UNITED STATES SECURITIES AND EXCHANGE
COMMISSION




WASHINGTON, D.C. 20549









FORM 10-KSB


|[X] |  | ANNUAL REPORT UNDER OR OF THE SECURITIES EXCHANGE ACT OF
1934
|--- |  | -------------------------------------------------------------



For the fiscal year ended December 31,
2005


|[  ] |  | TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
|---- |  | ----------------------------------------------------------------------------------



For the transition period from

to




Commission file number 0-27750




FIRSTPLUS Financial Group, Inc.




(Name of small business issuer in its
charter)







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






| |  |  |  | 0-27750                  |  | 
| |  |  |  | ------------------------ |  | 
| |  |  |  | (Commission File Number) |  | 






|5100 North OConnor Blvd., 6th FloorIrving, Texas |  |  |  | 75039     
|------------------------------------------------- |  |  |  | ----------
|(Address
of Principal Executive Offices)          |  |  |  | (Zip Code)






| |  |  |  | (214) 231-7600              |  | 
| |  |  |  | --------------------------- |  | 
| |  |  |  | (Issuers telephone number) |  | 



Securities registered under Section 12(b) of the Exchange Act: None




Securities registered under Section 12(g) of the Exchange Act:




Common Stock, par value $.01 per share




(Title of class)




Check whether the
issuer (1) filed all reports required to be filed by Section or of the Exchange Act during the past 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes [X]  No
[  ]




Check if there is no
disclosure of delinquent filers in response to Item 405 of Regulation S-B contained in this form, and no disclosure will be contained, to the best of
registrants knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-KSB or any amendment
to this Form 10-KSB.  [X]




Registrants
revenues for its most recent fiscal year: $0




Indicate by check
mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes [  ]  No [X]




Aggregate market
value of Registrants voting and non-voting common equity held by non-affiliates: Based upon the closing price at March 29, 2006 ($0.16), the
aggregate market value was $7,238,298.56.




State the number of
shares outstanding of each of the issuers classes of common equity, as of the latest practicable date. As of March 27, 2006, the issuer had
45,340,090 shares of common stock, $.01 par value, outstanding.




DOCUMENTS INCORPORATED BY REFERENCE




The Registrants
definitive proxy statement pertaining to the 2006 Special Meeting of Shareholders (the Proxy Statement) and filed or to be filed not later
than 120 days after the end of the fiscal year pursuant to Regulation 14A is incorporated herein by reference into Part III.




Transitional Small
Business Disclosure Format (Check one): Yes [  ]  No [X]












---





GENERAL NOTE




Except where otherwise stated,
references in this document to us, we, FPFG or the Company refer to FIRSTPLUS Financial Group, Inc.
(FIRSTPLUS). This Form 10-KSB contains forward-looking statements within the meaning of the safe harbor provisions under
Section 21E of the Securities Exchange Act of 1934, as amended, and the Private Securities Litigation Reform Act of 1995. We use forward-looking
statements in our description of our plans and objectives for future operations and assumptions underlying these plans and objectives, as well as in
our expectations, assumptions, estimates and projections about our business and industry. These forward-looking statements involve risks and
uncertainties. Our actual results could differ materially from those anticipated in such forward-looking statements as a result of certain factors as
more fully described in this Report.




Forward-looking terminology includes
the words may, expects, believes, anticipates, intends, projects or similar
terms, variations of such terms or the negative of such terms. These forward-looking statements are based upon our current expectations and are subject
to factors and uncertainties which could cause actual results to differ materially from those described in such forward-looking statements. We
expressly disclaim any obligation or undertaking to release publicly any updates or revisions to any forward-looking statements contained in this
Report to reflect any change in our expectations or any changes in events, conditions or circumstances on which any forward-looking statement is
based.




1


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PART I


|ITEM
1. |  | DESCRIPTION OF BUSINESS.
|------- |  | ------------------------



General




FIRSTPLUS Financial Group, Inc. (the
Company) was incorporated in 1994 in the State of Nevada. The Company was a diversified consumer finance company that originated, serviced,
and sold consumer finance receivables. The Company operated through various subsidiaries until 1998 when macroeconomic factors adversely affected
financial markets and largely destroyed the industrys access to the capital markets. Without access to working capital, the Companys
ability to provide consumer-based products evaporated and, like virtually all its competitors, it saw its business liquidated to satisfy obligations.
The Companys principal operating subsidiary at that time, FIRSTPLUS Financial, Inc. (FPFI), engaged in the business of originating,
purchasing, marketing and servicing home equity loans. Prior to the collapse of the financial markets, its primary loan product was a credit
consolidation or home improvement loan, which was generally secured by a second lien on real property (commonly referred to as a high loan to
value or HLTV loan). Over the course of many years, FPFI originated billions of dollars of loans. By 1998, FPFI had attained a market
leadership position in the HLTV loan business.




In March 1999, two wholly-owned
subsidiaries then owned by the Company, FPFI, and FIRSTPLUS Special Funding Corp., filed for reorganization under Chapter 11 of the United States
Bankruptcy Code. FIRSTPLUS Special Funding Corp. was a special purpose entity formed to facilitate certain borrowings by FPFI. The filing was made in
the United States Bankruptcy Court for the Northern District of Texas in Dallas. Neither the Company, nor any of its other subsidiaries, sought
bankruptcy protection.




Although the Company was not subject to
any bankruptcy proceedings, it had no income producing activities and was dependent on its subsidiaries to fund its obligations. FPFI was severely
limited in its ability to provide funds to the Company as a result of the bankruptcy filing. The Companys other significant operating subsidiary
at the time, Western Interstate Bancorp (WIB), was limited in its ability to release funds to the Company due to its debt covenant
restrictions. Additionally, WIBs main operating company, a FDIC-insured industrial loan company, FIRSTPLUS Bank, was also limited in the amount
of funds that it could release by way of dividends or intercompany loans due to regulatory restrictions. These limitations caused the Company and its
other subsidiaries to experience liquidity issues similar to FPFI.




The liquidity issues leading to the
FPFIs bankruptcy filing and the subsequent lack of operations and sources of income of the Company required significant focus by senior
management of the Company. Additionally, senior management concentrated on related strategic issues such as negotiating with lenders and creditors,
finding new sources of financing, and reorganizing and recapitalizing the Company. The resources available to the Company have been limited by the
liquidity issues and the downsizing of the Company and its operations.




Primarily due to lack of funds, the
Company has for the most part been in a dormant capacity for the past several years. In addition, the Companys operating subsidiaries, including
FPFI and WIB, had been transferred from the Company to a trust pursuant to the FPFI bankruptcy proceedings. As a result, the company has no interest in
FPFI or its assets other than its interest in the FPFI Intercompany Claim.




The Company currently has one employee,
its President and Chief Executive Officer, Mr. Jack (J.D.) Draper. Mr. Draper does not have an employment agreement with the Company. Since 1999, the
Company has managed to avoid bankruptcy by negotiating with creditors and utilizing the anticipated but uncertain cash flow from an allowed unsecured
claim against FPFI, more commonly known as the FPFG Intercompany Claim. The Companys management has withstood the pressure from creditors and
avoided bankruptcy primarily by assigning portions of the FPFG Intercompany Claim to various creditors. However, the Company has maintained that one of
its strategies has been to create value in the Company so that its prospects are enhanced for the future. The Company has been active in seeking a
platform for operations and has pursued several opportunities; however, those opportunities were abandoned when the transactions did not meet
the




2


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expectations of the Company after
further examination and the Company learned of opposition to those transactions by certain shareholders.




Executive Officers




The Companys executive officers
are as follows:




Jack (J.D.) Draper. Mr. Draper
has served as President and Chief Executive Officer since 2003. Mr. Draper is co-founder of FIRSTPLUS Financial, Inc. and has 25 years of progressive
management experience in the mortgage, second mortgage and property improvement industries. Mr. Draper is recognized as a compliance specialist in
state and federal lending laws. Mr. Draper is skilled in quality control plan development, fiscal planning and budget administration and has particular
expertise in strategic planning, operations management and project management. Before being appointed President and CEO of the Company in 2003, Mr.
Draper held the following executive leadership positions with companies in the financial services industry:


| |  | President and CEO, LDI Financial Inc.,
20022003
|- |  | ------------------------------------------------

| |  | Senior Vice President, 19th Investment Corporation,
20002002
|- |  | -------------------------------------------------------------

| |  | Chief Operating Officer, Heritage Organization/Capital Lending
Strategies, LLC, 19992000
|- |  | -----------------------------------------------------------------------------------------

| |  | Senior Vice President, PSB Lending Corporation, 1999
|- |  | ----------------------------------------------------

| |  | President and CEO, LDI Financial Inc.,
19961999
|- |  | ------------------------------------------------

| |  | Liquidation Specialist, Federal Deposit Insurance Corporation,
19901992
|- |  | ------------------------------------------------------------------------

| |  | Co-Founder-President, SFA: State Financial Acceptance Corp,
19891993
|- |  | ---------------------------------------------------------------------

|ITEM
2. |  | DESCRIPTION OF PROPERTY.
|------- |  | ------------------------



The Companys executive offices
are shared with the facilities leased by Capital Lending Strategies, LLC (Capital Lending), which incurs the cost and full responsibility
of the lease. There is no formal agreement between the Company and Capital Lending with respect to the lease arrangement.


|ITEM
3. |  | LEGAL PROCEEDINGS.
|------- |  | ------------------



Grantor Trust
Litigation




In 2002, the Company as sole settlor
and sole beneficiary established the FirstPlus Financial Group, Inc. Grantor Residual Trust (the Grantor Trust) and assigned to the Grantor
Trust the Companys remaining interest in the FPFG Intercompany Claim. The initial trustee of the Grantor Trust was George T. Davis
(Davis).




