Firstplus Financial 10QSB 2008 Q2 Quarterly report (small business)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)


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

For the quarterly period ended: June 30, 2008


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

For the transition period from to

Commission File Number: 001-13753

FIRSTPLUS FINANCIAL GROUP, INC.

(Exact name of small business issuer as specified in its charter)



Nevada		75-2561085
(State or other jurisdiction of incorporation or organization)		(IRS Employer Identification No.)

4285 SW Martin Highway, Palm City, FL		34990
(Address of principal executive offices)		(Zip code)

Registrant’s telephone number: (772) 221-4806

122 West John Carpenter Freeway, Suite 450 Irving, Texas 75039_ (972) 717 –7969(Former name, former address and former fiscal year, if changed since last report)

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

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

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

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o Nox

State the number of shares outstanding of each of the issuer’s classes of common equity, as of the latest practicable date:

61,095,090 shares of common stock issued and outstanding as of August 1, 2008

Transitional Small Business Disclosure Format (Check one): Yes o No x

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

Except where otherwise stated, references in this document to “us,” “we,” “FPFG” or “the Company” refer to FIRSTPLUS Financial Group, Inc. (“FIRSTPLUS”). This Form

10-QSB contains forward-looking statements within the meaning of the “safe harbor”

provisions under Section 21E of the Securities Exchange Act of 1934, as amended, and the

Private Securities Litigation Reform Act of 1995. The Company uses forward-looking

statements in its description of its plans and objectives for future operations and

assumptions underlying these plans and objectives, as well as in its expectations,

assumptions, estimates and projections about its business and industry. These forward-

looking statements involve risks and uncertainties. The Company’s actual results could

differ materially from those anticipated in such forward-looking statements as a result of

certain factors as more fully described in this Report and other risks and factors identified

from time to time in the Company’s reports filed with the Securities and Exchange

Commission.

Forward-looking terminology includes the words “may”, “expects”, “believes”,

“anticipates”, “intends”, “projects” or similar terms, variations of such terms or the

negative of such terms. These forward-looking statements are based upon the Company’s

current expectations and are subject to factors and uncertainties which could cause actual

results to differ materially from those described in such forward-looking statements. The

Company expressly disclaims any obligation or undertaking to release publicly any updates

or revisions to any forward-looking statements contained in this Report to reflect any

change in the Company’s expectations or any changes in events, conditions or

circumstances on which any forward-looking statement is based.

_____________________________________________________________________________

TABLE OF CONTENTS



		Page No.
NOTE CONCERNING FORWARD-LOOKING INFORMATION

PART I: FINANCIAL INFORMATION

Item 1.Financial Statements (unaudited)
Consolidated Balance Sheets as of June 30, 2008 and December 31, 2007		1
Consolidated Statements of Operations for the Three-Month Periods Ended June 30, 2008 and 2007		2
Consolidated Statements of Cash Flows for the Three-Month Periods Ended June 30, 2008 and 2007		3-4
Notes to Consolidated Financial Statements		5-11
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.		12-17
Item 4T. Controls and Procedures		17
PART II: OTHER INFORMATION Item 2.Unregistered Sales of Equity Securities and Use of Proceeds		18
Item 6. Exhibits		19

SIGNATURES		20-22

EXHIBIT INDEX

FIRSTPLUS Financial Group, Inc.

Consolidated Balance Sheets


	(Unaudited) June 30, 2008	December 31, 2007
ASSETS
Cash and cash equivalents	$1,126,289	$2,615,260
Accounts receivable net of allowances	1,344,584	3,441,208
Other receivables, factors		558,864
Inventory	6,421	612,341
Prepaid expenses	592,015	273,637
Tax refund receivable	16,000	16,000
Total current assets	3,085,309	7,517,310
Land	-	1,040,000
Property and equipment (net of accumulated depreciation of $229,904 and $155,274)	2,907,566	3,681,048
Notes receivable	3,192,047	347,316
Security deposits	12,000	71,117
Advances	564,949	70,000
Employee advances	31,206	31,206
Goodwill	4,194,530	5,447,998
Licenses and trademarks (net of accumulated amortization of $3,115 and $3,110)	36,203	35,625
Deposits	100,000	-
Deferred tax asset	1,379,315	1,379,315
Total assets	$15,503,125	$19,620,935
LIABILITIES AND STOCKHOLDERS' EQUITY:
Line of credit	$1,000,000	$1,000,000
Accounts payable	1,570,395	298,069
Accrued expenses	678,902	1,000,239
Billings in excess of costs and estimated earnings on uncompleted contracts	-	90,994
Deferred revenue	37,569	44,261
Notes payable	1,252,197	720,000
Total current liabilities	4,539,063	3,153,563
Commitments and contingencies	-	-
Total liabilities	4,539,063	3,153,563
Stockholders' equity:
Common stock, $.01 par value, 100,000,000 shares authorized; 61,095,100 and 49,845,100 shares issued and outstanding June 30, 2008 and December 31, 2007, respectively	610,951	498,451
Additional paid in capital	15,815,102	17,574,354
Accumulated deficit since December 31, 2002 when a deficit of $312,527,864 was eliminated in connection with a quasi-reorganization	(5,461,991)	(1,605,433)
Total stockholders' equity	10,964,062	16,467,372
Total liabilities and stockholders' equity	$15,503,125	$19,620,935

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

FIRSTPLUS Financial Group, Inc.

