##### Table of Contents





UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549





FORM 10-Q







|x | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|- | ---------------------------------------------------------------------------------------

For the quarterly period ended March 25, 2008

or



| ̈ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|- | ----------------------------------------------------------------------------------------

For the transition period from  to

Commission file number 333-122531





THE MONEY TREE INC.

(Exact name of registrant as specified in its charter)







|                                                               |  |                                     
|-------------------------------------------------------------- |  | ------------------------------------
|Georgia                                                        |  | 58-2171386                          
|(State or other jurisdiction of incorporation or organization) |  | (I.R.S. Employer Identification No.)

114 South Broad Street

Bainbridge, Georgia 39817

(Address, including zip code, of principal
executive offices)

Registrants telephone number, including area code (229) 246-6536





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

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definition of large accelerated filer,
accelerated filer and smaller reporting company in Rule 12b-2 of the Exchange Act. (Check one):



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

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

Indicate the number of shares outstanding of each of the registrants classes of common stock, as of the last practicable date.



|                    |  |                              
|------------------- |  | -----------------------------
|Class               |  | Outstanding at March 25, 2008
|Class A, Voting     |  | 2,686 Shares                 
|Class B, Non-Voting |  | 26,860 Shares                









---

##### Table of Contents

THE MONEY TREE INC.

FORM 10-Q

March 25, 2008

TABLE OF CONTENTS

Index to Financial Statements



|         |  |                                                                                                              |  |     
|-------- |  | ------------------------------------------------------------------------------------------------------------ |  | ----
|Item No. |  |                                                                                                              |  | Page
|         |  | PART I  FINANCIAL INFORMATION                                                                               |  |     
|         |  |                                                                                                             
|1        |  | Financial Statements                                                                                         |  | 2   
|         |  |                                                                                                             
|         |  | Consolidated Balance Sheets as of March 25, 2008 (Unaudited) and September 25, 2007                          |  | 2   
|         |  |                                                                                                             
|         |  | Consolidated Statements of Operations for the three and six months ended March 25, 2008 and 2007 (Unaudited) |  | 3   
|         |  |                                                                                                             
|         |  | Consolidated Statements of Cash Flows for the six months ended March 25, 2008 and 2007 (Unaudited)           |  | 4   
|         |  |                                                                                                             
|         |  | Notes to Consolidated Financial Statements (Unaudited)                                                       |  | 6   
|         |  |                                                                                                             
|2        |  | Managements Discussion and Analysis of Financial Condition and Results of Operations                        |  | 16  
|         |  |                                                                                                             
|3        |  | Quantitative and Qualitative Disclosures About Market Risk                                                   |  | 28  
|         |  |                                                                                                             
|4        |  | Controls and Procedures                                                                                      |  | 28  
|         |  |                                                                                                             
|         |  | PART II  OTHER INFORMATION                                                                                  |  |     
|         |  |                                                                                                             
|1        |  | Legal Proceedings                                                                                            |  | 30  
|         |  |                                                                                                             
|1A       |  | Risk Factors                                                                                                 |  | 30  
|         |  |                                                                                                             
|2        |  | Unregistered Sales of Equity Securities and Use of Proceeds                                                  |  | 30  
|         |  |                                                                                                             
|3        |  | Defaults Upon Senior Securities                                                                              |  | 30  
|         |  |                                                                                                             
|4        |  | Submission of Matters to a Vote of Security Holders                                                          |  | 30  
|         |  |                                                                                                             
|5        |  | Other Information                                                                                            |  | 30  
|         |  |                                                                                                             
|6        |  | Exhibits                                                                                                     |  | 30  



