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, 2006








o
            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 Floor
              Irving,
                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. x Yes  o
      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. o





Registrant’s
      revenues for its most recent fiscal year: $25,692










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


o
      Yes x No





Aggregate
      market value of Registrant’s voting and non-voting common equity held by
      non-affiliates: Based upon the closing price at March 29, 2007 ($.16), the
      aggregate market value was $7,719,214.





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 28, 2007, the issuer had
      48,245,090 shares of common stock, $.01 par value, outstanding.





**DOCUMENTS
      INCORPORATED BY REFERENCE**





The
      Registrant’s definitive proxy statement pertaining to the 2007 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): o Yes  x
      No





**GENERAL
      NOTE**





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


2


**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 approximately five 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. Pursuant to FPFI’s plan of reorganization,
      the Company’s operating subsidiaries, including FPFI and Western Interstate
      Bancorp, 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 anticipated but uncertain cash flow from
      the Company’s allowed unsecured claim against FPFI, more commonly known as the
      FPFG Intercompany Claim. 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.





Since
      1999, the Company has managed to avoid bankruptcy by negotiating with creditors.
      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.





Primarily
      due to lack of funds, the Company had for the most part been in a dormant
      capacity from 1999 to 2006. During 2006, the Company began analyzing an
      opportunity to enter the “ Buy-Here
      Pay-Here ”
auto
      finance industry. Based on this analysis, the Company determined to make a
      concerted effort to enter this business, initially focusing on the Dallas and
      Fort Worth, Texas market. In November 2006, the Company formed Olé Auto Group,
      Inc. (“Olé”) in order to carry out this activity. In November 2006, the Company
      acquired a pool of motor vehicle retail installment sale contracts and security
      agreements. Initially, the Company intends to open auto dealership operations
      in
      the Dallas-Fort Worth area and purchase cars and offer financing to its
      customers, typically marketing to customers with limited credit history or
      past
      credit problems.





**Business
      Operations**





The
      Company currently operates one automotive sales lot in Dallas/Fort Worth, Texas
      that focuses exclusively on the Buy-Here
      Pay-Here segment
      of the used car market. The Company plans to begin operating two additional
      sales lots in the Dallas/Fort Worth area in 2007 pending licensing
      approvals.





The
      Company believes that its target market for used car sales in the major
      metropolitan markets in Texas is significant, growing and underserved. Used
      car
      retail sales typically occur through franchised new car dealerships that sell
      used cars or independent used car dealerships. The sub-prime segment of the
      independent used car sales and finance market is serviced primarily by numerous
      small independent used car dealerships that sell and finance the sale of used
      cars to individuals with limited or damaged credit histories. Many independent
      used car dealers are not able to obtain debt financing from traditional lending
      sources such as banks, credit unions, or major finance companies. Many of these
      dealers typically finance their operations through the sale of contract
      receivables at a discount.





Buy-Here
      Pay-Here dealers
      sell and finance used cars to individuals with limited credit histories or
      past
      credit problems. The Buy-Here
      Pay-Here industry
      focuses on customers, collectively referred to as “sub-prime or


3


‘D’
      Borrowers”, who (1) do not have traditional bank accounts or do not rely on
      traditional financial services relationships, or “un-banked” consumers, or (2)
      do not have the ability to obtain credit from traditional sources such as banks
      and credit unions due to limited credit histories, low income, past credit
      problems, or “credit-impaired” borrowers. Buy-Here
      Pay-Here payment
      arrangements are often construed to be within the “sub-prime” category of
      financing and lending. Because the Company serves customers who are unable
      to
      meet the credit standards imposed by most traditional automobile financing
      sources, the Company expects generally to charge higher interest rates than
      those charged by traditional financing sources. Since the Company provides
      financing in a relatively high-risk market, the Company also expects to sustain
      a higher level of credit losses than traditional automobile financing
      sources.





This
      industry is served by traditional lending sources such as banks, savings and
      loans, and captive finance subsidiaries of automobile manufacturers, as well
      as
      by independent finance companies and Buy-Here
      Pay-Here dealers.
      Despite significant opportunities, many of the traditional lending sources
      do
      not consistently provide financing to individuals with limited credit histories
      or past credit problems. Management believes traditional lenders avoid this
      market because of its high credit risk and the associated collection challenges.
      In general, the Company believes that the industry is categorized according
      to
      the type of car sold (new versus used) and the credit characteristics of the
      borrower.





**Systems**





The
      Company utilizes commercially available software to manage all aspects of its
      operations in a single, integrated management information system. The Company
      has implemented both local and wide-area data and voice communication networks
      to account for all activity centrally and provide meaningful, real-time, daily
      checks and balances throughout the organizational structure. Upon acquisition
      of
      new inventory, the system adds the car to inventory and records the appropriate
      entries to track reconditioning costs. Upon the sale and financing of the
      vehicle, the system automatically records the sale, cost of sale, a reduction
      in
      inventory, the corresponding loan and all related entries and establishes the
      loan in the collections database. The system will also support the capability
      and flexibility to allow customers to make payments at any dealership location.
      The database structure of these systems also provides the Company with the
      ability to develop sophisticated management tools, including static pool
      analyses, to analyze customer payment history and loan performance, and to
      monitor underwriting effectiveness.





**Vehicle
      Acquisition**





The
      Company’s strategy incorporates the importance of offering inventory in
      generally better working condition than typical Buy-Here Pay-Here dealers.
      The
      Company believes upgraded inventory reduces the reconditioning costs and
      provides better quality portfolio performance as well as a significant
      competitive advantage.





The
      Company intends to acquire inventory from various sources, including local
      and
      regional auctions, wholesalers, franchised and independent dealers, and fleet
      owners, such as leasing companies and rental companies. The Company plans to
      control inventory costs by making volume purchases for all of its dealerships.
      In making its purchases, the Company will to take into account each car’s retail
      value and the costs of buying, reconditioning, and delivering the car for
      resale.





**Sales**





The
      Company has implemented a standardized sales training program for all of its
      managers and sales personnel to maintain a uniform sales methodology. The sales
      process, which emphasizes a “low-pressure” approach, was designed to incorporate
      the essential sales fundamentals of assisting the customer find the right
      vehicle based on the customer’s financial ability.





**Underwriting
      and Finance**





The
      Company provides financing for substantially all of its vehicle sales using
      retail installment loan contracts. As a buy-here pay-here dealer, the Company
      offers the customer certain advantages over more traditional financing sources
      including: broader underwriting guidelines, flexible payment terms including
      structuring loan payment due dates as weekly or biweekly, often coinciding
      with
      the customer’s payday, and the ability to make payments in person at the
      dealerships. Weekly and bi-weekly payments provide early warnings and allow
      the
      Company to react more quickly to potential problems.


4





After
      the
      customer and the Company reach a preliminary agreement as to financing terms,
      the Company obtains a credit application from the customer which includes
      information regarding employment, residence, credit history, and personal
      references.





**Servicing
      and Collections**





Upon
      the
      origination of a retail installment contract, the collections personnel will
      utilize the Company’s collections software to monitor the performance of the
      contracts, focusing on delinquent loans. Servicing activities consist of
      collecting and processing customer payments, responding to customer inquiries,
      initiating contact with customers who are delinquent in payment of an
      installment, maintaining the security interest in the financed vehicle,
      monitoring physical damage insurance coverage of the financed vehicle, and
      arranging for the repossession of financed vehicles, liquidation of collateral
      and pursuit of deficiencies when necessary.





**Seasonality**





Typically
      in the auto industry, there is an annual cycle to the sales volumes.
      Historically, there is an increase is sales activity beginning in February
      which
      peaks toward the end of the third quarter before beginning a decrease for the
      remainder of the year. These cycles can be affected by incentive programs
      offered by the automobile manufacturers from time to time. In the Buy-Here
      Pay-Here industry, the cycle is somewhat less pronounced due to the utilization
      of tax refunds by buyers in the early part of the year.





**Branding**





The
      Company intends to capitalize on management’s experience in building name and
      brand awareness in a highly fragmented and unsophisticated market. The Company
      intends to generate an image as a professional, yet approachable operation,
      in
      contrast to the generally unfavorable public image of many Buy-Here Pay-Here
      dealers.





To
      attract customers, the Company uses a mixture of target advertising in print,
      radio and television serving each local market.





**Competition**





The
      used
      automotive retailing industry is highly competitive. The Company competes with
      other Buy-Here
      Pay-Here dealers,
      the used vehicle retail operations of franchised automobile dealerships,
      independent used vehicle dealers, internet-based sales organizations and
      individuals who sell used vehicles in private transactions. The Company competes
      for both the purchase and resale of used vehicles. Many of these competitors
      have substantially greater financial resources and lower costs of funds than
      the
      Company. As a result of these conditions, the non-prime consumer automotive
      finance market is highly fragmented, and primarily serviced by smaller finance
      organizations that solicit business when and as their capital resources
      permit.





Despite
      the income potential in the non-prime consumer market, many traditional
      financing sources, such as banks, savings and loans, credit unions, captive
      finance companies and leasing companies do not consistently provide financing
      to, or have from time to time withdrawn from, this market. However, many of
      these same institutions will buy loans on this type of buyer once the initial,
      higher-risk period of the first three months have passed.





The
      Company believes the principal competitive factors in the sale of its used
      vehicles include (1) the availability of financing to consumers with limited
      credit histories or past credit problems; (2) the breadth and quality of vehicle
      selection; (3) pricing; (4) the convenience of a dealership’s location; (5) the
      option to purchase a service contract; and (6) customer service.





**Intellectual
      Property**





The
      Company has filed two applications for service marks related to the Olé logo and
      designs.


5


**Regulation
      and Licensing**





Our
      operations are subject to various federal, state, and local laws, ordinances
      and
      regulations pertaining to the sale and financing of vehicles. Under various
      state laws, the Company’s lots must obtain a license in order to operate or
      relocate. These laws also regulate advertising and sales practices. Our
      financing activities are subject to federal truth-in-lending and equal credit
      opportunity regulations as well as state and local motor vehicle finance laws,
      installment finance laws, usury laws and other installment sales laws. Among
      other things, these laws require the Company to limit or prescribe terms of
      the
      contract it originates, require specified disclosures to customers, restrict
      collection practices, limit the Company’s rights to repossess and sell
      collateral, and prohibit discrimination against customers on the basis of
      certain characteristics including age, race, gender and marital
      status.





