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                                                                      EXHIBIT-99


CAUTIONARY STATEMENT REGARDING FORWARD LOOKING STATEMENTS AND RISK FACTORS

      The Company wishes to take advantage of the "safe harbor" provisions of
the Private Securities Litigation Reform Act of 1995 and is filing this
cautionary statement in connection with such safe harbor legislation. The
Company's Form 10-K, this Form 10-Q, any other Form 10-Q, any Form 8-K, other
SEC filings (including, without limitation, the Company's definitive proxy
statement dated August 4, 1998 and Cygnet's prospectus dated August 4, 1998), or
any other written or oral statements made by or on behalf of the Company may
include forward looking statements which reflect the Company's current views
with respect to future events and financial performance. The words "believe,"
"expect," "anticipate," "intend," "forecast," "project," and similar expressions
identify forward looking statements.

      The Company wishes to caution investors that any forward looking
statements made by or on behalf of the Company are subject to uncertainties and
other factors that could cause actual results to differ materially from such
statements. These uncertainties and other factors include, but are not limited
to, the Risk Factors listed below (many of which have been discussed in prior
SEC filings by the Company). Though the Company has attempted to list
comprehensively these important factors, the Company wishes to caution investors
that other factors may in the future prove to be important in affecting the
Company's results of operations. New factors emerge from time to time and it is
not possible for management to predict all of such factors, nor can it assess
the impact of each such factor on the business or the extent to which any
factor, or combination of factors, may cause actual results to differ materially
from forward looking statements.

      Investors are further cautioned not to place undue reliance on such
forward looking statements as they speak only of the Company's views as of the
date the statement was made. The Company undertakes no obligation to publicly
update or revise any forward looking statements, whether as a result of new
information, future events, or otherwise.

     Capitalized terms not otherwise defined in this Exhibit 99 shall have the 
meaning assigned to them in the Form 10-Q.

RISK FACTORS

      Investing in the securities of the Company involves certain risks. In
addition to the other information included elsewhere in this Form 10-Q,
investors should give careful consideration to the following risk factors which
may impact the Company's performance and the price of its stock.

NO ASSURANCE OF PROFITABILITY

      The Company began operations in 1992 and incurred significant operating
losses in 1994 and 1995. The Company recorded net earnings of $5.9 million in
1996 and net earnings in 1997 of $9.5 million. However, the Company incurred net
losses in the three month period ended March 31, 1998 of $1.9 million due
primarily to a charge of $9.1 million (approximately $5.6 million, net of income
taxes) for discontinued operations and in the three month period ended September
30, 1997 of $1.8 million due in large part to a charge of $10.0 million
(approximately $6.0 million, net of income taxes) against Residuals in Finance
Receivables Sold. There can be no assurance that the Company will be profitable
in future periods.

      The Company's ability to sustain profitability will depend primarily upon
its ability to: (i) expand its revenue generating operations while not
proportionately increasing its administrative overhead; (ii) originate and
purchase contracts with an acceptable level of credit risk; (iii) effectively
collect payments due on the contracts in its portfolio; (iv) locate sufficient
financing, with acceptable terms, to fund the expansion of used car sales and
the origination and purchase of additional contracts; (v) adapt to the
increasingly competitive market in which it operates; and (vi) properly execute
the Split-up transaction and related business strategy. Outside factors, such as
the economic, regulatory, and judicial environments in which it operates, will
also have an effect on the Company's business. The Company's inability to
achieve or maintain any or all of these objectives could have a material adverse
effect on the Company.

DEPENDENCE ON SECURITIZATIONS

      In recent periods, the Company's earnings (loss) from operations have been
significantly impacted by the sales of contract receivables and the earnings
(loss) recorded by the Company on the Residuals in Finance Receivables Sold. The
Company's ability to successfully complete securitizations in the future may be
affected by several factors, including the condition of securities markets
generally, conditions in the asset-backed securities markets specifically, 


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and the credit quality of the Company's portfolio. The amount of any gain on
sale in connection with securitizations is based upon certain estimates and
assumptions, which may not subsequently be realized. To the extent that actual
cash flows on a securitization differ materially from the original
securitization assumptions, and in the opinion of management those differences
appear to be other than temporary in nature, the Company is required to revalue
the Residuals in Finance Receivables Sold, and record a charge to earnings based
upon the reduction. In addition, the Company records ongoing income based upon
the cash flows on Residuals in Finance Receivables Sold. The income recorded on
the Residuals in Finance Receivables Sold will vary from quarter to quarter
based upon cash flows received in a given period. To the extent that cash flows
are deficient, charge offs of finance receivables exceed estimates, or
assumptions that were applied to the underlying portfolio are not realized, and
in the opinion of management those differences appear to be other than temporary
in nature, the Company is required to revalue the Residuals in Finance
Receivables Sold, and record a charge to earnings.

      During the year ended December 31, 1997, the Company recorded a charge for
continuing operations of $5.7 million ($3.4 million after taxes) against the
Residuals in Finance Receivables Sold. The charge resulted from an upward
revision in the Company's net charge off assumptions related to the underlying
contract portfolios supporting the Company's Residuals in Finance Receivables
Sold. Although the Company believes the charge was adequate to adjust the
assumptions to a level which will more closely approximate future net losses in
the underlying contract portfolio, there can be no assurance in that regard.

      UDRC and UDRC II (the Securitization Subsidiaries), are the Company's
wholly-owned special purpose "bankruptcy remote" entities. Their assets include
Residuals in Finance Receivables Sold and Investments Held in Trust, in the
amounts of $39.9 million and $22.1 million, respectively, at June 30, 1998,
which amounts would not be available to satisfy claims of creditors of the
Company.