Consolidated Statements of Operations

(Unaudited)


	For The Three Months Ended June 30, 2008	For The Three Months Ended June 30, 2007	For The Six Months Ended June 30, 2008	For The Six Months Ended June 30, 2007
Revenues	$1,330,783	$4,770,312	$2,426,007	$6,201,095

Cost of goods sold	1,117,784	2,998,437	1,785,600	3,950,936

Gross profit	212,999	1,771,875	640,407	2,250,159

Operating expenses:
General and administrative	1,941,588	1,940,159	5,145,464	2,682,767

Total operating expenses	1,941,588	1,940,159	5,145,464	2,682,767

Operating income (loss)	(1,728,589)	(168,285)	(4,505,057)	(432,609)

Non-operating income:
Impairment of goodwill	(1,729,011)	-	(1,729,011)	-
Gain on Sale of Ole` Auto Group	-	-	1,082,888	-
Loss on Sale of Real Estate	-	-	(251,601)	-
Other income	41,681	-	41,681	-
Note discounts	(51,590)	-	(51,590)	-
Interest, net	(5,084)	114,349	(60,355)	297,614

Income (loss) before provision for income taxes	(3,472,593)	(53,936)	(5,473,044)	(134,995)

Provision for income taxes	-	-	-	-

Net income (loss)	$(3,472,593)	$(53,936)	$(5,473,044)	$(134,995)
Earnings (loss) per share	$ (0.06)	$(-)	$(0.10)	$(-)
Weighted average of common shares outstanding	61,095,100	48,245,090	54,203,423	48,245,090

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

FIRSTPLUS Financial Group, Inc.

Consolidated Statements of Cash Flows

(Unaudited)



For the six months ended June 30,	2008	2007

Cash flow from operating activities:
Net loss	$(5,473,044)	$(134,995)
Adjustments to reconcile net loss to net cash used in operating activities:
Allowance for bad debts	(315,461)	726,469
Depreciation	107,455	3,988
Gain on Sale of Ole` Auto Group	(1,082,888)	-
Loss on sale of real estate	251,601	-
Impairment of goodwill	1,729,011	-
Changes in operating assets and liabilities:
Accounts receivable	2,412,085	(4,805,435)
Other receivables - factors	558,864	-
Inventory	605,920	(190,582)
Prepaid expenses	(318,378)	(890,831)
Advances	(494,949)	-
Notes receivable	355,269	102,457
Security deposits	59,117	(10,700)
Accounts payable	1,272,326	41,978
Income taxes payable	-	(23,809)
Accrued expenses	(321,337)	535,460
Billings in excess of costs and estimated earnings on contracts in progress	(90,994)	-
Deferred revenue	(6,692)

Net cash used in operating activities	(852,678)	(4,646,000)

Cash flows from investing activities:
Purchase of property and equipment	(242,806)	(702,435)
Sale of land	1,040,000	-
Sale of building	908,833	-
Purchase of land	-	(1,040,000)
Purchase of Premier Group	(425,000)	-
Purchase of licenses and trademarks	583	-
Stalwart Note Receivable	3,200,000	-
Sale of Ole` Auto Group	852,153
Collection on bankruptcy estate claim	-	2,341,761
Commitment on bankruptcy estate claim	-	366,240
Collection on note receivable Capital Lending Strategies, LLC	-	19,211

Net cash provided by investing activities	1,168,490	984,777


For the six months ended June 30,	2008	2007
Cash flows from financing activities:
Proceeds from notes payable	1,132,197	-
Repayment of notes payable	(600,000)	-
Note payable - Ole` Auto Group	-	(208,000)
Additional paid in capital	-	7,232
Net cash provided by (used in) financing activities	532,197	(200,768)

Net decreasein cash	$(1,488,971)	$(3,861,991)

Cash at the beginning of the period	$2,615,260	$13,021,978

Cash at the end of the period	$1,126,289	$9,159,987

Supplemental disclosure of cash flow information:

Cash paid for:

Interest	$ -	$ -

Taxes	$ -	$ -

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

______________________________________________________________________________

FIRSTPLUS FINANCIAL GROUP, INC.
Notes to the Consolidated Financial Statements

Description of the Company

The Company is a diversified company that provides commercial loan, consumer lending, residential and commercial restoration, facility (janitorial and maintenance) services, insurance adjusting services, construction management services and a facilities and restoration franchise business. Toward this end, the Company has made several complementary acquisitions of businesses that are designed to create value through synergy and enterprise-level expertise.

The Company has three direct subsidiaries, Rutgers Investment Group, Inc. (“Rutgers Investment”), FirstPlus Development Company (“FirstPlus Development”) and FirstPlus Enterprises, Inc. (“FirstPlus Enterprises”). In turn, FirstPlus Enterprises, Inc. has three of its own direct subsidiaries, FirstPlus Restoration Co., LLC (“FirstPlus Restoration”), FirstPlus Facility Services Co., LLC (“FirstPlus Facility”) and The Premier Group, LLC (“The Premier Group”). In turn, FirstPlus Restoration and FirstPlus Facility jointly own FirstPlus Restoration & Facility Services Company. Additionally, FirstPlus Development has one direct subsidiary FirstPlus Acquisitions-1, Inc. The operational aspects of certain of these subsidiaries are set forth below.

Rutgers Investment

Management’s focus on Rutgers Investment has been to qualify Rutgers Investment in 48 states as a mortgage banker. This process entails applying for mortgage banking licenses in each of the 48 states and thereafter qualifying as a mortgage banker in the particular state. Management anticipates that Rutgers Investment will be qualified as a mortgage banker in approximately 15 states during the fourth quarter of 2008. The remainder of this licensing process should be substantially completed by year-end.

