Money Tree 424B3 Prospectus supplement

FILED PURSUANT TO RULE 424 (B) (3)

REGISTRATION NO: 333-122533

THE MONEY TREE INC.

SUBORDINATED DEMAND NOTES

SUPPLEMENT NO. 4 DATED DECEMBER 31, 2007

TO THE PROSPECTUS DATED FEBRUARY 6, 2007

This document supplements, and should be read in conjunction with, the prospectus of The Money Tree Inc. dated February 6, 2007 relating to the Subordinated Demand Notes. This Supplement No. 4 supersedes the information contained in Supplement No. 3 dated August 23, 2007, which Supplement No. 3 superseded Supplement No. 2 dated May 15, 2007 and Supplement No. 1 dated February 27, 2007. The purpose of this supplement is as follows:

• To update the status of the offering of debentures and demand notes;

• To describe the payment of a $1,000,000 promissory note to Life of the South Corporation and the prepayment of a $500,000 promissory note to the Estate of Vance R. Martin;

• To update the “Risk Factors” section of the prospectus;

• To update the “Management” section of the prospectus;

• To provide our “Compensation Discussion and Analysis” regarding material factors underlying our compensation policies and decisions;

• To provide our consolidated audited financial statements for the fiscal year ended September 25, 2007;

• To update the “Management’s Discussion and Analysis of Financial Condition and Results of Operations” for the financial information included in our consolidated audited financial statements; and

• To update various other sections of the prospectus for the financial information included in our consolidated audited financial statements.

Status of Our Public Offerings

We commenced our public offering of $35 million of Subordinated Demand Notes and $75 million in Series A Variable Rate Subordinated Debentures in December 2005. As of December 25, 2007, we had raised $13,571,864 in gross offering proceeds from the sale of Demand Notes and $31,102,145 in gross offering proceeds from the sale of Debentures in these public offerings.

Payment of Promissory Notes

On July 31, 2007, we repaid in full the outstanding principal balance ($100,000) on a promissory note to Life of the South Corporation, and on August 10, 2007, paid all accrued but unpaid interest through the payoff date ($785). The note, dated August 5, 2005, was made in the original principal amount of $1,000,000 and required monthly interest only payments until the maturity date of August 5, 2007. This note was repaid on the final scheduled installment date.

On August 24, 2007, The Money Tree of Louisiana, Inc., our wholly-owned subsidiary, repaid in full the outstanding principal balance plus all accrued but unpaid interest to date ($30,493) on a promissory note to Vance R. Martin, our late founder, issued in connection with the acquisition of seven finance offices. The note, dated July 14, 2004, was made in the original principal amount of $500,000 and required monthly interest only payments until the maturity date of June 28, 2008. The note allowed for prepayment in whole or in part prior to maturity on any interest paying date. In accordance with the terms of the note, the Estate of Vance R. Martin waived any right to receive written advance notice of prepayment. There were no prepayment penalties associated with the prepayment of this note.

Risk Factors

The following should be read in conjunction with and supplemented to the Risk Factors section beginning on page 10 of the prospectus.

We have a higher than normal cash balance which could negatively affect our profitability and future cash flows.

As of September 25, 2007, our cash and cash equivalents balance was $17.9 million, which is a $5 million increase over the balance as of September 25, 2006. Our cash and cash equivalents are currently being deployed in income-generating assets which generate returns that are less than our finance receivables or other potential investments, which will likely result in reduced net interest margin spreads. A principal component of our profitability is our net interest margin, which is the difference between the interest that we earn on finance receivables and the interest that we pay on borrowed funds. As the interest earned on our cash and cash equivalents will generally be less than the interest we are paying for our outstanding debentures and demand notes, our net interest margin will be negatively affected. If we continue to maintain a high cash and cash equivalent balance, the reduction in net interest margins will negatively affect our profitability and future cash flows.

Our focus towards smaller, shorter-term loans has resulted in a significant decrease in loan volume, which has resulted in a negative effect on our net revenues before retail sales.

In the fiscal year 2006, we modified our business plan to curtail larger, longer-term loans to our customers and to focus on smaller, shorter-term lending. Although our default risk may decrease by this change in focus, we have experienced a decrease in our overall gross loan volume by approximately $3.6 million (3.2%) from fiscal year 2006. This lower gross loan volume has, in turn, resulted in corresponding decreases in interest income, fees and related charges earned on customers’ loans, as well as decreases in ancillary products being sold to customers, and ultimately, a decrease in sales and profit margin. Accordingly, this change in focus towards smaller, shorter-term loans has resulted in a negative effect on our net revenues before retail sales.

Our shareholders’ deficit balance may limit our ability to obtain future financing, which could have a negative effect on our operations and our liquidity.

As of September 25, 2007, we had a shareholders’ deficit of $(929,700), which means our total liabilities exceed our total assets. Bankruptcy law defines this state of a company’s liabilities exceeding its assets as balance-sheet insolvency. The existence of a shareholders’

2

deficit may limit our ability to obtain future debt or equity financing. If we are unable to obtain financing in the future, it could have a negative effect on our operations and our liquidity.

Management

Effective August 17, 2007, W. Derek Martin resigned as President of The Money Tree Inc. and its subsidiaries in order to devote time to his various other business interests. Mr. Martin remains as the Sole Director of The Money Tree Inc. and will focus on the strategic plans for The Money Tree Inc.

Effective August 17, 2007, Bradley D. Bellville, age 41, was appointed as President of The Money Tree Inc. and assumed the day-to-day operations of the company. Mr. Bellville joined The Money Tree Inc. in 1990 and has extensive experience with the company through various other management positions of the company. Mr. Bellville held the position of Vice President – Operations from 1997 until 2005, and then assumed the role of Vice President from 2005 to 2007. In his new position as President of the company, Mr. Bellville will receive annual compensation of $225,000. Mr. Bellville may receive an incentive-based cash bonus of 1% of annual net income before taxes, as reflected on the company’s annual audited financial statements, less the company’s federal and state income taxes as reported on the company’s federal and state income tax returns. The incentive-based bonus is effective for the fiscal year ending September 25, 2008. The actual amount of the incentive-based cash bonus cannot be determined at this time. Mr. Bellville is not eligible for any incentive-based bonus for the fiscal year 2007.

Effective August 20, 2007, D. Michael Wallace, age 39, was appointed Vice President – Administration of The Money Tree Inc. and assumed responsibility of the company’s loan department and the daily oversight of the company’s corporate headquarters and other departments therein. Mr. Wallace held the position of Branch Manager with The Money Tree Inc. from 2001 to 2005 before assuming the role of Assistant Vice President from 2005 to 2007.

Compensation Discussion and Analysis

This Compensation Discussion and Analysis describes our compensation philosophy and policies for fiscal year 2007 that applied to the executives named below in the Summary Compensation Table (the “Named Executive Officers”). It explains the structure and rationale associated with each material element of each Named Executive Officer’s total compensation, and it provides important context for the more detailed disclosure tables and specific compensation amounts provided following this discussion and analysis.

The following discussion and analysis contains statements regarding future company performance targets and goals. These targets and goals are disclosed in the limited context of our compensation programs and should not be understood to be statements of management’s expectations or estimates of results or other guidance. We specifically caution investors not to apply these statements to other contexts.

Objectives of the Named Executive Officer Compensation Program

The objectives of our executive compensation program are to attract, retain and motivate highly talented executives and to align each executive’s incentives with our annual and long-term objectives. Specifically, our executive compensation program is designed to accomplish the following goals and objectives:

3

• maintain a compensation program that is equitable in our marketplace;

• provide opportunities that integrate pay with the annual and long-term performance goals;

• encourage achievement of strategic objectives;

• recognize and reward individual initiative and achievements;

• maintain an appropriate balance between base salary and short- and long-term incentive opportunity; and

• allow us to compete for, retain and motivate talented executives critical to our success and consistent with our quality of life philosophy.

Determining Named Executive Officer Compensation

We are a family-owned business with W. Derek Martin, the Sole Director, and his siblings beneficially owning all of the voting common stock. We do not have an official “compensation committee,” or other committee performing compensation-related activities on behalf of the Board of Directors. Until resigning from his position as President in August, 2007, Mr. Martin solely determined the compensation of all of the Named Executive Officers. Except for the compensation of Mr. Martin and himself, our current President, Mr. Bellville, now determines the compensation of all of the Named Executive Officers, but may on occasion receive information pertaining to compensation-based decisions from other Named Executive Officers. As the Sole Director, Mr. Martin continues to determine his and Mr. Bellville’s salary.

Our determination and assessments of executive compensation are primarily driven by the following four factors: (1) market data based on the compensation levels, programs and practices of certain other comparable companies for comparable positions, (2) our financial performance, (3) the Named Executive Officer’s performance, and (4) the Named Executive Officer’s tenure. We believe these four factors provide a reasonably measurable assessment of executive performance in light of building value and creating a healthy financial position for us. We rely upon our judgment about each individual Named Executive Officer, and not on rigid formulas or short-term changes in business performance, in determining the amount and mix of compensation elements and whether each particular payment or award provides an appropriate incentive and reward for performance that sustains and enhances our long-term growth.

2007 Named Executive Officer Compensation Components

Our executive compensation program consists primarily of base salary and bonuses. The program is complemented with other benefits such as 401(k) matching contributions, commissions, group health insurance, life insurance premiums and medical insurance premiums for all Named Executive Officers, and the provision of a company vehicle, country club memberships, and professional membership dues for certain Named Executive Officers.

Annual Base Salary

We intend to provide our Named Executive Officers with a level of assured cash compensation based on the individual’s position, experience, performance, past and potential contribution to us, and level of responsibility, as well as our overall financial performance. No

4

specific weighting is applied to any one factor considered, and Mr. Bellville and Mr. Martin use their own judgment and expertise in determining appropriate salaries within the parameters of the compensation philosophy. Base salary is one fixed component of our Named Executive Officers’ total direct compensation. With the exception of Mr. Martin and Mr. Bellville, each Named Executive Officer’s individual performance is reviewed on a yearly basis by Mr. Bellville, and the reviews are then discussed between Mr. Bellville and the Named Executive Officers. Mr. Martin reviews Mr. Bellville’s annual performance, and as the Sole Director, Mr. Martin no longer receives an annual employment review. The outcome of the yearly process is one tool Mr. Bellville utilizes in determining appropriate yearly salaries. For fiscal year 2008, the Named Executive Officers’ salaries are as follows:

Named Executive Officer	FY 2008 Salary		Percentage Increase / (Decrease) from FY 2007 Salary
W. Derek Martin	$	68,250	(57.7	%)
Bradley D. Bellville	$	225,000	64.8	%
Steve Morrison	$	84,000	5.00	%
David Hill	$	79,452	1.00	%
Claud Haynes	$	101,676	5.00	%

Bonus Awards

In addition to base salary, Named Executive Officers may receive a monthly cash bonus or sales-based commission. Each monthly bonus is determined on an individual basis based on whether the Named Executive Officer meets certain monthly performance goals which may be based on, but are not limited to, cash collection amounts, loan volume, delinquent account reduction and ancillary product sales. Additionally, sales commissions are given, where applicable, for those Named Executive Officers who meet certain sales-based goals. The President of the Company, Bradley D. Bellville, will receive a bonus equal to 1% of the Company’s net income before taxes for the fiscal year 2008. For fiscal year 2007, the bonus awards paid to Named Executive Officers were as follows:

Named Executive Officer	Bonus Award
W. Derek Martin	$	3,950
Bradley D. Bellville	$	9,900
Steve Morrison	$	3,250
David Hill	$	68,301
Claud Haynes	$	24,461

401(k) Plan

We sponsor the The Money Tree 401(k) Plan in which all qualified employees may participate. The purpose of the 401(k) plan is to provide participating employees with an opportunity to accumulate capital for their future economic security through their elective deferrals and our contributions. We believe this plan creates a strong incentive for participating employees to remain with us and to prepare for their individual futures. This benefits both employee retention and employee morale.

Perquisites and Other Named Executive Officer Benefits

Perquisites and other executive benefits are a part of our Named Executive Officers’ overall compensation. Our Named Executive Officers are eligible for the same group health

5

insurance plan as is provided to other eligible employees. Such group health insurance plan includes medical, dental, vision, prescription drug coverage, basic life insurance and short-term disability. We reimburse Named Executive Officers for their life insurance premiums, and pay for varying amounts of medical insurance premiums for all Named Executive Officers. Additionally, company cars are provided to Mr. Martin, Mr. Bellville, Mr. Hill and Mr. Haynes, and we pay monthly country club memberships for Mr. Bellville and Mr. Martin. Although we reimburse all Named Executive Officers for professional association dues, civic and social club membership dues for networking and entertaining, business-related meals and entertainment, and business-related cellular phone charges, these expenses are paid on behalf of employees for business use and we do not consider them personal perquisites.

For information on the incremental cost of these perquisites and other personal benefits, refer to the Summary Compensation Table. We believe the perquisites we provide to our Named Executive Officers are appropriate to ensure our executive compensation remains competitive.

Employment Agreements

We do not have any employment agreements with any of our Named Executive Officers.

Tax and Accounting Considerations

We consider and review the deductibility of executive compensation under Section 162(m) of the Internal Revenue Code (the “Code”), which generally provides that we may not deduct certain compensation of more than $1,000,000 that is paid to certain individuals. We do not have any Named Executive Officers that met this limit during fiscal year 2007.

We are aware of the regulatory developments under Code Section 409A, which was enacted as part of the American Jobs Creation Act of 2004. Section 409A imposes substantial limitations and conditions on non-qualified deferred compensation plans, including certain types of equity compensation and separation pay arrangements. We intend to amend our compensation arrangements, if necessary, in order to ensure their full compliance with Section 409A before the current transition period expires on December 31, 2007.

Conclusion

We believe our executive compensation program is reasonable and competitive with the compensation paid by other competing institutions of similar size and geographic location. The program is designed to reward managers for strong personal and company performance. Mr. Bellville and Mr. Martin monitor the various guidelines that make up the program and reserve the right to adjust them as necessary to continue to meet our objectives.

Compensation Committee Report

In the absence of a standing “compensation committee,” Mr. Martin, the Sole Director, has reviewed and discussed the Compensation Discussion and Analysis as required by Item 402(b) of Regulation S-K with management and, based on such review and discussions, determined that the Compensation Discussion and Analysis be included in this supplement.

The Board of Directors:

W. Derek Martin

6

Summary Compensation Table

The following table provides certain summary information concerning the annual and long-term compensation paid or accrued by The Money Tree Inc. and its subsidiaries to or on behalf of our Named Executive Officers.

Name and Principal Position	Fiscal Year	Salary (4)		Bonus (5)		All Other Compensation (6)		Total
W. Derek Martin, Chairman(1)	2007	$	217,230	$	3,950	$	18,356	$	239,536
Bradley D. Bellville, President(2)	2007	$	142,813	$	9,900	$	14,512	$	167,225
Steve Morrison, Chief Financial Officer	2007	$	82,500	$	3,250	$	3	$	85,753
David Hill, General Manager(3)	2007	$	78,891	$	68,301	$	41	$	147,233
Claud Haynes, Operations Manager	2007	$	97,445	$	24,461	$	41	$	121,947

(1) Mr. Martin served as our President until he resigned from that position on August 17, 2007. Mr. Martin continues to serve as an employee and as Sole Director.

(2) Mr. Bellville assumed the role of our President on August 17, 2007.

(3) Mr. Hill is the General Manager of Best Buy Autos of Bainbridge Inc., a subsidiary of The Money Tree of Georgia, Inc.

(4) The salary amounts shown are equal to the gross salary amounts that were paid to the Named Executive Officers during fiscal year 2007. As yearly salary increases are given, where appropriate, on the anniversary of the employee’s hire date, the salary reported may include a portion of the Named Executive Officer’s previous annual base salary and their current annual base salary.