In November 2004, the Company appointed
two additional trustees for the Grantor Trust. Thereafter, those additional trustees sought to reach agreement with Davis (who remained as a trustee)
concerning the distribution of funds which were beginning to flow to the Grantor Trust from the FPFI bankruptcy. Davis challenged the appointment of
the additional trustees and refused to agree to a distribution proposed by the Company. The Company and the additional trustees filed suit in Texas
state court in Dallas (FirstPlus Financial Group, Inc., Michael Montgomery, Jack Draper and The FirstPlus Financial Group Grantor Residual Trust v.
George T. Davis and The FPFI Creditor Trust; Civil Action No. 05-02962; in the 298th District Court of Dallas County, Texas) (the Trust
Suit) seeking declaratory relief against Davis and the FPFI creditors trust to the effect that the additional trustees had been properly
appointed and were authorized to act.




When the Company selected Davis as the
initial trustee upon formation of the Grantor Trust, the Company had confidence in its appointee and also appointed Davis as Vice President of
Shareholder Relations. He also was appointed to a vacant seat on the Board of Directors. The Company believed that Davis would also have the confidence
of a group of shareholders with whom the Company consulted prior to the formation of the Grantor Trust, including a group of shareholders purportedly
represented by Danford L. Martin.




3


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Distributions on the FPFG Intercompany
Claim, including distributions to the Grantor Trust, became available in the fourth quarter of 2004. Prior to the actual distribution of funds to the
Grantor Trust, a dispute arose with Davis concerning the validity of the Companys appointment of additional trustees for the Grantor Trust.
Because this unresolved issue led to uncertainty on the part of the Creditor Trust as to who could properly direct the distribution of funds to the
Grantor Trust, the Creditor Trust requested that the bankruptcy court take custody of the funds and resolve the trustee issue. The bankruptcy court
determined, however, that it did not have jurisdiction to resolve that dispute and dismissed the Creditor Trusts request. Immediately thereafter,
the Company initiated the Trust Suit in Texas state court. That action remains pending, and while funds totaling approximately $12 million are
currently available for distribution by the Creditor Trust to the Grantor Trust, no such funds have actually been distributed to the Grantor Trust due
to the dispute over the trustee issue.




When it appeared that payments on the
FPFG Intercompany Claim were about to commence, Davis began making unfounded allegations against the well-respected trustee of the Creditor Trust, with
whom the Company believes it otherwise has a good relationship. The allegations were unsupported factually but continued to be lodged by Davis. The
Company believes that these accusations were contrary to the interests of the Grantor Trust in that the trustee of the Creditors Trust is the person
who processes all payments to the Grantor Trust on account of the FPFG Intercompany Claim.




Further, as the commencement of
payments on the FPFG Intercompany Claim appeared imminent, the Board of Directors sought confirmation from Davis that creditors holding valid claims
against the Company would not be ignored and would be paid as distributions on the FPFG Intercompany Claim were received as required by the trust
agreement governing the Grantor Trust. Davis refused to provide that confirmation to the Board of Directors and took no steps to adequately plan for
the payment of creditor claims.




In light of Davis behavior
concerning the Grantor Trusts sole source of revenue and disregarding the need to pay creditors with valid claims, the Board of Directors
believed that appointing two additional trustees to the Grantor Trust would improve relations with the Creditor Trust and ensure that provisions for
the creditors of FirstPlus would be made. The Company did not remove Davis as trustee at that time.




Upon the appointment of the two
additional trustees, they began to develop a plan for a distribution to shareholders with adequate provisions for creditors. In an effort to resolve
the dispute between the additional trustees and Davis, the additional trustees proposed an immediate distribution to the Grantor Trust, followed by a
$3.5 million distribution to the shareholders which the additional trustees agreed would not affect the determination of the issues in the Trust Suit.
Davis has continued to object to any distribution to shareholders unless he can be designated as the sole party to have access and control over the
funds held by the Grantor Trust. In this regard, the Grantor Trust, acting through a majority of the trustees, attempted to reach an agreement with
Davis to make a distribution to shareholders.




While that action was pending, the
Company, as settlor of the Grantor Trust, terminated Davis for cause pursuant to the terms of the trust agreement governing the Grantor Trust and
appointed a successor trustee. Davis has sought declaratory relief in the Trust Suit to the effect that he has not been terminated. However, a
continuation of litigation by Davis and his refusal to attempt to resolve the dispute between the trustees has amounted to a veto of the intended
distribution to the shareholders.




On February 17, 2006, the court in the
Trust Suit granted the Companys motion for partial summary judgment against Davis. In granting the partial summary judgment, the court determined
that:


| |  | the Company is the sole beneficiary of the Group
Trust;
|- |  | -------------------------------------------------------

| |  | the Company, as the sole settlor and sole beneficiary, has the
ability to appoint additional trustees;
|- |  | ------------------------------------------------------------------------------------------------------

| |  | the Company properly appointed the additional
trustees;
|- |  | -------------------------------------------------------

| |  | by virtue of the appointment of additional trustees, Davis is
not the sole trustee of the Group Trust; and
|- |  | ----------------------------------------------------------------------------------------------------------

| |  | a majority of the appointed trustees are authorized to direct
distributions from the FPFI Creditor Trust to the Group Trust.
|- |  | ----------------------------------------------------------------------------------------------------------------------------



4


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The court has not yet entered a final
judgment in the lawsuit on these matters, and ancillary claims regarding the validity of the Companys termination of Mr. Davis and attorneys fees
are still pending in the lawsuit. However, the Company believes that the courts ruling will finally allow the trustees of the Group Trust to
conduct the business of the Group Trust.




Special Meeting
Litigation




In March 2005, a group of Company
shareholders commenced a court action, styled Danford L. Martin, et al. v. FirstPlus Financial Group, Inc., et al., in the Second Judicial
District Court for the State of Nevada (the Election Suit) to compel a shareholders meeting and election of directors. The Company
has treated the Election Suit as a valid request for meeting pursuant to the bylaws. During the hearings in the court and in discussions with the
petitioners in the Election Suit, the Company has at all times insisted that the meeting and the election be conducted in accordance with all
applicable laws, regulations and procedures.




The petitioners submitted two separate
plans of election that the Company believed would have, if adopted by the court, resulted in a meeting:


| |  | without providing shareholders with customary and necessary
information on the subject of the election;
|- |  | -------------------------------------------------------------------------------------------------------

| |  | that would have failed to convene a quorum;
|- |  | -------------------------------------------

| |  | that would have failed to yield a valid outcome under the
Companys articles of incorporation and bylaws and applicable law; and
|- |  | --------------------------------------------------------------------------------------------------------------------------------

| |  | that would have violated applicable law in numerous
respects.
|- |  | -------------------------------------------------------------



In fact, under one of the
petitioners proposed plans of election, the solicitation of proxies and provision of information to shareholders regarding the subject of the
meeting would have been expressly forbidden. The Companys position has at all times been that the shareholders should receive the required
disclosures about the Company and about the persons soliciting votes, including those persons soliciting votes in opposition to the
Company.




The court has directed that a
shareholders meeting and election of directors, utilizing the proxy process, be held. The meeting is currently scheduled for April 28, 2006 in
Reno, Nevada. The Company has informed the petitioners that it intends to follow applicable laws, regulations and, except to the extent otherwise
expressly directed by the court, provisions of the Companys articles of incorporation and bylaws in the conduct of the meeting and the
election.




The shareholders meeting and
election of directors was originally scheduled for September 1, 2005. Petitioners counsel requested that the Company postpone the
shareholders meeting to November 16, 2005, and the Company agreed to this date. In November 2005, the Company and the petitioners participated in
a status hearing at the court. At the hearing, upon the request of the petitioners and over the Companys objections, the court reset the meeting
date for January 13, 2006. In December 2005, the court again reset the meeting date to April 28, 2006 after the Company explained that the
parties would not have been able to comply with a January 2006 meeting date for regulatory reasons.




In February 2006, the Company filed an
answer and counterclaim in the Election Suit. Although the Company has treated the Election Suit as a valid request for a meeting in accordance with
the Companys bylaws, after reviewing the several amendments to the petitioners proxy materials and the behavior of the petitioners and
their advisors during the Election Suit, the Company filed the counterclaim to address the damages incurred by the Company and its shareholders due to
the actions of the petitioners, two purported committees that are in no way affiliated with the Company and the controlling persons of the
purported committees.