The
      Company has obtained the necessary sales and finance licenses to operate the
      car
      dealership business. The Company believes it is in compliance in all material
      respects with all applicable federal, state and local laws, ordinances and
      regulations. However, the adoption of additional laws, changes in the
      interpretation of existing laws, or the Company’s entrance into jurisdictions
      with more stringent regulatory requirements could have a material adverse effect
      on the Company’s used vehicle sales and finance business. There can be no
      assurance that the Company will be able to maintain all requisite licenses
      and
      permits, and the failure to satisfy those and other regulatory requirements
      could have a material adverse effect on the Company’s operations.





**Environmental
      Compliance**





The
      Company believes it is materially in compliance with applicable environmental
      regulations. The Company does not spend any material amounts on environmental
      compliance.





**Executive
      Officers**





The
      Company currently has three employees, its executive officers are listed below.
      None of these executive officers have employment agreements with the Company.
      In
      addition, the Company’s wholly-owned subsidiary, Olé Auto Group, Inc., has 16
      employees, including two additional executive officers.





*Daniel
      T. Phillips* .
      Daniel
      T. Phillips has served as a director since 1994 and as President and Chief
      Executive Officer since November 2006. Mr. Phillips is co-founder of FIRSTPLUS
      Financial Group, Inc. From 1996 to 2003, Mr. Phillips served as Chairman and
      CEO
      of FIRSTPLUS, overseeing the operations of its subsidiaries, which combined
      had
      6,000 employees producing, securitizing and servicing up to $9 billion dollars
      of loans. Currently, Mr. Phillips serves on the Board of Managers and is a
      Member and the CEO of Capital Lending Strategies, LLC, a position he has held
      since 2003. Mr. Phillips has also served as Chairman of the Board of Renaissance
      Acceptance Group, Inc. since 2001. From 1993 to 1996, Mr. Phillips served as
      President and CEO of RAC Financial Group, Inc., the parent of FIRSTPLUS
      Financial Inc., FIRSTPLUS Financial West, Inc., First Security Mortgage
      Corporation and State Financial Acceptance Corporation. He is also former
      President and CEO of LinCo Financial Corporation and served in the United States
      Marine Corps from 1967 to 1970. Mr. Phillips is responsible for the development
      of sophisticated risk scorecards for the high loan to value second mortgage
      business and in his career he has successfully securitized $9 billion of
      business rated by S&P, Moody’s and Fitch.





*James
      Roundtree* . Mr.
      Roundtree has served as Chief Financial Officer since November 2006 and as
      a
      director since December 2006. From 1996 to 2001, Mr. Roundtree served in various
      financial positions within the registrant and its wholly owned subsidiary
      FirstPlus Financial, Inc., primarily as chief accounting officer and CFO. Mr.
      Roundtree has served as trustee of the FirstPlus Financial Group, Inc. Grantor
      Residual Trust since 2006. Currently, Mr. Roundtree serves on the Board of
      Managers and is a Member and the CFO of Capital Lending Strategies, LLC, a
      position he has held since 2003. Prior to working with Capital Lending
      Strategies, LLC, Mr. Roundtree was self employed as a consultant from 2001
      until
      2003. Mr. Roundtree worked in public accounting from 1984 through 1996,
      primarily with Ernst & Young, providing attestation services to financial
      institutions. Mr. Roundtree holds a Bachelor of Science in Accounting from
      the
      University of Texas at Dallas and a Juris Doctorate from William Howard Taft
      University.





*Jack
      (J.D.) Draper* .
      Mr.
      Draper served as President and Chief Executive Officer from October 2003 to
      November 2006 and has served as Executive Vice President since November 2006.
      Mr. Draper has 25 years of management experience in the mortgage, second
      mortgage and property improvement industries. Mr. Draper has experience with
      compliance issues in state and federal lending laws. Mr. Draper is skilled
      in
      quality control plan


6


development,
      fiscal planning and budget administration and has experience in strategic
      planning, operations management and project management. Before being appointed
      President and CEO of the registrant in 2003, Mr. Draper served as President
      and
      CEO of LDI Financial Inc. from 2002 to 2003.





**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. Olé Auto Group, Inc.
      has a sublease from Capital Lending for its executive office facilities which
      expires in May 2010 and rent payments of $3,881.50 per month. In addition,
      the
      Company has leases for two automotive sales lots in Dallas and Fort Worth,
      Texas. The Dallas lease is for a term of five years with payments ranging from
      $10,000 to $12,5000 per month over the term of the lease. The Fort Worth lease
      is for a term of three years with monthly rental payments of $6,500. In
      addition, the Company owns an additional lot in Dallas, Texas.





**ITEM
              3.**
            **LEGAL
                PROCEEDINGS.**





None.





**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, 2006.


7




**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 28, 2007, there were 1,290 shareholders of record of the Company’s
      common stock and 48,245,090 shares issued and outstanding.





In
      2006,
      the Company instructed the Grantor Trust to make a distribution to the Company’s
      shareholders of record on August 3, 2006 in an amount of $.08 per share,
      assuming 45,340,090 shares of the registrant’s common stock issued and
      outstanding as of the record date. Pursuant to the settlement agreement with
      the
      petitioners in the lawsuit styled *Danford
      L. Martin, et al. v. FirstPlus Financial Group, Inc., et al* .,
      the
      Company agreed that upon receipt by the Grantor Trust of funds from the portion
      of the FPFG Intercompany Claim assigned by the Company to the Grantor Trust,
      it
      would cause the Grantor Trust to make distributions to the holders of the
      Company’s common stock of fifty percent of such funds annually. The Company will
      announce record dates for these distributions at the applicable times. 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.





*Equity
      Compensation Plan Information*




The
      following table provides information as of December 31, 2006, about our common
      stock that may be issued upon the exercise of options, warrants and rights
      under
      all of our existing equity compensation plans (including individual
      arrangements):




**Plan
                Category**
            **Number
                of securities to be**
              **issued
                upon exercise of**
              **outstanding
                options,**
              **warrants
                and rights**
              **(a)**
            **Weighted-average**
              **exercise
                price of**
              **outstanding
                options,**
              **warrants
                and rights**
              **(b)**
            **Number
                of securities remaining**
              **available
                for future issuance under**
              **equity
                compensation plans**
              **(excluding
                securities reflected in**
              **column
                (a))**
              **(c)**Equity
                compensation plans approved by security holders
            —
            —
            —Equity
                compensation plans not approved by security holders
            3,760,000
            $0.08
            740,000Total
            3,760,000
            $0.08
            740,000





On
      December 12, 2006, the registrant’s board of directors approved the Stock Option
      Plan for FIRSTPLUS Financial Group, Inc. (the “Plan”). The primary purpose of
      the Plan is to advance the interests of the registrant by providing an
      additional incentive in the form of stock options and restricted stock to
      attract and retain qualified and competent employees upon whose efforts and
      judgment its success is largely dependent. The Plan made 4,500,000 shares of
      the
      registrant’s common stock available for issuance as awards under the Plan.
      Officers, directors and employees of the registrant, and employees of the
      registrant’s wholly-owned subsidiary, Ole Auto Group, Inc., are eligible to
      receive awards under the Plan.




Awards
      under the Plan may consist of a stock option or a restricted share award. Stock
      options may take the form of an incentive stock option or a non-qualified stock
      option. The Plan will be administered, including determination of the recipients
      of, and the nature and size of, awards granted under the Plan, by the committee
      of the board of directors meeting the criteria set forth in the Plan. If the
      board of directors has not appointed such a committee, the Plan will be
      administered by the board of directors.




8


The
      exercise price of an option shall not be less than the fair market value, as
      defined under the Plan, on the date of grant. Unless otherwise provided in
      an
      option agreement, options granted under the Plan will vest as
      follows:





·
            one-third
                of the shares will vest on the date of
                grant;


·
            one-third
                of the shares will vest on the first anniversary of the date of grant;
                and


·
            one-third
                of the shares will vest on the second anniversary of the date of
                grant.





Unless
      the terms of an option agreement provide for a different date of termination,
      the unexercised portion of an option award shall automatically and without
      notice terminate and become null and void at the time of the earliest to occur
      of the following:





·
            immediately
                upon termination of employment (or termination of service as a director)
                with the registrant as a result, in whole or in material part, of
                a
                discharge for cause;


·
            the
                60th day following optionee’s termination of employment (or termination of
                service as a director) with the registrant for any reason except
                cause;
                provided, however, that if the optionee shall die during such sixty
                (60)
                day period, he or she will be deemed to have terminated employment
                (or
                termination of service as a director) as a result of death, and the
                termination of the option will be governed by the previous clause;
                or


·
            on
                the 180th day following a termination of employment (or termination
                of
                service as a director) by reason of death or disability;
                or


·
            the
                tenth (10th) anniversary of the date of
                grant.





The
      restricted stock awards will be subject to the restrictions and the restriction
      period determined by the board of directors. Each grant of restricted stock
      may
      be subject to a different restriction period. The holders of restricted stock
      will have the right to vote the shares but will not have the right to receive
      any dividends declared or paid with respect to the shares. The recipient of
      a
      restricted stock award will be required to purchase the restricted stock from
      the registrant at a purchase price equal to the greater of (a) the aggregate
      par
      value of the shares represented by such restricted stock, or (b) the purchase
      price, if any, specified in a restricted stock agreement. Upon the expiration
      or
      termination of the restriction period and the satisfaction of any other
      conditions prescribed by the Board, having properly paid the purchase price,
      the
      restrictions applicable to shares of restricted stock shall lapse, and, unless
      otherwise provided in restricted stock agreement, the shares shall be delivered,
      free of all such restrictions, to the holder.





On
      December 12, 2006, the registrant’s board of directors approved awards of
      470,000 stock options to be granted under the Plan to each of:




**Name**
            **Title**Robert
                P. Freeman
            Director,
                Chairman of the BoardJohn
                R. Fitzgerald
            DirectorDaniel
                P. Phillips
            Director,
                President and Chief Executive OfficerDavid
                B. Ward
            DirectorJames
                Roundtree
            Director,
                Chief Financial OfficerJack
                (J.D.) Draper
            Executive
                Vice PresidentDaniel
                Chu
            Director
                and Co-President of Ole Auto Group, Inc.Eddie
                Perkins
            Director
                and Co-President of Ole Auto Group,
                Inc.





The
      exercise price per share for each of the awards is $.08 per share, and each
      award has a term of 10 years. The options vest with respect to one-third of
      the
      shares issuable thereunder on the date of grant, one-third of the shares on
      the
      first anniversary of the date of grant and one-third of the shares on the second
      anniversary of the date of grant.


9




**ITEM
              6.**
            **MANAGEMENT'S
                DISCUSSION AND ANALYSIS OR 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). In March 1999, two wholly-owned subsidiaries then
      owned by the Company, including FPFI, filed for reorganization under Chapter
      11
      of the United States Bankruptcy Code. 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 then 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.