(5) This amount includes both performance-based bonuses, as detailed in “2007 Named Executive Officer Compensation Components – Bonus Awards,” and commissions paid to Mr. Haynes by Home Furniture Mart Inc., a subsidiary of The Money Tree Inc.

(6) The details of “All other Compensation” are set forth below:

Name	Fiscal Year	Company Vehicle		Medical Insurance		Country Club Membership		Life Insurance		Total
W. Derek Martin	2007	$	10,209	$	6,306	$	1,800	$	41	$	18,356
Bradley Bellville	2007	$	5,824	$	6,306	$	1,800	$	582	$	14,512
Steve Morrison	2007	$	—	$	—	$	—	$	3	$	3
David Hill	2007	$	—	$	—	$	—	$	41	$	41
Claud Haynes	2007	$	—	$	—	$	—	$	41	$	41

7

Selected Consolidated Financial Data

The information contained in the Selected Consolidated Financial Data section on pages 16 and 17 of the prospectus are hereby deleted in their entirety and replaced by the following information.

The following selected consolidated financial data should be read in conjunction with “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and our audited consolidated financial statements and related notes included elsewhere in this supplement. The selected consolidated balance sheet data, as of September 25, 2007 and 2006, and the selected consolidated income statement data, for the fiscal years ended September 25, 2007, 2006 and 2005, have been derived from our audited consolidated financial statements and related notes included in this supplement. The selected consolidated balance sheet data, as of September 25, 2005 and 2004, and the selected consolidated income statement data, for the fiscal year ended September 25, 2004 and 2003, have been derived from our audited financial statements that are not included in this supplement. The selected consolidated balance sheet data, as of September 25, 2003 have been derived from our audited financial statements that are not included in this supplement.

[THE REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]

8

	As of, and for, the Fiscal Year Ended September 25,
	2007			2006			2005			2004			2003
Interest and fee income	$	19,481		$	20,048		$	18,843		$	17,052		$	12,714
Interest expense		(8,026	)		(7,350	)		(6,355	)		(5,848	)		(4,919	)
Net interest and fee income before provision for credit losses		11,455			12,698			12,488			11,204			7,795
Provision for credit losses		(4,983	)		(4,737	)		(2,768	)		(2,923	)		(1,983	)
Net interest and fee income after provision for credit losses		6,472			7,961			9,720			8,281			5,812
Insurance commissions		10,120			11,263			10,490			6,477			6,177
Commissions from motor club memberships(1)		1,947			1,957			1,475			1,995			1,612
Delinquency Fees		1,776			1,565			1,676			1,638			1,267
Income tax service income(2)		3			83			162			400			452
Other income		748			689			797			496			264
Net revenues before retail sales		21,066			23,518			24,320			19,287			15,584
Retail sales		19,002			17,972			15,061			14,360			19,940
Cost of sales		(12,170	)		(11,611	)		(9,358	)		(9,401	)		(14,207	)
Gross margin on retail sales		6,832			6,361			5,703			4,959			5,733
Net revenues		27,898			29,879			30,023			24,246			21,317
Operating expenses		(27,604	)		(29,151	)		(29,205	)		(24,854	)		(21,728	)
Net operating income (loss)		294			728			818			(608	)		(411	)
Other non-operating income		—			151			—			—			—
Loss on sale of property and equipment		(19	)		(75	)		(81	)		(31	)		(20	)
Income (loss) before income tax expense		275			804			737			(639	)		(431	)
Income tax expense		101			(274	)		(304	)		208			141
Net income (loss)	$	376		$	530		$	433		$	(431	)	$	(290	)
Ratio of earnings to fixed charges(3)		1.03			1.10			1.10			(4	)		(4	)
Cash and cash equivalents	$	17,854		$	12,920		$	9,619		$	8,373		$	8,749
Finance receivables(5)		79,549			79,797			77,292			65,066			58,123
Allowance for credit losses		(3,711	)		(3,139	)		(2,632	)		(2,056	)		(1,705	)
Finance receivables, net		75,838			76,658			74,660			63,010			56,418
Other receivables		861			1,013			1,099			4,904			2,074
Inventory		3,057			2,195			2,402			2,293			3,009
Property and equipment, net		4,220			4,581			4,850			4,657			3,272
Total assets		105,784			101,487			96,005			86,091			75,471
Senior debt		512			669			1,186			2,062			888
Senior subordinated debt		—			600			1,000			700			3,900
Subordinated debt, related parties		—			370			800			800			271
Debentures(6)		81,861			77,910			68,905			61,582			52,701
Demand notes(6)		5,991			8,137			12,867			11,702			10,277
Shareholders’ deficit	$	(930	)	$	(1,305	)	$	(1,835	)	$	(2,268	)	$	(1,837	)

⁽¹⁾ Received from Interstate Motor Club, Inc., an affiliated entity.

⁽²⁾ Received from Cash Check Inc. of Ga., an affiliated entity.

⁽³⁾ The ratio of earnings to fixed charges represents the number of times fixed charges are covered by earnings. For purposes of this ratio, “earnings” is determined by adding pre-tax income to “fixed charges,” which consists of interest on all indebtedness and an interest factor attributable to rent expense.

⁽⁴⁾ Calculation results in a deficiency in the ratio (i.e., less than one-to-one coverage). The deficiency in earnings to cover fixed charges was $430,913 for the year ended September 25, 2003 and $638,918 for the year ended September 25, 2004.

⁽⁵⁾ Net of unearned insurance commissions, unearned finance charges and unearned discounts.

⁽⁶⁾ Issued, in part, by our subsidiary, The Money Tree of Georgia Inc. See Note 8 to our audited financial statements for the year ended September 25, 2007.

9

Management’s Discussion and Analysis of Financial Condition and Results of Operations

The information contained in the Management’s Discussion and Analysis of Financial Condition and Results of Operations section on pages 18 through 37 of the prospectus are hereby deleted in their entirety and replaced by the following information.

The following discussion should be read in conjunction with the information under “Selected Consolidated Financial Data” and our audited consolidated financial statements and related notes and other financial data included elsewhere in this supplement.

Overview

We make consumer finance loans and provide other financial products and services through our branch offices in Georgia, Alabama, Louisiana and Florida. We sell retail merchandise, principally furniture, appliances and electronics, at certain of our branch office locations and operate three used automobile dealerships in the State of Georgia. We also offer insurance products, prepaid phone services and automobile club memberships to our loan customers.

We fund our consumer loan demand through a combination of cash collections from our consumer loans, proceeds raised from the sale of debentures and demand notes and loans from various banks and other financial institutions. Our consumer loan business consists of making, purchasing and servicing direct consumer loans, consumer sales finance contracts and motor vehicle installment sales contracts. Direct consumer loans generally serve individuals with limited access to other sources of consumer credit, such as banks, savings and loans, other consumer finance businesses and credit cards. Direct consumer loans are general loans made typically to people who need money for some unusual or unforeseen expense, for the purpose of paying off an accumulation of small debts or for the purchase of furniture and appliances. Please see “Business – General” for a more detailed discussion of the various types of loans we make to our customers. The following table sets forth certain information about the components of our finance receivables:

Description of Loans and Contracts

	As of, or for, the Year Ended September 25,
	2007			2006			2005
Direct Consumer Loans:
Number of Loans Made to New Borrowers		20,838			22,068			26,183
Number of Loans Made to Former Borrowers		55,117			54,794			52,785
Number of Loans Made to Existing Borrowers		110,364			98,386			100,439
Total Number of Loans Made		186,319			175,248			179,407
Total Volume of Loans Made	$	73,350,400		$	81,634,461		$	89,520,904
Average Size of Loans Made	$	394		$	466		$	499
Number of Loans Outstanding		76,284			73,440			71,070
Total of Loans Outstanding*	$	40,719,291		$	46,071,669		$	48,840,570
Percent of Loans Outstanding		46.6	%		51.7	%		55.3	%
Average Balance on Outstanding Loans	$	534		$	627		$	687

10

Description of Loans and Contracts

	As of, or for, the Year Ended September 25,
	2007			2006			2005
Motor Vehicle Installment Sales Contracts:
Total Number of Contracts Made		977			964			851
Total Volume of Contracts Made	$	17,965,678		$	17,425,293		$	14,155,640
Average Size of Contracts Made	$	18,389		$	18,076		$	16,634
Number of Contracts Outstanding		2,798			2,550			2,385
Total of Contracts Outstanding*	$	32,259,968		$	31,280,840		$	29,765,603
Percent of Total Loans and Contracts		36.9	%		35.1	%		33.7	%
Average Balance on Outstanding Contracts	$	11,530		$	12,267		$	12,480
Consumer Sales Finance Contracts:
Number of Contracts Made to New Customers		137			124			352
Number of Loans Made to Former Customers		2,684			2,250			3,641
Number of Loans Made to Existing Customers		3,120			2,432			2,291
Total Contracts Made		5,941			4,806			6,284
Total Volume of Contracts Made	$	16,869,906		$	12,749,329		$	10,904,159
Number of Contracts Outstanding		7,067			6,310			5,468
Total of Contracts Outstanding*	$	14,466,682		$	11,813,566		$	9,661,474
Percent of Total Loans and Contracts		16.5	%		13.2	%		11.0	%
Average Balance of Outstanding Contracts	$	2,047		$	1,872		$	1,767

* Contracts outstanding are exclusive of the following aggregate amounts of bankrupt accounts: $6,115,375 for the year ended September 25, 2007; $5,618,931 for the year ended September 25, 2006; and $4,921,905 for the year ended September 25, 2005.

Below is a table showing our total gross outstanding finance receivables and bankrupt accounts:

	September 25, 2007		September 25, 2006		September 25, 2005
Total Loans and Contracts Outstanding (gross):
Direct Consumer Loans	$	40,719,291	$	46,071,669	$	48,840,570
Motor Vehicle Installment		32,259,968		31,280,840		29,765,603
Consumer Sales Finance		14,466,682		11,813,566		9,661,474
Bankrupt Accounts		6,115,375		5,618,931		4,921,905
Total Gross Outstanding	$	93,561,316	$	94,785,006	$	93,189,552

Below is a roll-forward of the balance of each category of our outstanding finance receivables. Loans originated reflect the gross amount of loans made or purchased during the period presented inclusive of pre-computed interest, fees and insurance premiums. Collections represent cash receipts in the form of repayments made on our loans as reflected in our Consolidated Statements of Cash Flows. Refinancings represent the amount of the pay off of loans refinanced. Charge offs represent the gross amount of loans charged off as uncollectible (charge offs are shown net of non-file insurance receipts in our Allowance for Credit Losses). Rebates represent reductions to gross loan amounts of precomputed interest and insurance premiums resulting from loans refinanced and other loans paid off before maturity. See page F-9 (Summary of Significant Accounting Policies – Income Recognition) for further discussion

11

related to rebates of interest. Other adjustments primarily represent accounts transferred to and from the department that administers bankrupt accounts.

	Fiscal Year Ended September 25, 2007			Fiscal Year Ended September 25, 2006			Fiscal Year Ended September 25, 2005
Direct Consumer Loans:
Balance – beginning	$	46,071,669		$	48,840,570		$	38,281,888
Loans originated		73,350,400			81,634,461			89,520,904
Collections		(52,252,511	)		(57,356,295	)		(54,192,456	)
Refinancings		(18,154,981	)		(16,545,531	)		(16,169,389	)
Charge offs		(4,066,752	)		(4,753,034	)		(2,828,792	)
Rebates/other adjustments		(4,228,534	)		(5,748,502	)		(5,771,586	)
Balance – end	$	40,719,291		$	46,071,669		$	48,840,570
Consumer Sales Finance Contracts:
Balance – beginning	$	11,813,566		$	9,661,474		$	7,240,653
Loans originated		16,869,906			12,749,329			10,904,159
Collections		(6,058,209	)		(5,003,968	)		(3,923,845	)
Refinancings		(4,993,560	)		(3,527,789	)		(2,810,207	)
Charge offs		(1,110,556	)		(513,941	)		(448,951	)
Rebates/other adjustments		(2,054,465	)		(1,551,539	)		(1,300,335	)
Balance – end	$	14,466,682		$	11,813,566		$	9,661,474
Motor Vehicle Installment Sales Contracts:
Balance – beginning	$	31,280,840		$	29,765,603		$	30,557,683
Loans originated		17,965,678			17,425,293			14,155,640
Collections		(14,469,121	)		(13,446,490	)		(12,424,225	)
Refinancings		—			—			—
Charge offs		(1,185,753	)		(1,161,114	)		(1,316,489	)
Rebates/other adjustments		(1,331,676	)		(1,302,452	)		(1,207,006	)
Balance – end	$	32,259,968		$	31,280,840		$	29,765,603
Total Active Accounts:
Balance – beginning	$	89,166,075		$	88,267,647		$	76,080,224
Loans originated		108,185,984			111,809,083			114,580,703
Collections		(72,779,841	)		(75,806,753	)		(70,540,526	)
Refinancings		(23,148,541	)		(20,073,320	)		(18,979,595	)
Charge offs		(6,363,061	)		(6,428,089	)		(4,594,232	)
Rebates/other adjustments		(7,614,675	)		(8,602,493	)		(8,278,927	)
Balance – end	$	87,445,941		$	89,166,075		$	88,267,647
Total Bankrupt Accounts:
Balance – beginning	$	5,618,931		$	4,921,905		$	3,531,667
Charge offs		(790,514	)		(714,068	)		(649,741	)
Adjustments		1,286,958			1,411,094			2,039,979
Balance – end		6,115,375			5,618,931			4,921,905
Total Gross O/S Receivables	$	93,561,316		$	94,785,006		$	93,189,552

12

Below is a reconciliation of the amounts of the finance receivables originated and repaid (collections) from the receivable roll-forward to the amounts shown in our Consolidated Statements of Cash Flows.

	Fiscal Year Ended September 25, 2007			Fiscal Year Ended September 25, 2006			Fiscal Year Ended September 25, 2005
Finance Receivables Originated:
Direct consumer loans	$	73,350,400		$	81,634,461		$	89,520,904
Consumer sales finance		16,869,906			12,749,329			10,904,159
Motor vehicle installment sales		17,965,678			17,425,293			14,155,640
Total gross loans originated		108,185,984			111,809,083			114,580,703
Gross receivables purchased		—			—			—
Non-cash items included in gross finance receivables*		(31,243,362	)		(29,267,388	)		(29,622,467	)
Finance receivables originated – cash flows**	$	76,942,622		$	82,541,695		$	84,958,236
Loans Repaid:
Collections
Direct consumer loans	$	52,252,512		$	57,356,295		$	54,192,456
Consumer sales finance		6,058,208			5,003,969			3,923,845
Motor vehicle installment sales		14,469,121			13,446,490			12,424,225
Finance receivables repaid – cash flows	$	72,779,841		$	75,806,754		$	70,540,526

* Includes precomputed interest and fees (since these amounts are included in the gross amount of finance receivables originated but are not advanced in the form of cash to customers) and refinanced receivable balances (since there is no cash generated from the repayment of original receivables refinanced).

** Includes amounts advanced to customers in conjunction with refinancings, which were $10,545,399 for the fiscal year ended September 25, 2007; $10,537,845 for the fiscal year ended September 25, 2006; and $10,423,617 for the fiscal year ended September 25, 2005.

Segments and Seasonality

We segment our business operations into the following two segments:

• consumer finance and sales; and

• automotive finance and sales.

The consumer finance and sales segment is comprised primarily of small consumer loans and sales of consumer goods such as furniture, appliances and electronics. We typically experience our strongest financial performance for the consumer finance and sales segment during the holiday season, which is our first fiscal quarter ending December 25.

The automotive finance and sales segment is comprised exclusively of used vehicle sales and their related financing. We typically experience our strongest financial performance for the automotive finance and sales segment during our second fiscal quarter ending March 25 when used car sales are the highest. Please refer to Note 17 in the “Notes to Consolidated Financial Statements” for a breakdown of our operations by segment.