5


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In the counterclaim, the Company has
alleged, among other things, that:


| |  | the purported committees have used their improper
influence and control over Davis, the Companys former director and Vice President  Shareholder Relations, both during his time in office
with the Company and after the termination of his positions with the Company, and as a result have breached their duties to the Company and caused
Davis to breach his duties to the Company;
|- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  | the committees have exerted this improper influence
and control over Davis to interfere with the Companys business and to obtain material non-public information about the Company and to selectively
use or disseminate that information, and as a result have breached their duties to the Company and caused Davis to breach his duties to the
Company;
|- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  | the committees have exerted this improper influence
and control over Davis in Davis role as trustee of the Grantor Trust described below to the detriment of the Company and the FPFI Intercompany
Claim, and as a result have breached their duties to the Company and caused Davis to breach his duties to the Company;
|- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  | members of the committees and certain other
petitioners improperly traded shares of the Companys common stock based upon the publishing of reports by one of the committees which
ignored or purposely misstated the amount of the Companys liabilities and assets, causing the price of the Companys common stock to
fluctuate with the issuance of the reports and that such conduct constitutes part of a scheme and artifice to manipulate the market for the personal
financial gain of such petitioners, to create support for the slate of nominees which may be nominated by one of the committees in the
upcoming election of directors and to secure additional monetary contributions to fund the litigation and further the scheme;
|- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  | one or more of the petitioners who controlled the content and
timing of the committee reports published and disseminated false and misleading information about the Company in those reports and
coordinated their trades in Company common stock with the release of those reports;
|- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  | the petitioners have engaged in an ongoing campaign of
misinformation regarding the Company and its officers and directors on various websites, including making false statements to the court, the Company
and the Companys shareholders in the Election Suit; and
|- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  | the petitioners have abused the Election Suit to further a
scheme of manipulation of the court process and the election by using a court order to, among other things, delay the Companys performance with a
pre-existing contract and subjecting the Company to possible penalties under the contract, delaying the meeting due to their refusal or inability to
properly file their proxy materials with the Securities and Exchange Commission, inducing the Company to enter into agreements regarding the special
meeting date and a mediation proposed by the petitioners and subsequently breaching such agreements.
|- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



Although it was not required to do so,
the Company has paid attorneys fees for the petitioners in an aggregate amount of $25,000 and agreed to pay printing and distribution fees for
petitioners proxy materials in an amount not to exceed an aggregate of $20,000, which the parties have stipulated fully satisfies any and all
requests petitioners have made or could have made in the future concerning reimbursement for petitioners attorneys fees and expenses
associated with the Election Suit. The Company has applied the $20,000 amount to the printing and mailing costs it incurred in connection with its
attempt to hold the shareholders meeting in November 2005 that was delayed by the court upon the request of the petitioners.


|ITEM
4. |  | SUBMISSION OF MATTERS TO A VOTE OF SECURITY
HOLDERS.
|------- |  | ----------------------------------------------------



There were no matters submitted to a
vote of the security holders during the fourth quarter of the fiscal year ended December 31, 2005.




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PART II


|ITEM
5. |  | MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER
MATTERS.
|------- |  | ---------------------------------------------------------



There is no established public trading
market for the Companys common stock. The Companys common stock is quoted under the symbol FPFX in the Pink Sheets. As of March
27, 2006, there were 1,293 shareholders of record of the Companys common stock and 45,340,090 shares issued and outstanding. The Company has not
paid any dividends on its common stock in the last two fiscal years. The Company has not had any revenues in the last two fiscal years. However,
proposed distributions to the Companys shareholders from the Grantor Trust are discussed in Item 3, Legal Proceedings, under the heading
Grantor Trust Litigation. Distributions from the Grantor Trust are limited by the terms of the Grantor Trusts trust agreement, which
forbids distributions from the trust estate to shareholders if the distribution would render the Company insolvent.


|ITEM
6. |  | PLAN OF OPERATION.
|------- |  | ------------------



General




FIRSTPLUS Financial Group, Inc. (the
Company) was a diversified consumer finance company that originated, serviced, and sold consumer finance receivables. The Company operated
through various subsidiaries until 1998 when macroeconomic factors adversely affected financial markets and largely destroyed the industrys
access to the capital markets. Without access to working capital, the Companys ability to provide consumer-based products evaporated and, like
virtually all its competitors, it saw its business liquidated to satisfy obligations. The Companys principal operating subsidiary, FIRSTPLUS
Financial, Inc. (FPFI), engaged in the business of originating, purchasing, marketing and servicing home equity loans. Prior to the
collapse of the financial markets, its primary loan product was a credit consolidation or home improvement loan, which was generally secured by a
second lien on real property (commonly referred to as a high loan to value or HLTV loan). Over the course of many years, FPFI
originated billions of dollars of loans. By 1998, FPFI had attained a market leadership position in the HLTV loan business.




In March 1999, two wholly-owned
subsidiaries then owned by the Company, FPFI, and FIRSTPLUS Special Funding Corp., filed for reorganization under Chapter 11 of the United States
Bankruptcy Code. FIRSTPLUS Special Funding Corp. was a special purpose entity formed to facilitate certain borrowings by FPFI. The filing was made in
the United States Bankruptcy Court for the Northern District of Texas in Dallas. Neither the Company, nor any of its other subsidiaries, sought
bankruptcy protection.




FPFIs plan of reorganization was
confirmed on April 7, 2000 by the United States Bankruptcy Court, Northern District of Texas, Dallas Division. The plan of reorganization provided for
the creation of the FPFI Creditor Trust (the Creditor Trust) to facilitate implementation of the plan of reorganization, to hold trust
assets for the benefit of the beneficiaries, to resolve claims, to make distributions in accordance with the plan of reorganization and to provide
various administrative services related to the Creditor Trust and the implementation of the plan of reorganization. Under the plan of reorganization,
the Company still owned FPFI but could not transfer its interest in FPFI until the Creditor Trust terminates. However, the Creditor Trust trustee is
the sole officer and director of FPFI. The stock was transferred to a voting trust whereby the voting trust would have the sole power to hold and vote
the stock. As a result, the Company has no interest in FPFI or the Creditor Trusts assets other than its interest in the FPFI Intercompany
Claim.




In the plan of reorganization, the
Company was able to resolve many of its own creditor claims through the plan of reorganization. In addition, the Company received the FPFG Intercompany
Claim as a general unsecured claim defined in the plan of reorganization to be in an amount that was not to be less than $50 million. By being a holder
of the FPFG Intercompany Claim, the Company became a beneficiary of the Creditor Trust. Under the plan of reorganization, the Company would only
receive distributions as a beneficiary of the Creditor Trust from payments on the FPFG Intercompany Claim based on a previous series of securitized
loan pools that had been sold in the marketplace. At that time, the amount and timing of cash flow from residuals were completely unknown. The Company
has no operations with respect to, or any control over, the securitized loans.




7


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To settle other claims asserted against
it, the Company assigned portions of the FPFG Intercompany Claim to various creditors. Consistent with the plan of reorganization, in settlement of the
claims of the holders of the Companys 7.25% Convertible Subordinated Notes due 2003, the bondholders received an instrument representing the
right to receive an assignment of 25% of the FPFG Intercompany Claim, permitting the bondholders to become a direct beneficiary of the Creditor Trust,
and an agreement to instruct the Creditor Trust to make two payments to the bondholders of $1,428,000 based on certain conditions. The bondholder
settlement was consummated in June 2001. Two of the bondholders also received agreements allowing them to convert portions of their new interest into
an aggregate of 5,555,000 shares of the Companys common stock. The Company believes that it is entitled to a reassignment of a portion of the new
interests from the bondholders with conversion rights and has initiated discussions with one of the holders and the trustee for the new interests
regarding the reassignment.




At the closing of the plan of
reorganization, in settlement of claims of Paine Webber Real Estate Securities Inc. (Paine Webber), the Company assigned a 22% interest in
the FPFG Intercompany Claim to Paine Webber allowing Paine Webber to become a direct beneficiary of the Creditor Trust. The Paine Webber claim has been
settled, and the Company recovered the assignment from Paine Webber in August 2005.




The Company has agreed to pay 1.86% of
the distributions it receives, up to an aggregate amount of $931,000, on the FPFG Intercompany Claim to Thaxton Investment Corporation
(Thaxton). The amounts payable to Thaxton are based on a settlement of disputes concerning the purchase price paid by Thaxton to FirstPlus
Consumer Finance, Inc. (Consumer Finance), then a subsidiary of the Company, pursuant to the sale of all of the assets of Consumer Finance
to Thaxton in 1999.




The Company has previously discussed
with other creditors settlement of various claims by assignment of portions of the FPFG Intercompany Claim. For example, the Company had agreed to
assign a 7.6% interest in the distributions to its former landlord in connection with amendments to the Companys then existing lease for its
executive and administrative offices. However, negotiations with this landlord and other parties have been dormant in recent years. There is no
assurance that these parties may not assert claims in excess of the Companys current estimate of the value of these claims or that there are no
additional parties who may assert claims with respect to the FPFG Intercompany Claim. Since the bankruptcy proceedings, the FPFG Intercompany Claim had
been the only substantial asset of the Company and the only source of potential payment for its obligations. The Company has booked a valuation reserve
of approximately $3.0 million against the amount set aside for potential creditors claims.




There can be no assurance as to the
ultimate value of the FPFG Intercompany Claim or the timing of distributions on the FPFG Intercompany Claim.




Although the Company was not subject to
any bankruptcy proceedings, it had no income producing activities and was dependent on its subsidiaries to fund its obligations. FPFI was severely
limited in its ability to provide funds to the Company as a result of the bankruptcy filing. The Companys other significant operating subsidiary
at the time, Western Interstate Bancorp (WIB), was limited in its ability to release funds to the Company due to its debt covenant
restrictions. Additionally, WIBs main operating company, an FDIC-insured industrial loan company, FIRSTPLUS Bank, was also limited in the amount
of funds that it could release by way of dividends or intercompany loans due to regulatory restrictions. These limitations caused the Company and its
other subsidiaries to experience liquidity issues similar to FPFI.




The liquidity issues leading to the
FPFIs bankruptcy filing and the subsequent lack of operations and sources of income of the Company required significant focus by senior
management of the Company. Additionally, senior management concentrated on related strategic issues such as negotiating with lenders and creditors,
finding new sources of financing, and reorganizing and recapitalizing the Company. The resources available to the Company have been limited by the
liquidity issues and the downsizing of the Company and its operations.




Primarily due to lack of funds, the
Company has for the most part been in a dormant capacity for the past several years. Since 1999, the Company has managed to avoid bankruptcy by
negotiating with creditors




8


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and utilizing the anticipated but
uncertain cash flow from an allowed unsecured claim against FPFI, more commonly known as the FPFG Intercompany Claim. As of December 31, 2005, the
Company had approximately $1.3 million in cash and cash equivalents which management believes will be sufficient to cover operating expenses for the
next twelve months. As of March 31, 2006, the trustee of the Creditor Trust has set aside approximately $12 million for the Grantor Trust, for which
the Company is the sole beneficiary. The Company does not believe it will have to raise additional funds in the next twelve months.




