects to complete and sell during
            the
            first half of 2007. We have notified this client that we would like to
            terminate
            our relationship once the existing inventory of homes is completed. The
            client
            has a note payable to us in the principal amount of approximately $204
            thousand.
            We may not be able to recover the full amount of this note, which may
            force us
            to pursue collection activities and a write off for the entire amount.
            In
            addition to the note payable, we may need to provide funds to complete
            the
            construction and sale of the homes the client currently has under construction
            and for sale. We have accrued approximately $50 thousand for this contingency.
            The loss of this client will cause revenues from homebuilding to be
            substantially lower, possibly dropping to zero, for the second and third
            quarters of 2007.
  We
            plan
            to commence our own homebuilding activities beginning in June 2007.
  **Land
            Sales**
  Land
            sales accounted for approximately 55% of our total revenues for the three
            months
            ended March 31, 2007, totaling approximately $970 thousand for the period
            at a
            gross profit margin of approximately 13%, as compared to 60% of our total
            revenues for the three months ended March 31, 2006 and a gross profit
            margin of
            approximately 36% in that period.
  We
            have
            been developing and acquiring land for sale to homebuilders and expect
            to see a
            material increase in our land sales as we offer more land for sale to
            national
            and regional homebuilders as well as to local homebuilders. Developing
            finished
            lots from land takes approximately one to three years. We plan to sell
            the
            majority of our lots to national, regional and local homebuilders that
            may
            purchase anywhere from five to 100 or more lots at a time. We expect
            lot sales
            to vary significantly from quarter to quarter causing significant fluctuations
            in our revenues and gross profit.
  **Costs
            and Expenses**
  ***General
            and Administrative Expenses***
  General
            and administrative expenses are composed primarily of salaries of general
            and
            administrative personnel and related employee benefits and taxes, accounting
            and
            legal, and general office expenses and insurance. During the three months
            ended
            March 31, 2007, salaries, benefits, taxes and related employee expenses
            totaled
            approximately $365 thousand and represented approximately 37% of total
            general
            and administrative expenses for the period, as compared to approximately
            $435
            thousand, which represented approximately 44% of total general and
            administrative expenses for the three months ended March 31, 2006. Legal,
            accounting, and audit expense, which includes the expense of filing our
            registration statements and other SEC filings, totaled approximately
            $159
            thousand and $182 thousand in the three months ended March 31, 2007 and
            2006,
            respectively. Depreciation expense included in general and administrative
            expenses was approximately $57 thousand and $46 thousand for the three
            months
            ended March 31, 2007 and 2006, respectively. General and administrative
            expenses
            included from the consolidation of our VIEs were less than 5% of the
            total
            general and administrative expenses for the three months ended March
            31, 2007.
            We expect total general and administrative expenses to increase significantly
            over the next year as we enter the homebuilding business.
  ***Sales
            and Marketing Expenses***
  Sales
            and
            marketing expenses include salaries and related taxes and benefits, marketing
            activities including website, brochures, catalogs, signage, and billboards,
            and
            market research. Sales and marketing salaries, benefits, taxes and related
            employee expenses for the three months ended March 31, 2007 and 2006
            were
            approximately $23 thousand and $59 thousand, respectively, and represented
            approximately 32% and 46% of our total marketing costs for the respective
            periods. The remaining expenses for the three months ended March 31,
            2007 and
            2006 were for other incidental items and services. We expect sales and
            marketing
            expenses to increase substantially as we enter the homebuilding
            business.
  21
 ***Interest
            Expense and Income***
  Interest
            expense for the three months ended March 31, 2007 and 2006 were approximately
            $619 thousand and $514 thousand, respectively, and was related to debt
            on
            properties purchased, convertible debt interest costs and amortization
            of the
            convertible debt discounts. Included in the interest expense was amortization
            of
            subordinated convertible debt of approximately $142 thousand and $179
            thousand,
            respectively. To the extent we purchase additional land that we hold
            for future
            development, our interest expenses will increase.
  Interest
            income of approximately $48 thousand and $97 thousand for the three months
            ended
            March 31, 2007 and 2006, respectively, consisted of interest earned on
            our cash
            and cash equivalents and immaterial amounts of other income.
  **Financial
            Condition and Capital Resources**
  ***Liquidity***
  At
            March
            31, 2007 we had approximately $4.4 million in cash and cash equivalents.
            We plan
            on investing approximately $23 million for the purchase of land, installment
            payments, options fees and development costs over the next year. This
            includes
            the development of land including the installation of water and wastewater