As state licensing is completed, it is expected that commercial loans will include (term, bridge, real estate, line of credit loans), financing (equipment, machinery, purchase order, accounts receivable), sale-leasebacks of existing machinery, new leases, mergers and leveraged buyouts. In marketing these financial solutions, Rutgers Investment will focus on businesses that are less attractive to conventional banking institutions, including those in the construction industries. Rutgers Investment plans to accept a variety of collateral as consideration, including commercial accounts receivable, machinery and equipment, inventory, real estate, and liquid securities.

Additionally, as state licensing is completed, the firm’s target market strategy for residential loans will be on the individual borrower with a credit score on the lower end of the credit score spectrum seeking to refinance for improved terms and debt consolidation.

Rutgers Investment is presently conducting mortgage banking on a limited basis and has offices in Pennsylvania and Texas.

Rutgers Investment and HomeLoanAdvisors.com (“HLA”) entered into an outsourced mortgage processing and fulfillment services agreement effective December 31, 2007. The relationship proved unsuccessful and the agreement was terminated by Rutgers Investment on March 14, 2008.

In support of Rutgers Investment, the Company, on December 31, 2007, issued 10,000,000 shares of its common stock to Rutgers for $1,000,000 that was evidenced by Rutgers Investment’s subordinated debenture delivered to the Company. This debenture was secured by a pledge of the Company common stock that was issued to Rutgers.

The Company also issued 250,000 shares of its common stock to a financing consultant who arranged warehouse line of credit financing effective April 1, 2008.

The Company closed Rutgers Investment Group’s New York division during the quarter ending June 30, 2008 and recorded an impairment charge against goodwill associated with the acquisition of Rutgers Investment Group in July 2007.

FirstPlus Enterprises

FirstPlus Enterprises seeks to acquire established companies in a variety of industries, as well as newer developing companies or financially distressed companies in need of resources and direction to realize their business goals. Our personnel and outside consultants are skilled in the areas of operations and finance, disciplines vital to the success of these acquisitions.

In the first quarter of 2008, FirstPlus Enterprises completed two transactions. On January 31, 2008 The Premier Group, LLC was acquired by FirstPlus Enterprises. The purchase price consisted of a cash payment of $425,000 and 1,000,000 shares of the Company’s common stock, the closing price of which on Thursday, January 31, 2008 was $0.10 per share. The Premier Group is a licensed insurance adjuster that resolves insurance claims on behalf of its clients. Also, effective March 31, 2008, FirstPlus Enterprises sold all of the outstanding capital stock of its Olé Auto Group, Inc. subsidiary for $3,200,000 to Stalwart Enterprises, Inc. The purchase price is payable under a secured promissory note with an initial term of seven years and bears interest at the rate of 6% per annum.

Olé Auto Group

Olé Auto Group, a wholly owned subsidiary of FirstPlus Enterprises, was sold effective March 31, 2008. Prior to its sale, the Olé Auto Group was active in the Buy Here-Pay Here segment of the used automobile market, which accommodated customers with limited or damaged credit histories. In some cases, Olé Auto Group directly financed the sales of used automobiles. As of the end of the quarter, the Olé Auto Group had two used car dealerships in Texas and a reconditioning center to detail, inspect, and restore automobiles purchased at auction and to support Olé Auto Group’s operations.

FirstPlus Restoration

FirstPlus Restoration, a wholly owned subsidiary of FirstPlus Enterprises, provides on a nationwide basis first class restoration services to residential, commercial and industrial property owners who have sustained a hardship related to a fire, water, smoke, mold or wind damage occurrence.

In its operations, FirstPlus Restoration utilizes state of the art radio tracking equipment that provides First Plus Restoration the ability to monitor and track all emergency calls, as well as several non-intrusive technologies including infrared camera, thermographic and Cold Jet dry ice blasting technologies. The firm also uses the training facility (see below), managed by FirstPlus Restoration and Facility, for employee and contractor training, continuing education and certifications.

FirstPlus Restoration’s relationships with insurance carriers and insurance adjusters are material to its business as it customarily contracts with insurance companies for payment prior to beginning restoration services. On December 31, 2007, FirstPlus Restoration acquired the assets of American Insurance Restoration in order to increase its capacity. Additionally, the recent acquisition of The Premier Group LLC that provides insurance adjusting services to the general public will assist FirstPlus Restoration in acquiring new business.

FirstPlus Restoration provides customer service 24 hours a day, seven days a week. FirstPlus Restoration services customers in Maryland, Delaware, New Jersey, Pennsylvania, Florida, and New York.

The Company closed its FirstPlus Restoration division during the quarter ending June 30, 2008 and recorded an impairment charge against goodwill associated with the acquisition of FirstPlus Restoration in July 2007.

FirstPlus Facility

FirstPlus Facility, a wholly owned subsidiary of FirstPlus Enterprises, is a national janitorial/maintenance repair service provider for industrial, commercial and residential facilities that occupy both interior and exterior environments. Restorative services include general cleaning (from heavy-duty to detail cleaning), floor care, construction clean-up, transitional store cleaning, commercial kitchen cleaning and light bulb replacement. FirstPlus Facility recently commenced providing maintenance repair services. FirstPlus Facility also uses the training facility (see below), managed by FirstPlus Restoration and Facility, for employee and contractor training, continuing

education and certifications.