The Companys management has
withstood the pressure from creditors and avoided bankruptcy primarily by assigning portions of the FPFG Intercompany Claim to various creditors.
However, the Company has maintained that one of its strategies has been to create value in the Company so that its prospects are enhanced for the
future. The Company has been active in seeking a platform for operations and has pursued several opportunities; however, those opportunities were
abandoned when the transactions did not meet the expectations of the Company after further examination and the Company learned of opposition to those
transactions by certain shareholders.




Strategic Plan




Although the Company is not pursuing
any specific opportunities at this time, it is reviewing the marketplace and its strategic plan. The areas for opportunity may include buying an
existing company, merging with a growing concern or entering into a joint venture. In 2004, the Company received a substantial return on its investment
in Capital Lending, a startup company which provides financial and risk services offering insured loan programs to financial institutions. In recent
years, the financial services industry has seen substantial growth and the Company is confident that this trend will continue. The Company has engaged
a consultant to assist in the development and implementation of its strategic plan. The Company offers strong leadership with the vision and passion
needed to catapult the Company into any sector of the industry.




The Company has not identified
a target business




To date, the Company has not selected
any target business on which to concentrate its search for a business combination. Thus, there is no basis to evaluate the possible merits or risks of
any target business or potential transaction into which the Company may enter. To the extent the Company enters into a transaction with a financially
unstable company or an entity in its early stage of development or growth, including entities without established records of sales or earnings, the
Company may be affected by numerous risks inherent in the business and operations of financially unstable and early stage or potential emerging growth
companies. Although the Companys management will endeavor to evaluate the risks inherent in a particular target business, the Company cannot
assure you that it will properly ascertain or assess all significant risk factors.




Sources of potential
opportunities




The Company anticipates that business
opportunities will be brought to its attention from various sources, including its network relationships, who may present solicited or unsolicited
proposals. The Companys officers and directors as well as their affiliates may also bring transaction candidates to the Companys attention.
While the Company does not presently anticipate engaging the services of professional firms that specialize in business acquisitions on any formal
basis, the Company may engage these firms in the future, in which event the Company may pay a finders fee or other compensation. In no event,
however, will the Company pay any of its existing officers, directors or shareholders or any entity with which they are affiliated any finders
fee or other compensation for services rendered to it prior to or in connection with the consummation of a transaction.




9


---



Selection of a potential
business opportunity and structuring of a transaction




In evaluating a prospective business
opportunity or transaction, the Company will consider, among other factors, the following:


| |  | financial condition and results of operation;
|- |  | ---------------------------------------------

| |  | growth potential;
|- |  | -----------------

| |  | experience and skill of management and availability of
additional personnel;
|- |  | ----------------------------------------------------------------------------

| |  | capital requirements;
|- |  | ---------------------

| |  | competitive position;
|- |  | ---------------------

| |  | stage of development of the products, processes or
services;
|- |  | ------------------------------------------------------------

| |  | degree of current or potential market acceptance of the
products, processes or services;
|- |  | ----------------------------------------------------------------------------------------

| |  | proprietary features and degree of intellectual property or
other protection of the products, processes or services;
|- |  | --------------------------------------------------------------------------------------------------------------------

| |  | regulatory environment of the industry; and
|- |  | -------------------------------------------

| |  | costs associated with effecting the business
combination.
|- |  | ---------------------------------------------------------



These criteria are not intended to be
exhaustive. Any evaluation relating to the merits of a particular business opportunity or transaction will be based, to the extent relevant, on the
above factors as well as other considerations deemed relevant by the Companys management in pursuing the business opportunity or transaction
consistent with the Companys overall strategy. In evaluating a prospective business opportunity or transaction, the Company will conduct an
extensive due diligence review which will encompass, among other things, meetings with incumbent management and inspection of facilities, as well as
review of financial and other information which will be made available to the Company.




The fair market value of such business
will be determined by the Companys Board of Directors based upon standards generally accepted by the financial community, such as actual and
potential sales, earnings and cash flow and book value. If the Board of Directors is not able to independently determine that the target business has a
sufficient fair market value, the Company will obtain an opinion or valuation from an unaffiliated, independent investment banking or business
valuation firm with respect to the satisfaction of such criteria. For example, a valuation was obtained for the Companys proposed transaction
with New Freedom Mortgage Corporation in 2001, although the transaction was not consummated, and the Company obtained a fairness opinion with respect
to its initial equity investment in Capital Lending in 2002.




The time and costs required to select
and evaluate a business opportunity and to structure and complete a transaction cannot presently be ascertained with any degree of certainty. Any costs
incurred with respect to the identification and evaluation of a prospective business opportunity or transaction will result in a loss to the Company
and reduce the amount of capital available to otherwise complete a business combination.




Probable lack of business
diversification




While the Company may seek to pursue
business opportunities with more than one target business, it is probable that the Company will have the ability to pursue only a single business
opportunity or transaction. Accordingly, the prospects for the Companys success may be entirely dependent upon the future performance of a single
business or investment. Unlike other entities that may have the resources to complete several transactions in multiple industries or multiple areas of
a single industry, it is probable that the Company will not have the resources to diversify its operations or benefit from the possible spreading of
risks or offsetting of losses. The Companys lack of diversification may:


| |  | subject the Company to numerous economic, competitive and
regulatory developments, any or all of which may have a substantial adverse impact upon the particular industry in which it may operate subsequent to a
transaction, and
|- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



10


---

| |  | result in the Companys dependency upon the development or
market acceptance of a single or limited number of products, processes or services.
|- |  | ----------------------------------------------------------------------------------------------------------------------------------------------



Limited ability to evaluate
the target business management




Although the Company intends to closely
scrutinize a prospective business opportunity or transaction, the Company cannot assure you that its assessment of the prospective business opportunity
or transaction will prove to be correct. Furthermore, the future role of the Companys officers and directors, if any, in a prospective business
opportunity or transaction cannot presently be stated with any certainty. While it is possible that one or more of the Companys current officers
and directors will remain associated in some capacity with the Company following a prospective business opportunity or transaction, it is unlikely that
any of them will devote their full efforts to the Companys affairs subsequent to prospective business opportunity or transaction. Moreover, the
Company cannot assure you that its officers and directors will have significant experience or knowledge relating to the operations of the particular
prospective business opportunity or transaction.




Following a transaction, the Company
may seek to recruit additional executive officers or employees to supplement its current management. The Company cannot assure you that it will have
the ability to recruit additional executive officers or employees, or that additional executive officers or employees will have the requisite skills,
knowledge or experience necessary to enhance the Companys current management.




Competition




In identifying, evaluating and
selecting a business opportunity, the Company expects to encounter intense competition from other entities having similar business objectives. Many of
these entities are well established and have extensive experience identifying and effecting business opportunities directly or through affiliates. Many
of these competitors possess greater technical, human and other resources than the Company and its financial resources will be relatively limited when
contrasted with those of many of these competitors. While the Company believes there are numerous potential business opportunities or transactions that
may be available to it, the Companys ability to compete in pursuing these opportunities or transactions will be limited by its available
financial resources. This inherent competitive limitation gives others an advantage in pursuing these business opportunities or
transactions.




Any of these obligations may place the
Company at a competitive disadvantage in successfully pursuing a business opportunity or transaction. The Company believes, however, that its network
relationships and the experience of its management team and Board of Directors may give it a competitive advantage over other competitors for pursuing
business opportunities or transactions.




Financial Reporting Issues




Changes In and Disagreements With
Accountants on Accounting and Financial Disclosure




On June 3, 2005, the Company engaged
Lightfoot Guest Moore & Co., PC, as its independent auditor for the year ending December 31, 2004. The Company had not formally had an independent
auditor since September 1999, when Ernst & Young LLP resigned as the Companys principal accountant. The resignation of Ernst & Young LLP
was discussed in a Current Report on Form 8-K filed with the Securities and Exchange Commission (SEC) on October 6, 1999.




The Company disclosed the engagement of
Lightfoot Guest Moore & Co., PC in a Current Report on Form 8-K filed with the SEC on September 22, 2005 (the Form 8-K), which included
the following information:




On June 3, FirstPlus Financial Group,
Inc. (the Company) engaged Lightfoot Guest Moore & Co., PC as its new independent registered public accounting firm.




During the fiscal years ended December
31, 2004 and 2003 and through June 3, 2005, the Company had not consulted Lightfoot Guest Moore & Co., PC regarding either (i) the application of
accounting principles to




11


---



a specific completed or
contemplated transaction, or the type of audit opinion that might be rendered on the Companys financial statements, and neither written nor oral
advice was provided to the Company nor oral advice that was an important factor considered by the Company in reaching a decision as to the accounting,
auditing or financial reporting issue; or (ii) any manner that was either the subject of a disagreement or event identified in response to paragraph
(a)(1)(iv) of Item 304 of Regulation S-B.




Status of Financial
Reporting




In January 1999, the Company announced
that it would be implementing new accounting guidance regarding the valuation of its retained interests from securitization transactions which had been
recently provided by the Financial Accounting Standards Board (FASB). FASB issued a draft Special Report (A Guide to Implementation
of Statement 125 on Accounting for Transfers and Servicing of Financial Assets and Extinguishments of Liabilities, Questions and Answers, Second
Edition) which was finalized during December 1998. In this Special Report, FASB concluded that the cash-out method of valuing
retained interests should be used to estimate fair value. The SEC Staff announced in December 1998 that the change to the cash-out method
should be made by restatement. Based on this guidance, the Company decided to revise its methodology for estimating the fair value of certain financial
instruments for each of the fiscal years in the three-year period ended September 30, 1997, the three-month transition period ended December 31, 1997,
and the first three quarters of the fiscal year ended December 31, 1998. As the Company disclosed in its Form 10-Q for the quarter ended September
1998, it was expected that the impact would be material to the results of all prior periods.