1



---

##### Table of Contents

The Money Tree Inc. and Subsidiaries

Consolidated Balance Sheets



|                                                                                                    |  |                |             |   |                    |   |             |  
|--------------------------------------------------------------------------------------------------- |  | -------------- | ----------- | - | ------------------ | - | ----------- | -
|                                                                                                    |  | March 25, 2008 |             |   | September 25, 2007 |  
|                                                                                                    |  | (Unaudited)    |             |   |                    |  
|Assets                                                                                              |  |                |             |   |                    |   |             |  
|Cash and cash equivalents                                                                           |  | $              | 17,734,805  |   |                    | $ | 17,854,277  |  
|Finance receivables, net                                                                            |  |                | 76,060,824  |   |                    |   | 75,837,823  |  
|Other receivables                                                                                   |  |                | 856,506     |   |                    |   | 863,356     |  
|Inventory                                                                                           |  |                | 2,669,511   |   |                    |   | 3,056,775   |  
|Property and equipment, net                                                                         |  |                | 4,126,623   |   |                    |   | 4,219,885   |  
|Deferred income taxes                                                                               |  |                | 1,163,000   |   |                    |   | 1,210,000   |  
|Goodwill                                                                                            |  |                | 991,243     |   |                    |   | 991,243     |  
|Other assets                                                                                        |  |                | 1,876,218   |   |                    |   | 1,750,142   |  
|                                                                                                    |  |                |             |   |                    |   |             |  
|Total assets                                                                                        |  | $              | 105,478,730 |   |                    | $ | 105,783,501 |  
|                                                                                                    |  |                |             |   |                    |   |             |  
|                                                                                                    |  |               
|Liabilities and Shareholders Deficit                                                               |  |                |             |   |                    |   |             |  
|                                                                                                    |  |               
|Liabilities                                                                                         |  |                |             |   |                    |   |             |  
|Accounts payable and other accrued liabilities                                                      |  | $              | 3,934,085   |   |                    | $ | 4,020,056   |  
|Accrued interest payable                                                                            |  |                | 15,215,325  |   |                    |   | 14,329,092  |  
|Senior debt                                                                                         |  |                | 441,848     |   |                    |   | 511,663     |  
|Variable rate subordinated debentures                                                               |  |                | 82,602,464  |   |                    |   | 81,861,016  |  
|Demand notes                                                                                        |  |                | 4,218,249   |   |                    |   | 5,991,374   |  
|                                                                                                    |  |                |             |   |                    |   |             |  
|Total liabilities                                                                                   |  |                | 106,411,971 |   |                    |   | 106,713,201 |  
|                                                                                                    |  |                |             |   |                    |   |             |  
|                                                                                                    |  |               
|Shareholders Deficit                                                                               |  |                |             |   |                    |   |             |  
|Common stock:                                                                                       |  |                |             |   |                    |   |             |  
|Class A voting, no par value; 500,000 shares authorized, 2,686 shares issued and outstanding        |  |                | 1,677,647   |   |                    |   | 1,677,647   |  
|Class B non-voting, no par value; 1,500,000 shares authorized, 26,860 shares issued and outstanding |  |                |            |   |                    |   |            |  
|Accumulated deficit                                                                                 |  |                | (2,610,888  | ) |                    |   | (2,607,347  | )
|                                                                                                    |  |                |             |   |                    |   |             |  
|Total shareholders deficit                                                                         |  |                | (933,241    | ) |                    |   | (929,700    | )
|                                                                                                    |  |                |             |   |                    |   |             |  
|Total liabilities and shareholders deficit                                                         |  | $              | 105,478,730 |   |                    | $ | 105,783,501 |  
|                                                                                                    |  |                |             |   |                    |   |             |  

See accompanying notes to the consolidated financial statements.