DEPENDENCE ON EXTERNAL FINANCING; CASH POSITION

      The Company has borrowed, and will continue to borrow, substantial amounts
to fund its operations. In this regard, the Company's operations, are highly
capital intensive. Currently, the Company receives financing pursuant to the
Revolving Facility with GE Capital, which has a maximum commitment of $100.0
million. Under the Revolving Facility, the Company may borrow up to 65.0% of the
principal balance of eligible Company Dealership contracts and up to 86.0% of
the principal balance of eligible Third Party Dealer contracts. However, an
amount up to $10.0 million of the borrowing capacity under the Revolving
Facility is not available at any time when the guarantee of the Company to the
contract purchaser is in effect. The Revolving Facility is secured by
substantially all of the Company's assets. In addition, the Revolving Facility
and/or other credit facilities of the Company contain various restrictive
covenants that limit, among other things, the Company's ability to engage in
mergers and acquisitions, incur additional indebtedness, and pay dividends or
make other distributions, and also requires the Company to meet certain
financial tests. Although the Company believes it is currently in compliance
with the terms and conditions of the Revolving Facility and such other
facilities, other than the interest coverage ratio for which the Company
obtained a waiver, there can be no assurance that the Company will be able to
continue to satisfy such terms and conditions or that the Revolving Facility
will be extended beyond its current expiration date. In addition, the Company
has established a Securitization Program pursuant to which the Company is
subject to numerous terms and conditions. Failure of the Company to engage in
securitization transactions could have a material adverse effect on the Company.

      The Company's cash and cash equivalents decreased from $3.5 million at
December 31, 1997 to $1.7 million at June 30, 1998. This decrease is due in
large part to the growth of the Cygnet Dealer Program loan portfolio. The
Company is currently evaluating its alternatives for the future financing of the
Cygnet Dealer Program, including its financing, in part, through the Split-up.
On January 28, 1998, the Company borrowed $7 million from Greenwich Capital (the
"Greenwich Loan"), the proceeds of which were utilized to reduce the Revolving
Facility. The Greenwich Loan was repaid on April 1, 1998. The Company is
currently evaluating other longer term financing options, including certain
additional financing transactions that may be entered into with Greenwich
Capital. There can be no assurance that any further securitizations will be
completed or that the Company will be able to secure additional financing when
and as needed in the future, or on terms acceptable to the Company.

POOR CREDITWORTHINESS OF BORROWERS; HIGH RISK OF CREDIT LOSSES

      Substantially all of the contracts that the Company services are with
Sub-Prime Borrowers. Due to their poor credit histories and/or low incomes,
Sub-Prime Borrowers are generally unable to obtain credit from traditional
financial institutions, such as banks, savings and loans, credit unions, or
captive finance companies owned by 


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automobile manufacturers. The Company has established an Allowance for Credit
Losses, which approximated 18.5% of contract principal balances as of June 30,
1998 and December 31, 1997, respectively, to cover anticipated credit losses on
the contracts currently in its portfolio. The Company believes its current
Allowance for Credit Losses is adequate to absorb anticipated credit losses.
However, there is no assurance that the Company has adequately provided for, or
will adequately provide for, such credit risks or that credit losses in excess
of its Allowance for Credit Losses will not occur in the future. A significant
variation in the timing of or increase in credit losses on the Company's
portfolio would have a material adverse effect on the Company.

      Discontinued operations of the Company include the Cygnet Dealer Program,
pursuant to which the Company provides qualified Third Party Dealers with
warehouse purchase facilities and operating lines of credit primarily secured by
such dealers' retail installment contract portfolios and/or inventory. While the
Company requires Third Party Dealers to meet certain minimum net worth and
operating history criteria to be considered for inclusion in the Cygnet Dealer
Program, the Company will, nevertheless, be extending credit to dealers who may
not otherwise be able to obtain debt financing from traditional lending
institutions such as banks, credit unions, and major finance companies.
Consequently, similar to its other financing activities, the Company will be
subject to a high risk of credit losses that could have a material adverse
effect on the Company and on the Company's ability to meet its own financing
obligations.

POTENTIAL CHANGE IN BUSINESS STRATEGY -- DISCONTINUED OPERATIONS

      In February 1998, the Company announced its intention to close its Branch
Office network, and exit this line of business in the first quarter of 1998. The
closure was substantially complete by March 31, 1998. Further, in April 1998,
the Company announced that its Board of Directors had directed management to
proceed with separating current operations into two publicly held companies. The
Company's continuing operations will focus exclusively on the retail sale of
used cars through its chain of dealerships, as well as the collection and
servicing of the resulting loans. The Company would also retain its existing
securitization program and the residual interests in all securitization
transactions previously effected by the Company, its existing insurance
operations relating to its dealership activities, and its rent-a-car franchise
business (which is generally inactive). Cygnet has been formed to operate all
non-dealership operations. There can be no assurance that the Company will
effect a Split-up of any business operations; what form that such a transaction
would take if implemented, including whether stockholders will receive or be
able to acquire equity interests in any operation transferred in connection with
a Split-up; or that any Split-up would prove successful or economically
beneficial to the Company or its stockholders. Further, failure to implement a
Split-up could adversely affect the Company's operations and financial
condition, as well as the market for its common stock and warrants. In addition,
under the Company's most recent securitizations, absent consent of the
interested parties, a Split-up of its servicing operations would constitute a
"termination event," under which the insurer in respect of the securitization
could terminate the Company's servicing rights. Further, upon a termination
event, distributions in connection with the Company's residual interest in such
securitization effectively would be suspended until the interest of third party
holders is paid in full.