As a result of limited resources and
conflicting demands, the Company has not completed its analysis necessary to complete the restatement. In addition, the Company has not had the
financial resources or personnel to prepare and file its periodic reports with the SEC. In July 2005, the Company received a letter from the SEC
directing the Company to file all required reports or become subject to a revocation of registration under the Securities Exchange Act of 1934. In
connection with the shareholders meeting described under the heading  Litigation  Special Meeting, the Company has
obtained audited financial statements it believes to be sufficient to distribute a proxy statement and solicit proxies for the shareholders
meeting and election of directors. However, this information alone will not cure the Companys reporting delinquencies with the SEC. The Company
has initiated discussions with the SEC regarding its compliance issues and has started the process to prepare its plan to correct any SEC reporting
delinquencies.




Following the settlement of the
Companys securities-related class action lawsuit in 2003, the Company began to analyze the extent of its liabilities and reporting compliance
issues. In 2004, the Company received a small return on its investment in Capital Lending which allowed it to pay mounting debts and begin becoming
compliant with its charter requirements in the State of Nevada. This also allowed the Company to organize its financial records in preparation for an
audit of its financial statements for the year ended December 31, 2004, which is an expensive and time consuming process. Through changes in management
and the nature of FPFIs bankruptcy and litigation filed against the Company, the business records have been scattered. As a result, gathering the
necessary information to complete audited financial statements has taken more time than anticipated or would be required under other circumstances. The
Company cannot currently estimate when it will complete the restatement or the delinquent reports for past time periods.




12


---



FIRSTPLUS Financial Group, Inc.


|ITEM
7. |  | FINANCIAL STATEMENTS
|------- |  | --------------------






|Report of
Independent Registered Public Accounting Firm                           |  |  |  |  | 14 | 
|--------------------------------------------------------------------------------- |  |  |  |  | -- | 
|                                                                                 
|Balance
Sheet December 31, 2005                                                   |  |  |  |  | 15 | 
|                                                                                 
|Statements
of Operations For the Years Ended December 31, 2005 and 2004           |  |  |  |  | 16 | 
|                                                                                 
|Statements
of Stockholders Equity For the Years Ended December 31, 2005 and 2004 |  |  |  |  | 17 | 
|                                                                                 
|Statements
of Cash Flows For the Years Ended December 31, 2005 and 2004           |  |  |  |  | 18 | 
|                                                                                 
|Notes to
Financial Statements                                                     |  |  |  |  | 19 | 



13


---



REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING
FIRM




The Board of Directors and StockholdersFIRSTPLUS
Financial Group, Inc. Irving, Texas




We have audited the accompanying
balance sheet of FIRSTPLUS Financial Group, Inc. as of December 31, 2005, and the related statements of operations, stockholders equity, and cash
flows for each of the two years in the period ended December 31, 2005. 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 the 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. The Company is not required to have, nor were we
engaged to perform an audit of its internal control over financial reporting. Our audit included consideration of internal control over financial
reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the
effectiveness of the Companys internal control over financial reporting. Accordingly, we express no such opinion. An audit includes examining, on
a test basis, evidence supporting the amounts and disclosures in the financial statements, 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 financial
statements referred to above present fairly, in all material respects, the financial position of FIRSTPLUS Financial Group, Inc. at December 31, 2005
and the results of its operations and its cash flows for each of the two years in the period ended December 31, 2005 in conformity with accounting
principles generally accepted in the United States of America.




As discussed in Note 2 to the financial
statements, the Company effected a quasi-reorganization in December 2002. In conjunction with the accounting for the quasi-reorganization, the Company
adjusted the recorded value of specific assets and liabilities to fair value. In addition, as required by quasi-reorganization accounting, the Company
early adopted Statement of Financial Accounting Standards (SFAS) No. 142, Goodwill and Other Intangible Assets, SFAS No. 143,
Accounting for Asset Retirement Obligations, SFAS No. 14, Accounting for the Impairment or Disposal of Long-Lived Assets, SFAS
No. 145, Rescission of FASB Statements No.4, 44 and 64, Amendment to FASB Statement No. 13, and Technical Corrections and SFAS No. 146,
Accounting for Costs Associated with Exit or Disposal Activities.




/s/ Lightfoot Guest Moore & Co., PC




Dallas, Texas March 29, 2006




14


---





FIRSTPLUS Financial Group, Inc.




BALANCE SHEET







|                                                                                                                                  |  |  |  | December 31, 2005
|--------------------------------------------------------------------------------------------------------------------------------- |  |  |  | -----------------
|ASSETS:                                                                                                                          
|Cash and cash
equivalents                                                                                                         |  |  |  | $                
|                                                                                                                                 
|Total current
assets                                                                                                              |  |  |  |                  
|                                                                                                                                 
|Accounts
receivable Capital Lending Strategies, LLC                                                                               |  |  |  |                  
|Claim from
bankruptcy estate (see note 3)                                                                                         |  |  |  |                  
|Deferred tax
asset                                                                                                                |  |  |  |                  
|Investment in
Capital Lending Strategies, LLC                                                                                     |  |  |  |                  
|                                                                                                                                 
|Total
assets                                                                                                                      |  |  |  | $                
|                                                                                                                                 
|LIABILITIES AND STOCKHOLDERS EQUITY:                                                                                            
|Accrued
expenses                                                                                                                  |  |  |  | $                
|Current
liabilities  income taxes payable                                                                                        |  |  |  |                  
|                                                                                                                                 
|Total current
liabilities                                                                                                         |  |  |  |                  
|Commitments
and contingencies                                                                                                     |  |  |  |                  
|                                                                                                                                 
|Stockholders equity:                                                                                                            
|Common stock,
$.01 par value, 100,000,000 shares authorized; 45,340,090 shares issued and outstanding                             |  |  |  |                  
|Additional
paid in capital                                                                                                        |  |  |  |                  
|Retained
earnings since December 31, 2002 when a deficit of $312,527,864 was eliminated in connection with a quasi-reorganization |  |  |  |                  
|                                                                                                                                 
|Total
stockholders equity                                                                                                        |  |  |  |                  
|Total
liabilities and stockholders equity                                                                                        |  |  |  | $                



See accompanying notes to financial
statements




15


---



FIRSTPLUS Financial Group, Inc.




STATEMENTS OF OPERATIONS







|                                                |  |  |  | For the Years Ended December 31, |           
|----------------------------------------------- |  |  |  | -------------------------------- | ----------
|
|Revenues                                        |  |  |  | $                                |          
|                                               
|Operating expenses:                            
|General and
administrative                      |  |  |  |                                  | 1,945,996 
|                                               
|Total
operating expenses                        |  |  |  |                                  | 1,945,996 
|                                               
|Operating
income (loss)                         |  |  |  |                                  | (1,945,996
|                                               
|Non-operating income:                          
|Gain on sale
of Capital Lending Strategies, LLC |  |  |  |                                  |          
|Loss on loan
default                            |  |  |  |                                  |          
|Interest,
net                                   |  |  |  |                                  | 26,691    
|                                               
|Income (loss)
before provision for income taxes |  |  |  |                                  | (1,919,305
|                                               
|Provision for
income taxes/(benefit)            |  |  |  |                                  | (93,300   
|                                               
|Net income
(loss)                               |  |  |  | $                                | (1,826,005
|                                               
|Earnings
(loss) per share                       |  |  |  | $                                | (0.04     
|                                               
|Weighted
average of common shares outstanding   |  |  |  |                                  | 45,019,542



See accompanying notes to financial
statements




16


---



FIRSTPLUS Financial Group, Inc.




STATEMENTS OF STOCKHOLDERS EQUITYFor the Years Ended December 31, 2005 and 2004







|                                                                           |  |  |  | Number of Shares |            | Common Stock |  | Paid-in Capital |         | Retained Earnings |  | Total Stockholders Equity
|-------------------------------------------------------------------------- |  |  |  | ---------------- | ---------- | ------------ |  | --------------- | ------- | ----------------- |  | --------------------------
|Balance,
December 31, 2003                                                 |  |  |  |                  | 44,338,505 |              |  | $               | 443,385 |                   |  | $                         
|                                                                          
|Issuance of
stock on conversion of certificated interests                  |  |  |  |                  | 1,585      |              |  |                 | 16      |                   |  |                           
|                                                                          
|Net
income                                                                 |  |  |  |                  |            |              |  |                 |        |                   |  |                           
|                                                                          
|Balance,
December 31, 2004                                                 |  |  |  |                  | 44,340,090 |              |  |                 | 443,401 |                   |  |                           
|                                                                          
|Issuance of
stock on conversion of certificated interests                  |  |  |  |                  | 1,000,000  |              |  |                 | 10,000  |                   |  |                           
|                                                                          
|Revaluation
of amounts adjusted in quasi-reorganization (notes 3, 5 and 7) |  |  |  |                  |            |              |  |                 |         |                   |  |                           
|                                                                          
|Net
loss                                                                   |  |  |  |                  |            |              |  |                 |        |                   |  |                           
|                                                                          
|Balance,
December 31, 2005                                                 |  |  |  |                  | 45,340,090 |              |  | $               | 453,401 |                   |  | $                         



See accompanying notes to financial
statements




17


---



FIRSTPLUS Financial Group, Inc.