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”), 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, and the conversion rights have been fully executed. In
      2006, the Company received a reassignment of a 444,440 units of the interests,
      out of 33,212,000 units initially issued, from the Bondholders with conversion
      rights.





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
      will 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.


10





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 recorded an allowance since any claim would
      be
      dependent on the receipt of funds from the bankruptcy estate of the Company’s
      former subsidiaries. The Company has recorded a contingent liability of
      approximately $3.0 million based on the funds received by the Grantor Trust
      from
      the Creditor Trust. 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.





Primarily
      due to lack of funds, the Company had for the most part been in a dormant
      capacity from 1999 to 2006. 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. During 2006, the Company
      began
      analyzing an opportunity to enter the “Buy-Here Pay-Here” auto finance industry.
      Based on this analysis, the Company determined to make a concerted effort to
      enter this business, initially focusing on the Dallas and Fort Worth, Texas
      market. In November 2006, the Company formed Olé Auto Group, Inc. (“Olé”) in
      order to carry out this activity and acquired a pool of motor vehicle retail
      installment sale contracts and security agreements. Initially, the Company
      intends to open auto dealership operations in the Dallas-Fort Worth area and
      purchase cars and offer financing to its customers, typically marketing to
      customers with limited credit history or past credit problems.





On
      February 28, 2006, the Company entered into a factoring agreement with Signs
      For
      Life LLC (“Signs”) which provided for the Company to purchase accounts arising
      out sales of merchandise or services rendered by Signs that the Company approves
      for purchase. Versatile Financial Technology LLC (“Versatile”) had also agreed
      to grant to the Company an option to acquire its 51% interest in Signs and
      a
      right of first refusal to acquire its interest in Signs. On March 26, 2007,
      the
      board of directors voted to discontinue its arrangement with Versatile and
      the
      underlying operations of Signs. The Company will charge off $445,000 of
      investments shown on the books at cost and does not expect this to result in
      future cash expenditures. The Company believes it may be entitled to a refund
      of
      a $150,000 payment collected from the Company by Versatile, and the Company
      intends to pursue the return of the payment; however, there can be no assurance
      that the Company will obtain the return of all or any part of the
      payment.





As
      of
      December 31, 2006, the Company had approximately $13 million in cash and cash
      equivalents which management believes will be sufficient to cover operating
      expenses for the next twelve months. The Company does not believe it will have
      to raise additional funds in the next twelve months.




**Results
        of Operations**
 
 **Year
        ended December 31, 2006 compared to the year ended December 31,
        2005**
 
 The
        Company has had virtually no liquidity and no operations for several years.
        The
        Company’s main asset has been the FPFG Intercompany Claim. The timing and
        amounts to be received on the FPFG Intercompany Claim are based on the
        performance of underlying loans in asset backed securitizations, and subject
        to
        many uncertainties. The FPFG Intercompany Claim began producing cash flow
        to the
        Company in 2005 and 2006, but due to the lawsuit styled *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
        funds were held in the registry of the court. In May 2006, over the objections
        of George Davis, the court authorized the release of approximately $10 million
        to the Grantor Trust.
 
 As
        noted
        above, the Company had no operations during 2005. The Company’s activities
        during 2005 were primarily focused on responding to litigation and trying
        to
        preserve liquidity in order to emerge from operational dormancy and to develop
        new business opportunities.
 
 During
        2006, with a portion of the funds from the FPFG Intercompany Claim, the Company
        began to explore business opportunities. Although the Company has determined
        to
        enter into the Buy-Here Pay-Here automobile sales and finance business, no
        operations were begun in 2006. However, the Company purchased an automobile
        receivable portfolio in November of 2006 for a purchase price of $520,000.
        The
        Company earned $25,692 in interest income on this portfolio during November
        and
        December 2006.
 
 Also
        in
        preparation for entering the Buy-Here Pay-Here automobile sales business,
        Olé
hired two executives with significant experience in the Buy-Here Pay-Here
        business in October 2006. Accordingly, payroll expenses were approximately
        $133
        thousand in 2006, as compared to $1,500 in 2005. Additionally, the Company
        entered into a property lease in Fort Worth, Texas to facilitate the operation
        of its first Buy-Here Pay-Here sales and finance lot. This sales and finance
        lot
        became operational on January 1, 2007.
 
 Professional
        and legal fees were approximately $1.98 million in 2006, as compared to
        approximately $1.63 million in 2005. This increase of approximately $350
        thousand is a result of the increased costs associated with the conclusion
        of
        the litigation involving the Company in 2006.
 
 Consulting
        fees in 2006 were approximately $230 thousand as compared to $144 thousand
        in
        2005. This $90 thousand increase was primarily attributable to paying consulting
        fees to analyze different business opportunities as well as developing a
        business plan for the Buy-Here Pay-Here automobile sales and finance
        business.
 
 The
        Company’s board of directors’ fees were $302 thousand in 2006. This was an
        increase of approximately $282 thousand over the fees of approximately $20
        thousand in 2005. This increase in fees was in recognition of the many years
        of
        service that the board had worked with minimal pay.




**Strategic
      Plan**





Olé’s
      initial efforts will be concentrated on the major metropolitan markets in Texas.
      The two principal components of the Company’s business are the selling and
      financing of used automobiles. The Company believes that its vertically
      integrated structure is its most critical distinguishing characteristic from
      other sub prime indirect auto lenders because it aligns the sales and
      underwriting process and facilitates collaboration toward achieving mutually
      shared objectives.





The
      Company will utilize a “hub and spoke” approach as its template for growth.
      Under this approach, Olé performs specific functions on a centralized basis such
      as vehicle acquisition, accounting, marketing, training, and management
      information systems, polices, compliance and general corporate oversight, while
      decentralizing the sales, service, collections, and payment processing functions
      at the branch level.





As
      the
      Company grows its dealerships in a concentrated geographic area, it will explore
      the cost efficiency of centralizing the reconditioning, underwriting and
      advanced collections components of its operations. As the Company expands to
      multiple cities, the configuration would provide for multiple hubs and with
      a
      centralized corporate structure.





**Risk
      Factors**





The
      Company’s business involves various risks. When evaluating the Company’s
      business the following information should be carefully considered in conjunction
      with the other information contained in its periodic filings with the Securities
      and Exchange Commission. Additional risks and uncertainties not known to the
      Company currently or that currently the Company deems to be immaterial also
      may
      impair the Company’s business operations. If the Company is unable to prevent
      events that have a negative effect from occurring, then the Company’s business
      may suffer. Negative events are likely to decrease the Company’s revenue,
      increase its costs, make its financial results poorer and/or decrease its
      financial strength, and may cause its stock price to decline.





11





**Risks
      Related To The Company**





**The
      Company recently changed its business to become an operator of** **Buy-Here
      Pay-Here** **automobile dealerships. As a result,** **it
      has an extremely limited operating history.**





From
      1999
      until 2006, the Company had for the most part been in a dormant capacity. The
      Company decided to enter the Buy-Here Pay-Here automobile market in 2006.
      Accordingly, an investment in the Company involves substantial risk associated
      with investment in an early-stage entity with a limited operating history that
      is pursuing a business strategy that is new to existing management and board
      of
      directors and has no assurance of success. The Company’s operations are subject
      to all the risks inherent in the establishment and expansion of a start up
      business enterprise, including a limited operating history and potential losses
      and negative cash flow. The likelihood of success must be considered in light
      of
      the problems, difficulties and delays frequently encountered in connection
      with
      the establishment and growth of a start up business. There can be no assurance
      that the Company will achieve profitability or continue to operate profitably
      in
      the future.





**For
      the Company to pursue its strategy for growth, it may need to raise additional
      funds either through borrowing or the issuance of equity or convertible debt
      securities.**





The
      Company’s acquisition and growth strategy may include buying an existing
      company, merging with a growing concern or entering into a joint venture and
      may
      include a roll up strategy to acquire Buy-Here
      Pay-Here automobile dealerships and receivables origination and collection businesses
      or
      pursuing a new line of business. Such a strategy requires substantial capital
      investment not only for the acquisition of additional companies, but also for
      the effective integration, operation and expansion of these businesses.
      Financing may be necessary for the expansion of the Company’s existing
      operations. The Company’s future capital requirements will depend on a number of
      factors, including the Company’s ability to grow the Company’s revenues and
      manage the Company’s business. The Company’s growth will depend upon its ability
      to raise additional capital, possibly through the issuance of long-term or
      short-term indebtedness or the issuance of the Company’s equity securities in
      private or public transactions. There can be no assurance that the Company
      will
      obtain financing on favorable terms, if at all.





**If
      the Company raises additional funds through the issuance of equity or
      convertible debt securities, the ownership of current shareholders will be
      diluted.**





If
      the
      Company raises additional funds through the issuance of equity or convertible
      debt securities, the percentage ownership held by existing shareholders will
      be
      reduced and those shareholders may experience significant dilution. In addition,
      new securities may contain certain rights, preferences or privileges that are
      senior to those of the Company’s common stock. Furthermore, any additional
      equity financing may be dilutive to shareholders, and debt financing, if
      available, may involve restrictive covenants, which may limit the Company’s
      operating flexibility with respect to certain business matters. If additional
      funds are raised through the issuance of equity securities, the percentage
      ownership of the Company’s shareholders will be reduced, shareholders may
      experience additional dilution in net book value per share and such equity
      securities may have rights, preferences or privileges senior to those of the
      holders of the Company’s common stock. If adequate funds are not available on
      acceptable terms, the Company may be unable to develop or enhance the Company’s
      services and products, take advantage of future opportunities or respond to
      competitive pressures, any of which could have a material adverse effect on
      the
      Company’s business, financial condition, results of operations and future
      prospects.





**Failure
      to manage growth effectively may lead to losses.**





Expansion
      of the Company’s operations could place a significant strain on the Company’s
      limited personnel, management and other resources. Depending on the outcome
      of
      the Company’s planned operations, it may be required to attract, train, motivate
      and manage new employees to develop operational, management and information
      systems and controls. There can be no assurance that the Company’s current and
      planned personnel, systems, procedures and controls will be adequate to support
      the Company’s future operations, that management will be able to hire, train,
      retain, motivate and manage required personnel or that Company management will
      be able to successfully identify, manage and exploit existing and potential
      market opportunities. If the Company is unable to manage growth effectively,
      its
      business, prospects, financial condition and results of operations will be
      materially adversely affected.