      During the three month period ended March 31, 1998, the Company recorded a
charge of $9.1 million (approximately $5.6 million, net of income taxes) for
discontinued operations. There can be no assurance that the charge will prove
adequate or that upward or downward adjustments to the charge will not be
required in future periods.

POSSIBLE FAILURE TO CONSUMMATE THE SPLIT-UP

      It is anticipated that the Split-up of the Company will be accomplished
through a Rights Offering to Company stockholders. There are numerous conditions
to both the making of the Rights Offering and the successful conclusion of the
Split-up following the Offering Period. Among other things, these transactions
require numerous consents from all parties to various existing agreements of the
Company and its subsidiaries. It is possible that 



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certain consents can be obtained only if the Company remains contingently liable
on the underlying transactions. In addition, various regulatory approvals and
licenses must be obtained for the consummation of the transactions and the
operation of the transferred businesses by Cygnet and its subsidiaries. Although
the Company and/or Cygnet intends to timely initiate application for all
required licenses, obtaining such approvals and licenses is subject to the
procedures of the applicable governmental licensing entity. There can be no
assurance that all required approvals, licenses or conditions will be obtained
or achieved in a timely manner. Moreover, either the Rights Offering or the 
Split-up may be abandoned or postponed at any time for any reason in the
sole discretion of the Company's or Cygnet's Board of Directors. Other
conditions and uncertainties include the approval of the Split-up by the
stockholders of the Company, the finalization of appraisals of the assets to be
transferred and certain income tax consequences of the Rights Offering and the
sale of the transferred assets from the Company to Cygnet.

      Uncertainties concerning the progress and ultimate outcome of the Split-up
could cause fluctuation and instability in the market price of the Company's
common stock. If the Rights Offering is made but the Split-up does not occur,
the Rights will not be exercised for Cygnet common stock and all subscription
funds will be returned without interest.

      Relative to the above discussion, there can be no assurance that all of
the conditions to the Rights Offering or the Split-up will be satisfied or that
the Split-up will be effected or the Rights will be issued. See the Company's
proxy statement dated August 4, 1998 and Cygnet's prospectus dated August 4,
1998 for more complete information about the risks and uncertainties associated
with Split-up and the related Rights Offering and their impact on the Company
and Cygnet.

RISKS RELATING TO THE CYGNET PREFERRED STOCK

      The Cygnet Preferred Stock provides for certain cumulative dividends.
However, dividends on the Cygnet Preferred Stock are payable only out of funds
legally available therefor when and as declared by the Cygnet Board of
Directors. If dividends are not paid for a specified period, the Company will
have the right to elect two members of the Cygnet Board of Directors (in
addition to the then existing number of directors) at the next following meeting
of stockholders of Cygnet and thereafter until all accrued dividends are paid in
full. However, such directors will constitute a minority of Cygnet's Board of
Directors.

      Currently, the Company owns the Transferred Assets that would be
transferred to Cygnet if the Split-up is successfully concluded and,
accordingly, has control over the risks and liabilities inherent in such assets.
Following the Split-up, although a substantial portion of the Company's assets
and net worth will be embodied in the Cygnet Preferred Stock, the Company will
no longer have control over the Transferred Assets and associated risks, but
must rely on Cygnet and its management for expected returns on the Cygnet
Preferred Stock. Although the Cygnet Preferred Stock will be senior in right of 
payment to all Cygnet common stock, Cygnet's Certificate of Incorporation
authorizes its Board of Directors to issue up to 500,000 shares of its preferred
stock. Additional issuances of preferred stock by Cygnet may be pari passu in
right of payment with the Cygnet Preferred Stock. The Cygnet Preferred Stock
will also be junior in right of payment to all indebtedness of Cygnet. There are
no restrictions in the Cygnet Preferred Stock on the ability of Cygnet to incur
indebtedness.

SPLIT-UP TRANSACTION -- POTENTIAL FEDERAL INCOME TAX CONSEQUENCES OF THE
RIGHTS OFFERING AND SALE OF THE TRANSFERRED ASSETS

     Tax Consequences to Holders of Company common stock. Holders of Company 
common stock will generally recognize dividend income (taxable as ordinary 
income) in an amount equal to the fair market value, if any, of the Rights as 
of the date of their distribution. There can be no assurance as to the 
exact amount of dividend income, if any, a holder of Company common stock will
recognize upon the receipt of Rights. If the Rights are trading for value on 
the date of their distribution, the Company may, in its discretion, report to 
holders of Company common stock the receipt of dividend income in an amount 
equal to the average of the high and low trading prices of the Rights on such 
date.

     To avoid the possibility of the recognition of ordinary income and the 
creation of a potentially deferred or nondeductible capital loss, it will, in 
many instances, be in the interests of holders of Company common stock 
receiving Rights to either exercise or sell the Rights, rather than to allow 
the Rights to lapse.

     Tax Consequences to Company Consolidated Group of Distribution of Rights.

     Distribution of Rights. The Company will recognize gain on the 
distribution of the Rights in an amount equal to the greater of (1) the fair 
market value, if any, of the Rights as of the date of their distribution or (2) 
the sum of (a) the aggregate amount, if any, by which (i) the fair market value 
of each Transferred Asset as of the Effective Date exceeds (ii) the amount paid 
by Cygnet for such Transferred Asset plus (b) the aggregate amount, if any, by 
which the fair market value of each Interim Asset as of the Effective Date 
exceeds (iii) the adjusted tax basis of such Interim Asset. Based primarily on 
the advice of an appraiser and other experts, management of the Company believes
that as a consequence, the fair market value of each of the Interim Assets
should not exceed their adjusted tax basis as of the Effective Date.