2



---

##### Table of Contents

The Money Tree Inc. and Subsidiaries

Consolidated Statements of Operations



|                                                                              |  |                              |            |   |                            |   |            |      |  |   |             |   |  |   |             |  
|----------------------------------------------------------------------------- |  | ---------------------------- | ---------- | - | -------------------------- | - | ---------- | ---- |  | - | ----------- | - |  | - | ----------- | -
|                                                                              |  | Three months ended March 25, |            |   | Six months ended March 25, |  
|                                                                              |  | 2008                         |            |   | 2007                       |   |            | 2008 |  |   | 2007        |  
|                                                                              |  | (Unaudited)                  |            |   | (Unaudited)                |  
|Interest and fee income                                                       |  | $                            | 4,849,163  |   |                            | $ | 4,751,280  |      |  | $ | 9,837,355   |   |  | $ | 9,885,885   |  
|Interest expense                                                              |  |                              | (2,046,379 | ) |                            |   | (1,945,927 | )    |  |   | (4,111,892  | ) |  |   | (3,886,996  | )
|                                                                              |  |                              |            |   |                            |   |            |      |  |   |             |   |  |   |             |  
|Net interest and fee income before provision for credit losses                |  |                              | 2,802,784  |   |                            |   | 2,805,353  |      |  |   | 5,725,463   |   |  |   | 5,998,889   |  
|Provision for credit losses                                                   |  |                              | (927,625   | ) |                            |   | (955,897   | )    |  |   | (2,470,298  | ) |  |   | (2,082,599  | )
|                                                                              |  |                              |            |   |                            |   |            |      |  |   |             |   |  |   |             |  
|Net interest and fee income after provision for credit losses                 |  |                              | 1,875,159  |   |                            |   | 1,849,456  |      |  |   | 3,255,165   |   |  |   | 3,916,290   |  
|Insurance commissions                                                         |  |                              | 2,387,463  |   |                            |   | 2,588,617  |      |  |   | 4,950,478   |   |  |   | 5,285,040   |  
|Commissions from motor club memberships from company owned by related parties |  |                              | 396,834    |   |                            |   | 394,494    |      |  |   | 909,150     |   |  |   | 939,481     |  
|Delinquency fees                                                              |  |                              | 485,203    |   |                            |   | 502,992    |      |  |   | 897,017     |   |  |   | 909,291     |  
|Income tax service agreement income from company owned by related parties     |  |                              |           |   |                            |   | 3,310      |      |  |   |            |   |  |   | 3,310       |  
|Other income                                                                  |  |                              | 159,396    |   |                            |   | 185,501    |      |  |   | 311,259     |   |  |   | 371,782     |  
|                                                                              |  |                              |            |   |                            |   |            |      |  |   |             |   |  |   |             |  
|Net revenue before retail sales                                               |  |                              | 5,304,055  |   |                            |   | 5,524,370  |      |  |   | 10,323,069  |   |  |   | 11,425,194  |  
|                                                                              |  |                              |            |   |                            |   |            |      |  |   |             |   |  |   |             |  
|Retail sales                                                                  |  |                              | 4,506,583  |   |                            |   | 4,626,927  |      |  |   | 9,541,498   |   |  |   | 9,712,194   |  
|Cost of sales                                                                 |  |                              | (2,894,464 | ) |                            |   | (3,025,232 | )    |  |   | (5,972,756  | ) |  |   | (6,220,811  | )
|                                                                              |  |                              |            |   |                            |   |            |      |  |   |             |   |  |   |             |  
|Gross margin on retail sales                                                  |  |                              | 1,612,119  |   |                            |   | 1,601,695  |      |  |   | 3,568,742   |   |  |   | 3,491,383   |  
|                                                                              |  |                              |            |   |                            |   |            |      |  |   |             |   |  |   |             |  
|Net revenues                                                                  |  |                              | 6,916,174  |   |                            |   | 7,126,065  |      |  |   | 13,891,811  |   |  |   | 14,916,577  |  
|                                                                              |  |                              |            |   |                            |   |            |      |  |   |             |   |  |   |             |  
|Operating expenses                                                            |  |                              |            |   |                            |   |            |      |  |   |             |   |  |   |             |  
|Personnel expense                                                             |  |                              | (4,086,671 | ) |                            |   | (3,982,576 | )    |  |   | (7,968,141  | ) |  |   | (7,841,854  | )
|Facilities expense                                                            |  |                              | (911,463   | ) |                            |   | (918,766   | )    |  |   | (1,905,896  | ) |  |   | (1,878,031  | )
|General and administrative expenses                                           |  |                              | (791,840   | ) |                            |   | (766,846   | )    |  |   | (1,561,328  | ) |  |   | (1,533,725  | )
|Other operating expenses                                                      |  |                              | (1,259,135 | ) |                            |   | (1,432,646 | )    |  |   | (2,444,988  | ) |  |   | (2,712,894  | )
|                                                                              |  |                              |            |   |                            |   |            |      |  |   |             |   |  |   |             |  
|Total operating expenses                                                      |  |                              | (7,049,109 | ) |                            |   | (7,100,834 | )    |  |   | (13,880,353 | ) |  |   | (13,966,504 | )
|                                                                              |  |                              |            |   |                            |   |            |      |  |   |             |   |  |   |             |  
|Net operating income (loss)                                                   |  |                              | (132,935   | ) |                            |   | 25,231     |      |  |   | 11,458      |   |  |   | 950,073     |  
|Loss on sale of property and equipment                                        |  |                              | (3,455     | ) |                            |   | (12,188    | )    |  |   | (18,092     | ) |  |   | (21,826     | )
|                                                                              |  |                              |            |   |                            |   |            |      |  |   |             |   |  |   |             |  
|Income (loss) before income tax expense                                       |  |                              | (136,390   | ) |                            |   | 13,043     |      |  |   | (6,634      | ) |  |   | 928,247     |  
|Income tax (expense) benefit                                                  |  |                              | 62,336     |   |                            |   | 264,062    |      |  |   | 3,093       |   |  |   | (266,471    | )
|                                                                              |  |                              |            |   |                            |   |            |      |  |   |             |   |  |   |             |  
|Net income (loss)                                                             |  | $                            | (74,054    | ) |                            | $ | 277,105    |      |  | $ | (3,541      | ) |  | $ | 661,776     |  
|                                                                              |  |                              |            |   |                            |   |            |      |  |   |             |   |  |   |             |  
|Net income (loss) per common share, basic and diluted                         |  | $                            | (2.51      | ) |                            | $ | 9.38       |      |  | $ | (0.12       | ) |  | $ | 22.40       |  
|                                                                              |  |                              |            |   |                            |   |            |      |  |   |             |   |  |   |             |  

See accompanying notes to the consolidated financial statements.