12





**Risks
      Related To The Company’s Business And The Automotive Retail and Finance
      Industry**





**The
      Company is subject to economic conditions which are beyond its
      control.**





The
      Company is subject to changes in general economic conditions that are beyond
      our
      control. During periods of economic slowdown or recession, delinquencies,
      defaults, repossessions and losses generally increase. These periods also may
      be
      accompanied by decreased consumer demand for automobiles and declining values
      of
      automobiles securing outstanding loans, which weakens collateral coverage and
      increases the amount of a loss in the event of default. Significant increases
      in
      the inventory of used automobiles during periods of economic recession may
      also
      depress the prices at which repossessed automobiles may be sold or delay the
      timing of these sales. Additionally, higher gasoline prices, unstable real
      estate values or other factors that impact consumer confidence or disposable
      income could decrease consumer demand for automobiles as well as weaken
      collateral values on certain types of automobiles. Because the Company focuses
      on sub-prime borrowers, the actual rates of delinquencies, defaults,
      repossessions and losses on these loans are higher than those experienced in
      the
      general automobile finance industry and could be more dramatically affected
      by a
      general economic downturn. In addition, during an economic slowdown or
      recession, the Company’s servicing costs may increase without a corresponding
      increase in its finance charge income. No assurance can be given that the
      Company’s operations will afford adequate protection against these risks. Any
      sustained period of increased delinquencies, defaults, repossessions or losses
      or increased servicing costs could adversely affect the Company’s financial
      position, liquidity and results of operations.





**The
      Company operates in a highly competitive environment with low barriers to
      entry.**





If
      the
      Company is unable to compete with the Company’s competitors, the Company’s
      business, financial condition, results of operations, cash flows and prospects
      could be materially adversely affected. The Company operates in a highly
      competitive environment. The Company’s competition includes publicly and
      privately-owned dealerships, some of which operate large groups, and any of
      which may sell the same or similar makes of new and used vehicles in the
      Company’s markets at competitive prices. Other competitors include franchised
      automotive dealerships, private market buyers and sellers of used vehicles,
      used
      vehicle dealers, and publicly and privately-owned finance companies, including
      those of vehicle manufacturers, and, on-line automotive retailers and
      lead-referral companies. Other dealers or franchises may start a new dealership
      near one of the Company’s locations, or an existing dealer may move its
      dealership to a location which would compete directly with it. Many of these
      competitors are larger and have greater financial and marketing resources than
      the Company. These and other competitive pressures could materially adversely
      affect the Company’s business, financial condition, results of operations, cash
      flows and prospects.





There
      are
      relatively low barriers to entry into the Company’s business. The Company is
      likely to face additional competition from new entrants into the market in
      the
      future. There can be no assurance that existing or future competitors will
      not
      develop or offer services that provide significant performance, price, creative
      or other advantages over those offered by the Company, which could have a
      material adverse effect on its business, financial condition, results of
      operations and future prospects.





**There
      will be fluctuations in quarterly operating results and margins caused by the
      seasonality of the Company’s business.**





The
      Company may experience seasonality in the Company’s business, resulting in
      diminished revenues as a consequence of decreased demand for automobiles during
      summer and year-end vacation and holiday periods. Due to these and other
      factors, the Company’s operating results in any given quarter may fall below
      expectations. Furthermore, the Company’s planned growth strategy may subject its
      operating results to substantial variables and changes each quarter.
      Accordingly, given the possibility of these fluctuations, quarterly comparisons
      of the results of operations during any fiscal year are not necessarily
      meaningful and results for any one fiscal quarter should not be relied upon
      as
      an indication of future performance.





13





**The
      Company depends on successful acquisitions of vehicle inventory. Should the
      Company fail to acquire the appropriate inventory, its business will be
      adversely affected.**





A
      reduction in the availability or access to sources of inventory would adversely
      affect the Company’s business. A failure to adjust appraisal offers to stay in
      line with the broader market trade-in offer trends, or a failure to recognize
      those trends, could negatively impact the Company’s ability to acquire
      inventory. Should excess inventory develop, the inability to liquidate excess
      inventory at prices that allow the Company to meet its margin targets or to
      recover its costs would adversely affect the Company’s
      profitability.





**The
      Company may become subject to legal and administrative
      proceedings.**





The
      Company buys and resells vehicles and related products. The Company’s failure or
      inability to meet a client’s expectations in the performance of these functions
      could injure the Company’s business reputation or result in a claim for
      substantial damages, regardless of the Company’s responsibility for such
      failure. The successful assertion of one or more large claims against it that
      are uninsured, exceed available insurance coverage or result in changes to
      the
      Company’s insurance policies, including premium increases or the imposition of a
      large deductible or co-insurance requirements, could adversely affect the
      Company’s business, results of operations and financial conditions. In addition,
      the sub-prime lending area is subject to numerous legal proceedings arising
      out
      of the conduct of the Company’s business, including litigation with customers
      and actions brought by governmental authorities, including several class action
      and other lawsuits. Any lawsuits or proceedings brought against it in the future
      cannot be predicted and an unfavorable resolution of one or more matters could
      have a material adverse effect on the Company’s business, financial condition,
      results of operations, cash flows and prospects.





**The
      Company’s business would be adversely affected if its lost its licenses or if in
      the future more burdensome government regulations were
      enacted.**





The
      Company’s operations are subject to regulation, supervision and licensing under
      various federal, state and local statutes, ordinances and regulations. These
      rules and regulations generally provide for licensing as a sales finance company
      or consumer lender, limitations on the amount, duration and charges, including
      interest rates, for various categories of loans, requirements as to the form
      and
      content of finance contracts and other documentation, and restrictions on
      collection practices and creditors’ rights. The Company is also subject to
      extensive federal regulations which require it to provide certain disclosures
      to
      prospective borrowers, protect against discriminatory lending practices and
      unfair credit practices and prohibit the Company from discriminating against
      credit applicants on the basis of race, color, sex, age or marital status.
      The
      Company is also required to maintain the privacy of certain consumer data in
      its
      possession and to periodically communicate with consumers on privacy
      matters.





There
      can
      be no assurance that the Company will be able to maintain all requisite licenses
      and permits, and the failure to satisfy those and other regulatory requirements
      could have a material adverse effect on its operations. Further, the adoption
      of
      additional, or the revision of existing, rules and regulations could have a
      material adverse effect on the Company’s business.





**The
      Company** **may
      not be able to identify or complete acquisitions or it may consummate an
      acquisition that adversely affects its operating results.**





One
      of
      the Company’s strategies is to acquire businesses or technologies that will
      complement its existing operations and otherwise actively pursue new business
      opportunities. The Company has limited experience in acquiring businesses in
      the
      Buy-Here Pay-Here automobile market. There can be no assurance that the Company
      will be able to acquire or profitably manage acquisitions or successfully
      integrate them into its operations. Furthermore, certain risks are inherent
      in
      the Company’s acquisition strategy, such as the diversion of management’s time
      and attention and combining disparate company cultures and facilities.
      Acquisitions may have an adverse effect on the Company’s operating results,
      particularly in quarters immediately following the consummation of such
      transactions, as the Company integrates the operations of the acquired
      businesses into its operations. Once integrated, acquisitions may not achieve
      levels of net sales or profitability comparable to those achieved by its
      existing operations or otherwise perform as expected. There is no assurance
      that
      any new acquisitions will occur. If any acquisitions are effected, there is
      no
      assurance they can be made on favorable terms or that they will prove to be
      profitable.





**The
      Company is and will continue to be exposed to the risks of sub-prime sector
      lending.**


14




The
        Company’s business is primarily a category of lending commonly known as
“sub-prime” in the automobile lending industry. These types of loans may be made
        to applicants who (a) have not yet established a conventional credit history,
        (b) do not qualify for conventional credit, or (c) who have experienced certain
        adverse credit events but who meet certain other creditworthiness tests.
        Such
“sub-prime” loans may experience higher rates of delinquencies, repossessions
        and losses, especially under adverse economic conditions, as compared with
        loans
        originated under a traditional lending program. The sub-prime market for
        credit
        consists of making loans which may not be made by traditional sources of
        credit,
        which in the automobile finance business is comprised of insured-deposit
        taking
        institutions such as banks, thrifts and credit unions, and finance companies
        which are “captives” (i.e., finance subsidiaries) of automobile manufacturers.
“sub-prime” loans may also have less valuable collateral. Collateral
        considerations in the sub-prime automobile market primarily result from the
        Company’s financing of used vehicles. Although depreciation also affects new
        automobiles, the market value of an automobile which is several years old
        may be
        more difficult to ascertain than for a new vehicle since such value will
        depend
        on mileage and general condition, which may vary substantially for different
        vehicles of a similar model year. As a result of all of the foregoing factors,
        the performance of a sub-prime portfolio may be more susceptible to performance
        deterioration than a prime portfolio, since the borrowers, being more marginal
        credits, are likely to be affected to a greater degree by economic downturns,
        and since the collateral, often consisting of older, used vehicles, may be
        more
        difficult to value.




**There
      are risks associated with security interests and repossession of collateral.**





The
      automobile receivables that the Company originates, buys, sells or services
      are
      secured by security interests in the financed vehicles. The procedure for
      perfecting a security interest on a motor vehicle varies from state to state.
      In
      most states, perfection of security interests in a motor vehicle requires that
      the lien be noted on the vehicle’s title certificate.





Failure
      to properly perfect a lien or to otherwise comply with the requirements of
      the
      relevant statute would impair the priority of the security interest and the
      ability to enforce those liens by either collecting a deficiency judgment or
      repossessing the financed vehicle and could also subject the Company to a claim
      by the debtor for tortuous conversion in an attempt to repossess the vehicle.
      In
      addition, such security interests may also be subject to a number of federal
      and
      state laws, including the Uniform Commercial Code as in effect in various
      states. Under such statutes, liens of third parties for the storage or repair
      of
      financed vehicles, unpaid taxes or other liens arising by operation of law,
      which are beyond the control of the Company, may have priority over the security
      interest granted even if such liens arise subsequent to the granting of a
      security interest and there has been no receipt of notice of such
      liens.





The
      collateral car underlying the specific car loan may be at risk of partial or
      total loss. The value of the vehicle securing an automobile receivable is
      usually less than the sum of the balance due on such automobile receivable,
      the
      cost of repossessing, reconditioning and reselling the vehicle and the expense
      of obtaining a deficiency judgment. In addition, the value of a vehicle securing
      an automobile receivable may depreciate at a rate faster than that at which
      the
      automobile receivable is being repaid. These deficiencies could in the aggregate
      adversely affect the Company’s business.





**There
      are risks that there could be restrictions on enforcement of vehicle loan
      contracts and collateral recoveries.**





Various
      federal and state laws impose requirements and restrictions applicable to the
      origination and servicing of retail installment vehicle loan contracts.
      Violations of certain of those laws may give rise to claims and defenses by
      a
      borrower. In addition, a borrower may be entitled to assert claims and defenses
      that it has against the seller of the financed vehicles.