STATEMENTS OF CASH FLOWS







|                                                                                         |  |  |  | For the Years Ended December 31, |           
|---------------------------------------------------------------------------------------- |  |  |  | -------------------------------- | ----------
|
|Cash flow from operating activities:                                                    
|Net income
(loss)                                                                        |  |  |  | $                                | (1,826,005
|Adjustments to reconcile net income to net cash provided (used) by operating activities:
|Gain on sale
of investment                                                               |  |  |  |                                  |          
|Loss on loan
default  United Lending Partners LLC                                       |  |  |  |                                  |          
|Changes in
operating assets and liabilities:                                             |  |  |  |                                  |           
|Deferred tax
asset                                                                       |  |  |  |                                  | (93,300   
|Accrued
expenses                                                                         |  |  |  |                                  | 131,928   
|Income taxes
payable                                                                     |  |  |  |                                  | (19,600   
|Net cash
provided (used) by operating activities                                         |  |  |  |                                  | (1,806,977
|                                                                                        
|Cash flows from investing activities:                                                   
|Proceeds from
sale of investments                                                        |  |  |  |                                  |          
|Collection on
bankruptcy estate claim                                                    |  |  |  |                                  | 2,346,773 
|Advances on
line of credit Capital Lending Strategies LLC                                |  |  |  |                                  |          
|Collections
on line of credit Capital Lending Strategies LLC                             |  |  |  |                                  | 42,264    
|Receipt of
state refund  net                                                            |  |  |  |                                  | 168,741   
|Receipt of
401k forfeitures (note 7)                                                     |  |  |  |                                  | 93,284    
|Loss on loan
default  United Lending Partners LLC                                       |  |  |  |                                  |          
|Change in
other investments                                                              |  |  |  |                                  |          
|                                                                                        
|Net cash
provided (used) by investing activities                                         |  |  |  |                                  | 2,651,062 
|                                                                                        
|Net increase
in cash                                                                     |  |  |  |                                  | 844,085   
|                                                                                        
|Cash at the
beginning of the year                                                        |  |  |  |                                  | 460,310   
|                                                                                        
|Cash at the
end of the year                                                              |  |  |  | $                                | 1,304,395 
|Supplemental disclosure of cash flow information:                                       
|Cash paid for:                                                                          
|Interest                                                                                 |  |  |  | $                                | 1,289     
|Taxes                                                                                    |  |  |  | $                                | 19,600    



See accompanying notes to financial
statements




18


---



FIRSTPLUS Financial Group, Inc.Notes to the Financial
Statements







|1. |  | Description Of The Company:
|-- |  | ---------------------------



FIRSTPLUS Financial Group, Inc.
(FPFG) (together with its subsidiaries, the Company) was a specialized consumer finance company that originated, purchased,
serviced and sold consumer finance receivables. The Companys principal loan product was a debt consolidation or home improvement loan secured by
a second lien on real property (High LTV Loans). The Company sold substantially all of its High LTV Loans through its securitization
program and retained rights to service those loans.




The Companys operations required
continued access to financing sources. The Companys primary operating cash requirements included the funding of (i) loan originations, (ii)
reserve accounts, overcollateralization requirements, fees and expenses incurred in connection with its securitization transactions, (iii) television,
radio and direct mail advertising and other marketing and (iv) administrative and other operating expenses.




Due to numerous market factors beyond
the Companys control during the fourth quarter of 1998, the Companys access to those financing sources was unavailable. As a result, the
subsidiaries filed a bankruptcy petition under Chapter 11 of the Bankruptcy Code. As part of the plan of reorganization accepted by the bankruptcy
court on April 7, 2000, certain creditors of the subsidiaries received a Certificated Interest representing Obligations under the plan of
reorganization. FPFG also retained an unsecured interest in monies that it had advanced to its subsidiaries. As payments are made from the former
subsidiaries to FPFG, the Obligations to the Certificated Interests are paid. The claim was placed in the FirstPlus Financial Grantor Residual Trust.
The bankruptcy estate has established a creditor trust from which available funds are paid to creditors of FPFGs former subsidiaries. After
secured creditors have been paid, funds are released to pay the Obligations to the Certificated Interests and to the Grantor Trust.


|2. |  | Summary Of Significant Accounting Policies:
|-- |  | -------------------------------------------



Revenue
Recognition:




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




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




Cash and Cash
Equivalents:




For purposes of the balance sheet and
statement of cash flows, the Company considers all highly liquid investments which are readily convertible into known amounts of cash and have a
maturity of three months or less when acquired to be cash equivalents. At December 31, 2005, management believes that the carrying amount of cash
equivalents approximates fair value because of the short maturity of these financial instruments.




Loans and Allowance for Loan
Losses




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




Concentration of Credit
Risk:




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




19


---



FIRSTPLUS Financial Group, Inc.Notes to the Financial
Statements  Continued




2.    Summary Of Significant Accounting Policies:
(Continued)




Income
Taxes:




In accordance with SFAS No. 109,
Accounting for Income Taxes, deferred income taxes are recognized for the tax consequences in future years of differences between the tax
basis of assets and liabilities and their financial reporting amounts at each year-end based on enacted tax laws and statutory tax rates applicable to
the periods in which the differences are expected to affect taxable income. Valuation allowances are established, when necessary, to reduce deferred
tax assets to the amount expected to be realized. The provision for income taxes represents the tax payable for the period and the change during the
period in deferred tax assets and liabilities. Based on the December 31, 2005 loss, FPFG will have a net operating loss carryforward available of
approximately $1,450,000. A valuation allowance is provided against the deferred tax asset for future taxable income as realization is
uncertain.




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




Managements
Estimates:




The preparation of financial statements
in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of
assets and liabilities and disclosure of contingent assets and liabilities at the dates of the financial statements and the reported amounts of
expenses during the reporting periods. Actual results could differ from those estimates.




Quasi-reorganization:




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


|3. |  | Other Assets
|-- |  | ------------



FPFG retains a claim against the
bankruptcy estate of its former subsidiaries for monies advanced to them. On January 20, 2006, the bankruptcy trustee remitted $9,523,451 to the Dallas
County District Clerk designated for partial payment of that claim. In March 2006, another $1,742,552 has been remitted to the Dallas County District
Clerk and $723,323 has been set aside for FPFG, bringing the aggregate amount of funds designated for the benefit of FPFG to $11,989,326. FPFG, nor the
bankruptcy trustee, can estimate the amount or timing of any future payments. The Company has conducted an exhaustive search for outstanding claims
against FPFG or claims against its former subsidiaries that FPFG has assumed. FPFG has booked a valuation reserve of $3,015,000 which is comprised of
known and probable claims against FPFG and its assignments of 9.46% of its interest in the Intercompany Claim.




The funds placed with Dallas County
District Clerk have been invested in 30-day U.S. Treasury bills with an automatic renewal policy. The Treasury bills earn interest at the rate of 4.03%
per annum. Because the funds are not readily accessible to the Company due to litigation with the trustee of the Grantor Trust, the Company did not
consider the funds to be cash or cash equivalents as of December 31, 2005.




FPFG owns a minority equity interest in
Capital Lending Strategies, LLC (CLS). During 2004, it sold approximately 60% of its former holdings in CLS to an unrelated third party
which provided FPFGs working capital in 2004. The investment (less than 20%) is recorded on the books at the cost basis of
$71,150.




20


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FIRSTPLUS Financial Group, Inc.Notes to the Financial
Statements  Continued


|4. |  | Commitments and Contingencies
|-- |  | -----------------------------



FPFG has recorded a valuation allowance
of $3,015,000 for potential claims arising from creditors of FPFG and its former subsidiaries. No creditors have initiated a claim against FPFG. FPFG
has recorded an allowance since any claim would be dependent on the receipt of funds from the bankruptcy estate of FPFGs former
subsidiaries.




In October 2005, FPFG entered into a
contract with Versatile Consulting LLC to provide services in identifying and acquiring an operating entity in the financial services sector. The
contract is for a period of twelve months and requires payments of $10,000 per month with a $25,000 initial startup fee.


|5. |  | Stockholders Equity
|-- |  | --------------------



Holders of the Companys 7.25%
Convertible Subordinated Notes Due 2003 (discharged under a plan of reorganization under Chapter 11 of the Bankruptcy Code dated April 7, 2000)
received a Certificated Interest payable from residual funds of the subsidiaries after the secured interests have been paid. Two of the former
noteholders received rights to convert a portion of their Certificated Interests into shares of the FPFGs common stock. On April 27, 2005, the
sole remaining Certificated Interest holder with conversion rights exercised rights for 1,000,000 shares. At December 31, 2005, the Certificated
Interest holder held conversion rights to 1,655,000 shares of common stock.




The net proceeds of $168,741 remitted
to the state of Texas prior to the quasi-reorganization was returned to the Company during 2005. The Company has treated the return as an adjustment to
additional paid in capital in connection with the reorganization.


|6. |  | Director Stock Option Plan
|-- |  | --------------------------



The Company has stock options
outstanding to participants under the 1995 Non-Employee Director Plan to grant options to members of the Board of Directors who are not employees of
the Company or its subsidiaries on the date they become a director. No options under the 1995 Employee Option Plan may be exercised more than ten years
from the date of grant.




Each of the four directors holds
options for the issuance of 300,000 shares of common stock for an aggregate total of 1,200,000 shares. The options are exercisable at $0.10 per option.
If exercised, the shares would have an anti-dilutive effect on earnings (loss) per share.