13

Net Interest Margin

A principal component of our profitability is our net interest margin, which is the difference between the interest that we earn on finance receivables and the interest that we pay on borrowed funds. In some states, statutes regulate the interest rates that we may charge our customers, while, in other locations, competitive market conditions establish interest rates that we may charge. Differences also exist in the interest rates that we earn on the various components of our finance receivable portfolio.

Unlike our interest income, our interest expense is sensitive to general market interest rate fluctuations. These general market fluctuations directly impact our cost of funds. Our general limited ability to increase the interest rates earned on new and existing finance receivables restricts our ability to react to increases in our cost of funds. Accordingly, increases in market interest rates generally will narrow our interest rate spread and lower our profitability, while decreases in market interest rates generally will widen our interest rate spread and increase our profitability. Significant increases in market interest rates will likely result in a reduction in our liquidity and profitability and impair our ability to pay interest and principal on the Debentures. See “Quantitative and Qualitative Disclosures About Market Risk” below.

The following table presents important data relating to our net interest margin:

	As of, or for, the Year Ended September 25,
	2007			2006			2005
Average net finance receivables (1)	$	79,247,445		$	80,614,846		$	70,640,777
Average notes payable(2)	$	87,680,692		$	87,496,046		$	80,154,165
Interest income	$	14,742,029		$	15,864,416		$	14,573,071
Loan fee income		4,738,711			4,183,795			4,269,944
Total interest and fee income		19,480,740			20,048,211			18,843,015
Interest expense		8,025,969			7,349,884			6,354,744
Net interest and fee income before provision for credit losses	$	11,454,771		$	12,698,327		$	12,488,271
Average interest rate earned		24.6	%		24.9	%		26.7	%
Average interest rate paid		9.2	%		8.4	%		7.9	%
Net interest rate spread		15.4	%		16.5	%		18.8	%
Net interest margin(3)		14.5	%		15.8	%		17.7	%

⁽¹⁾ Averages are computed using month-end balances of finance receivables (net of unearned interest/fees, insurance commissions, and unearned discounts) during the year presented.Net finance receivables for this purpose include all outstanding finance receivables, including accounts in bankruptcy and non-accrual status.

⁽²⁾ Averages are computed using month-end balances of interest bearing debt (including senior debt, senior subordinated debt, subordinated debt to related parties, debentures and demand notes) during the year presented.

⁽³⁾ Net interest margin represents net interest and fee income (net of the provision for credit losses) divided by average net finance receivables.

14

Rate/Volume Analysis

The following table sets forth the effects of changing rates and volumes on our net interest income. Information is provided with respect to (i) effects of interest income attributable to changes in volume (changes in volume multiplied by prior rate), (ii) effects on interest income attributable to changes in rate (changes in rate multiplied by prior volume), and (iii) changes in rate/volume (change in rate multiplied by change in volume).

	Increase (Decrease) Due to																		Total net increase (decrease)
	Volume						Rate						Rate/Volume
	9/25/07			9/25/06			9/25/07			9/25/06			9/25/07			9/25/06			9/25/07			9/25/06
Earning assets:
Interest income on finance receivables:	$	(224,699	)	$	2,439,027		$	(204,355	)	$	(1,049,970	)	$	(2,417	)	$	(54,861	)	$	(431,471	)(1)	$	1,334,196	(1)
Interest bearing liabilities:
Debentures & demand notes		150,543			534,708			597,906			432,103			11,871			34,917			760,320			1,001,728
Other debt		(85,253	)		(12,172	)		9,945			8,369			(8,927	)		(2,785	)		(84,235	)		(6,588	)
Total interest expense		65,290			522,536			607,851			440,472			2,944			32,132			676,085			995,140
Net interest income	$	(289,989	)	$	1,916,491		$	(812,206	)	$	(1,490,442	)	$	(5,361	)	$	(86,993	)	$	(1,107,556	)	$	339,056

⁽¹⁾ Excludes approximately $4,000 and $136,000 of earned discounts included in interest income in 2007 and 2006, respectively, as a result of finance receivables purchased at a discount in fiscal year 2004.

Return on Deficit and Assets

Below is a table showing certain performance ratios for the fiscal years ended September 25, 2007 and 2006. These ratios are typically reported by financial institutions in connection with their annual financial performance.

Performance Ratios(1)	2007		2006
Return on average assets(2)	0.5	%	0.5	%
Return on average shareholders’ deficit(3)	-50.0	%	-36.7	%
Average deficit to average assets ratio(4)	-0.7	%	-1.4	%

⁽¹⁾ Averages are computed using quarter end balances.

⁽²⁾ Calculated as net income divided by average total assets during the fiscal year.

⁽³⁾ Calculated as net income divided by average shareholders’ deficit during the fiscal year.

⁽⁴⁾ Calculated as average shareholders’ deficit divided by average total assets during the fiscal year.

Analysis of Allowance for Credit Losses

An allowance for credit losses is maintained primarily to account for the probable losses inherent in the finance receivables portfolio. The allowance is calculated based upon management’s estimate of the expected collectability of loans outstanding based upon a variety

15

of factors, including, without limitation, periodic analysis of the loan portfolio, historic loan loss experience, borrowers’ ability to repay and collateral considerations. We maintain an allowance for credit losses at a level that we consider adequate to provide for probable losses based on historical ratios of charge-offs to average notes receivable.

The following table shows these ratios of charge offs to average notes receivable for the categories of our finance receivables. The average net finance receivables are computed using monthly balances, net of unearned interest, unearned insurance commissions and unearned discounts. Charge offs are shown at gross amounts as presented in the receivable roll-forward on page 12. Recoveries represent receipts from non-file insurance claims and cash recoveries.

	As of, or for, the Fiscal Year Ended September 25,
	2007			2006			2005
Direct Consumer Loans and Consumer Sales Finance Contracts:
Average net finance receivables	$	53,453,781		$	55,184,869		$	47,201,084
Charge offs – direct consumer	$	4,066,752		$	4,753,034		$	2,828,792
Charge offs – consumer sales finance	$	1,110,556		$	513,941		$	448,951
Charge offs – bankruptcy	$	790,514		$	714,068		$	649,741
Total gross charge offs	$	5,967,822		$	5,981,043		$	3,927,484
Recoveries (all direct consumer)*	$	(2,751,142	)	$	(2,915,407	)	$	(3,047,784	)
Charge offs, net	$	3,216,680		$	3,065,636		$	879,700
Percent of net charge offs to average receivables		6.0	%		5.6	%		1.9	%
Motor Vehicle Installment Sales Contracts:
Average net finance receivables	$	25,793,664		$	25,429,977		$	23,439,693
Charge offs, gross	$	1,185,753		$	1,161,114		$	1,316,488
Recoveries		—			—			—
Charge offs, net	$	1,185,753		$	1,161,114		$	1,316,488
Percent of net charge offs to average receivables		4.6	%		4.6	%		5.6	%
Total Receivables:
Average net finance receivables	$	79,247,445		$	80,614,846		$	70,640,777
Charge offs, gross	$	7,153,575		$	7,142,157		$	5,243,972
Recoveries (all direct consumer)*	$	(2,751,142	)	$	(2,915,407	)	$	(3,047,784	)
Charge offs, net	$	4,402,433		$	4,226,750		$	2,196,188
Percent of net charge offs to average receivables		5.6	%		5.2	%		3.1	%

During fiscal year 2007, our gross charge offs were slightly higher than in fiscal year 2006. Charge offs of consumer sales finance loans rose significantly over the prior year levels, primarily due to the increased amounts of these type loans originated over the past two years. Charge offs of accounts in bankruptcy also increased in 2007. Although customers filing bankruptcy decreased dramatically following the bankruptcy reform in late 2005, filings recently have returned close to the pre-reform levels. Direct consumer loans charged off in 2007 decreased from 2006 levels. However, considering the effect of Hurricane Katrina in 2006, the charge offs were approximately the same.

16

Gross charge offs of finance receivables were considerably higher in fiscal 2006 over the prior years’ averages. However, approximately 30% of the net charge offs for the consumer segment relate to the company’s subsidiary, The Money Tree of Louisiana, Inc. Hurricane Katrina had a significant impact on our Louisiana customers and employees. Many were displaced and this inhibited the collection efforts in its aftermath. In early 2006, we deployed a group of collection specialists to assess the loan portfolio in the New Orleans area. This resulted in approximately $700,000 of accounts being charged off, most occurring in the 2^nd and 3^rd fiscal quarters of 2006 as this group worked through the process of determining the loans collectability.

As of September 25, 2007 and 2006, our allowance for credit losses was $3.7 million and $3.1 million, respectively. The primary factor for the increase in our allowance for credit losses was additional reserves to maintain a level we consider adequate based on the historical loss experience of net charge offs to average net outstanding finance receivables and other factors. The allowance for credit losses is 4.7% and 3.9% of the net outstanding finance receivables at September 25, 2007 and 2006, respectively.

Delinquency Information

Our delinquency levels reflect, among other factors, changes in the mix of loans in the portfolio, the quality of receivables, the success of collection efforts, bankruptcy trends and general economic conditions. The delinquency information in the following tables is computed on the basis of the amount past due in accordance with the original payment terms of the loan (contractual method). We use the contractual method for all external reporting purposes. Management closely monitors delinquency using this method to measure the quality of our loan portfolio and the probability of credit loss. We also use other tools, such as a recency report, which shows the date of the last full contractual payment received on the loan, to determine a particular customer’s willingness to pay. For example, if a delinquent customer has made a recent payment, we may decide to delay more serious collection measures, such as repossession of collateral. However, such a payment will not change the non-accrual status of the account until all of the principal and interest amounts contractually due are brought current (we receive one or more full contractual payments and the account is less than 60 days contractually delinquent), at which time we believe future payments are reasonably assured. Our gross finance receivables on non-accrual status, including bankruptcy accounts, totaled approximately $20.1 million and approximately $18.6 million for the fiscal years ended September 25, 2007 and 2006, respectively. Suspended interest as a result of these non-accrual accounts totaled $1.1 million, $1.0 million and $0.8 million for the fiscal years ended September 25, 2007, 2006 and 2005, respectively. Generally, we do not refinance delinquent accounts. However, on occasion, a past due account will qualify for refinancing. We use the following criteria for determining whether a delinquent account qualifies for refinancing: (1) a re-evaluation of the customer’s creditworthiness is performed to ensure additional credit is warranted; and (2) a payment must have been received on the account within the last 10 days. Since we refinance delinquent loans on such an infrequent basis, we do not maintain any statistics relating to this type of refinancing. Below is certain information relating to the delinquency status of each category of our receivables for the years ended September 25, 2007 and 2006:

17

As of September 25, 2007
	Direct Consumer Sales			Consumer Sales Finance Contracts			Motor Vehicle Installment Sales Contracts			Bankrupt Accounts			Total
Gross Loans and Contracts Receivable	$	40,719,291		$	14,466,682		$	32,259,968		$	6,115,375		$	93,561,316
Loans and Contracts 60-90 days past due	$	867,807		$	254,167		$	20,849		$	247,171		$	1,389,994
Percentage of Outstanding		2.13	%		1.76	%		0.06	%		4.04	%		1.49	%
Loans and Contracts greater than 90 days past due	$	10,867,871		$	3,149,552		$	26,130		$	3,261,191		$	17,304,744
Percentage of Outstanding		26.69	%		21.77	%		0.08	%		53.33	%		18.50	%
Loans and Contracts greater than 60 days past due	$	11,735,678		$	3,403,719		$	46,979		$	3,508,362		$	18,694,738
Percentage of Outstanding		28.82	%		23.53	%		0.15	%		57.37	%		19.98	%
As of September 25, 2006
	Direct Consumer Sales			Consumer Sales Finance Contracts			Motor Vehicle Installment Sales Contracts			Bankrupt Accounts			Total
Gross Loans and Contracts Receivable	$	46,071,669		$	11,813,566		$	31,280,840		$	5,618,931		$	94,785,006
Loans and Contracts 60-90 days past due	$	930,305		$	232,289		$	66,208		$	191,548		$	1,420,350
Percentage of Outstanding		2.02	%		1.97	%		0.21	%		3.41	%		1.50	%
Loans and Contracts greater than 90 days past due	$	10,026,777		$	2,916,164		$	8,385		$	2,832,426		$	15,783,752
Percentage of Outstanding		21.76	%		24.68	%		0.03	%		50.41	%		16.65	%
Loans and Contracts greater than 60 days past due	$	10,957,082		$	3,148,453		$	74,593		$	3,023,974		$	17,204,102
Percentage of Outstanding		23.78	%		26.65	%		0.24	%		53.82	%		18.15	%

Results of Operations

Comparison of Fiscal Years Ended September 25, 2007 and 2006

Net Revenues

Net revenues were $27.9 million and $29.9 million for the fiscal years ended September 25, 2007 and 2006, respectively. The decrease in net revenues was primarily as a result of the decrease in insurance commissions and interest and fee income. In the third quarter of fiscal year 2006, we modified our business plan to curtail larger, longer-term loans and to focus on smaller, shorter-term lending. This resulted in our gross loan volume decreasing 3.2% in 2007 compared to 2006. Direct Consumer loan volume decreased 10%, while Consumer Sales Finance loan volume increased 32% and Auto Sales Finance loan volume increased 3%. Due to the change in the mix of our loan portfolio, interest and loan fees were down compared to 2006 as well as the commissions earned on insurance products sold in conjunction with customer loans. We did see increases in retail sales and the resulting gross margins on these sales, which correlate to the increases in sales financing loans originated mentioned above.

Net Interest and Fee Income Before Provision for Credit Losses

Net interest and fee income before provision for credit losses was $11.5 million and $12.7 million for fiscal years ended September 25, 2007 and 2006, respectively. As discussed above, the decrease in our overall loan volume during fiscal year 2007 was the primary contributor to the decrease in interest and fee income. Interest expense was $8.0 million in 2007

18

and $7.3 million in 2006. The increase in interest expense was due to the additional borrowings from the sale of debentures.

Provision for Credit Losses

Provision for credit losses was $5.0 million and $4.7 million for fiscal years ended September 25, 2007 and 2006, respectively. Our analysis of the net charge offs to net outstanding finance receivables indicated an increasing trend. Thus, we deemed that additional reserves in the allowance for credit losses were necessary. Although our net outstanding finance receivables decreased slightly, the additional reserves resulted in increases in the corresponding provisions for credit losses.

Insurance and Other Products

Income from commissions on insurance products and motor club memberships decreased from $13.2 million in 2006 to $12.1 million in 2007. During 2007, commissions on credit insurance products were $7.0 million and non-credit insurance products and motor club memberships were $5.1 million. Approximately 64% of our loans during this period included one or more of our insurance products or motor club memberships. Delinquency fees and other income was in aggregate $2.5 million and $2.3 million for fiscal years ended September 25, 2007 and 2006, respectively. This increase was primarily due to the increases in delinquency fees as well as other miscellaneous charges and products included in other income.

Gross Margin on Retail Sales

Gross margin on retail sales were $6.8 million and $6.4 million for fiscal years ended September 25, 2007 and 2006, respectively. Gross margins in the consumer segment increased $0.5 million from 2006 while the automotive segment’s margin decreased $0.1 million. Vehicle sales were down $0.2 million from 2006 while sales in the consumer segment were up $1.2 million in 2007 over 2006.

Operating Expenses

Operating expenses were $27.6 million and $29.2 million for fiscal years ended September 25, 2007 and 2006, respectively. As a result of some decreases in staffing levels and significant decreases in health benefit related cost, personnel expenses decreased over 4% from 2006, while other operating expenses decreased 11%. We refined our process for customer solicitation that resulted in savings in postage and other costs. Travel and related cost were also down significantly from prior year levels due to a decreased number of personnel required to travel. General and administrative expenses decreased approximately 4% as a result of more favorable rates on telecommunications contracts.