            infrastructure, streets and common areas. We intend to and expect to
            purchase or
            obtain options to purchase additional acreage for development and additional
            finished lots for sale. We are actively seeking additional debt financing
            and
            expect to finance approximately $16 million of the $23 million. We intend
            to
            repay the loans through a combination of cash generated from lot and
            land sales.
  We
            plan
            to exercise a land option on the Bohl’s tract of approximately $7.2 million by
            May 2007. Additionally we plan to enter the homebuilding business effective
            July
            19, 2007.
  Our
            growth will require substantial amounts of cash for earnest money deposits,
            land
            purchases, development costs, interest payments and to enter the homebuilding
            business. Until it begins to sell an adequate number of lots and homes
            to cover
            monthly operating expenses, sales, marketing, general and administrative
            costs
            will deplete cash.
  To
            maintain our liquidity, we have financed the majority of our land and
            development activities with debt and equity, and believe we can continue
            to do
            so in the future, through a combination of conventional and subordinated
            convertible debt, joint venture financing, sales of selected lot positions,
            sales of land and lot options, and by raising additional equity.
  Land
            comprises the majority of the our assets, which could suffer devaluation
            if the
            housing and real estate market suffers a significant downturn, due to
            interest
            rate increases or other reasons. Our debt might then be called, requiring
            liquidation of assets to satisfy its debt obligations or the use of its
            cash. A
            significant downturn could also make it more difficult for us to liquidate
            assets, to raise cash and pay off debts, which could have a material
            adverse
            effect upon us.
  ***Capital
            Resources***
  We
            had
            raised approximately $16.8 million of subordinated convertible debt.
            At March
            31, 2007, we had a $10 million line of credit for land and homebuilding
            that is
            unused. We had outstanding notes payable and lines of credit of approximately
            $19 million. We have filed a Registration Statement on Form S-1 for the
            public
            offering of 5,000,000 shares of its common stock. The Registration statement
            has
            not yet been declared effective by the Securities and Exchange Commission
            and
            there is no guarantee that we will consummate the transaction.
  **Off-Balance
            Sheet Arrangements**
  As
            of
            March 31, 2007, we had no off-balance sheet arrangements.
  **Critical
            Accounting Policies and Estimates**
  Our
            accounting policies are more fully described in the notes to our consolidated
            financial statements.
  As
            discussed in the notes to the consolidated financial statements, the
            preparation
            of financial statements in conformity with accounting principles generally
            accepted in the United States of America requires management to make
            estimates
            and assumptions about future events that affect the amounts reported
            in our
            consolidated financial statements and accompanying notes. Future events
            and
            their effects cannot be determined with absolute certainty. Therefore,
            the
            determination of estimates requires the exercise of judgment. Actual
            results
            could differ from those estimates, and such differences may be material
            to our
            consolidated financial statements. Listed below are those policies and
            estimates
            that we believe are critical and require the use of significant judgment
            in
            their application.
  22
 ***Consolidation
            of Variable Interest Entities***
  We
            offer
            certain homebuilder clients surety for their interim construction loans
            and cash
            advances to facilitate sales of our residential lots. We may be considered
            the
            primary beneficiary as defined under FASB Interpretation No. 46(R) (“FIN
            46(R)”), “Consolidation of Variable Interest Entities” (VIE), and the Company
            may have a significant, but less than controlling, interest in the entities.
            We
            account for each of these entities in accordance with FIN 46(R). Management
            uses
            its judgment when determining if the we are the primary beneficiary of,
            or has a
            controlling interest in, any of these entities. Factors considered in
            determining whether we have significant influence or has control include
            risk
            and reward sharing, experience and financial condition of the other partners,
            voting rights, involvement in day-to-day capital and operating decisions
            and
            continuing involvement.
  ***Inventory***
  Inventory
            is stated at cost unless it is determined to be impaired, in which case
            the
            impaired inventory would be written down to the fair market value. Inventory
            costs include land, land development costs, deposits on land purchase
            contracts,
            model home construction costs, advances to builders and capitalized interest
            and
            real estate taxes incurred during development and construction
            phases.
  ***Revenue
            Recognition***
  Revenues
            from property sales are recognized in accordance with SFAS No. 66, “Accounting
            for Sales of Real Estate.” Revenues from land development services to builders
            are recognized when the properties associated with the services are sold,
            when
            the risks and rewards of ownership are transferred to the buyer and when
            the
            consideration has been received, or the title company has processed payment.
            For