3



---

##### Table of Contents

The Money Tree Inc. and Subsidiaries

Consolidated Statements of Cash Flows



|                                                                                         |  |             |             |   |      |   |             |  
|---------------------------------------------------------------------------------------- |  | ----------- | ----------- | - | ---- | - | ----------- | -
|Six months ended March 25,                                                               |  | 2008        |             |   | 2007 |  
|                                                                                         |  | (Unaudited) |            
|Cash flows from operating activities                                                     |  |             |             |   |      |   |             |  
|Net income (loss)                                                                        |  | $           | (3,541      | ) |      | $ | 661,776     |  
|Adjustments to reconcile net income (loss) to net cash provided by operating activities: |  |             |             |   |      |   |             |  
|Provision for credit losses                                                              |  |             | 2,470,298   |   |      |   | 2,082,599   |  
|Depreciation                                                                             |  |             | 384,984     |   |      |   | 408,246     |  
|Amortization                                                                             |  |             | 2,857       |   |      |   | 2,857       |  
|Deferred income taxes                                                                    |  |             | 47,000      |   |      |   |            |  
|Loss on sale of property and equipment                                                   |  |             | 18,092      |   |      |   | 21,826      |  
|Change in assets and liabilities                                                         |  |             |             |   |      |   |             |  
|Other receivables                                                                        |  |             | 6,850       |   |      |   | 49,490      |  
|Inventory                                                                                |  |             | 387,264     |   |      |   | 83,256      |  
|Other assets                                                                             |  |             | (128,933    | ) |      |   | 490,440     |  
|Accounts payable and other accrued liabilities                                           |  |             | (85,971     | ) |      |   | 228,479     |  
|Accrued interest payable                                                                 |  |             | 886,233     |   |      |   | 1,297,050   |  
|                                                                                         |  |             |             |   |      |   |             |  
|Net cash provided by operating activities                                                |  |             | 3,985,133   |   |      |   | 5,326,019   |  
|                                                                                         |  |             |             |   |      |   |             |  
|Cash flows from investing activities                                                     |  |             |             |   |      |   |             |  
|Finance receivables originated                                                           |  |             | (38,356,420 | ) |      |   | (38,096,586 | )
|Finance receivables repaid                                                               |  |             | 35,663,121  |   |      |   | 37,544,442  |  
|Purchase of property and equipment                                                       |  |             | (348,362    | ) |      |   | (758,382    | )
|Proceeds from sale of property and equipment                                             |  |             | 38,548      |   |      |   | 519,282     |  
|                                                                                         |  |             |             |   |      |   |             |  
|Net cash used in investing activities                                                    |  |             | (3,003,113  | ) |      |   | (791,244    | )
|                                                                                         |  |             |             |   |      |   |             |  
|Cash flows from financing activities                                                     |  |             |             |   |      |   |             |  
|Net proceeds (repayments) on:                                                            |  |             |             |   |      |   |             |  
|Senior debt                                                                              |  |             | (69,815     | ) |      |   | (69,975     | )
|Demand notes                                                                             |  |             | (1,773,125  | ) |      |   | (1,571,835  | )
|Repayments on senior subordinated debt                                                   |  |             |            |   |      |   | (300,000    | )
|Repayments on junior subordinated debt and related parties                               |  |             |            |   |      |   | (210,000    | )
|Proceeds-variable rate subordinated debentures                                           |  |             | 7,590,167   |   |      |   | 6,760,879   |  
|Payments-variable rate subordinated debentures                                           |  |             | (6,848,719  | ) |      |   | (5,346,235  | )
|                                                                                         |  |             |             |   |      |   |             |  
|Net cash used in financing activities                                                    |  |             | (1,101,492  | ) |      |   | (737,166    | )
|                                                                                         |  |             |             |   |      |   |             |  
|Net change in cash and cash equivalents                                                  |  |             | (119,472    | ) |      |   | 3,797,609   |  
|                                                                                         |  |            
|Cash and cash equivalents, beginning of period                                           |  |             | 17,854,277  |   |      |   | 12,919,524  |  
|                                                                                         |  |             |             |   |      |   |             |  
|Cash and cash equivalents, end of period                                                 |  | $           | 17,734,805  |   |      | $ | 16,717,133  |  
|                                                                                         |  |             |             |   |      |   |             |  

See accompanying notes to the consolidated financial statements.