Similar to FirstPlus Restoration, FirstPlus Facility offers 24 hour a day, seven day a week customer service through its toll-free telephone number and directly services customers in Maryland, Delaware, New Jersey, Pennsylvania and New York. Additionally, FirstPlus Facility has a contract management program that allows for the servicing of national contracts through the use of sub-contractors. The use of subcontractors enables FirstPlus Facility to expand its area of service to a larger geographical region and provides a larger labor pool to draw from. The subcontractors are monitored by our operations manager, and carry their own insurance, based on our requirements.

The largest part of FirstPlus Facility’s income is based on recurring monthly contracts with annual renewals. Additive income is derived from “one-time cleaning,” i.e., construction clean-ups.

FirstPlus Restoration & Facility (FirstPlus R&F)

FirstPlus R&F, a wholly owned subsidiary of FirstPlus Restoration and FirstPlus Facility, is designed to be a franchisor offering the right to own and operate locations that provide emergency restoration and commercial cleaning services, as well as janitorial and building maintenance services.

It is anticipated that franchises will be available for purchase during 2008. Buying a franchise enables the owner to offer and provide emergency restoration and cleaning services related to fire damage, water damage and mold contamination, as well as janitorial and building maintenance services under certain proprietary trademarks.

In order to train potential franchisees, FirstPlus R&F has built a world-class training facility consisting of a learning center, as well as simulated job-site locations for on the job styles of training. This same facility is also utilized by FirstPlus Restoration and FirstPlus Facility for training purposes. The facility is currently under review to obtain an Institute of Inspection, Cleaning and Restoration and Certification (IICRC) approved school status. FirstPlus R&F will have the ability to train franchisees on operating procedures, as well as offer them certifications in industry related courses and offer continuing education. The facility also contains a one thousand square foot home that can be saturated with 1500-2000 gallons of water for instruction on how to use the most up to date technology to dry the entire structure without having to remove any building material. The facility is one of seven located in North America and one of nine in the world, thus placing FirstPlus R&F at the forefront of what can be offered to franchisees relative to restoration training.

FirstPlus Development

FirstPlus Development is a first tier wholly owned subsidiary of the FirstPlus Financial Group serving as a general contractor and construction manager, with its principal office in Philadelphia, Pennsylvania. Additionally, FirstPlus Development is licensed to do business in New York, New Jersey, Delaware, Texas, Florida, Maryland, and Louisiana.

FirstPlus Development utilizes a state of the art estimating system, approved by most national insurance carriers, that permits it to bid on additional projects for a variety of industries that otherwise may not have been available to FirstPlus Development.

FirstPlus Development’s current operation has expanded from moderate size alterations and single family homes to large scale alterations and design/build residential, commercial and industrial projects for private developers and municipalities.

To date, FirstPlus Development has completed a number of residential and commercial projects, including a design-build renovation and expansion in Bethany Beach, Delaware, new modular homes in Dover and Elsmere, Delaware and a renovation to a National Landmark Theatre in Philadelphia. The firm is currently working on four Assisted Living Facilities for a National Chain, located in New Jersey.

FirstPlus Acquisitions-1, Inc.

FirstPlus Acquisitions-1 is chiefly a real estate holding company and property management firm. Its purpose is to acquire real estate for leasing and investment purposes, as well as for use by FirstPlus subsidiaries. FirstPlus Acquisitions provides the FirstPlus Group and, more specifically, FirstPlus Development with the ability to acquire real estate and protect it from the risks associated with major construction. The firm will serve to reduce the liability of the other subsidiaries by limiting the exposure associated with the owning of real estate.

The Premier Group, LLC

The Premier Group, LLC, a Florida limited liability company, was acquired by FirstPlus Enterprises on January 31, 2008 and provides insurance adjusting services and claims processingservices to the general public. A typical Premier Group client has sustained damage to their residential or commercial property and must process a claim with an insurance underwriter. The Premier Group is licensed, bonded and fully operational in South Florida, as well as in Pennsylvania and plans to expand services in the near future to include Central and Northern Florida during 2008. Application for licensing has been also initiated in order to expand the Company’s services to New Jersey, Delaware, New York, and Maryland.

Summary of Significant Accounting Policies

Principles of Consolidation:

The consolidated financial statements include the accounts of FIRSTPLUS Financial Group, Inc., and its wholly-owned subsidiaries, Rutgers Investment Group, Inc., First Plus Development, Inc., and First Plus Enterprises, Inc. All significant intercompany balances and transactions have been eliminated in consolidation.

Revenue Recognition:

Revenue and dividends from investments are recognized at the time the investment dividends are declared payable by the underlying investment. Capital gains and losses are recorded on the date of sale of the investment.

Interest income is recognized on the interest method. Interest income is discontinued when management determines future collection is unlikely. Loans are placed on non-accrual or charged-off at an earlier date if collection of principal or interest is considered doubtful.

Cash and Cash Equivalents:

For purposes of the balance sheet and statement of cash flows, the Company considers all highly liquid investments which are readily convertible into known amounts of cash and have a maturity of three months or less when acquired to be cash equivalents. At December 31, 2007, management believes that the carrying amount of cash equivalents approximates fair value because of the short maturity of these financial instruments.

Loans and Allowance for Loan Losses:

The Company measures and reserves for impairment on a loan-by-loan basis using the present value of expected future cash flows discounted at the loan’s effective interest rate.

Accounts Receivable and Allowance for Bad Debts:

The Company estimates potential bad debts using the allowance method.

Inventory:

Inventories are stated at the lower of cost or market on the first-in, first-out basis.