Comparison of Fiscal Years Ended September 25, 2006 and 2005

Net Revenues

Net revenues were $29.9 million and $30.0 million for the fiscal years ended September 25, 2006 and 2005, respectively. The decrease in net revenues was primarily as a result of the increase in the provision for credit losses over 2005 and the increase in interest expense on debt from the sale of debentures. These cost increases were partially offset by

19

increases in interest, fees and related charges earned on customers’ loans, as well as the sale of various ancillary products to such customers, as described in more detail below.

Net Interest and Fee Income Before Provision for Credit Losses

Net interest and fee income before provision for credit losses was $12.7 million and $12.5 million for fiscal years ended September 25, 2006 and 2005, respectively. During fiscal year 2006, gross interest income increased $1.2 million while loan fees decreased $0.1 million over 2005. Interest expense was $7.3 million in 2006 and $6.4 million in 2005. The increase in interest expense was due to the additional borrowings from the sale of debentures.

Provision for Credit Losses

Provision for credit losses was $4.7 million and $2.8 million for fiscal years ended September 25, 2006 and 2005, respectively. The significant increase was due in part to additional charge offs of customer loans, primarily in Louisiana as a result of Hurricane Katrina, and increases in the allowance for credit losses and corresponding provisions.

Insurance and Other Products

Income from commissions on insurance products and motor club memberships increased from $12.0 million in 2005 to $13.2 million in 2006. During 2006, commissions on credit insurance products were $8.3 million and non-credit insurance products and motor club memberships were $4.9 million. Approximately 63% of our loans during this period included one or more of our insurance products or motor club memberships. Delinquency fees and other income was in aggregate $2.3 million and $2.5 million for fiscal years ended September 25, 2006 and 2005, respectively. This decrease was primarily due to the decreases in delinquency fees as well as other miscellaneous charges and products included in other income.

Gross Margin on Retail Sales

Gross margin on retail sales were $6.4 million and $5.7 million for fiscal years ended September 25, 2006 and 2005, respectively. Gross margins in the consumer segment decreased $0.2 million from 2005 while the automotive segment’s margin increased $0.9 million. Vehicle sales were up $2.1 million over 2005, due in part to the full-year impact in 2006 of the fourth car lot which opened in mid-2005 even in light of our decision to close one of our two Bainbridge lots in June 2006 due to poor sales and operating losses. Although we expect this to negatively effect gross sales and margins in the future, the reduction of the cost of operating this lot should have a positive effect on net income. Sales in the consumer segment were up $0.5 million in 2006 over 2005.

Operating Expenses

Operating expenses were $29.2 million and $29.2 million for fiscal years ended September 25, 2006 and 2005, respectively. Personnel and Facilities expenses were up slightly (each increased 5%), while General & Administrative and Other operating expenses decreased 6% and 11%, respectively. We refined our process for customer solicitation that resulted in savings in postage and other costs. Telecommunication costs were down from prior year levels due to favorable rates obtained on contract renewals.

20

Liquidity and Capital Resources

General

Liquidity is our ability to meet short-term financial obligations whether through collection of receivables, sales of Debentures and Demand Notes or by generating additional funds through sales of assets to our competitors (such as our finance receivables or vehicle inventory). Continued liquidity is, therefore, largely dependent on the collection of our receivables and the sale of debt securities that meet the investment requirements of the public. We believe the cash flow from our operations coupled with sales of the Debentures and Demand Notes will be sufficient to cover our liquidity needs and cash flow requirements during 2008.

Liquidity management refers to our ability to generate sufficient cash to fund the following primary uses of cash:

• meet all of our debenture and demand note redemption obligations;

• pay interest on all of our debentures and demand notes;

• pay operating expenses; and

• fund consumer finance loan demand and used automobile vehicle inventory.

The primary objective for liquidity management is to ensure that at all times we can meet the redemption obligations of our note holders. A secondary purpose of liquidity management is profit management. Because profit and liquidity are often conflicting objectives, we attempt to maximize our net interest margin by making adequate, but not excessive, liquidity provisions. To the extent we have adequate cash to meet our redemption obligations and pay interest to our note holders, we will use remaining cash to make consumer finance loans, purchase used automobile vehicle inventory and invest in other sources of potential revenues.

Changes in our liquidity position result from operating, investing and financing activities. Cash flows from operating activities are generally the cash effects of transactions and other events that enter into the determination of our net income, including without limitation purchases of used automobiles, electronics, furnishings and other consumer goods for resale to our customers. The primary investing activities include consumer loan originations and purchases and collections on such consumer loans. Our financing activities focus almost entirely on the sale of Debentures and Demand Notes.

Cash and cash equivalents increased by approximately $4.9 million during fiscal year 2007 from a balance of $12.9 million at September 25, 2006 to $17.8 million at September 25, 2007, as compared to a increase of approximately $3.3 million during fiscal year 2006 from a balance of $9.6 million at September 25, 2005 to $12.9 million at September 25, 2006. During 2007, the primary sources of cash were loan repayments from customers and proceeds net of redemptions from sales of debentures. During 2007, the primary uses of cash were loan originations to customers and redemptions of debentures and demand notes. Since we changed our business plan in fiscal year 2006, cash required to fund our lending activities has decreased significantly. This along with increases in cash provided by operations has resulted in the cash and cash equivalent balances we currently have. We carry these increased amounts of cash to insure that we are able to meet our redemption obligations, specifically our demand notes, and to have sufficient cash reserves to meet our anticipated increase in loan volume during our first fiscal quarter of 2008.

During 2007, our investing activities were generally funded by the $8.9 million of net cash provided by operating activities and $0.7 million of net cash provided by financing

21

activities. Below is a table showing the net effect of our cash flows from financial activities for our fiscal years ended September 25, 2007 and 2006:

	2007			2006
Senior debt – borrowing	$	3,618,439		$	3,915,053
Senior debt – repayments		(3,775,325	)		(4,432,050	)
Net	$	(156,886	)	$	(516,997	)
Senior subordinated debt – borrowing	$	—			—
Senior subordinated debt – repayments		(600,000	)		(400,000	)
Net	$	(600,000	)	$	(400,000	)
Junior subordinated debt – borrowing	$	—			—
Junior subordinated debt – repayments		(370,000	)	$	(430,000	)
Net	$	(370,000	)	$	(430,000	)
Demand notes – borrowing	$	2,806,294		$	11,495,511
Demand notes – repayments		(4,951,770	)		(16,225,868	)
Net	$	(2,145,476	)	$	(4,730,357	)
Debentures – borrowing	$	14,132,396		$	21,060,333
Debentures – repayments		(10,181,582	)		(12,054,884	)
Net	$	3,950,814		$	9,005,449

Cash payments for interest for the fiscal years ended September 25, 2007 and 2006 were as follows:

	2007		2006
Senior debt	$	117,767	$	119,046
Senior subordinated debt		40,395		71,382
Junior subordinated debt, including related parties		15,692		50,944
Debentures and demand notes		5,104,435		5,003,762
Total interest payments	$	5,278,289	$	5,245,134

During 2007, we used a net of $4.6 million for investing activities. We received $72.8 million in loan repayments from our customers and received $0.6 million in proceeds from the sale of property and equipment. However, we originated $76.9 million in new loans to customers and purchased $1.0 million worth of property and equipment.

During 2008, we expect to continue to use a significant amount of net offering proceeds we raise from the sale of Debentures and Demand Notes to fund redemption obligations and pay interest on our securities. During the fiscal year ended September 25, 2007, we redeemed $10.2 million of debentures and $5.0 million of demand notes issued by us and our subsidiary, The Money Tree of Georgia Inc. We will use any remaining net offering proceeds to fund our consumer loan demand, purchase used automobiles, open new branch office locations and to fund the other company activities described in “Use of Proceeds.”

Debentures and Demand Notes

During the fiscal year ended September 25, 2007, we (1) received gross proceeds of $14.1 million from the sale of debentures and $2.8 million from the sale of demand notes, and (2) paid $10.2 million for redemption of debentures and $5.0 million for redemption of demand notes. As of September 25, 2007, we and our subsidiary The Money Tree of Georgia Inc. had

22

$81.9 million of debentures and $6.0 million of demand notes outstanding compared to $77.9 million of debentures and $8.1 million of demand notes outstanding, as of September 25, 2006.

As described in more detail in “Description of Debentures,” the debentures may be redeemed at our investor’s option at the end of the interest adjustment period selected by them (one years, two years or four years) or at maturity. Demand Notes may be redeemed by holders at any time. We intend to meet our obligation to repay such debt with cash generated from sales of the Debentures and Demand Notes, cash on hand, income from operations or working capital.

Pursuant to this supplement, we are offering up to $75.0 million of Debentures for sale to the public. In addition, pursuant to a separate registration statement filed with the SEC (Commission Registration No. 333-122533), we are offering up to $35.0 million of Demand Notes for sale to the public. Currently, we are substantially reliant upon the net offering proceeds to be raised from these offerings to meet our redemption obligations and for our other short and long-term liquidity needs. See “Lack of a Significant Line of Credit” below.

Lack of a Significant Line of Credit

Although we have been without a significant line of credit for the past several years, we have not experienced any material cash flow problems and do not expect any cash flow problems during the next 12 months. This is due in part to the following factors:

• During the period of September 26, 2006 through September 25, 2007, we averaged over $1.4 million per month in sales of new debentures and demand notes,

• We had average cash equivalents balance during fiscal year 2007 of $16.6 million. Our cash and cash equivalents balance at September 25, 2007 was $17.9 million;

• Cash repayment of customer loans in fiscal year 2007 was approximately $72.8 million. This represents approximately 78% of our average gross outstanding finance receivables during the period;

• During fiscal year 2006, we modified our business plan regarding lending. We decided to curtail the number of larger, longer-term loans and focus on small, shorter-term lending. This has led to a narrowing of the gap between our loans originated and loans repaid, thus requiring less cash needed in this area; and

• The average term of our direct consumer loans is less than seven months and, therefore, if we anticipate having short-term cash flow problems, we could curtail the amount of funds we loan to our customers and focus on collections to increase cash flow.

We are, however, continually evaluating the possibility of obtaining a line of credit for our long-term financing needs. If we fail to secure a line of credit, we will continue to be heavily reliant upon our ability to sell the Debentures and Demand Notes for our liquidity. If the sale of Debentures and Demand Notes is curtailed for any reason and we fail to obtain a line of credit, our ability to meet our obligations, including our redemption obligations with respect to the debentures and demand notes, could be materially and adversely affected. Please see “Risk

23

Factors – We may be unable to meet our debenture and demand note redemption obligations which could force us to sell off our loan receivables and other operating assets or cease our operations.”

Subsequent Events

From September 26, 2007 to November 25, 2007, we had raised $0.5 million in debentures net of redemptions and we had redeemed $0.6 million more demand notes than we had sold. These include amounts that were redeemed through our subsidiary, The Money Tree of Georgia Inc.

Recent Accounting Pronouncements

Set forth below are recent accounting pronouncements that may have a future effect on operations.

In June 2006, the Financial Accounting Standards Board (FASB) issued FASB Interpretation No. 48 (FIN 48),Accounting for Uncertainty in Income Taxes-an interpretation of FASB Statement 109. FIN 48 clarifies the accounting for uncertainty in income taxes recognized in an enterprise’s financial statements in accordance with FASB Statement No. 109,Accounting for Income Taxes. FIN 48 prescribes a comprehensive model for recognizing, measuring, presenting and disclosing in the financial statements tax positions taken or expected to be taken on a tax return. If there are changes in net assets as a result of application of FIN 48 these will be accounted for as an adjustment to retained earnings. Additional disclosures about the amounts of such liabilities will be required also. The Interpretation is effective for fiscal years beginning after December 15, 2006. The Company is evaluating the impact of FIN 48 on the Company’s financial position and operating results.

In September 2006, the Financial Accounting Standards Board (FASB) issued SFAS 157,Fair Value Measurements. SFAS 157 defines fair value, establishes a framework for measuring fair value under generally accepted accounting principles, and expands disclosures about fair value measurements. SFAS 157 is effective for financial statements issued for fiscal years beginning after November 15, 2007. The Company is currently evaluating the impact the adoption of this statement could have on its financial condition, results of operations and cash flows.

In September 2006, the Financial Accounting Standards Board (FASB) issued SFAS 158, Employers’ Accounting for Defined Benefit Pension and Other Postretirement Plans. SFAS 158 requires an employer to recognize the overfunded or underfunded status of a defined benefit plan as an asset or liability in the balance sheet and to recognize changes in that funded status in the year in which the changes occur through comprehensive income. This pronouncement will be effective for financial statements issued for fiscal years beginning after December 15, 2006. The Company is evaluating the impact of SFAS 158 on the Company’s financial position and operating results.

In February 2007, the FASB issued SFAS 159,The Fair Value Option for Financial Assets and Liabilities - Including an amendment of FASB Statement No. 115. SFAS 159 permits entities to choose to measure certain financial assets and liabilities at fair value (the “fair value option”). Unrealized gains and losses, arising subsequent to adoption, are reported in earnings. The Company is required to adopt SFAS 159 for the fiscal year beginning September 26, 2007.

24

The Company has not yet determined the impact, if any, that SFAS 159 will have on its consolidated financial statements.

In December 2007, the FASB issued SFAS 141(R),Business Combinations. This Statement replaces SFAS 141, “Business Combinations.” This Statement retains the fundamental requirements in Statement 141 that the acquisition method of accounting (which Statement 141 called the purchase method) be used for all business combinations and for an acquirer to be identified for each business combination. This Statement also establishes principles and requirements for how the acquirer: a) recognizes and measures in its financial statements the identifiable assets acquired, the liabilities assumed, and any noncontrolling interest in the acquiree; b) recognizes and measures the goodwill acquired in the business combination or a gain from a bargain purchase and c) determines what information to disclose to enable users of the financial statements to evaluate the nature and financial effects of the business combination. SFAS 141(R) will apply prospectively to business combinations for which the acquisition date is on or after the Company’s fiscal year beginning September 26, 2009. While the Company has not yet evaluated this statement for the impact, if any, that SFAS 141(R) will have on its consolidated financial statements, the Company will be required to expense costs related to any acquisitions after September 25, 2009.

In December 2007, the FASB issued SFAS 160,Noncontrolling Interests in Consolidated Financial Statements. This Statement amends Accounting Research Bulletin 51 to establish accounting and reporting standards for the noncontrolling (minority) interest in a subsidiary and for the deconsolidation of a subsidiary. It clarifies that a noncontrolling interest in a subsidiary is an ownership interest in the consolidated entity that should be reported as equity in the consolidated financial statements. The Company has not yet determined the impact, if any, that SFAS 160 will have on its consolidated financial statements. SFAS 160 is effective for the Company’s fiscal year beginning September 26, 2009.

Critical Accounting Policies

Our accounting and reporting policies conform with accounting principles generally accepted in the United States of America (GAAP) and predominant practice within the financial services industry. The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and the accompanying notes. Actual results could differ from those estimates.

We believe that the determination of our allowance for credit losses involves a higher degree of judgment and complexity than our other significant accounting policies. The allowance for credit losses is calculated with the objective of maintaining a reserve level believed by management to be sufficient to absorb estimated credit losses. Management’s determination of the adequacy of the allowance is based on periodic evaluations of the loan portfolio and other relevant factors. However, this evaluation is inherently subjective as it requires material estimates, including, among others, expected default probabilities, loss given default, the amounts and timing of expected future cash flows on impaired loans, and general amounts for historical loss experience. We also consider economic conditions, uncertainties in estimating losses and inherent risks in the loan portfolio. All of these factors may be susceptible to significant change. To the extent actual outcomes differ from management’s estimates,

25

additional provisions for credit losses may be required that would adversely impact earnings in future periods.