            projects that are consolidated, homebuilding revenues and services will
            be
            categorized as homebuilding revenues and revenues from property sales
            or options
            will be categorized as homebuilding revenues and revenues from property
            sales or
            options will be categorized as land sales.
  ***Use
            of Estimates***
  We
            have
            estimated and accrued liabilities for real estate property taxes on our
            purchased land in anticipation of development, and other liabilities
            including
            the beneficial conversion liability, the fair value of warrants and options.
            To
            the extent that the estimates are dramatically different to the actual
            amounts,
            it could have a material effect on the financial statements.
  We
            have
            three properties that are in Municipal Utility Districts, or MUDs. We
            incur
            development costs for water, sewage lines and associated treatment plants
            and
            other development costs and fees for these properties. Under the agreement
            with
            the MUDs, we expect to be reimbursed partially for the above developments
            costs.
            The MUDs will issue bonds to repay us once there is enough assessed value
            on the
            property for the MUD taxes to repay the bonds. As homes are sold, the
            assessed
            value increases in the MUD. It can take several years before there is
            enough
            assessed value to recapture the costs. We estimate that we will recover
            approximately 50% to 70% of eligible costs. In some circumstances, the
            MUDs will
            pay for property set aside for the preservation of endangered species,
            greenbelts and similar uses. To the extent that the estimates are dramatically
            different to the actual amounts, it could have a material effect on the
            financial statements.
  ***Concentrations***
  Our
            current activities are limited to the geographical area of central Texas
            which
            we define as encompassing the Austin Metropolitan Statistical Area, or
            Austin
            MSA, and the San Antonio Metropolitan Statistical Area, or San Antonio
            MSA. This
            geographic concentration makes our operations more vulnerable to local
            economic
            downturns than those of larger, more diversified companies.
  We
            are
            also dependent upon a limited number of homebuilder services customers
            which are
            subject to numerous uncertainties related to homebuilding including weather
            delays and damage, labor and material shortages, insufficient capital,
            materials
            theft or poor workmanship. Revenues from one homebuilder customer accounted
            for
            100% of our total homebuilding revenue for the three months ended March
            31,
            2007.
  23
 ***Convertible
            Debt***
  The
            convertible debt and the related warrants have been accounted for in
            accordance
            with Emerging Issues Task Force (EITF) No. 98-5, “Accounting for Convertible
            Securities with Beneficial Conversion Features or Contingently Adjustable
            Conversion Ratios”, EITF No. 00-19, “Accounting for Derivative Financial
            Instruments Indexed to, and Potentially Settled in, a Company’s Own Stock,” EITF
            00-27, “Application of issue 98-5 to Certain Convertible Instruments,” EITF
            05-02 “Meaning of ‘Conventional Convertible Debt Instrument’ in Issue No.
            00-19,” and EITF 05-04 “The Effect of a Liquidated Damages Clause on a
            Freestanding Financial Instrument Subject to Issue No. 00-19.” See “Recent
            Accounting Pronouncements.” Prior to the quarter ended September 30, 2006, we
            obtained an independent third party valuation as of the date of convertible
            debt
            issuances to determine the fair market value of our common stock as management
            determined that the price of our stock quoted on the Over-the-Counter
            Bulletin
            Board was not reflective of the market price of the stock as of those
            days due
            to insufficient trading and a lack of public information regarding our
            financial
            performance. Beginning with the quarter ended September 30, 2006, we
            determined
            that there was enough public float available to provide sufficient information
            about us to the public, and we began using the stated Over-the Counter
            Bulletin
            Board as the market price of its common stock.
  **Item
                3.**  **Controls
                and Procedures**
  **Evaluation
            of Disclosure Controls and Procedures.**Our management, including our
            Chief Executive Officer and our Chief Financial Officer, have evaluated
            our
            disclosure controls and procedures (as defined in Rules 13a-15(e) and
            15d-15(e)
            of the Securities Exchange Act of 1934, as amended), as of the period
            ended
            March 31, 2007, the period covered by this Quarterly Report on Form 10-QSB.
            Based upon that evaluation, our principal executive officer and principal
            financial officer have concluded that our disclosure controls and procedures
            were effective as of March 31, 2007 to ensure the timely collection,
            evaluation
            and disclosure of information relating to our company that would potentially
            be
            subject to disclosure under the Securities Exchange Act of 1934, as amended,
            and
            the rules and regulations promulgated thereunder is recorded, processed,
            summarized and reported within the time periods specified in Securities
            and
            Exchange Commission rules and forms.
  **Changes
            in Internal Control Over Financial Reporting.** There
            were no changes in our internal controls over financial reporting that
            have
            materially affected, or are reasonably likely to materially affect, our
            internal
            controls over financial reporting during the three months ended March
            31,
            2007.
 