     If any tax liabilities are triggered by the Company's recognition of gain 
on the distribution of the Rights, such tax liabilities will be borne solely by 
the Company.

     Sales of Transferred Assets. If the consideration paid by Cygnet to the
Company for any of the Transferred Assets (including the allocable portion of
any Company liabilities assumed by Cygnet) exceeds the adjusted tax basis of
such asset, gain will be recognized by the Company consolidated group to the
extent of such excess. Based primarily on the advice on appraiser and other 
experts, management of the Company believes that the gain recognized in
connection with the sale of the Transferred Assets should be immaterial.

     The appraisals, advice of other experts, and the beliefs of management of
the Company are not binding on the Internal Revenue Service. Further, the fair
market value of one or more the Transferred Assets may increase during the
period between June 30, 1998 and the effective date of the Split-up and result 
in the payment by Cygnet of greater consideration. Accordingly, it cannot be
stated with complete assurance that the Company's gain on the sale of the
Transferred Assets would be immaterial.

     If any tax liabilities are triggered by the Company's recognition of gain 
on the sale of the Transferred Assets, such tax liabilities will be borne 
solely by the Company.

     Receipt of Interim Consideration. The receipt of Interim Consideration by 
the Company from Cygnet will generate taxable income to the Company to the 
extent of the amount received. Tax liabilities triggered by such receipt will 
be borne solely by the Company.

     Redemptions of Preferred Stock. Although redemptions of Cygnet Preferred 
Stock owned by the Company are intended to be treated for federal income tax 
purposes as sales of the redeemed shares generally resulting in no gain or loss 
to the Company, ownership of Cygnet common stock by any person or entity owning 
50% or more of the value of the outstanding Company stock, either directly or 
indirectly through application of various attribution rules, may cause the 
proceeds of such redemptions to be treated as taxable dividends resulting in 
income to the Company to the extent of the redemption proceeds. If any tax 
liabilities are triggered in connection with redemptions of Cygnet Preferred 
Stock held by the Company, such tax liabilities will be borne solely by the 
Company.


LOSS OF DIVERSIFICATION AND EARNINGS ON THE TRANSFERRED ASSETS

The effectuation of the Split-up will reduce the diversification of current
Company operations, could increase the seasonal fluctuation in sales and
earnings of the Continuing Company Businesses, and could increase the
susceptibility of the Continuing Company Businesses to economic fluctuations
inherent in business cycles. The Company's used car sales business is inherently
more subject to seasonal fluctuations than are the Split-up Businesses being
transferred to Cygnet. This is principally due to seasonal buying patterns
resulting in part from the fact that many of the Company's customers receive
income tax refunds during the first half of the year, which are a primary source
of down payments on used car purchases. Moreover, because the Company generally
sells more cars during the first half of the year, it will have more contracts
to securitize during that period, and securitizations have historically been a
primary source of earnings for the Company. A large percentage of the 1997
reported earnings of the Company consolidated group is comprised of gain from
the sale of the Owned Contracts (defined below under "Risks to the Company
Relating to the FMAC Transaction") in the FMAC transaction as well as interest
income on loans made by the Company under the DIP Facility (defined below under
"Risks to the Company Relating to the FMAC Transaction") and on the Senior Bank
Debt (defined below under "Risks to the Company Relating to the FMAC
Transaction") in the FMAC transaction, the remaining future earnings, if any,
under which would be transferred to Cygnet.

DATA PROCESSING AND TECHNOLOGY AND YEAR 2000

      The success of any participant in the sub-prime industry, including the
Company, depends in part on its ability to continue to adapt its technology, on
a timely and cost-effective basis, to meet changing customer and industry
standards and requirements. During the prior year, the Company converted to a
new loan servicing and collection data processing system at its Gilbert, Arizona
facility which services the Company's Arizona, Nevada, and New Mexico Company 


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Dealership loan portfolios as well as substantially all of the Third Party
Dealer Branch Office loan portfolio. In connection with these conversions, the
Company confronted various implementation and integration issues, which
management believes resulted in increases in both contract delinquencies and
charge offs. Although many of these issues have been resolved, failure to
promptly and fully resolve all issues could have a material adverse effect on
the Company.

      The Company services its loan portfolios on loan servicing and collection
data processing systems on various platforms. The Company is in the process of
converting substantially all of its Continuing Operations loan servicing and
collection data processing to a single loan servicing and collection data
processing system. Failure to successfully complete the conversion to a single
loan servicing and data processing system could have a material adverse effect
on the Company.

      The Company has commenced a study of its computer systems in order to
assess its exposure to year 2000 issues. The Company expects to make the
necessary modifications or changes to its computer information systems to enable
proper processing of transactions relating to the year 2000 and beyond. The
Company estimates that it will cost from $500,000 to $1.0 million to modify its
existing systems, should it choose to do so. The Company will evaluate
appropriate courses of action, including replacement of certain systems whose
associated costs would be recorded as assets and subsequently amortized or
modification of its existing systems which costs would be expensed as incurred.
However, failure of the Company to fully address and resolve its year 2000
issues, including modification of its existing systems, replacement of such
systems, or other matters could have a material adverse effect on the Company.