Finance receivables are considered impaired, i.e. income recognition ceases, as a result of past-due status or a judgment by management that, although payments are current, such action is prudent. Finance receivables on which payments are past due 90 days or more are considered impaired unless they are well-secured and in the process of collection or renewal. Any losses incurred from finance receivables that are impaired are charged off at 180 days past due. Related accrued interest and fees are reversed against current period income.

When a loan is impaired, interest accrued but uncollected is generally reversed against interest income. Cash receipts on impaired loans are generally applied to reduce the unpaid principal balance.

We recognize deferred tax assets and liabilities for the future tax effects of temporary differences, net operating loss carry-forwards and tax credits. Deferred tax assets are subject to management’s judgment based upon available evidence that future realization is more likely than not. If management determines that we may be unable to realize all or part of net deferred tax assets in the future, a direct charge to income tax expense may be required to reduce the recorded value of the net deferred tax asset to the expected realizable amount.

We have not substantially changed any aspect of our overall approach in the application of the foregoing policies. There have been no material changes in assumptions or estimation techniques utilized as compared to previous years. Please refer to Note 2 in the notes to our audited consolidated financial statements for details regarding our summary of significant accounting policies.

Impact of Inflation and General Economic Conditions

Although inflation has not had a material adverse effect on our financial condition or results of operations, increases in the inflation rate are generally associated with increased interest rates. A significant and sustained increase in the interest rates would likely unfavorably impact our profitability by reducing the interest rate spread between the rate of interest we receive on our customer loans and interest rates we pay to our note holders, banks and finance companies. Inflation may also negatively affect our operating expenses.

Contractual Commitments and Contingencies

Our operations are carried on in branch office locations which we occupy pursuant to lease agreements. The leases typically provide for a lease term of five years. Please see Notes 12 and 15 in the notes to our audited consolidated financial statements for details relating to our rental commitments and contingent liabilities, respectively. Please also see “Business – Properties” and “Certain Relationships and Related Transactions” for further discussion of our leases. Below is a table showing our contractual obligations under current debt financing and leasing arrangements as of September 25, 2007:

26

Contractual Obligations

Payments Due by Period (in thousands)

	Total		Less than 1 year		1 – 3 years		3 – 5 years		More than 5 years
Long term debt	$	88,364	$	21,851	$	45,885	$	20,628	$	—
Operating leases		5,945		2,474		2,631		772		68
Total obligations	$	94,309	$	24,325	$	48,516	$	21,400	$	68

Quantitative and Qualitative Disclosures About Market Risk

Our profitability and financial performance are sensitive to changes in the U.S. Treasury yields and the spread between the effective rate of interest we receive on customer loans and the interest rates we pay on our borrowings. Our finance income is generally not sensitive to fluctuations in market interest rates. The primary exposure that we face is changes in interest rates on our borrowings. A substantial and sustained increase in market interest rates would likely adversely affect our growth and profitability since we will be required to increase the interest rates we pay to holders of Debentures at the end of each interest adjustment period. We would also face pressure to increase interest rates on our demand notes to stay competitive. The overall objective of our interest rate risk management strategy is to mitigate the effects of changing interest rates on our interest expense through the utilization of short-term variable rate debt and medium and long term fixed rate debt. We have not entered into any derivative instruments to manage our interest rate risk. Please see Note 8 in the notes to our audited consolidated financial statements for information on our debt, including maturities and interest rates.

Certain Relationships and Related Transactions

The information contained in the Certain Relationships and Related Transactions section on pages 53 and 54 of the prospectus are hereby deleted in their entirety and replaced by the following information.

Our officers also serve as the officers of various of our subsidiaries. W. Derek Martin is our Sole Director and Sole Director of each of our subsidiaries. We may be subject to various conflicts of interest in our relationship with Mr. Martin and his other business enterprises. The following is a description of transactions and relationships between us, our executive officers and our Sole Director and each of their affiliates.

Our President, Bradley Bellville, owns 40% of the outstanding stock of Interstate Motor Club and each of the late Vance R. Martin’s three children, including W. Derek Martin, our Sole Director, owns 20%. Interstate Motor Club pays us a commission for each membership sold pursuant to an Agency Sales Agreement. During fiscal year ended September 25, 2007, we received $1.9 million in commissions pursuant to the Agency Sales Agreement.

Martin Family Group, LLLP owns the real estate for 13 of our branch office locations, one used car lot and our principal executive offices. We have entered into lease agreements with Martin Family Group, LLLP whereby rent is paid monthly for use of these locations. Mr. Martin is the president of Martin Investments, Inc. which is the managing general partner of Martin Family Group, LLLP. In addition, Martin Sublease, L.L.C. leases from the owners, and subleases to us, 53 of these branch office locations and two used car lots. Some of this spread covers costs for leasehold improvements and property operating costs paid directly by Martin Sublease, L.L.C. Management believes that these leases are at rates which are comparable to

27

those obtainable from independent third parties. During fiscal year ended September 25, 2007, we paid total lease payments of $2,033,091 million in the aggregate to Martin Family Group, LLLP and Martin Sublease, L.L.C.

Cash Check is a company owned by the Estate of Vance R. Martin (50%), Bradley Bellville, our President (25%), and Beverly A. Cross, our Corporate Secretary (25%).Cash Check prepares and files income tax returns to our customers and other consumers. Pursuant to a service agreement, Cash Check prepares and files income tax returns for our customers. We provide substantially all expenses related to customer service, including personnel, facilities and equipment for Cash Check and receive approximately 90% of the net income resulting from income tax returns filed by Cash Check. The service agreement states that the following services be provided to Cash Check: (1) assisting customers in preparing tax returns; (2) handling the in-office preparation and processing of tax returns; (3) maintaining a supply of forms and documents related to the preparation and electronic filing of tax returns; and (4) doing such other acts as are necessary or desirable in connection with preparing and electronically filing tax returns for customers. During fiscal year ended September 25, 2007, we received $3,310 pursuant to the service agreement.

Experts

The information contained in the Experts section on page 60 of the prospectus are hereby deleted in their entirety and hereby replaced with the following information.

The consolidated financial statements appearing in this Supplement have been audited by Carr, Riggs & Ingram, LLC, an independent registered public accounting firm, to the extent and for the periods indicated in their report appearing elsewhere herein, and are included in reliance upon such report and upon the authority of such firm as experts in accounting and auditing.

28

Index to Financial Statements

	Page
Report of Independent Registered Public Accounting Firm	F-2

Audited Financial Statements

Consolidated Balance Sheets as of September 25, 2007 and 2006	F-3
Consolidated Statements of Operations for the years ended September 25, 2007, 2006 and 2005	F-4
Consolidated Statements of Shareholders’ Deficit for the years ended September 25, 2007, 2006 and 2005	F-5
Consolidated Statements of Cash Flows for the years ended September 25, 2007, 2006 and 2005	F-6
Notes to Consolidated Financial Statements	F-8

F-1

Report of Independent Registered Public Accounting Firm

To the Director and Shareholders

The Money Tree Inc. and subsidiaries

We have audited the accompanying consolidated balance sheets of The Money Tree Inc. and subsidiaries as of September 25, 2007 and 2006, and the related consolidated statements of income, shareholders’ deficit, and cash flows for each of the three years in the period ended September 25, 2007. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of The Money Tree Inc. and subsidiaries as of September 25, 2007 and 2006, and the results of their operations and their cash flows for each of the three years in the period ended September 25, 2007, in conformity with U.S. generally accepted accounting principles.

/s/ Carr, Riggs & Ingram, LLC

Tallahassee, Florida

December 21, 2007

F-2

The Money Tree Inc. and Subsidiaries

Consolidated Balance Sheets

September 25,	2007			2006
Assets
Cash and cash equivalents	$	17,854,277		$	12,919,524
Finance receivables, net		75,837,823			76,657,536
Other receivables		861,366			1,012,913
Employee receivables		1,990			2,029
Inventory		3,056,775			2,195,463
Property and equipment, net		4,219,885			4,580,804
Deferred income taxes		1,210,000			645,000
Goodwill		991,243			1,357,067
Other assets		1,750,142			2,116,618
Total assets	$	105,783,501		$	101,486,954
Liabilities and Shareholders’ Deficit
Liabilities
Accounts payable and other accrued liabilities	$	4,020,056		$	3,525,278
Accrued interest payable		14,329,092			11,581,412
Senior debt		511,663			668,549
Senior subordinated debt		—			600,000
Variable rate subordinated debentures		81,861,016			77,910,202
Demand notes		5,991,374			8,136,850
Junior subordinated debt, related parties		—			370,000
Total liabilities		106,713,201			102,792,291
Commitments and contingencies (see Notes 12 and 15)
Shareholders’ deficit
Common stock:
Class A voting, no par value; 500,000 shares authorized, 2,686 shares issued and outstanding		1,677,647			1,677,647
Class B non-voting, no par value; 1,500,000 shares authorized, 26,860 shares issued and outstanding		—			—
Accumulated deficit		(2,607,347	)		(2,982,984	)
Total shareholders’ deficit		(929,700	)		(1,305,337	)
Total liabilities and shareholders’ deficit	$	105,783,501		$	101,486,954

See accompanying notes to the consolidated financial statements.

F-3

The Money Tree Inc. and Subsidiaries

Consolidated Statements of Income

Years ended September 25,	2007			2006			2005
Interest and fee income	$	19,480,740		$	20,048,211		$	18,843,015
Interest expense		(8,025,969	)		(7,349,884	)		(6,354,744	)
Net interest and fee income before provision for credit losses		11,454,771			12,698,327			12,488,271
Provision for credit losses		(4,982,494	)		(4,737,644	)		(2,767,868	)
Net interest and fee income after provision for credit losses		6,472,277			7,960,683			9,720,403
Insurance commissions		10,120,463			11,262,655			10,490,324
Commissions from motor club memberships from company owned by related parties		1,946,476			1,957,478			1,474,454
Delinquency Fees		1,775,728			1,564,872			1,675,903
Income tax service agreement income from company owned by related parties		3,310			83,034			161,739
Other income		747,829			689,606			797,068
Net revenue before retail sales		21,066,083			23,518,328			24,319,891
Retail sales		19,001,858			17,972,565			15,342,564
Cost of sales		(12,170,317	)		(11,611,383	)		(9,639,546	)
Gross margin on retail sales		6,831,541			6,361,182			5,703,018
Net revenues		27,897,624			29,879,510			30,022,909
Operating expenses
Personnel expense		(15,349,102	)		(16,055,481	)		(15,349,599	)
Facilities expense		(3,760,048	)		(3,829,170	)		(3,640,192	)
General and administrative expenses		(3,150,330	)		(3,291,818	)		(3,520,904	)
Other operating expenses		(5,344,159	)		(5,974,476	)		(6,693,942	)
Total operating expenses		(27,603,639	)		(29,150,945	)		(29,204,637	)
Net operating income		293,985			728,565			818,272
Other non-operating income		—			151,233			—
Loss on sale of property and equipment		(19,012	)		(75,720	)		(80,695	)
Income before income tax benefit (expense)		274,973			804,078			737,577
Income tax benefit (expense)		100,664			(274,490	)		(304,429	)
Net income	$	375,637		$	529,588		$	433,148
Net income per common share, basic and diluted	$	12.71		$	17.92		$	14.66

See accompanying notes to the consolidated financial statements.

F-4

The Money Tree Inc. and Subsidiaries

Consolidated Statements of Shareholders’ Deficit

	Common Stock						Accumulated Deficit			Total Shareholders’ Deficit
	Class A Voting			Class B Non-voting
	Shares	Stated Value		Shares	Stated Value
Balance at September 25, 2004	2,686	$	1,677,647	26,860	$	—	$	(3,945,720	)	$	(2,268,073	)
Net income	—		—	—		—		433,148			433,148
Balance at September 25, 2005	2,686		1,677,647	26,860		—		(3,512,572	)		(1,834,925	)
Net income	—		—	—		—		529,588			529,588
Balance at September 25, 2006	2,686		1,677,647	26,860		—		(2,982,984	)		(1,305,337	)
Net income	—		—	—		—		375,637			375,637
Balance at September 25, 2007	2,686	$	1,677,647	26,860	$	—	$	(2,607,347	)	$	(929,700	)

See accompanying notes to the consolidated financial statements.

F-5

The Money Tree Inc. and Subsidiaries

Consolidated Statements of Cash Flows

Years ended September 25,	2007			2006			2005
Cash flows from operating activities
Net income	$	375,637		$	529,588		$	433,148
Adjustments to reconcile net income to net cash provided by operating activities:
Provision for credit losses		4,982,494			4,737,644			2,767,868
Depreciation		794,418			946,745			901,134
Amortization		5,714			6,746			8,191
Goodwill write-down		365,824			—			—
Deferred income taxes		(565,000	)		—			(196,464	)
Loss on sale of property and equipment		19,012			75,720			80,695
Change in assets and liabilities:
Other receivables		151,547			86,439			3,804,736
Employee receivables		39			3,436			12,562
Inventory		(861,312	)		206,168			(108,762	)
Other assets		360,762			(755,902	)		(346,012	)
Accounts payable and other accrued liabilities		494,778			(80,027	)		(63,827	)
Accrued interest payable		2,747,680			2,104,750			1,633,047
Net cash provided by operating activities		8,871,593			7,861,307			8,926,316
Cash flows from investing activities
Finance receivables originated		(76,942,622	)		(82,541,695	)		(84,958,236	)
Finance receivables repaid		72,779,841			75,806,754			70,540,526
Purchase of property and equipment		(1,032,849	)		(898,832	)		(1,264,295	)
Proceeds from sale of property and equipment		580,338			145,338			90,130
Net cash used in investing activities		(4,615,292	)		(7,488,435	)		(15,591,875	)
Cash flows from financing activities
Net proceeds (repayments) on:
Senior debt		(156,886	)		(516,997	)		(876,698	)
Demand notes		(2,145,476	)		(4,730,357	)		1,165,228
Proceeds on senior subordinated debt		—			—			1,000,000
Repayments on senior subordinated debt		(600,000	)		(400,000	)		(700,000	)
Repayments on junior subordinated debt and related parties		(370,000	)		(430,000	)		—
Proceeds-variable rate subordinated debentures		14,132,396			21,060,333			18,226,514
Payments-variable rate subordinated debentures		(10,181,582	)		(12,054,884	)		(10,904,042	)
Net cash provided by financing activities		678,452			2,928,095			7,911,002
Net change in cash and cash equivalents		4,934,753			3,300,967			1,245,443
Cash and cash equivalents, beginning of year		12,919,524			9,618,557			8,373,114
Cash and cash equivalents, end of year	$	17,854,277		$	12,919,524		$	9,618,557

See accompanying notes to the consolidated financial statements.

F-6

The Money Tree Inc. and Subsidiaries

Consolidated Statements of Cash Flows (continued)

Years ended September 25,	2007		2006		2005
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid during the year for:
Interest	$	5,278,289	$	5,245,134	$	4,721,697
Income taxes	$	198,897	$	1,180,024	$	337,148

See accompanying notes to the consolidated financial statements.

F-7

The Money Tree Inc. and Subsidiaries

Notes to Consolidated Financial Statements

NOTE 1 – NATURE OF BUSINESS

The Company’s business consists of the operation of finance company offices in 102 locations throughout Georgia, Alabama, Louisiana and Florida; sales of retail merchandise (principally furniture, appliances, and electronics) at certain finance company locations; and the operation of three used automobile dealerships in the State of Georgia. The Company also earns revenues from commissions on premiums written for certain insurance products, when requested by loan customers, as an agent for a non-affiliated insurance company. Revenues are also generated from commissions on the sales of prepaid phone service and automobile club memberships.

The Company’s loan portfolio consists of consumer sales finance contracts receivables and direct consumer loan receivables. Consumer sales finance contracts receivables consist principally of retail installment sale contracts collateralized by used automobiles and consumer goods which are initiated by automobile and consumer good dealerships, subject to credit approval, in the locations where the Company operates offices. Direct consumer loan receivables are loans originated directly to customers for general use which are collateralized by existing automobiles or consumer goods, or are unsecured.