4



---

##### Table of Contents

The Money Tree Inc. and Subsidiaries

Consolidated Statements of Cash Flows (continued)



|                                                  |  |             |           |      |   |          
|------------------------------------------------- |  | ----------- | --------- | ---- | - | ---------
|Six months ended March 25,                        |  | 2008        |           | 2007
|                                                  |  | (Unaudited)
|SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: |  |             |           |      |   |          
|Cash paid during the period for:                  |  |             |           |      |   |          
|Interest                                          |  | $           | 3,155,881 |      | $ | 2,491,294
|                                                  |  |             |           |      |   |          
|Income taxes                                      |  | $           | 228,839   |      | $ | 6,949    
|                                                  |  |             |           |      |   |          

See accompanying notes to the consolidated financial statements.



5



---

##### Table of Contents

The Money Tree Inc. and Subsidiaries

Notes to Consolidated Financial Statements (Unaudited)

NOTE 1  BASIS OF PRESENTATION

The consolidated financial statements of The Money Tree Inc., a Georgia corporation (the Parent) and subsidiaries (collectively with the Parent, the Company) included herein have been prepared by the Company without
audit, pursuant to the rules and regulations of the United States Securities and Exchange Commission. Certain information and footnote disclosure normally included in financial statements prepared in accordance with U.S. generally accepted
accounting principles have been omitted. For a description of significant accounting policies used by the Company in the preparation of its consolidated financial statements, see Note 1 to the Consolidated Financial Statements in the Companys
2007 Annual Report on Form 10-K.

The consolidated financial statements include the accounts of the Company and all of its subsidiaries
after eliminating all significant intercompany transactions and reflect all normal, recurring adjustments which are, in the opinion of management, necessary to present a fair statement of the results of operations of the Company in conformity with
U.S. generally accepted accounting principles for the interim periods reported. The results of operations for the three and six months ended March 25, 2008 and 2007 are not necessarily indicative of the results for the full fiscal year.

NOTE 2  NATURE OF BUSINESS

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

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

NOTE 3  RECENT ACCOUNTING PRONOUNCEMENTS

In June 2006, the Financial Accounting Standards Board (FASB) issued FASB Interpretation No. 48 (FIN 48), Accounting for Uncertainty in Income
Taxesan interpretation of FASB Statement 109. FIN 48 clarifies the accounting for uncertainty in income taxes recognized in an enterprises financial statements in accordance with FASB Statement No. 109, Accounting for Income
Taxes. FIN 48 prescribes a comprehensive model for recognizing, measuring, presenting and disclosing in the financial statements tax positions taken or expected to be taken on a tax return. If there are changes in net assets as a result of
application of FIN 48 these will be accounted for as an adjustment to retained earnings. Additional disclosures about the amounts of such liabilities will be required also. The Company adopted FIN 48 on September 26, 2007 and its adoption did
not have a material effect on the Companys consolidated financial statements.

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



6



---

##### Table of Contents

The Money Tree Inc. and Subsidiaries

Notes to Consolidated Financial Statements (Unaudited)



NOTE 3  RECENT ACCOUNTING PRONOUNCEMENTS (Continued)



In February 2007, the FASB issued SFAS 159, The Fair Value Option for Financial Assets and
LiabilitiesIncluding an amendment of FASB Statement No. 115. SFAS 159 permits entities to choose to measure certain financial assets and liabilities at fair value (the fair value option). Unrealized gains and losses,
arising subsequent to adoption, are reported in earnings. SFAS 159 is effective for financial statements issued for fiscal years beginning after November 15, 2007. The Company is currently evaluating the impact the adoption of this statement
could have on the Companys consolidated financial statements.

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

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

FASB Statement No. 161, Disclosures about Derivative Instruments and Hedging Activities an amendment of FASB Statement No. 133 requires enhanced disclosures about an
entitys derivative and hedging activities and thereby improves the transparency of financial reporting. This Statement is effective for financial statements issued for fiscal years and interim periods beginning after November 15, 2008,
with early application encouraged. This Statement encourages, but does not require, comparative disclosures for earlier periods at initial adoption. Management does not expect SFAS No. 161 to have a material impact on the Companys
consolidated financial statements.