Property, Plant & Equipment:

The Parent Company and subsidiaries’ fixed assets consist of land, buildings, furniture, fixtures, equipment and airplane used in operations of each Company. The useful lives are estimated to be forty years for the building and between five and ten years for other fixed assets. The assets are being depreciated on the straight-line method.

Concentration of Credit Risk:

FPFG at times during operations has cash deposits that exceed $100,000 in one account in individual banks. The Federal Deposit Insurance Corporation (FDIC) insures only the first $100,000 of funds at member banks. FPFG has not incurred losses related to its cash.

Income Taxes:

In accordance with SFAS No. 109, “Accounting for Income Taxes,” and FIN 48 “Accounting for Uncertainty in Income Taxes — an Interpretation of FASB Statement No. 109” deferred income taxes are recognized for the tax consequences in future years of differences between the tax basis of assets and liabilities and their financial reporting amounts at each year-end based on enacted tax laws and statutory tax rates applicable to the periods in which the differences are expected to affect taxable income. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized. The provision for income taxes represents the tax payable for the period and the change during the period in deferred tax assets and liabilities. Based on the March 31, 2008 loss, FPFG will have a net operating loss carryforward available of approximately $45,300,000. A valuation allowance is provided against the deferred tax asset for future taxable income as realization is uncertain.

Income tax benefit is recorded net of any penalties and interest.

Management’s Estimates:

The preparation of financial statements in conformity with generally accepted accounting principles 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 dates of the financial statements and the reported amounts of expenses during the reporting periods. Actual results could differ from those estimates.

Quasi-reorganization:

The Company Board approved a plan to affect a quasi-reorganization effective December 31, 2002. A quasi-reorganization is an accounting procedure that eliminates an accumulated deficit in retained earnings and permits a company to proceed on much the same basis as if it had been legally reorganized. A quasi-reorganization involves adjusting a company’s assets and liabilities to their fair values. Any remaining deficit in retained earnings is then eliminated by a transfer of amounts from paid-in capital and capital stock, if necessary, giving a company a “fresh start” and a zero balance in retained earnings.

Effective with the change in management in June 2007 and the related refocusing of the Company’s strategic direction, the Company is no longer in a Quasi-reorganization stage of operations.

Goodwill and Other Intangibles:

Goodwill is not amortized. All other intangibles arising from acquisitions and research alliances have finite lives and are amortized over their estimated useful lives ranging from 5 to 7 years using the straight-line method. Amortization expense for 2007 and 2006 is $3,110 and $0, respectively. The estimated amortization expense for the five succeeding years approximates $3,000 before tax, per year. Substantially all of the amortization expense is included in general and administrative expenses. See Note 8 for further discussion of goodwill and other intangibles acquired during 2007.

Goodwill and net other intangibles are reviewed to assess recoverability at least annually and when certain impairment indicators are present.

The Company closed Rutgers Investment Group’s New York division during the quarter ending June 30, 2008 and recorded an impairment charge of $638,333 against goodwill associated with the acquisition of Rutgers Investment Group in July 2007.

The Company closed its FirstPlus Restoration division during the quarter ending June 30, 2008 and recorded an impairment charge of $1,090,678 against goodwill associated with the acquisition of FirstPlus Restoration &

Facilities Services in July 2007.

The Company recorded total impairment charges of $1,729,011 against goodwill associated with the acquisitions of Rutgers Investment Group and FirstPlus Restoration & Facilities Services during the quarter ended June 30, 2008.

Other Assets

FPFG retains a claim against the bankruptcy estate of its former subsidiaries from monies advanced to them.

On March 23, 2007 the bankruptcy trustee made a distribution of $2,708,000 to the Company, bringing the aggregate amount of funds designated for the benefit of FPFG to $21,819,193. On October 31, 2007 the bankruptcy trustee made a distribution of $6,226,422 to the Company, bringing the aggregate amount of funds designated for the benefit of FPFG to $28,045,615.

FPFG, nor the bankruptcy trustee, can estimate the amount or timing of any future payments. The Company has conducted an exhaustive search for outstanding claims against FPFG or claims against its former subsidiaries that FPFG has assumed.

Effective with the change in management in June 2007 and the related refocusing of the Company’s strategic direction, the Company reevaluated the relationship of the Company to the Grantor Trust and the status of its Quasi-Reorganization which took place in 2002. After performing an extensive legal investigation, the Company determined it was no longer liable for the $3,450,000 accrued contingent liability to former creditors as no former creditors have initiated a claim against FPFG and, as a result, recognized the release of creditor claims as non-operating income during the third quarter of 2007. In addition, the Company recognized the October 31, 2007 proceeds from the bankruptcy trustee of $6,226,422 as income from operations as the Company has utilized these funds to fund the start-up of its expanded operations created upon the completion of its business acquisitions during the third quarter of 2007.

The funds set aside by the bankruptcy trustee are not readily accessible to the Company; therefore, the Company did not consider the funds to be cash or cash equivalents as of June 30, 2008.

Commitments and Contingencies

On May 8, 2008, federal officials executed a search warrant at the FirstPlus Financial Group, Inc. corporate offices in Irving, Texas and several of its subsidiaries’ offices. FirstPlus Financial Group, Inc. denies any wrongdoing and if any charges are ever brought, it will vigorously defend them.

The Company and its major subsidiaries will continue to function in a normal business manner and also continue to serve its customers.

The Company leases its operating facilities for various terms under long-term, operating lease agreements. The leases expire at various dates through 2011 and provide for renewal options. In the normal course of business, it is expected that these leases will be renewed or replaced by leases on other properties. The leases provide for increases in future minimum annual rental payments. Lease expense totaled $528,886 during 2007.