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Financial Statement Presentation

The consolidated financial statements include the accounts of the Company and its subsidiaries, all of which are wholly owned. All significant intercompany accounts and transactions are eliminated in consolidation.

In preparing the financial statements in conformity with U.S. generally accepted accounting principles, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the balance sheet and the reported amounts of revenues and expenses for the reporting period. Actual results could vary from those estimates.

Cash and Cash Equivalents

Cash equivalents are short-term, highly liquid investments with original maturities of three months or less when purchased.

Finance Receivables

Finance receivables are stated at the amount of unpaid principal and accrued interest on certain loans where interest is recognized on an interest accrual basis. Finance receivables with precomputed finance charges are stated at the gross amount reduced by unearned interest, unearned insurance commissions and unearned discounts. In addition to these reductions, all finance receivables are stated net of the allowance for credit losses.

For loans acquired at a discount, the initial investment, which is accounted for in the aggregate, includes the amount paid to the seller plus any fees paid or less any fees received. The initial investment frequently differs from the related loan’s principal amount at the date of purchase. This difference is recognized as an adjustment of yield over the life of the loan. All other costs incurred in connection with acquiring loans, or committing to purchase loans are charged to expense as incurred.

F-8

The Money Tree Inc. and Subsidiaries

Notes to Consolidated Financial Statements

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Finance Receivables (continued)

Collectibility of the acquired loans is continually evaluated throughout the life of the acquired loan. If upon subsequent evaluation:

• the estimate of the total probable collections is more favorable, the amount of the discount to be amortized is adjusted accordingly.

• the estimate of amounts probable of collection is less favorable, the loans may be considered to be impaired.

• it is not possible to estimate the amount and timing of collection, then amortization ceases, and the cost-recovery method is implemented, which requires that all payments be applied to the principal amount of loan first and when that is reduced to zero, any additional amounts are recognized as income.

Income Recognition

Accounting principles generally accepted in the United States require that an interest yield method be used to calculate income recognized on accounts which have precomputed finance charges. Recognition of interest income is suspended on accounts with precomputed interest charges when the account becomes more than 90 days delinquent. An interest yield method is used by the Company on each individual precomputed account to calculate income for on-going accounts; however, state regulations often allow interest refunds to be made according to the Rule of 78’s method for payoffs and renewals when customers take such actions on their accounts. Since the majority of the Company’s precomputed accounts are paid off or renewed prior to maturity, the result is that most precomputed accounts are adjusted to a Rule of 78’s basis effective yield. Renewals and refinancings require that the borrower meet the underwriting guidelines similar to a new customer and, as a result, the interest rate and effective yield, as well as the other terms of the refinanced loans are at least as favorable to the lender as comparable loans with customers with similar risks who are not refinancing; therefore, all renewals and refinancings are treated as new loans. Further any unamortized net fees or costs and any prepayment penalties from the original loan are recognized in interest income when the new loan is granted. Rebates of interest, if applicable, are charged to interest income at the time of the new loan. The new loan is originated utilizing a portion of the proceeds to pay off the existing loan and the remaining portion advanced to the customer. The difference between income previously recognized under the interest yield method and the Rule of 78s method is recognized as an adjustment to interest income at the time of the rebate. Adjustments to interest income for the fiscal years ended September 25, 2007, 2006, and 2005 were $2,504,285, $2,919,148, and $2,405,559, respectively.

Accrual of interest income on interest-bearing finance receivables is suspended when no payment has been made on an account for 60 days or more on a contractual basis. The loan is returned to active status and accrual of income is resumed when all of the principal and interest amounts contractually due are brought current (one or more full contractual monthly payments are received and the account is less than 60 days contractually delinquent), at which time management believes future payments are reasonably assured. Interest accrued on loans charged off is reversed against interest income in the current period. Any amounts charged off that related to prior periods are not material for any period presented.

For loans acquired at a discount, the initial investment, which is accounted for in the aggregate, includes the amount paid to the seller plus any fees paid or less any fees received. The initial investment frequently differs from the related loan’s principal amount at the date of purchase. This difference is recognized as an adjustment of yield over the life of the loan. All other costs incurred in connection with acquiring loans, or committing to purchase loans are charged to expense as incurred. The discount on an acquired loan is amortized over the period in which the payments are probable of collection. Discounts are amortized using the interest method.

F-9

The Money Tree Inc. and Subsidiaries

Notes to Consolidated Financial Statements

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Income Recognition (continued)

The Company receives commissions from independent insurers for policies issued to finance customers. These insurance commissions are deferred and systematically amortized to income over the life of the related insurance contract since the insurance and lending activities are integral parts of the same transaction. Commissions for credit and non-credit insurance products are recognized over the risk period based on the method applicable to the insurance coverage’s risk exposure, which generally coincides with the term of the related loan contract. Insurance commissions for products that have constant risk exposure are earned using the straight-line method. Insurance commissions for insurance products with declining risk exposure or coverage are recognized using the Rule of 78s method that approximates the interest method. The auto and accidental death and dismemberment policies are earned over the policy’s predetermined schedule of coverage. The Company retains advance commissions that vary by products at the time the policies are written. Retrospective commissions are paid to the Company on an earned premium basis, net of claims and other expenses. Contingencies exist only to the extent of refunds due on early termination of policies that exceed the amount of advanced commissions retained. These refunds are netted against the gross amount of premiums written.

Commissions earned on the sale of motor club memberships are recognized at the time the membership is sold. The Company has no obligations related to refund of membership fees on cancellations. Claims filed by members are the responsibility of the issuer of the membership.

Retail sales include sales of used automobiles, home furnishings, electronic equipment, and appliances. Warranties on selected used vehicles are available as an add-on item through an unaffiliated warranty company. Home furnishings, electronic equipment and appliances carry their own manufacturer’s warranties. Retail sales revenues are recognized at the time of sale when title and risk of loss is transferred to the customer. Warranty revenues are recognized at the time of sale.

Income pursuant to a service agreement with Cash Check Inc. of Ga. is earned in the period in which additional expenses are incurred in support of the service provided by Cash Check for the Company’s customers. These expenses are reported in the operating expenses of the Company incrementally as the level of service increases.

Loan Origination Fees and Costs

Non-refundable loan origination fees and certain direct origination costs are deferred and recognized as an adjustment of the loan yield over the contractual life of the related loan. Unamortized amounts are recognized in income at the time loans are renewed or paid in full.

Credit Losses

The allowance for credit losses is determined by several factors. Historical loss experience is the primary factor in the determination of the allowance for credit losses. An evaluation is performed to compare the amount of accounts charged off, net of recoveries of such accounts, in relation to the average net outstanding finance receivables for the period being reviewed. Historically, management has found that this methodology has provided an adequate allowance due to the Company’s loan portfolio in the consumer segment consisting of a large number of smaller balance homogeneous loans. Also, a review of loans that comprised the automotive segment is performed monthly to determine if the allowance should be adjusted based on possible exposure related to collectibility of these loans. In accordance with the auto sales contract, the Company may repossess the collateralized vehicle after 30 days without payment to protect the vehicle’s integrity and to minimize the Company’s loss. Management routinely evaluates the inherent risks and change in the composition of our loan portfolio based on its extensive experience in

F-10

The Money Tree Inc. and Subsidiaries

Notes to Consolidated Financial Statements

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Credit Losses (continued)

the consumer finance industry in consideration of estimating the adequacy of the allowance. Also considered are delinquency trends, economic conditions, and industry factors. In most instances, an insurance product is purchased in conjunction with the loan. In the event of the death or injury of the customer or damage to pledged collateral, the proceeds from the claims would generally pay off or continue payments on the loan, thereby negating any consideration in the allowance determination. In other instances, a non-file or non-recording insurance policy is made in conjunction with the loan. (See description of non-file insurance below.) Proceeds from these claims are netted against charge offs as recoveries in the determination of the allowance. Provisions for credit losses are charged to income in amounts sufficient to maintain an allowance for credit losses at a level considered adequate to cover the probable loss inherent in our finance receivable portfolio. Each month, regional management reviews potential accounts for charge off with local branch management. A comprehensive charge off checklist is utilized to assist management in verifying that all collection activity and procedures have been followed. Once completed, it is submitted to senior management for final review.

The Company’s charge-off policy requires that balances be charged off when they are 180 days since last payment, unless upon review by management, the balance is deemed collectible by garnishment of wages, bankruptcy proceedings or other collection methods. Also, an account may be charged-off if it is determined by senior management that the account is uncollectible due to certain circumstances, as in the death of the customer who did not elect to purchase credit life insurance for the loan contract or in situations when repossession and sale of collateral occurs and the balance is not recoverable through the legal process or other methods. Loan balances charged off exclude accrued interest, which is reversed against interest income. Accounts that are to be disbursed under a plan of bankruptcy are monitored separately from other accounts. The charge-off policy generally coincides with the bankruptcy plan period while payments are scheduled under the loan. Direct consumer loans are charged off net of proceeds from non-filing insurance (see discussion below). For consumer sales finance and motor vehicle installment sales contracts, the Company is granted a security interest in the collateral for which the loan was made. In the event of default, the collateral on such contracts may be repossessed at 31 to 60 days delinquency (roughly two payments). After repossession, the collateral is sold according to UCC-9 disposition of collateral rules and the proceeds of the sale are applied to the customer’s account. If the likelihood of collection on a judgment is favorable, a suit is filed for the deficiency balance remaining and, if granted, garnishment and/or execution follows for collection of the balance. If the collateral is not conducive for repossession because of it being in unmarketable condition, judgment is sought without repossession and sale of collateral. If collection on a judgment is not favorable, the balance of the account is charged off.

The Company accounts for its impaired loans in accordance with Statement of Financial Accounting Standards (SFAS) No. 114, Accounting by Creditors for Impairment of a Loan, as amended by SFAS No. 118, Accounting by Creditors for Impairment of a Loan—Income Recognition and Disclosures.This standard requires that a creditor measure impairment based on the present value of expected future cash flows discounted at the loan’s effective interest rate, except that as a practical expedient, a creditor may measure impairment based on a loan’s observable market price, or the fair value of the collateral if the loan is collateral dependent. Regardless of the measurement method, a creditor must measure impairment based on the fair value of the collateral when the creditor determines that foreclosure is probable.

Non-file insurance

Non-file premiums are charged on direct consumer loans at inception and renewal in lieu of recording and perfecting the Company’s security interest in the assets pledged on such loans and are remitted to a third-party insurance company for non-file insurance coverage. Non-file insurance is not available for motor vehicle installment sales contracts and consumer sales finance contracts. Certain losses related to such direct consumer loans, which are not recoverable through life, accident and health, property, or unemployment insurance claims, are reimbursed through non-file insurance claims subject to policy limitations. These limitations include: no loans may exceed $5,000 to any one customer; no loans may exceed 36 months in term; and no fraudulent loans. When accounts covered by non-file insurance are deemed uncollectible, they are charged off and the claim filed with the insurance carrier, usually within 30 days. Proof of coverage and documentation of collection activity are submitted with the claim. Recoveries from non-file insurance are reflected in the accompanying consolidated financial statements as a reduction in credit losses and receivables related to such claim recoveries are included in other receivables (see Note 3).

F-11

The Money Tree Inc. and Subsidiaries

Notes to Consolidated Financial Statements

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Inventory

Inventory is valued at the lower of cost (first-in, first-out basis) or market. Inventory generally consists of home furnishings, electronics and used automobiles.

Property and equipment, net

Property and equipment are recorded at cost. Depreciation is provided by the straight-line method over the estimated useful lives of the assets ranging from 5 to 10 years. Leasehold improvements are recorded at cost and amortized using the straight-line method over the shorter of the estimated useful life of the assets or the lease term. Such amortization is included in depreciation expense in the accompanying consolidated statements of cash flows.

Goodwill and Other Intangible Assets

Prior to July 1, 2001, intangible assets acquired in business combinations accounted for by the purchase method of accounting were capitalized and amortized over their expected useful life. Acquisitions after June 30, 2001 are accounted for under SFAS No.141, “Business Combinations” and SFAS No. 142, “Goodwill and Other Intangible Assets.” Goodwill represents the excess of the purchase price over the fair value of the net assets acquired. The Company uses a fair value approach to test for the potential impairment of goodwill and tradenames. Estimated fair value exceeded carrying value for the tradenames. During the annual goodwill impairment testing process, the Company recorded an impairment charge in the fourth quarter of 2007 in the amount of $365,824. Amounts paid for covenants not to compete are amortized on a straight-line basis over a period of seven years.

Impairment of Long-Lived Assets

The Company periodically evaluates whether events or circumstances have occurred that indicate the carrying amount of long-lived assets and certain identifiable intangible assets may warrant revision or may not be recoverable. When factors indicate that these long-lived assets and certain identifiable intangible assets should be evaluated for possible impairment, the Company assesses the recoverability by determining whether the carrying value of such assets will be recovered through the future undiscounted cash flows expected from the use of the asset and its eventual disposition. In Management’s opinion, there has been no impairment of value of long-lived assets and certain identifiable intangible assets at September 25, 2007 and 2006.

Income Taxes

The Company provides for income taxes under the asset and liability method. Under this method, deferred income taxes are recognized for expected future tax consequences of temporary differences between financial statement carrying amounts and the tax bases of existing assets and liabilities using tax rates expected in the years in which those temporary differences are expected to be recovered or settled. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized.

Governmental Regulation

The Company is subject to various state and federal laws and regulations which, among other things, impose limits on interest rates, other charges, insurance premiums, and require licensing and qualification.

Fair Value of Financial Instruments

The following methods and assumptions are used by the Company in estimating fair values for financial instruments:

Cash and cash equivalents. Cash consists of cash on hand and with banks, either in commercial accounts, or money market accounts.

Finance receivables. Finance receivables are reported net of unearned interest, insurance commissions, discounts and allowances for credit losses, which are considered short-term because the average life is approximately five months, assuming prepayments. The discounted cash flows of the loans approximate the net finance receivables.

F-12

The Money Tree Inc. and Subsidiaries

Notes to Consolidated Financial Statements

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Fair Value of Financial Instruments (Continued)

Subordinated debentures. The carrying value approximates fair value due to rights to redeem the debenture for a price equal to 100 percent of the principal on demand. The debenture holder also may redeem the debenture for 100 percent of the principal on demand subject to a 90-day interest penalty.

Demand notes. The carrying value approximates fair value due to rights to withdraw the balance at any time.

Senior debt. The carrying value of the Company’s senior debt approximates fair value due to the relatively short period of time from origination of the instruments and their expected payment.

Advertising Costs

Advertising costs are expensed as incurred. Advertising expenses totaled $704,972, $865,512, and $864,170 for the years ended September 25, 2007, 2006, and 2005, respectively.

Allocation of Expenses to Related Party

Employees of The Money Tree Inc. perform services in support of Interstate Motor Club, an affiliate of the Company. The Company assesses Interstate Motor Club an administration fee that approximates the cost of support provided to Interstate Motor Club.

Net Income Per Common Share

Net income per common share is computed based upon weighted–average common shares outstanding. There are no potentially dilutive securities issued or outstanding.

Reclassifications

Certain reclassifications have been made to the prior period financials statements to conform with the method of presentation used in 2007.

Recent Accounting Pronouncements

In June 2006, the Financial Accounting Standards Board (FASB) issued FASB Interpretation No. 48 (FIN 48),Accounting for Uncertainty in Income Taxes-an interpretation of FASB Statement 109. FIN 48 clarifies the accounting for uncertainty in income taxes recognized in an enterprise’s financial statements in accordance with FASB Statement No. 109,Accounting for Income Taxes. FIN 48 prescribes a comprehensive model for recognizing, measuring, presenting and disclosing in the financial statements tax positions taken or expected to be taken on a tax return. If there are changes in net assets as a result of application of FIN 48 these will be accounted for as an adjustment to retained earnings. Additional disclosures about the amounts of such liabilities will be required also. The Interpretation is effective for fiscal years beginning after December 15, 2006. The Company is evaluating the impact of FIN 48 on the Company’s financial position and operating results.