7



---

##### Table of Contents

The Money Tree Inc. and Subsidiaries

Notes to Consolidated Financial Statements (Unaudited)



NOTE 4  FINANCE RECEIVABLES AND ALLOWANCE FOR CREDIT LOSSES

Finance receivables consisted of the following:



|                                                        |  |                |             |   |                    |   |             |  
|------------------------------------------------------- |  | -------------- | ----------- | - | ------------------ | - | ----------- | -
|                                                        |  | March 25, 2008 |             |   | September 25, 2007 |  
|                                                        |  | (Unaudited)    |             |   |                    |  
|Finance receivables, direct consumer                    |  | $              | 44,412,671  |   |                    | $ | 46,834,666  |  
|Finance receivables, consumer sales finance             |  |                | 16,813,744  |   |                    |   | 14,466,682  |  
|Finance receivables, auto sales finance                 |  |                | 32,220,882  |   |                    |   | 32,259,968  |  
|                                                        |  |                |             |   |                    |   |             |  
|Total gross finance receivables                         |  |                | 93,447,297  |   |                    |   | 93,561,316  |  
|Unearned insurance commissions                          |  |                | (2,707,526  | ) |                    |   | (2,815,646  | )
|Unearned finance charges                                |  |                | (11,967,035 | ) |                    |   | (12,122,154 | )
|Accrued interest receivable                             |  |                | 1,010,748   |   |                    |   | 924,986     |  
|                                                        |  |                |             |   |                    |   |             |  
|Finance receivables, before allowance for credit losses |  |                | 79,783,484  |   |                    |   | 79,548,502  |  
|Allowance for credit losses                             |  |                | (3,722,660  | ) |                    |   | (3,710,679  | )
|                                                        |  |                |             |   |                    |   |             |  
|Finance receivables, net                                |  | $              | 76,060,824  |   |                    | $ | 75,837,823  |  
|                                                        |  |                |             |   |                    |   |             |  

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



|                             |  |                                                 |            |   |                                               |   |            |                                                 |  |   |            |  
|---------------------------- |  | ----------------------------------------------- | ---------- | - | --------------------------------------------- | - | ---------- | ----------------------------------------------- |  | - | ---------- | -
|                             |  | As of and for thesix months endedMarch 25, 2008 |            |   | As of and for theyear endedSeptember 25, 2007 |   |            | As of and for thesix months endedMarch 25, 2007 | 
|                             |  | (Unaudited)                                     |            |   |                                               |   |            | (Unaudited)                                     | 
|Beginning balance            |  | $                                               | 3,710,679  |   |                                               | $ | 3,139,359  |                                                 |  | $ | 3,139,359  |  
|Provisions for credit losses |  |                                                 | 2,470,298  |   |                                               |   | 4,982,494  |                                                 |  |   | 2,082,599  |  
|Charge-offs                  |  |                                                 | (2,573,374 | ) |                                               |   | (4,583,650 | )                                               |  |   | (2,308,429 | )
|Recoveries                   |  |                                                 | 91,835     |   |                                               |   | 181,218    |                                                 |  |   | 94,414     |  
|Other                        |  |                                                 | 23,222     |   |                                               |   | (8,742     | )                                               |  |   | (17,140    | )
|                             |  |                                                 |            |   |                                               |   |            |                                                 |  |   |            |  
|Ending balance               |  | $                                               | 3,722,660  |   |                                               | $ | 3,710,679  |                                                 |  | $ | 2,990,803  |  
|                             |  |                                                 |            |   |                                               |   |            |                                                 |  |   |            |  

NOTE 5  INVENTORY

Inventory consisted of the following:



|                                 |  |                |           |                    |   |          
|-------------------------------- |  | -------------- | --------- | ------------------ | - | ---------
|                                 |  | March 25, 2008 |           | September 25, 2007
|                                 |  | (Unaudited)    |           |                   
|Used automobiles                 |  | $              | 1,913,691 |                    | $ | 2,170,617
|Home furnishings and electronics |  |                | 755,820   |                    |   | 886,158  
|                                 |  |                |           |                    |   |          
|Total inventory                  |  | $              | 2,669,511 |                    | $ | 3,056,775
|                                 |  |                |           |                    |   |          



8



---

##### Table of Contents

The Money Tree Inc. and Subsidiaries

Notes to Consolidated Financial Statements (Unaudited)



NOTE 6  ACCOUNTS PAYABLE AND OTHER ACCRUED LIABILITIES

Accounts payable and other accrued liabilities consisted of the following:



|                                                     |  |                |           |                    |   |          
|---------------------------------------------------- |  | -------------- | --------- | ------------------ | - | ---------
|                                                     |  | March 25, 2008 |           | September 25, 2007
|                                                     |  | (Unaudited)    |           |                   
|Accounts payable                                     |  | $              | 227,248   |                    | $ | 272,558  
|Insurance payable, loan related                      |  |                | 653,481   |                    |   | 698,719  
|Accrued payroll                                      |  |                | 534,088   |                    |   | 521,063  
|Accrued payroll taxes                                |  |                | 47,619    |                    |   | 39,402   
|Money orders                                         |  |                | 1,031,809 |                    |   | 987,264  
|Sales tax payable                                    |  |                | 1,288,776 |                    |   | 1,314,176
|Other liabilities                                    |  |                | 151,064   |                    |   | 186,874  
|                                                     |  |                |           |                    |   |          
|Total accounts payable and other accrued liabilities |  | $              | 3,934,085 |                    | $ | 4,020,056
|                                                     |  |                |           |                    |   |          