Through a unanimous written consent of the Company’s reconstituted Board of Directors on or after June 7, 2007, the Company sought to (1) rectify certain deficiencies — including, but not limited to delinquent tax filings,

lack of a business plan, lack of Sarbanes-Oxley Act compliance, and generally deficiency in all governmental reporting requirements, including accounting requirements — and (2) contemporaneously and unanimously agreed to retain William Maxwell (William Maxwell, P.LLC.) and other law firms and consultants associated with William Maxwell to advise the Board regarding business matters; they include business operations, legal operations of the company, legal issues facing the company, due diligence relative to potential acquisitions. Such operations would be those required to assist the Company in attaining trading status as a bulletin board stock. Compensation for Mr. Maxwell’s work for the Company was agreed to be disbursed on a monthly basis along with expenses incurred as a result of Company business. In addition, it was agreed that Mr. Maxwell — on a forward going basis — will be paid a bonus of $3 million in currency or stock (at the fixed rate of FPFX.PK exchange rate as of close of business on June 7, 2007). Mr. Maxwell will also be paid an additional $2 million in currency or stock (fixed rate FPFX.PK stock value as of June 7, 2007) should the Company’s stock be listed on a national exchange.

Management’s Discussion and Analysis or Plan of Operation.

The following discussion of results of operations and financial condition isbased upon, and should be read in conjunction with, our consolidated financialstatements and accompanying notes thereto included elsewhere herein.

Overview

Rutgers Investment

Rutgers Investment is presently conducting mortgage banking on a limited basis and has offices in Pennsylvania and Texas.

FirstPlus Enterprises

Olé Auto Group

FirstPlus Restoration

FirstPlus Facility

The largest part of FirstPlus Facility’s income is based on recurring monthly contracts with annual renewals. Additive income is derived from “one-time cleaning,” i.e., construction clean-ups.

FirstPlus Restoration & Facility (FirstPlus R&F)

FirstPlus Development

FirstPlus Acquisitions-1, Inc.

The Premier Group, LLC

RESULTS OF OPERATIONS

Three months ended June 30, 2008

The following discussion and financial information is presented to aid in understanding our consolidated financial

position and results of operations for the quarter ended June 30, 2008. The Olé Auto Group was sold effective March 31, 2008. Accordingly, the Company’s management has concluded that comparisons of the Company’s results of operations for the three months ended June 30, 2008 to the three months ended June 30, 2007 are not

helpful to an evaluation and understanding of the Company. Accordingly, (other than for Liquidity and Capital Resources) the discussion below focuses on the Company’s lines of business and the Company’s results of operations for the three months ended June 30, 2008.

Six months ended June 30, 2008

The following discussion and financial information is presented to aid in understanding our consolidated financial position and results of operations for the quarter ended June 30, 2008. The Company’s activities during quarter ended June 30, 2007 were primarily focused on developing new business opportunities. The Olé Auto Group was sold effective June 30, 2008. Accordingly, the Company’s management has concluded that comparisons of the Company’s results of operations for the three months ended June 30, 2008 to the three months ended June 30, 2007 are not helpful to an evaluation and understanding of the Company. Accordingly, (other than for Liquidity and Capital Resources) the discussion below focuses on the Company’s lines of business and the Company’s results of operations for the three months ended June 30, 2008.

REVENUES

Revenues for the three months ended June 30, 2008 were generated primarily from the operations of the following subsidiaries: FIRSTPLUS Financial Group, Inc., and its wholly-owned subsidiaries, Rutgers Investment Group, Inc., First Plus Development, Inc., and First Plus Enterprises, Inc. and consisted of gross revenues from sales of approximately $1,331,000 and other income of approximately $42,000.

Revenues for the six months ended June 30, 2008 were generated primarily from the operations of the following subsidiaries: FIRSTPLUS Financial Group, Inc., and its wholly-owned subsidiaries, Rutgers Investment Group, Inc., First Plus Development, Inc., and First Plus Enterprises, Inc. and consisted of gross revenues from sales of approximately $2,426,000, gain on sale of Olé Auto Group, Inc. of approximately $1,083,000 and other income of approximately $42,000.

GROSS PROFIT (LOSS)

Gross profit for the three months ended June 30, 2008, was approximately 16% which is comprised of 16% for subsidiary operations.

Gross profit for the three months ended June 30, 2008, was approximately 26% which is comprised of 26% for subsidiary operations.

OPERATING EXPENSES

Operating expenses for the three months ended June 30, 2008, include expenses for the subsidiaries operations, as well as for the Company, and consist of salaries of approximately $1,018,000 impairment of goodwill of approximately $1,729,000 and other overhead of approximately $924,000.

Operating expenses for the six months ended June 30, 2008, include expenses for the subsidiaries operations, as well as for the Company, and consist of salaries of approximately $2,102,000, professional fees of approximately $1,253,000, impairment of goodwill of approximately $1,729,000 and other overhead of approximately $1,791,000.

OTHER INCOME (EXPENSE), NET

The Company earned approximately $42,000 in non-operating interest income on investments owned during the three months ended June 30, 2008.

INVENTORY

The Olé Auto Group was sold effective March 31, 2008, and as of March 31, 2008, the inventory of the Company’s remaining operations is immaterial.