The Company accounts for this plan
under the recognition and measurement principles of Accounting Principles Board (APB) Opinion No. 25, Accounting for Stock Issued to
Employees, and related Interpretations. The Company adopted the disclosure-only provisions of SFAS 123, Accounting for Stock-Based
Compensation, as amended, by Statement of Financial Accounting Standards 148, Accounting for Stock-Based Compensation  Transition and
Disclosure. No stock-based employee compensation cost is reflected in net earnings (loss), as all options granted under this plan had an exercise
price equal to or greater than the market value of the underlying common stock on the date of grant. The Company did not issue any options, nor did any
options vest, during the two periods ended December 31, 2005; therefore, the pro forma effect on income and earnings per share would be
zero.


|7. |  | Pension Plan
|-- |  | ------------



The Company has made an exhaustive
effort through the IRS Identification program and through its former pension plan administrators to identify any possible beneficiaries of its
terminated pension plan. The Company has determined that $93,284 that was previously designated as a pension plan asset is in fact an asset of the
Company. If any former employee can demonstrate that they are legally entitled to any of the funds, the Company will disburse those funds to the
individual.




21


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FIRSTPLUS Financial Group, Inc.Notes to the Financial
Statements  Continued


|8. |  | Related Party Transactions
|-- |  | --------------------------



The Companys executive offices
are shared with the facilities leased by Capital Lending Strategies, LLC, which incurs the cost and full responsibility of the lease. There is no
formal agreement between the Company and Capital Lending Strategies, LLC with respect to the lease arrangement. Daniel T. Phillips, FPFGs
Director, is a Manager and Member of Capital Lending Strategies, LLC. The Company has estimated that the value of the arrangement to the Company is
less than $1,000 for each of the years ended December 31, 2005 and 2004.




The Company has loaned to Capital
Lending Strategies, LLC approximately $275,000. The loan balance at December 31, 2005 was $117,786. The line of credit bears interest at the prime rate
of interest as established by the Wall Street Journal plus 1% and matures on the second anniversary of any advance on the line of
credit.




In 2003, the Company entered into a
reciprocal swap with Capital Lending Strategies, LLC whereby the Company transferred most of its ownership interests in Capital Lending
Strategies, LLC to Capital Lending in exchange for all of the shares of Series D Convertible Preferred Stock of the Company then owned by Capital
Lending Strategies, LLC, which represented approximately 51% of the voting stock of the Company. The Company did not transfer back to Capital Lending
Strategies, LLC the ownership interests assigned to the plaintiffs co-lead counsel in escrow on behalf of the authorized claimants under the
settlement of the Companys consolidated class action lawsuit styled In re: FirstPlus Financial Group, Inc. Securities Litigation, Civil
Action No. 3:98-CV-2551-M.




Prior to the reciprocal swap, the
mutual ownership positions of the Company and Capital Lending Strategies, LLC resulted in Capital Lending Strategies, LLC holding a controlling
interest in the Company and approximately 12% of the Companys ownership of Capital Lending Strategies, LLC attributing back to
Capital Lending Strategies, LLC. Following the reciprocal swap, the Company retained the same economic interest in Capital Lending since none of its
ownership interest then attributed back to Capital Lending Strategies, LLC via Capital Lending Strategies, LLCs ownership of Company
stock. However, Capital Lending Strategies, LLC no longer owns any shares of the Company and is no longer in a position to control the Company through
its stock ownership. In May 2004, the Company sold its remaining interest in Capital Lending Strategies, LLC, other than the interest assigned on
behalf of the claimants in the class action lawsuit, for $796,580.




In August 2004, the Company made a loan
of $100,000 to United Lending Partners, LLC. The original term of the note was for 60 days with an interest rate of 15 percent. The note was renewed
twice and became due in February 2005. The loan is currently in default. Due to the uncertainty of collectibility, a valuation reserve for the full
amount of the loan was recorded as of December 31, 2004. During 2004, the Company received an interest only payment of $2,500. Due to the status of the
loan, interest income was not accrued. United Lending Partners, LLC is a subsidiary of Renaissance Acceptance Group, Inc. Daniel T. Phillips,
FPFGs Director, is a director and shareholder of Renaissance Acceptance Group, Inc.




FPFG has an insurance policy with
American Financial Services covering its directors and officers. The total premium for the policy is $59,260. Dexter & Company was the broker for
the policy. John R. Fitzgerald, FPFGs Director, is Executive Vice President of Dexter & Company. In December 2005, the Board approved
renewing the policy at a cost of approximately $77,000.


|9. |  | Recent Accounting Pronouncements
|-- |  | --------------------------------



In December 2004, the FASB issued
Statement of Financial Accounting Standards (SFAS) No. 123 (Revised 2004), Share-Based Payments. The new pronouncement replaces
the existing requirements under SFAS No. 123 and APB 25. According to SFAS No. 123(R), all forms of share-based payments to employees,




22


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FIRSTPLUS Financial Group, Inc.Notes to the Financial
Statements  Continued




9.    Recent Accounting Pronouncements
(Continued)




including employee stock options
and employee stock purchase plans, would be treated the same as any other form of compensation by recognizing the related cost in the statement of
operations. This pronouncement eliminates the ability to account for stock-based compensation transactions using APB No. 25 and generally would require
that such transactions be accounted for using a fair-value method. SFAS No. 123(R) is effective for awards and stock options granted, modified or
settled in cash in interim or annual periods beginning after December 15, 2005. The Company plans to adopt the modified prospective transition method,
which would necessitate the Company to recognize compensation cost for awards that are not fully vested as of the effective date of the SFAS 123(R)
based on the same estimate that the Company used to previously value its grants under SFAS 123.




The Company will be required to expense
the fair value of our stock option grants rather than disclose the impact on its statement of operations within the Companys footnotes, as is the
current practice. The Company will incur additional compensation expense as new awards are made after December 15, 2005. The Company is evaluating the
form of share-based compensation arrangements it will utilize in the future, if any.




In May 2005, the FASB issued SFAS 154,
Accounting Changes and Error Corrections, a replacement of APB Opinion No. 20 and FASB Statement No. 3. This statement provides guidance on
the accounting for and reporting of accounting changes and error corrections. It establishes, unless impracticable, retrospective application as the
required method for reporting a change in accounting principle in the absence of explicit transition requirements specific to the newly adopted
accounting principle. This statement also provides guidance for determining whether retrospective application of a change in accounting principle is
impracticable and for reporting a change when retrospective application is impracticable. SFAS 154 is effective for accounting changes and correction
of errors made in fiscal years beginning after December 15, 2005. The Company does not anticipate any material impact on its financial statements from
the adoption of SFAS 154 since it currently does not anticipate any voluntary changes to its accounting policies.


|10. |  | Subsequent Events
|--- |  | -----------------



In January 2006, the Company received a
partial summary judgment against George Davis, former trustee of the Grantor Residual Trust. Following the judgment, the bankruptcy trustee for the
FPFI Creditor trust transferred $9,523,451 to the Dallas District Clerk to be held on behalf of the Company until the litigation styled FirstPlus
Financial Group, Inc. et al v. George T Davis and The FPFI Creditor Trust is settled. The litigation revolves around the authority to distribute
funds, not the ownership of the funds. The funds have been invested in 30 day Treasury bills currently drawing 4.03% interest.




23


---



|ITEM 8. |  | CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING
AND FINANCIAL DISCLOSURE
|------- |  | ------------------------------------------------------------------------------------



The Company has had no disagreements
with its certified public accountants with respect to accounting practices or procedures or financial disclosure.


|ITEM
8A. |  | CONTROLS AND PROCEDURES.
|-------- |  | ------------------------



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




Because the Company has been in a
dormant capacity for the past several years, the Company has only one officer and employee. However, managements revised assessment has concluded
that, as of December 31, 2005, the Companys shortage of personnel is not sufficient to constitute effective disclosure controls and procedures in
light of the state of its financial records discussed in the paragraphs below and the resources required for the functions described under Item 6, Plan
of Operation, particularly if unforeseen circumstances arise, such as those described in Item 3, Legal Proceedings under the headings Grantor
Trust Litigation and Special Meeting Litigation.




The Company has implemented the
following changes in internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during
the period to which this report relates that have materially affected, or are reasonably likely to materially affect, its internal control over
financial reporting. Since 1999, the Company was essentially a dormant company without sufficient resources to retain an independent auditor. Prior to
1999, the Companys main operating entity employed a large accounting staff responsible for the Companys extensive accounting needs and
financial reporting. Prior to its collapse, FPFIs operations were geographically dispersed and its accounting records had not been centralized in
Dallas. When FPFI filed for bankruptcy protection in 1999, FPFI employees who maintained the Companys records were inundated with creditor
demands for information. Following FPFIs bankruptcy, virtually all of FPFIs remaining accounting personnel were laid off. The Company, with
its very limited personnel, attempted to maintain control over its records, but most of those records remained fragmented or under the control of the
FPFI bankruptcy estate.




In January 2004, the Company attempted
to assemble the fragmented records in an effort to develop a workable set of books and records. The individuals involved with this endeavor, while not
employed by the Company, volunteered to help and worked diligently to assemble the fragmented records. By the beginning of 2005, the Company had
finally gathered a workable set of books and records to begin the process of obtaining audited financial statements for 2004 and attempted to gather
the books and records necessary to address the deficiencies in the Companys financial reporting, including its period reports under the Exchange
Act.


|ITEM
8B. |  | OTHER INFORMATION.
|-------- |  | ------------------



None




24


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PART III


|ITEM
9. |  | DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL
PERSONS; COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT.
|------- |  | ----------------------------------------------------------------------------------------------------------------



Information contained under the caption
Election of Directors and Corporate Governance in the Proxy Statement is incorporated herein by reference in response to this
Item 9. See also the information in Item 1 under the heading Executive Officers.


|ITEM
10. |  | EXECUTIVE COMPENSATION.
|-------- |  | -----------------------



Information contained under the caption
Executive Compensation in the Proxy Statement is incorporated herein by reference in response to this Item 10.


|ITEM
11. |  | SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
AND RELATED STOCKHOLDER MATTERS.
|-------- |  | -----------------------------------------------------------------------------------------------



Information contained under the caption
Security Ownership of Certain Beneficial Owners and Management in the Proxy Statement is incorporated herein by reference in response to
this Item 11.


|ITEM
12. |  | CERTAIN RELATIONSHIPS AND RELATED
TRANSACTIONS.
|-------- |  | -----------------------------------------------



Information contained under the caption
Certain Relationships and Related Transactions in the Proxy Statement is incorporated herein by reference in response to this Item
12.


|ITEM
13. |  | EXHIBITS.
|-------- |  | ---------



The exhibits listed on the accompanying
Exhibit Index are filed as part of this Report.


|ITEM
14. |  | PRINCIPAL ACCOUNTANT FEES AND SERVICES.
|-------- |  | ---------------------------------------



Information contained under the caption
Independent Auditors  Audit Fees in the Proxy Statement is incorporated herein by reference in response to this Item
14.