In
      the
      event that the Company must rely on repossession and disposition of vehicles
      to
      recover scheduled payments due on defaulted contracts and/or as to which the
      related obligor has affirmatively indicated an inability or unwillingness to
      make payment, the Company may not realize the full amount due on the loan
      contract (or may not realize the full amount on a timely basis). Other factors
      that may affect the Company’s ability to realize the full amount due on a car
      financing contract include whether amendments to certificates of title relating
      to the vehicles have been properly filed, whether financing statements to
      perfect the security interest in the vehicles had been properly filed,
      depreciation, obsolescence, damage or loss of any vehicle, and the application
      of Federal and state


bankruptcy
      and insolvency laws. Certain states also impose requirements and restrictions
      relating to foreclosure sales of used cars and on obtaining deficiency judgments
      following those sales. The Company may not realize the full amount due on a
      used
      car loan because of the application of those requirements and restrictions
      or,
      because of depreciation, damage or loss to a financed used car, the application
      of federal and state bankruptcy and insolvency laws, or other factors. Any
      of
      the foregoing could adversely affect the Company’s business and results of
      operations.





15





**The
      Company is subject to consumer and protection and usury
      laws.**





Numerous
      federal and state consumer protection laws impose requirements upon the
      origination and collection of retail installment contracts. State laws impose
      finance charge ceilings and other restrictions on consumer transactions and
      may
      require certain contract disclosures in addition to those required under federal
      law. These requirements impose specific statutory liabilities upon creditors
      who
      fail to comply with these provisions. Further, to the extent that the Company
      acquires retail installment contracts from third parties, there may be liability
      for any violations of law committed by such third parties as a
      successor-in-interest. There can be no assurance that any state will not lower
      their usury limits or that these states or other jurisdictions into which the
      Company presently lends, or may lend in the future, will not (a) by judicial
      decision change the interpretation of existing precedents or (b) adopt
      additional laws, rules and regulations that could adversely effect the business,
      financial condition and results of operations of the Company.





**A
      failure of the Company’s ability to collect moneys owed as a result of
      bankruptcy law could have a material adverse effect on the Company’s business.**





There
      can
      be no assurance that the contractual structures and effectiveness of publicly
      filed liens by it will definitively protect the Company’s first priority secured
      security interests in the vehicle collateral. In the event of a failure of
      such
      priority secured security interest, the Company’s business could be materially
      and adversely affected. Limitations imposed by bankruptcy laws or other federal
      or state laws may limit or delay the Company’s ability to (a) repossess and
      resell used cars in which there is a valid, perfected security interest, (b)
      enforce a deficiency judgment, or (c) collect the amount due. In addition,
      there
      may be a determination that a deficiency judgment is not an appropriate or
      economically viable remedy. The Company may also settle at a significant
      discount any claim or any deficiency judgment that is obtained. There is no
      intent to obtain any insurance covering these risks. In the event that a
      deficiency judgment is not obtained, or is not satisfied, or a claim or
      deficiency judgment is satisfied at a discount, or is discharged, in whole
      or in
      part in bankruptcy proceedings, the loss may adversely affect the business
      operations or financial condition of the Company.





**The
      Company’s failure to attract and retain key management personnel could harm its
      business.**





The
      Company’s future success depends to a significant extent on the continued
      services of its senior management, particularly Daniel T. Phillips, its
      President and Chief Executive Officer, James Roundtree, its Chief Financial
      Officer, Eddie Perkins, co-President of Olé, and Daniel Chu, co-President of
      Olé.





The
      loss
      of the services of Mr. Phillips, Mr. Roundtree, Mr. Perkins or Mr. Chu would
      likely have an adverse effect on the Company’s business, results of operations
      and financial condition. The Company’s business requires managerial, financial
      and operational expertise and its future success depends upon the continued
      service of key personnel. As a Buy-Here Pay-Here automobile dealership operator,
      the Company operates in a specialized industry. The Company’s key personnel have
      experience and skills specific to this industry, and there is a limited number
      of individuals with the relevant experience and skills. The Company does not
      have employment agreements with its executive officers; however, Olé has
      employment agreements with its executive officers. If the Company loses any
      of
      its key personnel, its business operations could suffer.







**There
      are risks relating to the geographic concentration of the Company’s activities.
      In the event of an economic downturn in the region, this lack of diversification
      would prevent the Company from mitigating losses elsewhere.**





The
      Company’s business is concentrated in Dallas/Fort Worth, Texas. Adverse economic
      conditions in this area could adversely affect the delinquency, loan loss or
      repossession experience of the Company’s car financing business. As a
      consequence, the Company’s results of operations will depend substantially on
      local and regional economic conditions and consumer spending habits and
      preferences, as well as various other factors, such as tax rates and applicable
      state and local regulation. There can be no assurance that the Company will
      be
      able to expand geographically or that any such expansion will adequately
      insulate it from the adverse effects of local or regional economic
      conditions.





16





**Risks
      Related To Investing In The Company’s Common Stock**





**The
      Company’s stock price may be volatile.**





There
      is
      no established public trading market for the Company’s common stock. Currently,
      the Company’s common stock is quoted on the Pink Sheets. There can be no
      assurance that the Company’s common stock will be admitted to trade on any
      established trading market or exchange. Additionally, if the Company’s common
      stock is admitted for listing or trading, there can be no assurance that it
      will
      maintain the requirements for continued listing or trading on an established
      trading market or exchange.





The
      Company’s common stock may not be traded actively. An illiquid market for shares
      of the Company’s common stock may result in lower trading prices and increased
      volatility, which could negatively affect the value of your investment. If
      an
      active trading market does develop, it may not last and the trading price of
      the
      shares may fluctuate widely as a result of a number of factors, many of which
      are outside the Company’s control. The market price of the Company’s common
      stock may fluctuate significantly in response to a number of factors, some
      of
      which are beyond the Company’s control, including:





·
            quarterly
                variations in operating results;





·
            changes
                in financial estimates by securities
                analysts;





·
            changes
                in market valuations of other similar
                companies;





·
            announcements
                by it or the Company’s competitors of new products or of significant
                technical innovations, contracts, acquisitions, strategic partnerships
                or
                joint ventures;





·
            additions
                or departures of key personnel;





·
            any
                deviations in net sales or in losses from levels expected by securities
                analysts; and





·
            future
                sales of common stock.





In
      addition, the stock market has recently experienced extreme volatility that
      has
      often been unrelated to the performance of particular companies. These market
      fluctuations may cause the Company’s stock price to fall regardless of the
      Company’s performance.





**The
      Company’s articles of incorporation, bylaws and provisions of Nevada law could
      make it more difficult for a third party to acquire the Company, even if
      doing so could be in your interest.**





Provisions
      of the Company’s articles of incorporation and bylaws could make it more
      difficult for a third party to acquire the Company, even if doing so might
      be in
      the best interest of its shareholders. It could be difficult for a potential
      bidder to acquire the Company because its articles of incorporation and bylaws
      contain provisions which may discourage takeover attempts. These provisions
      may
      limit shareholders’ ability to approve a transaction that shareholders may think
      is in their best interests. These provisions include a requirement that certain
      procedures must be followed before matters can be proposed for consideration
      at
      meetings of the Company’s shareholders and the ability of its board of directors
      to fix the rights and preferences of an issue of shares of preferred stock
      without shareholder action. Provisions of Nevada’s business combinations statute
      also restrict certain business combinations with interested shareholders.





The
      provisions of the Company’s articles of incorporation, bylaws and Nevada law are
      intended to encourage potential acquirors to negotiate with the Company and
      allow the board of directors the opportunity to consider alternative proposals
      in the interest of maximizing shareholder value. However, such provisions may
      also discourage acquisition proposals or delay or prevent a change in control.





17





**The
      Company may not pay dividends or make dividends on its common
      stock.**





The
      payment of dividends on the Company’s common stock is subject to the discretion
      of its board of directors. The Company has agreed to direct the Grantor Trust
      to
      make distributions to the Company’s shareholders pursuant to a settlement
      agreement relating to its shareholder litigation in 2006. 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. As a result, the Company and
      the Grantor Trust may be restricted from making any shareholder
      distributions.





**Off-balance
      Sheet Arrangements.**





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





**Financial
      Reporting Issues**





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.





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. Through changes in management and the nature of FPFI’s
      bankruptcy and litigation filed against the Company, the historical 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.





18





**FIRSTPLUS
      FINANCIAL GROUP, INC.**





**ITEM
              7.**
            **FINANCIAL
                STATEMENTS**.





Report
                of Independent Registered Public Accounting Firm
            F-1Balance
                SheetDecember
                31, 2006
            F-2Statements
                of OperationsFor
                the Years Ended December 31, 2006 and 2005
            F-3Statements
                of Shareholders’ EquityFor
                the Years Ended December 31, 2006 and 2005
            F-4Statements
                of Cash FlowsFor
                the Years Ended December 31, 2006 and 2005
            F-5Notes
                to Financial Statements
            F-6




19




REPORT
        OF
        INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
  
 The
        Board
        of Directors and Stockholders
 FIRSTPLUS
        Financial Group, Inc.
 Irving,
        Texas
 
 
 We
        have
        audited the accompanying consolidated balance sheet of FIRSTPLUS Financial
        Group, Inc. as of December 31, 2006, and the related consolidated statements
        of
        operations, stockholders’ equity, and cash flows for each of the two years in
        the period ended December 31, 2006. 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, 2006 and the results of its operations and its cash flows for
        each
        of the two years in the period ended December 31, 2006 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
 April
        2,
        2007
  F-1
  **FIRSTPLUS
        FINANCIAL GROUP, INC.**
 
 **CONSOLIDATED
        BALANCE SHEET**
  December
                    31, 2006**ASSETS:**Cash
                    and cash equivalents
                
                $
                13,021,978Inventory
                
                
                566,145Prepaid
                    expenses
                
                
                29,643Furniture,
                    fixtures and equipment (net of accumulated depreciation of
                    $716)
                
                
                24,578Accounts
                    receivable Capital Lending Strategies, LLC
                
                
                82,343Notes
                    receivable
                
                
                481,473Security
                    deposits
                
                
                23,000Claim
                    from bankruptcy estate (see note 4)
                
                
                2,341,761Deferred
                    tax asset
                
                
                93,300Investment
                    in Capital Lending Strategies, LLC
                
                
                71,150Total
                    assets
                
                $
                16,735,371**LIABILITIES****AND
                    STOCKHOLDERS' EQUITY:**Accrued
                    expenses
                
                $
                171,739Income
                    taxes payable
                
                
                113,864Notes
                    payable
                
                
                312,000Total
                    liabilities
                
                
                597,603Commitments
                    and contingencies (see note 5)
                