LIQUIDITY AND CAPITAL RESOURCES

As of June 30, 2008, the Company had approximately $1,100,000 in cash and cash equivalents, as compared to approximately $7,300,000 on June 30, 2007 due to acquisitions and operations growth. During the six months ended June 30, 2008, the Company’s cash position was decreased by approximately $1,500,000 from December 31, 2007. The Company used approximately $852,000 in cash in its operating activities for the six months ended June 30, 2008 as compared to cash usage of $4,600,000 for operating activities for the six months ended June 30, 2007. There was a net loss of $(5,473,044) and depreciation and amortization expense of $107,455 that did not involve a use of cash as compared to a net loss of $134,995 and depreciation and amortization expense of $3,988 for the six months ended June 30, 2007. From December 31, 2007, the Company’s accounts receivable decreased by approximately $2,412,000 and accounts payable increased by $1,272,000 due to costs incurred with an acquisition and sale transactions and compliance activities. In addition from December 31, 2007, accrued expenses decreased by approximately $321,000, and other operating items used approximately $2,510,000 in cash as compared to cash usage of $4,646,000 for the six months ended June 30, 2007. The Company provided approximately $1,168,000 in cash in its investing activities at June 30, 2008 as compared to $985,000 from investing activities at June 30, 2008. Specifically, the Company acquired the Premier Group, LLC for $425,000 in cash and 1,000,000 shares of its common stock at $0.10 at the closing price on January 31, 2008. Also the Company’s subsidiary FirstPlus Acquisitions sold all of the outstanding capital stock of the Olé Auto Group effective March 31, 2008 for $3,200,000 payable under a promissory note for an initial term of seven years.

Finally, for the six months ended June 30, 2008, the Company provided approximately $532,000 in its financing activities comprised of $600,000 principal repayments on loans and notes payable while providing approximately $1,132,000 in cash with financing activities. At June 30, 2007, the Company used approximately $201,000 in its financing activities comprised of dividend payments while receiving $201,000 in cash with financing activities including loan repayments of approximately $201,000.

As of June 30, 2008, no receivables were greater than 60 days past due.

Management cannot provide assurance that the Company will ultimately achieve profitable operations or remain cash flow positive, or raise additional debt and/or equity capital. Management believes that the Company’s capital resources should be adequate to continue operating and maintaining its business strategy for the next nine months. However, if the Company is unable to realize sufficient revenues from its operations or is unable to raise or realize additional capital in the future, management expects that the Company will need to seek additional capital on less favorable terms and/or pursue other remedial measures. The financial statements included in this Quarterly Report on Form 10-Q do not include any adjustments related to the recoverability and classification of assets or the amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.

ENTRY INTO NEW BUSINESSES

In January 2008, the Company acquired the Premier Group, LLC. The Premier Group provides insurance adjusting services and claims processing services to the general public. The Premier Group is licensed, bonded and fully operational in South Florida, as well as in Pennsylvania and plans to expand services in the near future to include Central and Northern Florida by November 2008; the licensing application process has been also initiated in order to expand the Company’s services to New Jersey, Delaware, New York, and Maryland.

OFF-BALANCE SHEET ARRANGEMENTS

The Company does not have any off-balance-sheet arrangements.

RISK FACTORS

Our Annual Report on Form 10-KSB for the year ended December 31, 2007, includes a detailed discussion of our risk factors. The risks described in our Form 10-KSB are not the only risks facing the Company. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially adversely affect our business, financial condition and/or operating results.

CRITICAL ACCOUNTING POLICIES

Principles of Consolidation:

The consolidated financial statements include the accounts of the Company, and its wholly owned subsidiaries, Rutgers Investment Group, Inc., First Plus Development, Inc., and First Plus Enterprises, Inc. All significant intercompany balances and transactions have been eliminated in consolidation.

Goodwill and Other Intangibles:

Goodwill is not amortized. All other intangibles arising from acquisitions have finite lives and are amortized over their estimated useful lives ranging from 5 to 7 years using the straight-line method.

Goodwill and net other intangibles are reviewed to assess recoverability at least annually and when certain impairment indicators are present. No material impairments occurred with respect to the carrying value of our goodwill or other intangible assets in the first quarter of 2008.

Management’s Estimates:

Item 4T. Controls and Procedures

The Company’s management, with the participation of its Principal Executive Officer and Principal Financial Officer, has evaluated the effectiveness of its disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934 (the “Exchange Act”)) as of the end of the period covered by this report. Based on such evaluation, the Company’s Principal Executive Officer and Principal Financial Officer have concluded that, as of the end of such period, the Company’s financial reporting and disclosure controls and procedures, in addition to inadequately designed controls over financial reporting, were not effective in recording, processing, summarizing and reporting, on a timely basis, information required to be disclosed by the Company in the reports that it files or submits under the Exchange Act.

Due to resource restraints, adequate staffing of personnel in the accounting and financial reporting functions has not yet been attained. The Company’s shortage of personnel and inadequate segregation of duties, as well as resource restraints contribute to the lack of effective controls over financial reporting.

There were no changes in the Company’s internal control over financial reporting during the quarter ended March 31, 2008 that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

Management’s Report on Internal Control over Financial Reporting

Internal control over financial reporting is a process to provide reasonable assurance regarding the reliability of consolidated financial reporting and the preparation of financial statements for external purposes in accordance with U.S. generally accepted accounting principles. As stated above, there has been no change in the Company’s internal control over financial reporting during the period ended March 31, 2008 that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.

The Company’s management, including the Company’s Principal Executive Officer and Principal Financial Officer, do not expect that the Company’s disclosure controls and procedures or the Company’s internal controls, when implemented, will prevent all errors and all fraud. A control system, no matter how well conceived, operated and implemented can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of the controls can provide absolute assurance that all control issues and instances of fraud, if any, within the Company have been detected.