NOTE 7  DEBT

Debt consisted of the following:



|                                                                                                                                                                                                                                                                                                                                                                                   |  |                |            |                    |   |           
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | -------------- | ---------- | ------------------ | - | ----------
|                                                                                                                                                                                                                                                                                                                                                                                   |  | March 25, 2008 |            | September 25, 2007
|                                                                                                                                                                                                                                                                                                                                                                                   |  | (Unaudited)    |            |                   
|Senior debt: due to banks and commercial finance companies, collateralized by inventory and certain automotive equipment, and certain notes include personal guarantees of a
shareholder, interest at 4.49% to 8.25% (some variable), due 2008 to 2009. The carrying values of the collateral at March 25, 2008 and September 25, 2007 were $469,505 and $1,053,418, respectively. |  | $              | 441,848    |                    | $ | 511,663   
|                                                                                                                                                                                                                                                                                                                                                                                   |  |                |            |                    |   |           
|Total senior debt                                                                                                                                                                                                                                                                                                                                                                  |  |                | 441,848    |                    |   | 511,663   
|                                                                                                                                                                                                                                                                                                                                                                                   |  |                |            |                    |   |           
|                                                                                                                                                                                                                                                                                                                                                                                   |  |               
|Variable rate subordinated debentures issued by The Money Tree of Georgia Inc.: due to individuals, unsecured, interest at 4.25% to 9.6%, due at various dates through 2011.                                                                                                                                                                                                       |  |                | 51,217,700 |                    |   | 56,267,926
|                                                                                                                                                                                                                                                                                                                                                                                   |  |               
|Variable rate subordinated debentures issued by The Money Tree Inc.: due to individuals, unsecured, interest at 6.0% to 8.7%, due at various dates through
2011.                                                                                                                                                                                                                   |  |                | 31,384,764 |                    |   | 25,593,090
|                                                                                                                                                                                                                                                                                                                                                                                   |  |                |            |                    |   |           
|Total variable rate subordinated debentures                                                                                                                                                                                                                                                                                                                                        |  |                | 82,602,464 |                    |   | 81,861,016
|                                                                                                                                                                                                                                                                                                                                                                                   |  |                |            |                    |   |           



9



---

##### Table of Contents

The Money Tree Inc. and Subsidiaries

Notes to Consolidated Financial Statements (Unaudited)



NOTE 7  DEBT (Continued)



|                                                                                                                                |  |                |            |                    |   |           
|------------------------------------------------------------------------------------------------------------------------------- |  | -------------- | ---------- | ------------------ | - | ----------
|                                                                                                                                |  | March 25, 2008 |            | September 25, 2007
|                                                                                                                                |  | (Unaudited)    |            |                   
|Demand notes issued by The Money Tree of Georgia Inc.: due to individuals, unsecured, interest at 4.25% to 5.0%, due on demand. |  | $              | 739,390    |                    | $ | 1,451,550 
|                                                                                                                                |  |               
|Demand notes issued by The Money Tree Inc.: due to individuals, unsecured, interest at 4.25% to 5.0%, due on demand.            |  |                | 3,478,859  |                    |   | 4,539,824 
|                                                                                                                                |  |                |            |                    |   |           
|Total demand notes                                                                                                              |  |                | 4,218,249  |                    |   | 5,991,374 
|                                                                                                                                |  |                |            |                    |   |           
|Total debt                                                                                                                      |  | $              | 87,262,561 |                    | $ | 88,364,053
|                                                                                                                                |  |                |            |                    |   |           

NOTE 8  INCOME TAXES

At the end of each quarter, the Company makes its best estimate of the effective tax rate expected to be applicable for the full fiscal year and uses that rate in providing for income taxes on a
current year-to-date basis.

NOTE 9RELATED PARTY TRANSACTIONS

Martin Family Group, LLLP owns the real estate of thirteen branch offices, one used car lot, and the Companys principal executive offices. The estate of the Companys founder and
former CEO is a limited partner of Martin Family Group, LLLP. A shareholder of the Company is the president of Martin Investments, Inc., which is the managing general partner of Martin Family Group, LLLP. The Company has entered into lease
agreements whereby rent is paid monthly for use of these locations. In addition, Martin Sublease, L.L.C., which is controlled by Martin Investments, Inc., leases, and then subleases to the Company, another 53 branch office locations and two used car
lots for amounts greater than are paid in the underlying leases. This spread is generally to cover property operating cost or improvements made directly by these entities. In the opinion of management, rates paid for these are comparable to those
obtained from third parties. Total rents paid were $1,043,646 and $1,014,854 for the six months and $523,821 and $508,194 for the three months ended March 25, 2008 and 2007, respectively and are included in operating expense in the accompanying
unaudited Consolidated Statements of Operations.