                
                3,083,760Stockholders'
                    equity:Common
                      stock, $.01 par value, 101,000,000 sharesauthorized;
                      48,245,090 shares issued and outstanding
                
                
                482,451Additional
                    paid in capital
                
                
                17,306,123Retained
                      earnings (deficit) since December 31, 2002 when a deficit of  $312,527,864
                      was eliminated in connection with a
                      quasi-reorganization
                
                
                (4,734,566
                )Total
                    stockholders' equity
                
                
                13,054,008Total
                    liabilities and stockholders' equity
                
                $
                16,735,371
  See
        accompanying notes to consolidated financial statements.
  F-2
  **FIRSTPLUS
        FINANCIAL GROUP, INC.**
 **CONSOLIDATED
        STATEMENTS OF OPERATIONS**
  For
                    the Years EndedDecember
                    31,2006
                
                2005Revenues
                    (see note 3)
                
                $
                25,692
                
                $
                -Operating
                    expenses:General
                    and administrative
                
                
                3,069,053
                
                
                1,945,996Total
                    operating expenses
                
                
                3,069,053
                
                
                1,945,996Operating
                    income (loss)
                
                
                (3,043,361
                )
                
                (1,945,996
                )Non-operating
                    income/(loss):Versatile
                    Consulting LLC (see note 4)
                
                
                (466,701
                )
                
                -Interest
                
                
                412,621
                
                
                26,691Income
                    (loss) before provision for income taxes
                
                
                (3,097,441
                )
                
                (1,919,305
                )Provision
                    for income taxes/(benefit)
                
                
                -
                
                
                (93,300
                )Net
                    income (loss)
                
                $
                (3,097,441
                )
                $
                (1,826,005
                )Earnings
                    (loss) per share
                
                $
                (0.07
                )
                $
                (0.04
                )Weighted
                      average of common shares outstanding
                
                
                46,533,926
                
                
                45,019,542
  See
        accompanying notes to consolidated financial
        statements.
 
 F-3
  **FIRSTPLUS
        FINANCIAL GROUP, INC.**
 **CONSOLIDATED
        STATEMENTS OF STOCKHOLDERS’ EQUITY**
 For
        the
        Years Ended December 31, 2006 and 2005
  **Number**
                
                
                
                **Additional**
                
                **Retained**
                
                **Total****of**
                
                **Common**
                
                **Paid-in**
                
                **Earnings**
                
                **Stockholders'****Shares**
                
                **Stock**
                
                **Capital**
                
                **(Deficit)**
                
                **Equity**Balance,
                    December 31, 2004
                
                
                44,340,090
                
                
                443,401
                
                
                4,897,270
                
                
                188,880
                
                
                5,529,551Issuance
                      of stock on conversion
                      of certificated interests
                
                
                1,000,000
                
                
                10,000
                
                
                (10,000
                )
                
                -
                
                
                -Revaluation
                      of amounts adjusted in quasi-reorganization
                      (notes 4, 5, 6 and 8)
                
                
                
                
                
                -
                
                
                6,602,901
                
                
                -
                
                
                6,602,901Net
                    income
                
                
                
                
                
                -
                
                
                -
                
                
                (1,826,005
                )
                
                (1,826,005
                )Balance,
                    December 31, 2005
                
                
                45,340,090
                
                
                453,401
                
                
                11,490,171
                
                
                (1,637,125
                )
                
                10,306,447Issuance
                      of stock on conversion
                      of certificated interests
                
                
                2,905,000
                
                
                29,050
                
                
                (29,050
                )
                
                -
                
                
                -Revaluation
                      of amounts adjusted in quasi-reorganization
                      (notes 4, 5 and 6)
                
                
                
                
                
                -
                
                
                9,460,250
                
                
                -
                
                
                9,460,250Stock
                    based compensation
                
                
                
                
                
                -
                
                
                3,616
                
                
                -
                
                
                3,616Dividends
                    paid
                
                
                
                
                
                -
                
                
                (3,618,864
                )
                
                -
                
                
                (3,618,864
                )Net
                    loss
                
                
                
                
                
                -
                
                
                -
                
                
                (3,097,441
                )
                
                (3,097,441
                )Balance,
                    December 31, 2006
                
                
                48,245,090
                
                $
                482,451
                
                $
                17,306,123
                
                $
                (4,734,566
                )
                $
                13,054,008
  See
        accompanying notes to consolidated financial
        statements.
  F-4
  **FIRSTPLUS
        FINANCIAL GROUP, INC.**
 **CONSOLIDATED
        STATEMENTS OF CASH FLOWS**
  For
                    the Years EndedDecember
                    31,2006
                
                2005Cash
                    flows from operating activities:Net
                    income (loss)
                
                
                (3,097,441
                )
                $
                (1,826,005
                )Adjustments
                    to reconcile net income to net
                    cash provided (used) by operating activities:Depreciation
                
                
                717
                
                
                -Stock
                    based compensation
                
                
                3,616
                
                
                -Loss
                    on Versatile Consulting LLC (see note 4)
                
                
                466,701
                
                
                -Changes
                    in operating assets and liabilities:Inventory
                
                
                (566,145
                )
                
                -Prepaid
                    expenses
                
                
                (29,643
                )
                
                -Security
                    deposits
                
                
                (23,000
                )
                
                -Notes
                    receivable
                
                
                (481,473
                )
                
                -Deferred
                    tax asset
                
                
                -
                
                
                (93,300
                )Accrued
                    expenses
                
                
                10,529
                
                
                131,928Income
                    taxes payable
                
                
                20,564
                
                
                (19,600
                )Net
                    cash provided (used) by operating activities
                
                
                (3,695,575
                )
                
                (1,806,977
                )Cash
                    flows from investing activities:Collection
                    on bankruptcy estate claim
                
                
                16,029,933
                
                
                2,346,773Commitment
                    on bankruptcy estate claim
                
                
                3,083,760
                
                
                -Collections
                    on line of credit Capital Lending Strategies LLC
                
                
                35,443
                
                
                42,264Purchase
                    of fixed assets
                
                
                (25,294
                )
                
                -Receipt
                    of state refund - net
                
                
                62,881
                
                
                168,741Receipt
                    of 401k forfeitures (see note 8)
                
                
                -
                
                
                93,284Versatile
                    Consulting, LLC
                
                
                (466,701
                )
                
                -Net
                    cash provided by investing activities
                
                
                18,720,022
                
                
                2,651,062Cash
                    flows from financing activities:Note
                    payable - Olé Auto Group
                
                
                312,000
                
                
                -Dividends
                    paid
                
                
                (3,618,864
                )
                
                -Net
                    cash provided (used) in financing activities
                
                
                (3,306,864
                )
                
                -Net
                    increase in cash
                
                
                11,717,583
                
                
                844,085Cash
                    at the beginning of the year
                
                
                1,304,395
                
                
                460,310Cash
                    at the end of the year
                
                $
                13,021,978
                
                $
                1,304,395Supplemental
                    disclosure of cash flow information:Cash
                    paid for:Interest
                
                $
                -
                
                $
                1,289Taxes
                
                $
                -
                
                $
                19,600
  See
        accompanying notes to consolidated financial
        statements.
  F-5
  **FIRSTPLUS
          FINANCIAL GROUP, INC.**
 **Notes
          to the Consolidated 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 Group, Inc. Grantor Residual Trust (“the
        Grantor 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.
 
 As
        the
        settlor and sole beneficiary of the Grantor Trust, the Company has treated
        the
        Grantor Trust as a variable interest entity in accordance with accounting
        pronouncement FIN46(R). Accordingly, the Company has consolidated the entity
        and
        eliminated all intercompany transactions.
 
 As
        of
        December 1, 2006, the Company, through its wholly owned subsidiary Olé Auto
        Group, Inc. began operating an automotive sales lot and finance operations
        in
        Fort Worth, Texas, that focuses exclusively on the Buy
        Here-Pay Here segment
        of the used car market. The Company’s sales lot features a variety of makes and
        models and a range of sales prices. There were no auto sales during 2006.
        The
        Company also purchased receivables as part of the formation of the Olé Auto
        Group, Inc. (see note 3).
 
 The
        sub-prime segment of the independent used car sales and finance market is
        serviced primarily by numerous small independent used car dealerships that
        sell
        and finance the sale of used cars to individuals with limited or damaged
        credit
        histories. Many independent used car dealers are not able to obtain debt
        financing from traditional lending sources such as banks, credit unions,
        or
        major finance companies. Many of these dealers typically finance their
        operations through the sale of contract receivables at a discount. Buy
        Here-Pay Here dealers
        sell and finance used cars to individuals with limited credit histories or
        past
        credit problems. T he
        Buy
        Here-Pay Here industry focuses on customers, collectively referred to as
        “sub-prime or ‘D’ Borrowers”, who (1) do not have traditional bank accounts or
        do not rely on traditional financial services relationships, or “un-banked”
consumers, or (2) do not have the ability to obtain credit from traditional
        sources such as banks and credit unions due to limited credit histories,
        low
        income, past credit problems, or “credit-impaired” borrowers. Buy Here-Pay Here
        payment arrangements are often construed to be within the “sub-prime” category
        of financing and lending.
  F-6
 **FIRSTPLUS
            FINANCIAL GROUP, INC.**
 **Notes
            to the Consolidated Financial Statements**
 **1.**  **Description
        of the Company (continued)**
 
 The
        Company will provide financing for substantially all of its vehicle sales
        using
        retail installment loan contracts. As a Buy-Here Pay-Here dealer, the Company
        offers the customer certain advantages over more traditional financing sources
        including: broader underwriting guidelines, flexible payment terms including
        structuring loan payment due dates as weekly or biweekly, often coinciding
        with
        the customer’s payday, and the ability to make payments in person at the
        dealerships.
 
 **2.**  **Summary
        of Significant Accounting Policies**
 
 *Principles
        of Consolidation:*
 
 The
        consolidated financial statements include the accounts of FIRSTPLUS Financial
        Group, Inc., its wholly-owned subsidiary Olé Auto Group, Inc., and the Grantor
        Trust. All significant intercompany balances and transactions have been
        eliminated in consolidation.
 
 *Revenue
        Recognition:*
 
 Revenues
        from the sale of used vehicles are recognized when the sales contract is
        signed,
        the customer has taken possession of the vehicle and, if applicable, financing
        has been approved.
 
 Revenue
        and dividends from investments are recognized at the time the investment
        dividends are declared payable by the underlying investment. Capital gains
        and
        losses are recorded on the date of sale of the investment.
 