In September 2006, the Financial Accounting Standards Board (FASB) issued SFAS 157,Fair Value Measurements. SFAS 157 defines fair value, establishes a framework for measuring fair value under generally accepted accounting principles, and expands disclosures about fair value measurements. SFAS 157 is effective for financial statements issued for fiscal years beginning after November 15, 2007. The Company is currently evaluating the impact the adoption of this statement could have on its financial condition, results of operations and cash flows.

In September 2006, the Financial Accounting Standards Board (FASB) issued SFAS 158, Employers’ Accounting for Defined Benefit Pension and Other Postretirement Plans. SFAS 158 requires an employer to recognize the overfunded or underfunded status of a defined benefit plan as an asset or liability in the balance sheet and to recognize changes in that funded status in the year in which the changes occur through comprehensive income. This pronouncement will be effective for financial statements issued for fiscal years beginning after December 15, 2006. The Company is evaluating the impact of SFAS 158 on the Company’s financial position and operating results.

F-13

The Money Tree Inc. and Subsidiaries

Notes to Consolidated Financial Statements

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

In February 2007, the FASB issued SFAS 159,The Fair Value Option for Financial Assets and Liabilities—Including an amendment of FASB Statement No. 115. SFAS 159 permits entities to choose to measure certain financial assets and liabilities at fair value (the “fair value option”). Unrealized gains and losses, arising subsequent to adoption, are reported in earnings. The Company is required to adopt SFAS 159 for the fiscal year beginning September 26, 2007. The Company has not yet determined the impact, if any, that SFAS 159 will have on its consolidated financial statements.

In December 2007, the FASB issued SFAS 141(R),Business Combinations. This Statement replaces SFAS 141, “Business Combinations.” This Statement retains the fundamental requirements in Statement 141 that the acquisition method of accounting (which Statement 141 called the purchase method) be used for all business combinations and for an acquirer to be identified for each business combination. This Statement also establishes principles and requirements for how the acquirer: a) recognizes and measures in its financial statements the identifiable assets acquired, the liabilities assumed, and any noncontrolling interest in the acquiree; b) recognizes and measures the goodwill acquired in the business combination or a gain from a bargain purchase and c) determines what information to disclose to enable users of the financial statements to evaluate the nature and financial effects of the business combination. SFAS 141(R) will apply prospectively to business combinations for which the acquisition date is on or after the Company’s fiscal year beginning September 26, 2009. While the Company has not yet evaluated this statement for the impact, if any, that SFAS 141(R) will have on its consolidated financial statements, the Company will be required to expense costs related to any acquisitions after September 25, 2009.

In December 2007, the FASB issued SFAS 160,Noncontrolling Interests in Consolidated Financial Statements. This Statement amends Accounting Research Bulletin 51 to establish accounting and reporting standards for the noncontrolling (minority) interest in a subsidiary and for the deconsolidation of a subsidiary. It clarifies that a noncontrolling interest in a subsidiary is an ownership interest in the consolidated entity that should be reported as equity in the consolidated financial statements. The Company has not yet determined the impact, if any, that SFAS 160 will have on its consolidated financial statements. SFAS 160 is effective for the Company’s fiscal year beginning September 26, 2009.

NOTE 3 – FINANCE RECEIVABLES AND ALLOWANCE FOR CREDIT LOSSES

Finance receivables consisted of the following:

September 25,	2007			2006
Finance receivables, direct consumer	$	46,834,666		$	51,690,600
Finance receivables, consumer sales finance		14,466,682			11,813,566
Finance receivables, auto sales finance		32,259,968			31,280,840
Total gross finance receivables		93,561,316			94,785,006
Unearned insurance commissions		(2,815,646	)		(3,128,529	)
Unearned finance charges		(12,122,154	)		(12,781,597	)
Accrued interest receivable		924,986			925,874
Unearned discounts		—			(3,859	)
Finance receivables, before allowance for credit losses		79,548,502			79,796,895
Allowance for credit losses		(3,710,679	)		(3,139,359	)
Finance receivables, net	$	75,837,823		$	76,657,536

F-14

The Money Tree Inc. and Subsidiaries

Notes to Consolidated Financial Statements

NOTE 3 – FINANCE RECEIVABLES AND ALLOWANCE FOR CREDIT LOSSES (CONTINUED)

An analysis of the allowance for credit losses is as follows:

Years ended September 25,	2007			2006			2005
Beginning balance	$	3,139,359		$	2,631,814		$	2,055,402
Provisions for credit losses		4,982,494			4,737,644			2,767,868
Charge-offs		(4,583,650	)		(4,392,129	)		(2,300,592	)
Recoveries		181,218			165,379			104,404
Other		(8,742	)		(3,349	)		4,732
Ending balance	$	3,710,679		$	3,139,359		$	2,631,814

It is the Company’s experience that a substantial portion of the loan portfolio generally is renewed or repaid before contractual maturity dates. During the years ended September 25, 2007, 2006, and 2005, cash collections of principal amounts of receivables (including renewals and finance charges since finance receivables are recorded and tracked at their gross precomputed amount) totaled $95,928,382, $95,880,074, and $89,520,121, respectively, and these cash collections were 102 percent, 105 percent, and 107 percent of average gross finance receivable balances (excluding accounts in bankruptcy), respectively.

Finance receivables in a non-accrual status, including accounts in bankruptcy, totaled $20,132,798, $18,561,872, and $16,494,707 at September 25, 2007, 2006 and 2005, respectively. Because of their delinquency status, the Company considers these loans to be impaired. Consequently, the amount of loans in non-accrual status represents the Company’s investment in impaired loans. Since the Company’s portfolio of finance receivables is comprised primarily of small balance, homogenous loans, individual impairment is not performed, but rather evaluated as a group. The allowance for credit losses related to the entire portfolio of loans was $3,710,679, $3,139,359, and $2,631,814 at September 25, 2007, 2006 and 2005, respectively.

The Company ceases the accrual of interest income on interest-bearing finance receivables when no payment has been made for 60 days or more. Recognition of interest income suspends at 90 days contractual delinquency on accounts with precomputed interest charges. Suspended interest totaled $1,149,545, $1,039,956, and $777,488 for the years ended September 25, 2007, 2006, and 2005, respectively.

Finance receivables charged off are net of proceeds from non-filing insurance. The Company purchases non-file insurance on certain loans in lieu of filing a Uniform Commercial Code lien. Premiums collected are remitted to the insurance company to cover possible losses from charge offs as a result of not recording these liens. Amounts recoverable from non-file insurance claims totaled $2,569,924, $2,750,028, and $2,943,380, for the years ended September 25, 2007, 2006, and 2005, respectively. If this insurance product was discontinued, these proceeds would not be available to offset future credit losses and additional provisions for credit losses would be required. Amounts receivable from the insurance company related to non-file insurance claims were $382,472 and $538,184 at September 25, 2007 and 2006, respectively, and are included in other receivables in the accompanying consolidated balance sheets.

F-15

The Money Tree Inc. and Subsidiaries

Notes to Consolidated Financial Statements

NOTE 4 – INVENTORY

Inventory consisted of the following:

September 25,	2007		2006
Used automobiles	$	2,170,617	$	1,587,963
Home furnishings and electronics		886,158		607,500
Total inventory	$	3,056,775	$	2,195,463

NOTE 5 – PROPERTY AND EQUIPMENT, NET

Property and equipment consisted of the following:

September 25,	2007			2006
Furniture and equipment	$	5,770,369		$	5,625,684
Airplane		507,180			579,344
Automotive equipment		640,925			1,043,255
Leasehold improvements		2,590,676			2,511,185
		9,509,150			9,759,468
Accumulated depreciation		(5,289,265	)		(5,178,664	)
Total property and equipment, net	$	4,219,885		$	4,580,804

Depreciation expense totaled $794,418, $946,745, and $901,134 for the years ended September 25, 2007, 2006 and 2005, respectively.

NOTE 6 – GOODWILL AND INTANGIBLE ASSETS

For the fiscal year ended September 25, 2007, the Company tested goodwill for impairment according to the provisions of FASB Statement 142, “Goodwill and Other Intangible Assets,” and determined that goodwill had been impaired. Accordingly, the Company recorded a charge to earnings of $365,824 as a result of this impairment, which is included in other operating expenses in the Consolidated Statements of Operations. Future impairment tests will be performed annually in the fourth fiscal quarter. Tests will be performed between annual tests if an event occurs or circumstances change that would indicate the carrying amount may be impaired.

Goodwill and intangible assets consisted of the following:

September 25,	2007		2006
Goodwill, net of accumulated amortization of $520,825	$	991,243	$	1,357,067
Covenants not to compete, net of accumulated amortization of $46,844 and $41,130, respectively		10,492		16,206
Tradenames		30,000		30,000
Total intangible assets (included in Other Assets)	$	40,492	$	46,206

F-16

The Money Tree Inc. and Subsidiaries

Notes to Consolidated Financial Statements

NOTE 6 – GOODWILL AND INTANGIBLE ASSETS (CONTINUED)

Amortization of covenants not to compete totaled $5,714, $6,746, and $8,191, for the years ended September 25, 2007, 2006, and 2005, respectively.

The estimated amortization expense of covenants not to compete for succeeding years is as follows:

2008	$	5,714
2009		4,778
	$	10,492

NOTE 7 – ACCOUNTS PAYABLE AND OTHER ACCRUED LIABILITIES

Accounts payable and other accrued liabilities consisted of the following:

September 25,	2007		2006
Accounts payable	$	272,558	$	98,875
Insurance payable, loan related		698,719		659,350
Accrued payroll		521,063		513,968
Accrued payroll taxes		39,402		40,114
Money orders		987,264		799,694
Sales tax payable		1,314,176		1,260,163
Other liabilities		186,874		153,114
Total accounts payable and other accrued liabilities	$	4,020,056	$	3,525,278

NOTE 8 – DEBT

Debt consisted of the following:

September 25,	2007		2006
Senior debt: due to banks and commercial finance companies, collateralized by inventory and certain automotive equipment, and certain notes include personal guarantees of a shareholder, interest at 4.49% to 10.25% (some variable), due 2008 to 2010. The carrying values of the collateral at September 25, 2007 and 2006 were $1,053,418 and $1,145,801 respectively.	$	511,663	$	668,549
Total senior debt		511,663		668,549

F-17

The Money Tree Inc. and Subsidiaries

Notes to Consolidated Financial Statements

NOTE 8 – DEBT (CONTINUED)

September 25,	2007		2006
Senior subordinated debt: due to credit insurance company, unsecured, guaranteed by a Company shareholder, interest at prime plus 1%. The debt was paid in August 2007.	$	—	$	600,000
Total senior subordinated debt		—		600,000
Variable rate subordinated debentures issued by The Money Tree of Georgia Inc.: due to individuals, unsecured, interest at 4.25% to 9.6%, due at various dates through 2011.		56,267,926		64,678,723
Variable rate subordinated debentures issued by The Money Tree Inc.: due to individuals, unsecured, interest at 6.0% to 8.7%, due at various dates through 2011.		25,593,090		13,231,479
Total subordinated debentures		81,861,016		77,910,202
Demand notes issued by The Money Tree of Georgia Inc.: due to individuals, unsecured, interest at 4.25% to 5.0%, due on demand.		1,451,550		2,155,217
Demand notes issued by The Money Tree Inc.: due to individuals, unsecured, interest at 4.25% to 5.0%, due on demand.		4,539,824		5,981,633
Total demand notes		5,991,374		8,136,850
Junior subordinated debt, related parties: due to a shareholder, interest rate at 8%. Debt was paid in August 2007.		—		370,000
Total junior subordinated debt, related parties		—		370,000
Total debt	$	88,364,053	$	87,685,601

F-18

The Money Tree Inc. and Subsidiaries

Notes to Consolidated Financial Statements

NOTE 8 – DEBT (CONTINUED)

There are no pre-payment penalties on the senior debt or subordinated debt. At the Company’s discretion, these debt obligations could be satisfied by paying the outstanding principal balance plus accrued interest.

Effective December 25, 2005, the Company terminated the sale of debentures and demand notes through its subsidiary, The Money Tree of Georgia Inc. and commenced the sale of debentures and demand notes from the Parent company (see Note 18). Since many investors make periodic deposits to the demand notes, some chose to redeem the demand notes from The Money Tree of Georgia Inc. and establish demand notes from The Money Tree Inc. to avoid having multiple accounts.

Interest on the debentures is earned daily and is payable at any time upon request of the holder. Interest on the demand notes is payable only at the time demand is made by the holder for repayment of the note.

The debentures may be redeemed at the holder’s option at the end of the interest adjustment period selected (one year, two years or four years) or at maturity. Demand Notes may be redeemed by holders at any time. The Company intends to meet its obligation to repay such debt with cash generated from sales of the debentures and demand notes, cash on hand, income from operations or working capital.

There are no covenants or other special conditions with respect to the Company’s junior subordinated debt.

Aggregate debt maturities at September 25, 2007 are as follows:

	2008		2009		2010		2011		Total
Senior debt, banks and finance companies	$	501,292	$	8,876	$	1,495	$	—	$	511,663
Variable rate subordinated debentures		15,358,363		21,427,364		24,447,570		20,627,719		81,861,016
Demand notes		5,991,374		—		—		—		5,991,374
	$	21,851,029	$	21,436,240	$	24,449,065	$	20,627,719	$	88,364,053

Interest expense totaled $8,025,969, $7,349,884, and $6,354,744 for the years ended September 25, 2007, 2006 and 2005, respectively.

NOTE 9 – COMMON STOCK

The common stock of the Company is comprised of the following: Class A voting shares, no par value, 500,000 authorized, 2,686 shares issued and outstanding; and Class B non-voting shares, no par value, 1,500,000 authorized, 26,860 shares issued and outstanding.

F-19

The Money Tree Inc. and Subsidiaries

Notes to Consolidated Financial Statements

NOTE 10 – INCOME TAXES

The Company accounts for income taxes in accordance with Statement of Financial Accounting Statement No. 109 (FAS 109); accordingly deferred income taxes are provided at the enacted marginal rates on the difference between the financial statement and income taxes bases of assets and liabilities. Deferred income tax provisions or benefits are based on the change in the deferred tax assets and liabilities from period to period.

The provision for income taxes for the years ended September 25, 2007, 2006, and 2005 consisted of the following:

Years ended September 25,	2007			2006			2005
Current tax expense (benefit)
Federal	$	393,010		$	240,485		$	408,383
State		71,326			34,005			92,510
Total current		464,336			274,490			500,893
Deferred income tax expense (benefit)
Federal		(297,000	)		18,000			(174,091	)
State		(52,588	)		(4,949	)		(41,734	)
(Decrease) increase in valuation allowance		(215,412	)		(13,051	)		19,361
Total deferred		(565,000	)		—			(196,464	)
Total provision (benefit)	$	(100,664	)	$	274,490		$	304,429

The income tax provision differs from the amount of income tax determined by applying the U.S. federal rate to pretax income for the years ended September 25, 2007, 2006 and 2005 due to the following:

Years ended September 25,	2007			2006			2005
Income tax expense at Federal statutory income tax rates	$	93,491		$	273,387		$	250,776
Increase (decrease) in income taxes resulting from:
Non-taxable income		—			(52,717	)		—
State income taxes, net of federal tax benefit		10,889			31,836			1,990
Non-deductible expenses		19,207			26,502			27,355
(Decrease) increase in valuation allowance		(215,412	)		(13,051	)		19,361
Other		(8,839	)		8,533			4,947
	$	(100,664	)	$	274,490		$	304,429

Net deferred tax assets consist of the following components:

September 25,	2007			2006
Deferred tax liability:
Property and equipment	$	329,000		$	474,000
Intangible assets		—			3,000
		329,000			477,000
Deferred tax assets:
Allowance for credit losses		1,484,000			1,256,000
State net operating loss carryforwards		317,000			308,412
Interest income		214,000			197,000
Insurance commissions		948,000			1,080,000
Goodwill and intangible assets		80,000			—
		3,043,000			2,841,412
Net deferred tax assets		2,714,000			2,364,412
Valuation allowance		(1,504,000	)		(1,719,412	)
Net deferred tax assets, less valuation allowance	$	1,210,000		$	645,000

F-20

The Money Tree Inc. and Subsidiaries

Notes to Consolidated Financial Statements

NOTE 10 – INCOME TAXES (CONTINUED)

In assessing the realizability of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income and tax planning strategies in making this assessment. In order to fully realize the deferred tax asset, the Company will need to generate future taxable income prior to the expiration of the deferred tax assets governed by the tax code. Based upon the level of historical taxable income and projections for future taxable income over the periods during which the deferred tax assets are deductible, management believes it is more likely than not that the Company will realize the benefits of these deductible differences, net of the existing valuation allowances.