   24
  
 **PAR****T
            II - OTHER INFORMATION**
   **It** **em****1.**  **Legal
              Proceedings**
  None.
  **I** **tem****2.**  **Unregistered
              Sales of Equity Securities and Use of Proceeds**
  None.
  **It** **em****3.**  **Defaults
              Upon Senior Securities**
  None.
  **Ite** **m
              4****.**  **Submission
              of Matters to a Vote of Security Holders**
 In
              March
              2007 we notified our shareholders that we planned to take
              certain actions by the written consent of our shareholders. The actions
              were to
              approve (i) the Amended and Restated Articles of Incorporation of the
              Company
              pursuant to which the maximum number of shares of stock that the Company
              shall
              be authorized to have outstanding at any time shall be increased to
              one hundred
              ten million shares, of which one hundred million shares have been designated
              common stock at par value of $0.001, and ten million shares have been
              designated
              preferred stock; and (ii) an increase in the number of shares of our
              common
              stock reserved for issuance under the 2005 Stock Option/Stock Issuance
              Plan to a
              total of 2,500,000. No vote of our shareholders was required because
              we had
              obtained the written consent of a sufficient number of shares of our
              common
              stock to approve these matters.
 **Ite** **m****5.**  **Other
              Information**
 
 None.
  **Ite** **m****6. **Exhibits****
  Exhibit
                      No.
                  