 Interest
        income is recognized on the interest method. Interest
        income is discontinued when management determines future collection is unlikely.
        Loans are placed on non-accrual or charged-off at an earlier date if collection
        of principal or interest is considered doubtful.
 
 *Cash
        and Cash Equivalents:*
 
 For
        purposes of the balance sheet and statement of cash flows, the Company considers
        all highly liquid investments which are readily convertible into known amounts
        of cash and have a maturity of three months or less when acquired to be cash
        equivalents. At December 31, 2006, 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.
 
 *Inventory:*
 
 Inventories
        are stated at the lower of cost or market. The Company deals in used vehicles.
        The cost of used vehicles is determined on a specific identification basis.
        Vehicle reconditioning costs are capitalized as a component of inventory.
        Repossessed vehicles are recorded at fair value, which approximates wholesale
        value.
  F-7
 **FIRSTPLUS
            FINANCIAL GROUP, INC.**
 **Notes
            to the Consolidated Financial Statements**
 **2.**  **Summary
        of Significant Accounting Policies (continued)**
 
 *Property,
        Plant & Equipment:*
 
 The
        Company’s fixed assets consist of furniture and computers in its operations at
        Olé Auto Group. The useful lives are estimated between five and seven years.
        The
        assets are being depreciated on the straight-line method.
 
 *Concentration
        of Credit Risk:*
 
 FPFG
        at
        times during operations has cash deposits that exceed $100,000 in one account
        in
        individual banks. The Federal Deposit Insurance Corporation (FDIC) insures
        only
        the first $100,000 of funds at member banks. FPFG has not incurred losses
        related to its cash.
 
 *Income
        Taxes:*
 
 In
        accordance with SFAS No. 109, "Accounting for Income Taxes", 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,
        2006
        loss, FPFG will have a net operating loss carryforward available of
        approximately $4,547,000. 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.
  F-8
 **FIRSTPLUS
            FINANCIAL GROUP, INC.**
 **Notes
            to the Consolidated Financial Statements**
 **3.**  **Notes
        Receivable**
 
 As
        part of the formation of Olé Auto Group, Inc., the Company acquired receivables
        and is accounting for its interest in the outstanding receivables under SOP
        03-3, *Accounting
        for Certain Loans or Debt Securities Acquired in a Transfer,* (“SOP
        03-3”). Under SOP 03-3, future cash proceeds on the outstanding receivables are
        split between their accretable yield, which represents the difference between the estimated cash
        collections and the carrying value of the receivables, and the non-accretable
        yield, which represents the excess of contractual cash flows over the estimated
        cash collections. The accretable yield is recognized as interest income, within other income on
        the
        Company’s statement of operations, using the effective interest method over the
        expected term of the receivables. Future decreases in estimated cash flows
        will
        be recognized as an impairment charge and corresponding valuation allowance
        against the outstanding receivables. Subsequent increases in the estimated
        cash
        flows, if any, will be recognized prospectively as an adjustment to the
        receivables ’
        accretable yield over the remaining life of the receivables, after first
        reversing any previously recorded valuation allowance.
 
 As
        of the acquisition date for purposes of accounting under SOP 03-3, the Company
        calculated the accretable yield and non-accretable difference related to the outstanding
        financing receivables as follows:
  Accretable
                yield:Cash
                flows expected to be collected as of
                acquisition date
              
              $
              576,144Less:
                Carrying value as of acquisition
                date
              
              
              520,000Accretable
                yield as of acquisition date
              
              $
              56,144
 
 The
        net
        cash flows expected to be collected is net of an expected default amount
        of
        $64,250. The Company recognized $4,679 of accretable yield during the year
        as
        revenues from operations.
 
 **4.**  **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 was submitted to the Dallas
        County
        District Clerk and $723,323 has been set aside for FPFG. In October 2006,
        another $7,121,867 was set aside by the bankruptcy trustee. On March 23,
        2007
        the bankruptcy trustee made a distribution of $2,708,000 to the Company,
        bringing the aggregate amount of funds designated for the benefit of FPFG
        to
        $21,819,193. During 2006, the Grantor Trust received $19,113,693 on the
        Intercompany Claim. 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 $366,240 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
        set aside by the bankruptcy trustee are not readily accessible to the Company;
        therefore, the Company did not consider the funds to be cash or cash equivalents
        as of December 31, 2006.
 
 In
        March
        2006, the Company made an investment in Versatile Consulting, LLC. After
        legal
        difficulties with the minority owner and difficulties with the underlying
        opertions of the operating entity, the Company, during the fourth quarter
        has
        determined that the investment is worthless and has recorded an impairment
        for
        the full amount of funds invested.
  F-9
 **FIRSTPLUS
            FINANCIAL GROUP, INC.**
 **Notes
            to the Consolidated Financial Statements**
 **5.**  **Commitments
        and Contingencies**
 
 The
        Company entered into agreements with various parties regarding the assignment
        of
        a portion of the Intercompany Claim in connection with the bankruptcy filing
        of
        its subsidiary FirstPlus Financial, Inc. (FPFI) in order to satisfy some
        of
        FPFG’s obligations. FPFG has recorded a valuation allowance of $366,240 for
        potential claims arising from creditors of FPFG and its former subsidiaries.
        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. The Company
        has recorded a contingent liability of $3,083,760 based on the funds received
        by
        the Grantor Trust from the FPFI Creditor Trust. No creditors have initiated
        a
        claim against FPFG.
 
 The
        Company leases its operating facilities for various terms under long-term,
        operating lease agreements. The leases expire at various dates through 2011
        and
        provide for renewal options. In the normal course of business, it is expected
        that these leases will be renewed or replaced by leases on other properties.
        The
        leases provide for increases in future minimum annual rental payments. Lease
        expense totaled $10,000 and $0 during 2006 and 2005, respectively.
 
 The
        following is a schedule by year of future minimum rental payments required
        under
        the operating lease agreements:
 
 *Year
                  Ending**December
                  31*
              
              *Amount*2007
              
              $
              231,5782008
              
              
              251,5782009
              
              
              267,0782010
              
              
              169,4082011
              
              
              137,500Thereafter
              
              
              0$
              1,057,142
 
 Total
        minimum lease payments do not include contingent rentals that may be paid
        under
        certain leases because of use in excess of specified amounts. Contingent
        rental
        payments were not significant in 2006 or 2005.
 
 **6.**  **Stockholders’
        Equity**
 
 Holders
        of the Company's 7.25% Convertible Subordinated Notes Due 2003 ( amended
        by a supplemental indenture entered into by the Company and the trustee for
        the
        notes pursuant to 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 August 3, 2006, the remaining Certificated
        Interest holder with conversion rights converted the balance of its conversion
        rights into 2,905,000 shares of the Company.
 
 In
        settlement of an Election Suit, the Company agreed not to issue any shares
        of
        its common stock prior to the initial distribution and for a period of one
        year
        following the distribution, to not issue any shares of its common stock equal
        to
        30% of the then outstanding shares unless the Company obtains a fairness
        opinion
        with respect to such transaction.
  F-10
 **FIRSTPLUS
            FINANCIAL GROUP, INC.**
 **Notes
            to the Consolidated Financial Statements**
 **6.**  **Stockholders’
        Equity (continued)**
 
 In
        July 2006, the Company instructed the Grantor Trust to make a distribution
        to
        holders of the Company’s common stock on a pro rata basis as of August 3, 2006,
        in an aggregate amount equal to 50% of the funds representing 53% of the
        FPFG
        Intercompany Claim previously assigned to the Grantor Trust of funds received,
        after reserves and expenses incurred on behalf of the trust, by the Grantor
        Trust from the registry of the court in the Grantor Trust Lawsuit in accordance
        with the Company’s Settlement Agreement with Danford L. Martin, individually, on
        behalf of the FPFX Shareholder Value Committee and the FPFX Steering Committee
        and as attorney-in-fact for all of the Petitioners in the Election Suit (as
        defined therein). The Company distributed $3,618,864. The Company has determined
        that the distribution was a return of capital since the Company did not have
        any
        current or accumulated earnings and profits.
 
 **7.**  **Stock-based
        Compensation**
 
 Four
        directors held options for the issuance of 300,000 shares of common stock
        for an
        aggregate total of 1,200,000 shares. The options were exercisable at $0.10
        per
        option. Each of the directors agreed to forfeit their options as part of
        the
        adoption of a new stock option plan as of December 12, 2006.
 
 Effective
        January 1, 2006, under the modified prospective method, the Company adopted
        the
        provisions of SFAS 123(R), Share-Based Payment, a replacement of SFAS No.
        123,
        Accounting For Stock-Based Compensation, and rescission of APB Opinion No.
        25,
        Accounting for Stock Issued to Employees. This statement applies to all awards
        granted after the effective date and to modifications, repurchases or
        cancellations of existing awards.
 
 On
        December 12, 2006, the registrant’s board of directors approved the Stock Option
        Plan for FIRSTPLUS Financial Group, Inc. (the “Plan”). The Plan made 4,500,000
        shares of the registrant’s common stock available for issuance as awards under
        the Plan. Officers, director and employees of the registrant, and employees
        of
        the registrant’s wholly-owned subsidiary, Olé Auto Group, Inc., are eligible to
        receive awards under the Plan.
 
 Awards
        under the Plan may consist of a stock option or a restricted share award.
        Stock
        options may take the form of an incentive stock option or a non-qualified
        stock
        option. The Plan will be administered, including determination of the recipients
        of, and the nature and size of, awards granted under the Plan, by the committee
        of the board of directors meeting the criteria set forth in the Plan. If
        the
        board of directors has not appointed such a committee, the Plan will be
        administered by the board of directors.
 