At the end of the fiscal year 2007, the Company determined that it was more likely than not that an increased amount of the deferred tax assets is recoverable, based on improved financial performance. Accordingly, the valuation allowance, which was reduced by $215,412, contributed to a net increase in the deferred tax asset and a benefit in the current fiscal year income tax provision.

The Company has available at September 25, 2007, unused state operating loss and charitable carryforwards of $5,285,036 that expire in various amounts in years from 2009 through 2020.

NOTE 11 – RELATED PARTY TRANSACTIONS

Related party transactions and balances consisted of the following:

As of, or for the years ended September 25,	2007		2006		2005
Interest expense, junior subordinated debt, related parties	$	6,941	$	50,944	$	63,260
Junior subordinated debt owed to a shareholder		—		370,000		800,000
Rent expense, companies controlled by shareholders		2,033,291		2,187,432		2,135,222
Motor club commissions earned by The Money Tree Inc. and Subsidiaries represents sales of motor club memberships with the Company acting as agent for an affiliate owned by a shareholder and other related parties		1,946,476		1,957,478		1,474,454
Income tax service agreement income from affiliated company owned by a shareholder and other related parties		3,310		83,034		161,739
Advances to companies affiliated through common ownership		—		—		12,477

F-21

The Money Tree Inc. and Subsidiaries

Notes to Consolidated Financial Statements

NOTE 11 – RELATED PARTY TRANSACTIONS (CONTINUED)

Martin Family Group, LLLP owns the real estate of thirteen branch offices, one used car lot, and the Company’s principal executive offices. The estate of the Company’s founder and former CEO is a limited partner of Martin Family Group, LLLP. The Company’s Sole Director is the president of Martin Investments, Inc. which is the managing general partner of Martin Family Group LLLP. The Company has entered into lease agreements whereby rent is paid monthly for use of these locations. In addition, Martin Sublease LLC leases, and then subleases to the Company, another 53 branch office locations and two used car lots for amounts greater than are paid in the underlying leases. This spread is generally to cover property operating cost or improvements made directly by these entities. In the opinion of management, rates paid for these are comparable to those obtained from third parties. The Company’s Sole Director is the president of Martin Investments, Inc., the company which ultimately controls Martin Sublease LLC.

The Company receives commissions from sales of motor club memberships from an entity, owned by the Company’s founder and former CEO’s three children (including the Company’s Sole Director) and the Company’s President, pursuant to an Agency Sales Agreement.

The Company receives income tax service agreement income, pursuant to a service agreement, from an entity owned by the estate of the Company’s founder and former CEO and two other officers of the Company.

At various times in fiscal year 2005, the Company or its subsidiaries advanced loans to companies affiliated through common ownership. These were evidenced by promissory notes and accrued interest at rates prevailing at the time of the advance.

NOTE 12 – OPERATING LEASES

The Company leases office locations under various non-cancelable agreements that require various minimum annual rentals.

Future minimum rental commitments at September 25, 2007 were as follows:

Year Ending September 25	Companies controlled by related parties		Other		Total
2008	$	1,803,047	$	670,663	$	2,473,710
2009		1,153,888		462,902		1,616,790
2010		741,789		272,524		1,014,313
2011		362,241		150,223		512,464
2012		216,435		43,500		259,935
Thereafter		68,200		—		68,200
	$	4,345,600	$	1,599,812	$	5,945,412

Substantially all of the lease agreements are for a five-year term with one or more renewal options at end of the initial term. Rental expense totaled $2,818,172, $2,943,644, and $2,813,554, for the years ended September 25, 2007, 2006, and 2005, respectively.

NOTE 13 – CONCENTRATION OF CREDIT RISK

The Company’s portfolio of finance receivables is with consumers living throughout Georgia, Louisiana, Alabama and Florida, and consequently such consumers’ ability to honor their installment contracts may be affected by economic conditions in these areas. On sales finance contracts and certain other loans, the Company has access to any collateral supporting these receivables through repossession. Finance receivables are collateralized by personal property, automobiles, real property and mobile homes. On unsecured loans, a non-filing insurance policy is generally obtained so that in the event of default, a claim can be filed in order to recover the unpaid balance.

F-22

The Money Tree Inc. and Subsidiaries

Notes to Consolidated Financial Statements

NOTE 13 – CONCENTRATION OF CREDIT RISK (CONTINUED)

The Company maintains demand deposits with financial institutions. The Company’s policy is to maintain its cash balances at reputable financial institutions insured by the Federal Deposit Insurance Corporation (FDIC), which provides $100,000 of insurance coverage on each customer’s cash balances. At times during the years ended September 25, 2007 and 2006 the Company’s cash balances exceeded the FDIC insured coverage of $100,000 at certain financial institutions.

NOTE 14 – RETIREMENT PLAN

The Company has a 401(k) profit-sharing plan and trust. The plan covers substantially all employees, subject to attaining age 21 and completing 1 year of service with the Company. Under the plan, an employee may contribute up to 15 percent of his or her compensation, with the Company matching 25 percent of these contributions up to a maximum of 6 percent of the employee’s compensation.

Profit-sharing expense totaled $32,946, $35,297, and $21,235 for the years ended September 25, 2007, 2006, and 2005, respectively.

NOTE 15 – CONTINGENT LIABILITIES

The Company is a party to litigation arising in the normal course of business. With respect to all such lawsuits, claims, and proceedings, the Company establishes reserves when it is probable a liability has been incurred and the amount can reasonably be estimated. In the opinion of management, the resolution of such matters will not have a material effect on the consolidated financial statements.

NOTE 16 – DISCRETIONARY BONUSES

From time to time, the Company pays discretionary bonuses to its employees. The amount of these bonuses charged to operating expenses was $2,075,668, $1,994,175, and $1,901,868 for the years ended September 25, 2007, 2006, and 2005, respectively.

NOTE 17 – SEGMENT FINANCIAL INFORMATION

Statement of Financial Accounting Standards No. 131, “Disclosure about Segments of an Enterprise and Related Information” (SFAS 131), requires companies to determine segments based on how management makes decisions about allocating resources to segments and measuring their performance.

The Company has two reportable segments: Consumer Finance and Sales and also Automotive Finance and Sales.

Consumer finance and sales segment

This segment is comprised of original core operations of the Company: the small consumer loan business in the four states in which the Company operates. The 102 offices that make up this segment are similar in size and in the market they serve. All, with few exceptions, offer consumer goods for sale acting as an agent for another subsidiary of the Company, Home Furniture Mart Inc., which is aggregated in this segment since its sales are generated through these finance offices. This segment is structured with branch management reporting through a regional management level to an operational manager and ultimately to the chief operating decision maker.

Automotive finance and sales segment

This segment is comprised of three used automobile sales locations and offers financing in conjunction with these sales. These locations target similar customers in the Bainbridge, GA, Columbus, GA and Dublin, GA markets and surrounding areas who generally cannot qualify for traditional financing. The sales and the financing organizations are aggregated in the segment. A general manager is responsible for sales and finance administration at each of the locations and reports to an operational manager and ultimately to the chief operating decision maker.

Accounting policies of the segments are the same as those described in the summary of significant accounting policies. Performance is measured by various factors such as segment profit, loan volumes and delinquency and loss management. All corporate expenses are allocated to the segments. Provisions for income taxes are not allocated to segments.

F-23

The Money Tree Inc. and Subsidiaries

Notes to Consolidated Financial Statements

NOTE 17 – SEGMENT FINANCIAL INFORMATION (CONTINUED)

Year ended September 25, 2007	Consumer Finance & Sales Division			Automotive Finance & Sales Division			Total Segments
(In Thousands)
Interest and fee income	$	16,064		$	3,417		$	19,481
Interest expense		(5,708	)		(2,318	)		(8,026	)
Net interest and fee income before provision for credit losses		10,356			1,099			11,455
Provision for credit losses		(3,712	)		(1,270	)		(4,982	)
Net interest and fee income		6,644			(171	)		6,473
Insurance commissions		9,569			551			10,120
Commissions from sale of motor club memberships from affiliated company		1,946			—			1,946
Delinquency Fees		1,713			63			1,776
Income tax service agreement from affiliated company		3			—			3
Other income		731			17			748
Net revenues before retail sales		20,606			460			21,066
Gross margin on retail sales		2,986			3,846			6,832
Segment operating expenses		(23,639	)		(3,965	)		(27,604	)
Segment operating profit (loss)	$	(47	)	$	341		$	294
Depreciation	$	423		$	103		$	526
(Included in segment operating expenses)
Total segment assets	$	62,836		$	28,077		$	90,913
Capital expenditures	$	173		$	76		$	249

RECONCILIATION:	2007
Depreciation:
Segment depreciation	$	526
Depreciation at corporate level		268
Total depreciation	$	794
Total assets for reportable segments	$	90,913
Cash and cash equivalents at corporate level		9,762
Other receivables at corporate level		861
Employee receivables at corporate level		2
Property and equipment, net at corporate level		1,286
Deferred income taxes at corporate level		1,210
Other assets at corporate level		1,750
Consolidated Assets	$	105,784
Total capital expenditures for reportable segments	$	249
Capital expenditures at corporate level		784
Total capital expenditures	$	1,033

F-24

The Money Tree Inc. and Subsidiaries

Notes to Consolidated Financial Statements

NOTE 17 – SEGMENT FINANCIAL INFORMATION (CONTINUED)

Year ended September 25, 2006	Consumer Finance & Sales Division			Automotive Finance & Sales Division			Total Segments
(In Thousands)
Interest and fee income	$	16,699		$	3,349		$	20,048
Interest expense		(5,019	)		(2,331	)		(7,350	)
Net interest and fee income before provision for credit losses		11,680			1,018			12,698
Provision for credit losses		(3,676	)		(1,061	)		(4,737	)
Net interest and fee income		8,004			(43	)		7,961
Insurance commissions		10,642			621			11,263
Commissions from sale of motor club memberships from affiliated company		1,957			—			1,957
Delinquency Fees		1,494			71			1,565
Income tax service agreement from affiliated company		83			—			83
Other income		651			38			689
Net revenues before retail sales		22,831			687			23,518
Gross margin on retail sales		2,452			3,909			6,361
Segment operating expenses		(24,743	)		(4,408	)		(29,151	)
Segment operating profit	$	540		$	188		$	728
Depreciation	$	498		$	115		$	613
(Included in segment operating expenses)
Total segment assets	$	64,289		$	27,119		$	91,408
Capital expenditures	$	390		$	64		$	454
RECONCILIATION:							2006
Depreciation:
Segment depreciation							$	613
Depreciation at corporate level								334
Total depreciation							$	947
Total assets for reportable segments							$	91,408
Cash and cash equivalents at corporate level								5,073
Other receivables at corporate level								1,013
Employee receivables at corporate level								2
Property and equipment, net at corporate level								1,275
Deferred income taxes at corporate level								645
Other assets at corporate level								2,071
Consolidated Assets							$	101,487
Total capital expenditures for reportable segments							$	454
Capital expenditures at corporate level								445
Total capital expenditures							$	899

F-25

The Money Tree Inc. and Subsidiaries

Notes to Consolidated Financial Statements

NOTE 17 – SEGMENT FINANCIAL INFORMATION (CONTINUED)

Year ended September 25, 2005	Consumer Finance & Sales Division			Automotive Finance & Sales Division			Total Segments
(In Thousands)
Interest and fee income	$	15,453		$	3,390		$	18,843
Interest expense		(4,441	)		(1,914	)		(6,355	)
Net interest and fee income before provision for credit losses		11,012			1,476			12,488
Provision for credit losses		(891	)		(1,877	)		(2,768	)
Net interest and fee income		10,121			(401	)		9,720
Insurance commissions		10,108			383			10,491
Commissions from sale of motor club memberships from affiliated company		1,474						1,474
Delinquency Fees		1,606			70			1,676
Income tax service agreement from affiliated company		162						162
Other income		685			112			797
Net revenues before retail sales		24,156			164			24,320
Gross margin on retail sales		2,654			3,049			5,703
Segment operating expenses		(25,070	)		(4,135	)		(29,205	)
Segment operating profit (loss)	$	1,740		$	(922	)	$	818
Depreciation	$	478		$	99		$	577
(Included in segment operating expenses)
Total segment assets	$	65,669		$	25,905		$	91,574
Capital expenditures	$	855		$	144		$	999
RECONCILIATION:							2005
Depreciation:
Segment depreciation							$	577
Depreciation at corporate level								324
Total depreciation							$	901
Assets:
Total assets for reportable segments							$	91,574
Cash and cash equivalents at corporate level								44
Other receivables at corporate level								1,099
Employee receivables at corporate level								5
Property and equipment, net at corporate level								1,324
Deferred income taxes at corporate level								645
Other assets at corporate level								1,314
Consolidated Assets							$	96,005
Total capital expenditures for reportable segments							$	999
Capital expenditures at corporate level								265
Total capital expenditures							$	1,264

F-26

The Money Tree Inc. and Subsidiaries

Notes to Consolidated Financial Statements

NOTE 18 – DEBT REGISTRATIONS

The Money Tree Inc. has registered with the Securities and Exchange Commission on Form S-1 Registration Statements (1) $75,000,000 of Series A Variable Rate Subordinated Debentures (Commission File No. 333-122531) and (2) $35,000,000 of Subordinated Demand Notes (Commission File No. 333-122533). These Registration Statements were declared effective on November 4, 2005. These securities have also been registered with the state regulatory authorities in the States of Georgia, Florida and Louisiana.

NOTE 19 – VOTING COMMON STOCK SALE

On December 30, 2005, Vance R. Martin, former Chief Executive Officer of The Money Tree Inc., sold and transferred 1,475 shares of voting common stock (55% of the outstanding shares) to the Vance Rudolph Martin Defective Grantor Trust u/t/a dated December 28, 2005. W. Derek Martin, Sole Director of The Money Tree Inc. and son of Vance R. Martin, served as the sole trustee of the trust and, accordingly, had the power to vote the shares held by the trust. Vance R. Martin retained ownership of the remaining 1,211 shares of voting common stock (45% of the outstanding shares).

After Vance R. Martin’s death, 1,475 shares of voting common stock were transferred from the Vance Rudolph Martin Defective Grantor Trust u/t/a dated December 28, 2005 to the Vance R. Martin Family Trusts u/t/a dated September 20, 2005 effective as of August 10, 2006. W. Derek Martin, Sole Director of The Money Tree Inc. and son of Vance R. Martin, serves as the sole trustee of the trust and, accordingly, has the power to vote the shares held by the trust. The Estate of Vance R. Martin was transferred ownership of 1,211 shares of voting common stock effective as of August 10, 2006.

F-27