      The Company is dependent on its loan servicing and collection facilities
as well as long-distance and local telecommunications access in order to
transmit and process information among its various facilities. The Company
maintains a standard program whereby it prepares and stores off site back ups of
its main system applications and data files on a routine basis. Due primarily to
the Company's recent acquisitions and significant growth, the Company believes
that its current disaster response plan will need to be revised. Although
management intends to update the disaster response plan during 1998, there can
be no assurance a failure will not occur in the interim or that the plan as
revised will prevent or enable timely resolution of any systems failure.
Further, a natural disaster, calamity, or other significant event that causes
long-term damage to any of these facilities or that interrupts its
telecommunications networks could have a material adverse effect on the Company.

RISKS TO THE COMPANY RELATING TO THE FMAC TRANSACTION

      If the Split-up is effectuated, the Transferred Assets will include
substantially all assets (except cash received by the Company prior to the
Effective Date) and liabilities relating to the FMAC transaction. See
"Management's Discussion and Analysis of Results of Operations and Financial
Condition -- Transfer of Assets Pursuant to the Split-up." The liabilities being
transferred to Cygnet include certain funding obligations of the Company to
provide "debtor-in-possession" financing to FMAC (the "DIP Facility"). As of
June 30, 1998, the maximum commitment under the DIP Facility was $12.4 million,
of which $9.8 million was outstanding. The DIP Facility is a revolving facility
and, except for payments made from the proceeds of tax refunds received by FMAC,
will be permanently paid down only from distributions on certain residual
interests (the "B Pieces") in the various securitized loan pools of FMAC (the
"Securitized Pools"' after payment of certain other amounts.

      In addition, the liabilities being transferred to Cygnet include a
guarantee of a specified return on certain contracts (the "Owned Contracts")
sold to a third party purchaser (the "Contract Purchaser") in connection with
the FMAC transaction, subject to a maximum guarantee amount of $10 million (the
"Owned Contract Guarantee"). Although, as between the Company and Cygnet, Cygnet
will be responsible for the DIP Facility and Owned Contract Guarantee, the
Company will not be released from such obligations and will continue to be
directly liable on these obligations. Therefore, if Cygnet does not fulfill such
obligations, the Company must do so.

      During the pendency of the FMAC bankruptcy proceedings, the Company
purchased approximately 78% of FMAC's senior bank debt (the "Senior Bank Debt")
held by seven members (the "Selling Banks") of FMAC's original nine-member bank
group for approximately $69 million, which represented a discount of 10% (the
"Discount") of the outstanding principal amount of such debt. Under agreements
with the Selling Banks, the Company has agreed to pay the Selling Banks
additional consideration up to the amount of the Discount (the "Additional
Consideration") if and to the extent the FMAC plan of reorganization provides
for and FMAC or any other party subsequently makes a cash payment or issues
notes at market rates to certain unsecured creditors and equity holders of FMAC
on account of their allowed claims worth an amount in excess of 10% of their
allowed 


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claims (collectively, the "Excess Cash"). Following the Effective Date, the
Company would retain the obligation to pay any Additional Consideration to the
Selling Banks.

      One source of cash payments that may in the future be made to unsecured
creditors of FMAC is from recoveries on the Owned Contracts and the B Pieces
after payment of certain prior amounts. Under FMAC's plan of reorganization,
such excess recoveries will be shared on the basis of 82 1/2% for the benefit of
FMAC and 17 1/2% for the benefit of the Company (or Cygnet following the
Effective Date) (the "Excess Collection Split"), subject to certain
contingencies that may reduce or eliminate the Company's (or Cygnet's)
percentage share therein. However, the Company has the option, to be exercised
one time, to distribute shares of Common Stock of the Company (the "Stock Option
Shares") to FMAC or, at the request of FMAC and pursuant to its instructions,
directly to the unsecured creditors of FMAC, in exchange for FMAC's right to
receive all or a portion of distributions under the Excess Collections Split in
cash (including both recoveries under the Excess Collections Split from the
Owned Contracts and the B Pieces) (the "Stock Option"). To the extent exercised,
payments to FMAC's unsecured creditors and equity holders would be reduced,
which would reduce the risk of payment of the Additional Consideration to the
Selling Banks. The number of Stock Option Shares that the Company will issue
would be based on the Company's estimate of the cash distributions expected to
be received on FMAC's share of the Excess Collection Split. For purposes of the
election, the Stock Option Shares would be valued at 98% of the average of the
closing prices for the previous 10 trading days of Company Common Stock on
Nasdaq or such other market on which such stock may be traded (the "Stock Option
Value"), which must average at least $8.00 per share.

      After issuance and delivery of the Stock Option Shares, the Company will
be entitled to receive FMAC's share of cash distributions under the Excess
Collections Split (including both recoveries under the Excess Collections Split
from the Owned Contracts and the B Pieces) from and after the Exercise Date
until the Company has received such distributions equal to the Stock Option
Value. These distributions would be in addition to the Company's right to
receive its share under the Excess Collections Split that is to be transferred
to Cygnet. Once the Company has received cash distributions equal to the Stock
Option Value, FMAC will retain the remaining portion of its share of cash
distributions under the Excess Collections Split, if any, in excess of the Stock
Option Value.

      After the Effective Date, Cygnet will service the FMAC contract portfolios
relating to the Owned Contracts and the B Pieces. To facilitate the Company's
decision as to whether to exercise the Stock Option, under the Capitalization
Agreement, Cygnet will advise the Company at least 7 days prior to the date that
cash distributions under the Excess Collections Split are likely to begin and of
its estimate as to the likely amount and timing of such cash distributions.
Cygnet will allow the Company reasonable access to its books and records to
allow the Company to verify such estimate, and to cooperate with the Company in
determining the amount and timing of the Company's issuance of the Stock Option
Shares. In addition, Cygnet will pay over to the Company all of FMAC's share of
cash distributions under the Excess Collections Split up to the Stock Option
Value following any issuance by the Company of the Stock Option Shares.