                  Description3.1
                  
                  Amended
                      and Restated Bylaws of Registrant (filed as Exhibit 3.1 to
                      Registrant’s
                      Current Report on Form 8-K dated July 19, 2006 and incorporated
                      herein by
                      reference)3.2
                  
                  Amended
                      and restated Articles of Incorporation of Registrant (filed
                      as Exhibit 3.6
                      to the Registrant’s Registration Statement on Form SB-2 (File No.
                      333-131486) and incorporated herein by reference)4.1
                  
                  Specimen
                      certificate for shares of Common Stock of Registrant (filed
                      as Exhibit 4.1
                      to Registrant’s Registration Statement on Form S-1 (File No. 333-140747)
                      (the “Form S-1”) and incorporated herein by reference)10.1
                  
                  Employment
                      letter Agreement dated February 14, 2007 by and between Registrant
                      and
                      Clark N. Wilson (filed as Exhibit 10.10 to Registrant's Annual
                      Report on
                      Form 10-KSB for the year ended December 31, 2006 (the “2006 10-KSB”) and
                      incorporated herein by reference)10.2
                  
                  Employment
                      letter Agreement dated February 14, 2007 by and between Registrant
                      and
                      Arun Khurana (filed as Exhibit 10.11 to the 2006 10-KSB and
                      incorporated
                      herein by reference)10.3
                  
                  Amendment
                      No. 1 to Letter Agreement by and between Registrant and Capital
                      Growth
                      Financial (filed as Exhibit 10.13 to the Form S-1 and incorporated
                      herein
                      by reference)31.1
                  
                  Certification
                      pursuant to Section 302 of the Sarbanes-Oxley Act of
                      200231.2
                  
                  Certification
                      pursuant to Section 302 of the Sarbanes-Oxley Act of
                      200232
                  
                  Certification
                      pursuant to Section 906 of the Sarbanes-Oxley Act of
                      2002
   25
  **SIGNATURES**
 
 In
            accordance with the requirements of the Exchange Act, the registrant
            caused this
            report to be signed on its behalf by the undersigned, thereunto duly
            authorized.
 
 **WILSON
                      HOLDINGS, INC.**May
                      10, 2007
                  /s/ Clark
                    WilsonClark Wilson
                    President
                        and Chief Executive Officer
 
 
  
  
  EXHIBIT
            INDEX
 LIST
            OF
            EXHIBITS
 
 Exhibit
                      No.
                  
                  Description3.1
                  
                  Amended
                      and Restated Bylaws of Registrant (filed as Exhibit 3.1 to
                      Registrant’s
                      Current Report on Form 8-K dated July 19, 2006 and incorporated
                      herein by
                      reference)3.2
                  
                  Amended
                      and restated Articles of Incorporation of Registrant (filed
                      as Exhibit 3.6
                      to the Registrant’s Registration Statement on Form SB-2 (File No.
                      333-131486) and incorporated herein by reference)4.1
                  
                  Specimen
                      certificate for shares of Common Stock of Registrant (filed
                      as Exhibit 4.1
                      to Registrant’s Registration Statement on Form S-1 (File No. 333-140747)
                      (the “Form S-1”) and incorporated herein by reference)10.1
                  
                  Employment
                      letter Agreement dated February 14, 2007 by and between Registrant
                      and
                      Clark N. Wilson (filed as Exhibit 10.10 to Registrant's Annual
                      Report on
                      Form 10-KSB for the year ended December 31, 2006 (the “2006 10-KSB”) and
                      incorporated herein by reference)10.2
                  
                  Employment
                      letter Agreement dated February 14, 2007 by and between Registrant
                      and
                      Arun Khurana (filed as Exhibit 10.11 to the 2006 10-KSB and
                      incorporated
                      herein by reference)10.3
                  
                  Amendment
                      No. 1 to Letter Agreement by and between Registrant and Capital
                      Growth
                      Financial (filed as Exhibit 10.13 to the Form S-1 and incorporated
                      herein
                      by reference)31.1
                  
                  Certification
                      pursuant to Section 302 of the Sarbanes-Oxley Act of
                      200231.2
                  
                  Certification
                      pursuant to Section 302 of the Sarbanes-Oxley Act of
                      200232
                  
                  Certification
                      pursuant to Section 906 of the Sarbanes-Oxley Act of
                      2002