The Company is in the process of working towards implementing the needed changes to be in compliance for Sarbanes-Oxley Act, Section 404. The Company had retained a third party consultant to map out the material processes of the Company. Items that have been addressed are the Code of Ethics, Policy and Procedures Governing Sales and Purchases of Company Securities by Insiders, the Employee Handbook, Email Policy and Procedures to be Followed When Considering an Acquisition. Items that have been addressed and continue to be addressed are the Financial Reporting Process, Strategic Planning Process, Succession Planning and a Continuity/Disaster Recovery Plan. Additional effort is needed to fully remedy the deficiencies and we are continuing our efforts to improve and strengthen our control processes and procedures. The Company’s management, audit committee, and directors will, subject to resource restraints, implement policies and procedures in order that our controls and procedures are adequate and effective.

Item 8B. Other Information.

There are no items required to be disclosed on Current Report on Form 10-Q during the quarter ended March 31, 2008 that were not so reported.

PART II — OTHER INFORMATION

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

On January 31, 2008, FirstPlus Enterprises, Inc. a Company subsidiary acquired certain limited liability company interests. As part of the purchase price for these interests, the Company issued to the sellers of the interests, 1,000,000 shares of its common stock which had a closing price of $0.10 per share on January 31, 2008.

The securities issued in the above transaction did not involve a public offering and were issued to “accredited investors” as defined under Regulation D promulgated under the Securities Act of 1933 and as such were issued pursuant to exemptions from registration provided by Section 4(2) of the Securities Act and Regulation D as promulgated thereunder.

Item 5. Other Information

On May 19, 2008, the Company received a letter from Joseph Steward notifying the Company of his resignation, as of May 19, 2008 as a member of the Board of Directors of the Company. A copy of Mr. Steward’s letter is attached as Exhibit 17.

During June & July 2008 BOD meetings, the Board returned Dr. Robert O’Neal to the Board, and added William Todd Hickman, Paul H. Ballard, and Jack Roubinek, all prominent and successful businessmen, to the BOD. The BOD then named Robert O’Neal Chairman of the Board, and President. It also named William L Handley as Chief Executive Officer, and Gary D. Alexander as Acting Chief Financial Officer.

The BOD also engaged the services of the law firm Hulse-Stucki, PLLC to assist the Company in corporate governance, and to help the Company with coordinating communication with the U. S. Attorney’s Office to retrieve its aviation related asset.

The BOD also entered into a $ 300,000.00 loan agreement with Dr. Robert O’Neal. To date only minimal amounts have been used by the Company.

On July 1, 2008 the Company's operating lease located at 122 West John Carpenter Freeway, Irving, TX was canceled by the landlord. At present, the Company has re-located its operations to a temporary commercial office space located at 4285 SW Martin Highway, Palm City, Florida.

Going forward FirstPlus plans to focus its efforts back on the core business – a successful mortgage company.

Item 6. Exhibits.

A list of the exhibits required by Item 601 of Regulation S-K and filed as part of this report is set forth in the Index to Exhibits on page ___, which immediately precedes such exhibits.

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.

FIRST PLUS FINANCIAL GROUP, INC.

Date: August 20, 2008

By:

/s/ William L. Handley

William L. Handley

Chief Executive Officer

Date: August 20, 2008

By:

/s/ Gary D. Alexander

Gary D. Alexander

Acting Chief Financial Officer

EXHIBIT INDEX


Exhibit No.	Description
31.1*	Certification of Principal Executive Officer pursuant to Section 302(a) of the Sarbanes-Oxley Act of 2002
31.2*	Certification of Principal Financial Officer pursuant to Section 302(a) of the Sarbanes-Oxley Act of 2002
32.1*	Certification of Principal Executive Officer of Periodic Report Pursuant to Section 906 of Sarbanes-Oxley Act of 2002
32.2*	Certification of Principal Financial Officer of Periodic Report Pursuant to Section 906 of Sarbanes-Oxley Act of 2002

____________

Filed Herewith

Exhibit 31.1

CERTIFICATION OF THE PRINCIPAL EXECUTIVE OFFICER

PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, William L. Handley certify that:

I have reviewed this quarterly report on Form 10-Q of FIRSTPLUS Financial Group, Inc.;

Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:

(a)

Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)

Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(c)

Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a)

All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b)

Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: August 20, 2008

By:

/s/ William L. Handleyl

William L. Handley

Chief Executive Officer

(Principal Executive Officer)

Exhibit 31.2

CERTIFICATION OF THE PRINCIPAL FINANCIAL OFFICER

PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Gary D. Alexander, certify that:

I have reviewed this quarterly report on Form 10-Q of FIRSTPLUS Financial Group, Inc.;

(a)

(b)

(c)

(a)

(b)

Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: August 20, 2008

By:

/s/ Gary D. Alexander

Gary D. Alexander

Acting Chief Financial Officer

(Acting Principal Financial Officer and

Acting Principal Accounting Officer)

Exhibit 32.1

CERTIFICATION OF THE PRINCIPAL EXECUTIVE OFFICER

PURSUANT TO 18 U.S.C. SECTION 1350

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of FIRSTPLUS Financial Group, Inc., (the “Company”) on Form 10-Q for the quarter ended June 30, 2008 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, William L. Handley, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to my knowledge:

(1)

The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2)

The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: August 20, 2008

By:

/s/ William L. Handley

William L. Handley

Chief Executive Officer

(Principal Executive Officer)

Firstplus Financial Inactive 10QSB2008 Q2 Quarterly report (small business)