      Despite these arrangements with Cygnet, the FMAC transaction will pose
continuing risks to the Company. In this regard, the ability of the Company to
issue the Stock Option Shares is subject to certain contingencies, including the
market price of the Company's Common Stock, which is not within the control of
the Company, and the ability of the Company to maintain or effect the
registration of such shares under the Securities Act. Moreover, even if the
Company is able to issue Stock Option Shares, the number of Stock Option Shares
issued may not be in a sufficient amount to prevent the Additional Consideration
being payable to the Selling Banks. On the other hand, if the Company
overestimates the number of Stock Option Shares to be issued, it will cause
dilution to the Company's Common Stock without concurrent consideration being
received by the Company. Moreover, even if the Stock Option Shares are issued
and the cash payments to FMAC's unsecured creditors and equity holders are
reduced, there can be no assurance that the Selling Banks will not assert a
fight to the Additional Consideration.

      In addition, the Company has agreed in a contingent sharing agreement to
pay 10% of the Excess Collections Split received by the Company to Financial
Security Assurance ("FSA"), the insurer of certain obligations to holders of the
senior certificates representing interests in the Securitized Pools in exchange
for FSA's consent to amendments to documents governing servicing of the
Securitized Pools (the "FSA Obligation"). Although, as between the Company and
Cygnet, Cygnet will be obligated to fulfill the FSA Obligation, if Cygnet does
not do so, the Company will be liable to FSA to pay the required moneys.

      In connection with the transfer of servicing rights to Cygnet in relation
to the FMAC transaction, the Company may be required or choose to enter into a
subservicing arrangement with Cygnet as to certain pools, in which case the
Company would remain contingently liable.


                                       6
<PAGE>   7
RISKS TO THE COMPANY RELATING TO THE RELIANCE TRANSACTION

      The Company has been involved in the bankruptcy proceedings of Reliance
and has entered into a servicing agreement with Reliance (the "Servicing
Agreement"), pursuant to which the Company will service certain receivables of
Reliance. Reliance's plan of reorganization was confirmed on June 29, 1998 in
open court and became effective on July 31, 1998. The bankruptcy court executed
the formal order confirming the plan on July 2, 1998. The Servicing Agreement
requires the Company to issue warrants to purchase Company Common Stock
("Reliance Warrants") to Reliance in certain amounts at various times. See
"Management's Discussion and Analysis of Results of Operations and Financial
Condition of the Continuing Company Businesses --Reliance Transaction" for a
description of the amount and times at which Reliance Warrants would be issued.
The Servicing Agreement is expected to be transferred to Cygnet on the Effective
Date. However, the Company will retain the obligation to issue the Reliance
Warrants.

      Pursuant to the Capitalization Agreement, following the Effective Date,
the Company will use its best efforts to issue the Reliance Warrants at the
request of Cygnet from time to time when required, and Cygnet will pay to the
Company an amount of consideration upon each such issuance equal to the fair
value of the Reliance Warrants (as determined by the Company for financial
accounting purposes) on the date of issuance of the Reliance Warrants. The
issuance of the Reliance Warrants may result in dilution of the Company's Common
Stock and in market confusion based upon an ongoing tie between the Company and
Cygnet. Moreover, the consent of Reliance may be required in order to transfer
servicing and other rights relating to the Reliance transaction froth the
Company to Cygnet and there can be no assurance that such consent will be
obtained.

POTENTIAL ISSUANCE OF DILUTIVE SECURITIES

      The Company has granted warrants to purchase a total of approximately 1.5
million shares of Common Stock of the Company to various parties with exercise
prices ranging from $6.75 to $20.00 per share. Such issuances or warrant
exercises could prove to be dilutive for the Company's then existing
stockholders.

NO ASSURANCE OF SUCCESSFUL ACQUISITIONS

      In 1997, the Company completed three significant acquisitions (Seminole,
EZ Plan, and Kars) and intends to consider additional acquisitions, alliances,
and transactions involving other companies that could complement the Company's
existing business. There can be no assurance that suitable acquisition parties,
joint venture candidates, or transaction counterparties can be identified, or
that, if identified, any such transactions will be consummated on terms
favorable to the Company, or at all. Furthermore, there can be no assurance that
the Company will be able to integrate successfully such acquired businesses,
including those recently acquired, into its existing operations, which could
increase the Company's operating expenses in the short-term and adversely affect
the Company. Moreover, these types of transactions by the Company may result in
potentially dilutive issuances of equity securities, the incurrence of
additional debt, and amortization of expenses related to goodwill and intangible
assets, all of which could adversely affect the Company's profitability. As of
June 30, 1998, the Company had goodwill totaling approximately $14.7 million,
the components of which will be amortized over a period of 15 to 20 years. These
transactions involve numerous risks, such as the diversion of the attention of
the Company's management from other business concerns, the entrance of the
Company into markets in which it has had no or only limited experience, and the
potential loss of key employees of the acquired company, all of which could have
a material adverse effect on the Company.