 The
        exercise price of an option shall not be less than the fair market value,
        as
        defined under the Plan, on the date of grant. Unless otherwise provided in
        an
        option agreement, options granted under the Plan will vest as
        follows:
 
 ·
            one-third
                of the options will vest on the date of the
                grant; ·
            one-third
                of the options will vest on the first anniversary of the date of
                the
                grant; and ·
            one-third
                of the options will vest on the second anniversary of the date of
                the
                grant.  F-11
 **FIRSTPLUS
            FINANCIAL GROUP, INC.**
 **Notes
            to the Consolidated Financial Statements**
 **7.**  **Stock-based
        Compensation (continued)**
 
 Unless
        the terms of an option agreement provide for a different date of termination,
        the unexercised portion of an option award shall automatically and without
        notice terminate and become null and void at the time of the earliest to
        occur
        of the following:
 
 ·
            immediately
                upon termination of employment (or termination of service as a director)
                with the registrant as a result, in whole or in material part, of
                a
                discharge for cause; ·
            the
                60th day following optionee’s termination of employment (or termination of
                service as a director) with the registrant for any reason except
                cause;
                provided, however, that if the optionee shall die during such sixty
                (60)
                day period, he or she will be deemed to have terminated employment
                (or
                termination of service as a director) as a result of death, and the
                termination of the option will be governed by the previous clause;
                or ·
            on
                the 180th day following a termination of employment (or termination
                of
                service as a director) by reason of death or disability;
                or ·
            the
                tenth (10th) anniversary of the date of
                grant. 
 The
        restricted stock awards will be subject to the restrictions and the restriction
        period determined by the board of directors. Each grant of restricted stock
        may
        be subject to a different restriction period. The holders of restricted stock
        will have the right to vote the shares but will not have the right to receive
        any dividends declared or paid with respect to the shares. The recipient
        of a
        restricted stock award will be required to purchase the restricted stock
        from
        the registrant at a purchase price equal to the greater of (a) the aggregate
        par
        value of the shares represented by such restricted stock, or (b) the purchase
        price, if any, specified in a restricted stock agreement. Upon the expiration
        or
        termination of the restriction period and the satisfaction of any other
        conditions prescribed by the Board, having properly paid the purchase price,
        the
        restrictions applicable to shares of restricted stock shall lapse, and, unless
        otherwise provided in restricted stock agreement, the shares shall be delivered,
        free of all such restrictions, to the holder.
 
 The
        Company’s consolidated statements of operations for the twelve months ended
        December 31, 2006 includes $3,616 of stock-based compensation expense.
        Unrecognized stock-based compensation expense expected to be recognized over
        an
        average amortization period of 2 years was $7,232 at December 31, 2006.
 
 The
        fair
        value of the option grants is estimated as of the date of the grant using
        the
        Black-Scholes option pricing model with the following assumptions:
  2006Risk
                  Free Interest Rate
                
                
                4.28
                %Expected
                  Dividend Yield
                
                
                32.82
                %Expected
                  Lives (years)
                
                
                2.00Expected
                  Volatility
                
                
                61.00
                %Forfeiture
                  Rate
                
                
                -
  The
        risk-free interest rate is based on the U.S. Treasury Bill rates. The dividend
        yield reflects the expected dividend to be paid in accordance with the
        Settlement Agreement (see note 6). Expected volatility was based on a
        market-based implied volatility. The expected term of the options is based
        on
        what the Company believes will be representative of future behavior. In
        addition, the Company is required to estimate the expected forfeiture rate
        and
        recognize expense only for those shares expected to vest. If the actual
        forfeiture rate is materially different from the estimate, the stock-based
        compensation expense could be significantly different from what the Company
        has
        recorded in the current period.
  F-12
 **FIRSTPLUS
            FINANCIAL GROUP, INC.**
 **Notes
            to the Consolidated Financial Statements**
 **7.**  **Stock-based
        Compensation (continued)**
 
 SFAS
        No.
        123(R) also requires the benefits of tax deductions in excess of recognized
        compensation cost to be reported as a financing cash flow, rather than as
        an
        operating cash flow as previously required under EITF Issue No. 00-15,
        Classification in the Statement of Cash Flows of the Income Tax Benefit Received
        by a Company upon Exercise of a Nonqualified Employee Stock Option. This
        requirement does not affect the Company’s net operating cash flows or its net
        financing cash flows in the 12 month period ended December 31, 2006.
 
 **8.**  **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.
 
 **9.**  **Notes
        Payable**
 
 As
        part
        of the formation of Olé Auto Group, Inc., the Company acquired a book of notes
        receivable for $520,000 payable in three installments: $208,000 upon
        acquisition, $208,000 in January 2007, and the remaining $104,000 to be paid
        upon final collection of the estimated notes receivable.
 
 **10.**  **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, 2006 and 2005.
 
 The
        Company has loaned to Capital Lending Strategies, LLC approximately $275,000.
        The loan balance at December 31, 2006 was $82,343. 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.
 
 FPFG
        has
        an insurance policy with American Financial Services covering its directors
        and
        officers. The total premium for the policy is $77,500. Dexter & Company was
        the broker for the policy. John R. Fitzgerald, FPFG’s Director, is Executive
        Vice President of Dexter & Company.
 
 **11.**  **Subsequent
        Events**
 
 In
        March
        2007, the bankruptcy trustee set aside $2,708,000 for the benefit of the
        Company.
 
 Ol é Auto
        Group, Inc. began leasing its administrative offices on a three year lease
        from
        Capital Lending Strategies, LLC, a related party, at a rate of $3,882 per
        month.
        The lease was entered into in March 2007.
 
 On
        March
        13, 2007, the Company purchased property for the purpose of conducting its
        used
        auto sales operations. The cash purchase price was
        $1,545,000.




F-13





**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 had been in a dormant capacity for the past several years and has
      only recently begun new operations, the Company has only one officer and
      employee. However, management’s revised assessment has concluded that, as of
      December 31, 2006, 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.





There
      were no changes in the Company’s internal control over financial reporting
      during the quarter ended December 31, 2006 that have materially affected, or
      are
      reasonably likely to materially affect, the Company’s internal control over
      financial reporting.





**ITEM
              8B.**
            **OTHER
                INFORMATION.**





None.


20




**PART
      III**





**ITEM
              9.**
            **DIRECTORS,
                EXECUTIVE OFFICERS, PROMOTERS, CONTROL PERSONS AND CORPORATE GOVERNANCE;
                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
                SHAREHOLDER 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.




21





**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:
              April 4, 2007
            FIRSTPLUS
                Financial Group, Inc.(Registrant)By:
            /s/ Daniel
              T.
              PhillipsDaniel
                T. Phillips
              President
                and Chief Executive Officer





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. Freeman
            
            Director
                and Chairman of the Board
            April
                4, 2007Robert
                P. Freeman/s/
                Daniel T. Phillips
            
            Director,
                President and Chief
            April
                4, 2007Daniel
              T. Phillips
            
            Executive
              Officer
              (Principal Executive Officer)/s/
                James Roundtree
            
            Director,
                Chief Financial Officer
            April
                4, 2007James
              Roundtree
            
            (Principal
              Accounting
              Officer)/s/
                John R. Fitzgerald
            
            Director
            April
                4, 2007John
              R. Fitzgerald/s/
                David B. Ward
            
            Director
            April
                4, 2007David
              B. Ward










**INDEX
      TO EXHIBITS**





**Exhibit
                No.**
            
            **Document
                Description**2.1(1)
            
            Modified
                Third Amended Plan of Reorganization of FirstPlus Financial,
                Inc.2.2(1)
            
            Trust
                Agreement for the FPFI Creditor Trust3.1(1)
            
            Amended
                and Restated Articles of Incorporation, as amended3.2(1)
            
            Second
                Amended and Restated Bylaws4.1+
            
            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(1)
            
            First
                Amendment to Rights Agreement dated as of October 25, 2001, between
                FIRSTPLUS Financial Group, Inc. andMellon
                Investor Services LLC4.1.2(1)
            
            Second
                Amendment to Rights Agreement dated as of June 27, 2002, between
                FIRSTPLUS
                Financial Group, Inc. andMellon
                Investor Services LLC4.2(1)
            
            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(1)
            
            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 Date4.4(1)
            
            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 Date4.5(1)
            
            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(1)
            
            FIRSTPLUS
                Financial Group, Inc. Grantor Residual Trust Agreement, dated July
                15,
                20024.7(1)
            
            Supplemental
                Indenture, dated as of December 4, 2000, by and between FirstPlus
                Financial Group, Inc. and HSBC Bank USA4.8(1)
            
            Form
                of Certificate of Certificated Interests Representing Beneficial
                Interests
                in The FPFI Creditor Trust Exchanged For 7.25% Convertible Subordinated
                Notes Due 200310.1(1)
            
            Agreement
                for Settlement Between Bear Stearns & Co., Inc. and FirstPlus
                Financial Group, Inc., dated August 19, 1999.10.2(1)
            
            Conversion
                Agreement, dated as of June __, 2001, by and between FirstPlus Financial
                Group, Inc., and the Certificateholders signatory
                thereto10.3(1)
            
            Letter
                Agreement, dated June 13, 2001, by FirstPlus Financial Group, Inc.
                and
                accepted by FPFI Creditors Trust10.4(1)
            
            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, PA10.5(1)
            
            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
                LLP10.6(1)
            
            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
                LLP10.7(1)
            
            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 LLP10.8(1)
            
            Promissory
                Note, dated December 20, 2004, by United Lending Partners, LP in
                favor of
                FirstPlus Financial10.9(1)
            
            Subordination
                Agreement, dated December 30, 2004, by and between FirstPlus Financial
                Group, Inc. and United Lending Partners, LP10.10(1)
            
            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(2)
            
            Settlement
                Agreement, dated as of April 6, 2006, by and among FirstPlus Financial
                Group, Inc. and Danford L. Martin, individually, on behalf of the
                FPFX
                Shareholder Value Committee and the FPFX Steering Committee and as
                attorney-in-fact for all of the Petitioners in the Election Suit
                (as
                defined therein) (Exhibit 10.1)10.12(2)
            
            Factoring
                Agreement and Security Agreement, dated February 28, 2006, between
                Signs
                For Life, LLC and FirstPlus Financial Group, Inc. (Exhibit
                10.2)10.13(3)
            
            First
                Amended FirstPlus Financial Group, Inc. Grantor Residual Trust Agreement,
                dated July 6, 2006 by FirstPlus Financial Group, Inc. as the sole
                settlor
                and the sole beneficiary (Exhibit 10.1)10.14(4)
            
            Asset
                Purchase Agreement, dated as of November 3, 2006, by and between
                FIRSTPLUS
                Auto Group, Inc. and Eddie Perkins (Exhibit 10.1)10.15
            
            Stock
                Option Plan for FIRSTPLUS Financial Group, Inc.14.1*
            
            FirstPlus
                Financial Group, Inc. Code of Ethics21.1
            
            Subsidiaries
                of FIRSTPLUS Financial Group, Inc.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
                200232.2
            
            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.


(1)
            Incorporated
                by reference to the corresponding exhibit from the Company’s Current
                Report on Form 10-KSB for the year ended December 31,
                2005.


(2)
            Incorporated
                by reference to the exhibit shown in parentheses from the Company’s
                Quarterly Report on Form 10-QSB for the quarterly period ended March
                31,
                2006.


(3)
            Incorporated
                by reference to the exhibit shown in parentheses from the Company’s
                Quarterly Report on Form 10-QSB for the quarterly period ended June
                30,
                2006.


(4)
            Incorporated
                by reference to the exhibit shown in parentheses from the Company’s
                Quarterly Report on Form 10-QSB for the quarterly period ended September
                30, 2006.