25


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SIGNATURES




In accordance with Section 13 or 15(d)
of the Exchange Act, the registrant has caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.




Date: March 31, 2006




FIRSTPLUS Financial Group, Inc.
(Registrant)


|By |  | /s/ Jack (J.D.) DraperJack
(J.D.) Draper, President
|-- |  | ---------------------------------------------------



In accordance with the Exchange Act,
this report has been signed by the following persons on behalf of the registrant and in the capacities and on the dates indicated.







|Signature                                |  |  |  | Title                                                                              |  | Date          
|---------------------------------------- |  |  |  | ---------------------------------------------------------------------------------- |  | --------------
|/s/ Robert P.
FreemanRobert P. Freeman   |  |  |  | Director and Chairman of the Board                                                 |  | March 31,
2006
|                                        
|/s/ Jack (J.D.)
DraperJack (J.D.) Draper |  |  |  | President and Chief Executive Officer (Principal Executive and Accounting Officer) |  | March 31,
2006
|                                        
|/s/ John R.
FitzgeraldJohn R. Fitzgerald |  |  |  | Director                                                                           |  | March 31,
2006
|                                        
|/s/ Daniel T.
PhillipsDaniel T. Phillips |  |  |  | Director                                                                           |  | March 31,
2006
|                                        
|/s/ David B.
WardDavid B. Ward           |  |  |  | Director                                                                           |  | March 31,
2006



26


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INDEX TO EXHIBITS







|Exhibit
    No. |  |  |  | Document Description                                                                                                                                                                                                                                                                                                                                                                 
|--------------- |  |  |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|2.1*            |  |  |  | Modified Third Amended Plan of Reorganization of FirstPlus Financial, Inc.                                                                                                                                                                                                                                                                                                           
|2.2*            |  |  |  | Trust
Agreement for the FPFI Creditor Trust                                                                                                                                                                                                                                                                                                                                          
|3.1*            |  |  |  | Amended and Restated Articles of Incorporation, as amended                                                                                                                                                                                                                                                                                                                           
|3.2*            |  |  |  | Second
Amended and Restated Bylaws                                                                                                                                                                                                                                                                                                                                                   
|4.1+            |  |  |  | Rights
Agreement dated as of May 20, 1998, between FIRSTPLUS Financial Group, Inc. and ChaseMellon Shareholder Services, L.L.C., which includes the form of
Certificate of Designation for Designating Series C Junior Participating Preferred Stock, $1.00 par value, as Exhibit A, the form of Right Certificate
as Exhibit B, and the Summary of Rights as Exhibit C (Exhibit 4.1)
|4.1.1*          |  |  |  | First
Amendment to Rights Agreement dated as of October 25, 2001, between FIRSTPLUS Financial Group, Inc. and Mellon Investor Services LLC                                                                                                                                                                                                                                           
|4.1.2*          |  |  |  | Second
Amendment to Rights Agreement dated as of June 27, 2002, between FIRSTPLUS Financial Group, Inc. and Mellon Investor Services LLC                                                                                                                                                                                                                                             
|4.2*            |  |  |  | Form
of Certificate of Designation for Designating Series C Junior Participating Preferred Stock, $1.00 par value (included as Exhibit A to the Rights
Agreement, which is Exhibit 4.1 hereto)                                                                                                                                                                                       
|4.3*            |  |  |  | Form
of Right Certificate (included as Exhibit B to the Rights Agreement, which is Exhibit 4.1 hereto). Pursuant to the Rights Agreement, printed Right
Certificates will not be mailed until as soon as practicable after the Distribution Date                                                                                                                                     
|4.4*            |  |  |  | Form
of Summary of Rights (included as Exhibit C to the Rights Agreement, which is Exhibit 4.1 hereto) that, together with certificates representing the
outstanding Common Shares of the Company, shall represent the Rights until the Distribution Date                                                                                                                            
|4.5*            |  |  |  | Specimen of legend to be placed, pursuant to Section 3(c) of the Rights Agreement, on all new Common Share certificates issued after June 1,
1998 and prior to the Distribution Date upon transfer, exchange or new issuance (included in Section 3(c) of the Rights Agreement, which is Exhibit 4.1
hereto)                                                                         
|4.6*            |  |  |  | FIRSTPLUS Financial Group, Inc. Grantor Residual Trust Agreement, dated July 15, 2002                                                                                                                                                                                                                                                                                                
|4.7*            |  |  |  | Supplemental Indenture, dated as of December 4, 2000, by and between FirstPlus Financial Group, Inc. and HSBC Bank USA                                                                                                                                                                                                                                                               
|4.8*            |  |  |  | Form
of Certificate of Certificated Interests Representing Beneficial Interests in The FPFI Creditor Trust Exchanged For 7.25% Convertible Subordinated
Notes Due 2003                                                                                                                                                                                                               
|10.1*           |  |  |  | Agreement for Settlement Between Bear Stearns & Co., Inc. and FirstPlus Financial Group, Inc., dated August 19, 1999.                                                                                                                                                                                                                                                                
|10.2*           |  |  |  | Conversion Agreement, dated as of June   , 2001, by and between FirstPlus Financial Group, Inc., and the Certificateholders
signatory thereto                                                                                                                                                                                                                                        
|10.3*           |  |  |  | Letter
Agreement, dated June 13, 2001, by FirstPlus Financial Group, Inc. and accepted by FPFI Creditors Trust                                                                                                                                                                                                                                                                       
|10.4*           |  |  |  | Stipulation and Agreement of Settlement, dated as of July 30, 2003, between Class Representative Edward P. Doremus, III, Milberg Weiss Bershad
Hynes & Lerach LLP, Sirota & Sirota LLP, FirstPlus Financial Group, Inc., Daniel T. Phillips, Eric C. Green, Haynes and Boone, LLP and National
Union Fire Insurance Company of Pittsburgh, PA                                        
|10.5*           |  |  |  | Escrow
Agreement, dated as of July 30, 2003, by and among FirstPlus Financial Group, Inc., Class Representative Edward P. Doremus, III, Milberg Weiss Bershad
Hynes & Lerach LLP and Sirota & Sirota LLP                                                                                                                                                                             



27


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|Exhibit
    No. |  |  |  | Document Description                                                                                                                                                                                                                                  
|--------------- |  |  |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|10.6*           |  |  |  | Assignment and Assumption Agreement, dated as of July 30, 2003, by and between FirstPlus Financial Group, Inc., Class Representative Edward P.
Doremus, III, Milberg Weiss Bershad Hynes & Lerach LLP and Sirota & Sirota LLP                         
|10.7*           |  |  |  | Registration Rights Agreement, dated as of July 30, 2003, by and among FirstPlus Financial Group, Inc., Capital Lending Strategies, LLC, Class
Representative Edward P. Doremus, III, Milberg Weiss Bershad Hynes & Lerach LLP and Sirota & Sirota LLP
|10.8*           |  |  |  | Promissory Note, dated December 20, 2004, by United Lending Partners, LP in favor of FirstPlus Financial                                                                                                                                              
|10.9*           |  |  |  | Subordination Agreement, dated December 30, 2004, by and between FirstPlus Financial Group, Inc. and United Lending Partners,
LP                                                                                                                      
|10.10*          |  |  |  | Settlement Agreement and Mutual Release of Any and All Claims, dated October 12, 2001, by Thaxton Investment Corporation and FirstPlus
Financial Group, Inc.                                                                                          
|10.11           |  |  |  | Consultants Engagement Contract and Letter of Understanding, dated October , 2005, by and between FirstPlus Financial
Group, Inc. and Versatile Consulting                                                                                           
|14.1*           |  |  |  | FirstPlus Financial Group, Inc. Code of Ethics                                                                                                                                                                                                        
|31.1            |  |  |  | Certification of Chief Executive Officer required by Rule 13a-14(a) or Rule 15d-14(a)                                                                                                                                                                 
|31.2            |  |  |  | Certification of Chief Financial Officer required by Rule 13a-14(a) or Rule 15d-14(a)                                                                                                                                                                 
|32.1            |  |  |  | Certification of Jack (J.D.) Draper pursuant to Section 906 of the Sarbanes-Oxley Act of 2002                                                                                                                                                         
|32.2            |  |  |  | Certification of Jack (J.D.) Draper pursuant to Section 906 of the Sarbanes-Oxley Act of 2002                                                                                                                                                         






|+ |  | Incorporated by reference to the exhibit shown in parentheses
from the Companys Current Report on Form 8-K filed as of May 29, 1998.
|- |  | -------------------------------------------------------------------------------------------------------------------------------------

|* |  | Incorporated by reference to the exhibit from the Companys
Current Report on Form 10-KSB for the year ended December 31, 2005.
|- |  | -------------------------------------------------------------------------------------------------------------------------------



28


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