HIGHLY COMPETITIVE INDUSTRY

      Although the used car sales industry has historically been highly
fragmented, it has attracted significant attention from a number of large
companies, including AutoNation, U.S.A. and Driver's Mart, which have entered
the used car sales business or developed large used car sales operations. Many
franchised new car dealerships have also increased their focus on the used car
market. The Company believes that these companies are attracted by the
relatively high gross margins that can be achieved in this market and the
industry's lack of consolidation. Many of these companies and franchised dealers
have significantly greater financial, marketing, and other resources than the
Company. Among other things, increased competition could result in increased
wholesale costs for used cars, decreased retail sales prices, and lower margins.

      Like the sale of used cars, the business of purchasing and servicing
contracts originated from the sale of used cars 


                                       7
<PAGE>   8
to Sub-Prime Borrowers is highly fragmented and very competitive. Various
companies have increased the competition for the purchase of contracts, in many
cases purchasing contracts at prices that the Company believes are not
commensurate with the associated risk. There are numerous financial services
companies serving, or capable of serving, this market, including traditional
financial institutions such as banks, savings and loans, credit unions, and
captive finance companies owned by automobile manufacturers, and other
non-traditional consumer finance companies, many of which have significantly
greater financial and other resources than the Company. Increased competition
may cause downward pressure on the interest rates the Company charges on
contracts originated by its Company Dealerships or cause the Company to reduce
or eliminate the nonrefundable acquisition discount on the contracts it
purchases in bulk, which could have a material adverse effect on the Company.
Similarly, increased competition may be another reason for a potential Company
spin-off to third parties or shareholders of Third Party Dealer operations,
including its third party purchasing and servicing operations, Cygnet Dealer
Program, and all or portions of their related portfolios.

GENERAL ECONOMIC CONDITIONS

      The Company's business is directly related to sales of used cars, which
are affected by employment rates, prevailing interest rates, and other general
economic conditions. While the Company believes that current economic conditions
favor continued growth in the markets it serves and those in which it seeks to
expand, a future economic slowdown or recession could lead to decreased sales of
used cars and increased delinquencies, repossessions, and credit losses that
could hinder the Company's business. Because of the Company's focus on the
sub-prime segment of the automobile financing industry, its actual rate of
delinquencies, repossessions, and credit losses could be higher under adverse
conditions than those experienced in the used car sales and finance industry in
general.

INDUSTRY CONSIDERATIONS AND LEGAL CONTINGENCIES

      Several major used car finance companies have announced major downward
adjustments to their financial statements, violations of loan covenants, related
litigation, and other events. In addition, certain of these companies have filed
for bankruptcy protection. These events have had a disruptive effect on the
market for securities of sub-prime automobile finance companies, have resulted
in a tightening of credit to the sub-prime markets, and could lead to enhanced
regulatory oversight. Furthermore, companies in the used vehicle financing
market have been named as defendants in an increasing number of class action
lawsuits brought by customers alleging violations of various federal and state
consumer credit and similar laws and regulations. There can be no assurance that
these trends and events will not have significant negative impact on the
Company.

NEED TO ESTABLISH AND MAINTAIN RELATIONSHIPS WITH THIRD PARTY DEALERS

      Pursuant to the Cygnet Dealer Program, the Company enters into financing
agreements with qualified Third Party Dealers. The Company's Third Party Dealer
financing activities depend in large part upon its ability to establish and
maintain relationships with such dealers. While the Company believes that it has
been successful in developing and maintaining relationships with Third Party
Dealers in the markets that it currently serves, there can be no assurance that
the Company will be successful in maintaining or increasing its existing Third
Party Dealer base, or that a sufficient number of qualified dealers will become
involved in the Cygnet Dealer Program.

GEOGRAPHIC CONCENTRATION

      Company Dealership operations are currently located in Arizona, Georgia,
California, Texas, Florida, Nevada, and New Mexico. Because of this
concentration, the Company's business may be adversely affected in the event of
a downturn in the general economic conditions existing in the Company's primary
markets.

SENSITIVITY TO INTEREST RATES

      A substantial portion of the Company's financing income results from the
difference between the rate of interest it pays on the funds it borrows and the
rate of interest it earns on the contracts in its portfolio. While the contracts
the Company owns bear interest at a fixed rate, the indebtedness that the
Company incurs under its Revolving Facility bears interest at a floating rate.
In the event the Company's interest expense increases, it would seek to
compensate for such increases by raising the interest rates on its Company
Dealership contracts, increasing the acquisition discount at which it purchases
portfolios in bulk, or raising the retail sales prices of its used cars. To the
extent the Company were unable to do so, the Company's net interest margins
would decrease, thereby adversely affecting the Company's profitability.


                                       8
<PAGE>   9
IMPACT OF USURY LAWS

      Historically, a significant portion of the Company's used car sales
activities were conducted in, and a significant portion of the contracts the
Company services were originated in, Arizona, which does not impose limits on
the interest rate that a lender may charge. However, the Company has expanded,
and will continue to expand, its operations into states that impose usury
limits, such as Florida and Texas. The Company attempts to mitigate these rate
restrictions by raising the retail prices of its used cars or purchasing
contracts originated in these states at a higher discount. The Company's
inability to mitigate rate restrictions in states imposing usury limits would
adversely affect the Company's planned expansion and its results of operations.
There can be no assurance that the usury limitations to which the Company is or
may become subject or that additional laws, rules, and regulations that may be
adopted in the future will not adversely affect the Company's business.

DEPENDENCE UPON KEY PERSONNEL

      The Company's future success will depend upon the continued services of
the Company's senior management as well as the Company's ability to attract
additional members to its management team with experience in the used car sales
and financing industry. The unexpected loss of the services of any of the
Company's key management personnel, or its inability to attract new management
when necessary, could have a material adverse effect upon the Company. The
Company has entered into employment agreements (which include non-competition
provisions) with certain of its officers. The Company does not currently
maintain any key person life insurance on any of its executive officers.

     The Company's future success may be adversely affected by the loss of the
services of certain of the Company's senior management to Cygnet if the Split-up
is effected. Following the Split-up, Ernest C. Garcia, II would no longer serve
as Chief Executive Officer of the Company although he would retain his position
as Chairman of the Board of Directors of the Company. In addition, Steven P.
Johnson, the Company's current Senior Vice President and General Counsel, Donald
L. Addink, the Company's current Vice President -- Senior Analyst, and Eric J.
Splaver, the Company's current Controller, will no longer act in such capacities
with the Company. The loss of the services of such individuals may cause
disruption on a temporary basis as new individuals take over executive
management responsibilities for the Company in such positions.

CONTROL BY PRINCIPAL STOCKHOLDER

      Mr. Ernest C. Garcia, II, the Company's Chairman, Chief Executive Officer,
and principal stockholder, holds approximately 25.2% of the outstanding Common
Stock, including 136,500 shares held by The Garcia Family Foundation, Inc., an
Arizona non-profit corporation, and 20,000 shares held by Verde Investments,
Inc., a real estate investment corporation, controlled by Mr. Garcia. As a
result, Mr. Garcia has a significant influence upon the activities of the
Company, as well as on all matters requiring approval of the stockholders,
including electing or removing members of the Company's Board of Directors,
causing the Company to engage in transactions with affiliated entities, causing
or restricting the sale or merger of the Company, and changing the Company's
dividend policy. Mr. Garcia has indicated that he intends to resign his position
as Chief Executive Officer concurrent with the completion of the Split-up
transaction.

POTENTIAL ANTI-TAKEOVER EFFECT OF PREFERRED STOCK

      The Company's Certificate of Incorporation authorizes the Company to issue
"blank check" Preferred Stock, the designation, number, voting powers,
preferences, and rights of which may be fixed or altered from time to time by
the Board of Directors. Accordingly, the Board of Directors has the authority,
without stockholder approval, to issue Preferred Stock with dividend,
conversion, redemption, liquidation, sinking fund, voting, and other rights that
could adversely affect the voting power or other rights of the holders of the
Common Stock. The Preferred Stock could be utilized, under certain
circumstances, to discourage, delay, or prevent a merger, tender offer, or
change in control of the Company that a stockholder might consider to be in its
best interests. Although the Company has no present intention of issuing any
shares of its authorized Preferred Stock, there can be no assurance that the
Company will not do so in the future.

REGULATION, SUPERVISION, AND LICENSING

      The Company's operations are subject to ongoing regulation, supervision,
and licensing under various federal, 


                                       9
<PAGE>   10
state, and local statutes, ordinances, and regulations. Among other things,
these laws require that the Company obtain and maintain certain licenses and
qualifications, limit or prescribe terms of the contracts that the Company
originates and/or purchases, require specified disclosures to customers, limit
the Company's right to repossess and sell collateral, and prohibit the Company
from discriminating against certain customers. The Company is also subject to
federal and state franchising and insurance laws.

      The Company believes that it is currently in substantial compliance with
all applicable material federal, state, and local laws and regulations. There
can be no assurance, however, that the Company will be able to remain in
compliance with such laws, and such failure could result in fines or
interruption or cessation of certain of the business activities of the Company
and could have a material adverse effect on the operations of the Company. In
addition, the adoption of additional statutes and regulations, changes in the
interpretation of existing statutes and regulations, or the Company's entrance
into jurisdictions with more stringent regulatory requirements could have a
material adverse effect on the Company.

LISTING AND TRADING OF COMPANY COMMON STOCK

      The market price of the Common Stock has been and may continue to be
volatile in response to such factors as, among others, variations in the
anticipated or actual results of operations of the Company or other companies in
the used car sales and finance industry, changes in conditions affecting the
economy generally, analyst reports, or general trends in the industry.

      It is expected that, after the Effective Date of the Split-up, the
Company Common Stock will continue to be listed and traded on Nasdaq. However,
the Company's financial results will no longer be consolidated with the results
of the businesses of Cygnet, which may affect the trading price of the Company's
Common Stock.

      The prices at which the shares of the Company's Common Stock will trade
after the Split-up will be determined by the marketplace and may be influenced
by many factors, including, among others, the proportional value of the
Company's asset base, stream of cash flows, profits, or other measure of value
in relation to the prices of the Company Common Stock prior to the Split-up, the
depth and liquidity of the market for such shares, investor perceptions of the
Company and the industries in which its businesses participate, and general
economic and market conditions. The trading price of the Company Common Stock
after the Split-up may be less than, equal to, or greater than the trading
prices of the Company Common Stock prior to the Split-up.

MARKET PERCEPTION ISSUES

      Although one purpose of the separation of the Continuing Company
Businesses from those being transferred to Cygnet is to allow investors,
lenders, and others to more easily evaluate the performance and investment
characteristics of each business group and to enhance the likelihood that each
will achieve appropriate market recognition of its performance, there will, at
least for a significant period of time, continue to be ties between the two
companies that may prove confusing to the market. For example, although the
Transferred Assets will include substantially all of the assets and liabilities
of the Company in connection with the FMAC transaction, the Company will retain
certain contingent liabilities with respect to that transaction and may in the
future issue the Stock Option Shares (defined below under "Risks to the Company
Relating to the FMAC Transaction") in connection with assets transferred to
Cygnet. In addition, a substantial portion of the Company's assets and net worth
will be embodied in the Cygnet Preferred Stock.


                                       10