The Company receives commissions from sales of motor club memberships from an entity,
owned by the Companys President and the late founders three children (of which one is a Director), pursuant to an Agency Sales Agreement. Commissions earned on the sale of these memberships were $909,150 and $939,481 for the six months
and $396,834 and $394,494 for the three months ended March 25, 2008 and 2007, respectively.

The Company also engages from time to
time in other transactions with related parties. Refer to the Related Party Transactions disclosure in the notes to the Companys Consolidated Financial Statements as of and for the year ended September 25, 2007.



10



---

##### Table of Contents

The Money Tree Inc. and Subsidiaries

Notes to Consolidated Financial Statements (Unaudited)



NOTE 10  CONTINGENT LIABILITIES

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

NOTE 11  DISCRETIONARY BONUSES

From time to time, the Company pays discretionary bonuses to its employees. The amount of these bonuses charged to operating expenses was $1,201,774 and $1,130,995 for the six months and $623,119 and $600,197 for the three months ended
March 25, 2008 and 2007, respectively.

NOTE 12  SEGMENT FINANCIAL INFORMATION

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

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

Consumer finance and
sales segment

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

Automotive finance and sales segment

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

Accounting policies of the segments are the same as those described in the summary of significant accounting policies in the Companys Annual Report on Form 10-K. Performance is measured by various factors such
as segment profit, loan volumes and delinquency and loss management. All corporate expenses are allocated to the segments. Provision for income taxes are not allocated to segments.



11



---

##### Table of Contents

The Money Tree Inc. and Subsidiaries

Notes to Consolidated Financial Statements (Unaudited)



NOTE 12  SEGMENT FINANCIAL INFORMATION (CONTINUED)



|                                               |  |                                  |         |   |                                    |   |        |                |  |   |         |  
|---------------------------------------------- |  | -------------------------------- | ------- | - | ---------------------------------- | - | ------ | -------------- |  | - | ------- | -
|Six months ended March 25, 2008                |  | Consumer Finance& Sales Division |         |   | Automotive Finance& Sales Division |   |        | Total Segments | 
|In Thousands                                   |  | (Unaudited)                      |        
|Net revenues before retail sales               |  | $                                | 10,002  |   |                                    | $ | 321    |                |  | $ | 10,323  |  
|                                               |  |                                  |         |   |                                    |   |        |                |  |   |         |  
|Gross margin on retail sales                   |  |                                  | 1,860   |   |                                    |   | 1,709  |                |  |   | 3,569   |  
|                                               |  |                                  |         |   |                                    |   |        |                |  |   |         |  
|Segment operating expenses                     |  |                                  | (11,945 | ) |                                    |   | (1,936 | )              |  |   | (13,881 | )
|                                               |  |                                  |         |   |                                    |   |        |                |  |   |         |  
|Segment operating profit (loss)                |  | $                                | (83     | ) |                                    | $ | 94     |                |  | $ | 11      |  
|                                               |  |                                  |         |   |                                    |   |        |                |  |   |         |  
|                                               |  |                                  |        
|March 25, 2008                                 |  |                                  |         |   |                                    |   |        |                | 
|In Thousands                                   |  |                                  |         |   |                                    |   |        |                | 
|Assets                                         |  |                                  |         |   |                                    |   |        |                |  |   |         |  
|Total segment assets                           |  | $                                | 61,511  |   |                                    | $ | 27,919 |                |  | $ | 89,430  |  
|                                               |  |                                  |        
|RECONCILIATION:                                |  |                                  |         |   |                                    |   |        | March 25, 2008 | 
|                                               |  |                                  |         |   |                                    |   |        | (Thousands)    | 
|Assets:                                        |  |                                  |         |   |                                    |   |        |                |  |   |         |  
|Total assets for reportable segments           |  |                                  |         |   |                                    |   |        |                |  | $ | 89,430  |  
|                                               |  |                                  |        
|Cash and cash equivalents at corporate level   |  |                                  |         |   |                                    |   |        |                |  |   | 10,875  |  
|Other receivables at corporate level           |  |                                  |         |   |                                    |   |        |                |  |   | 856     |  
|Property and equipment, net at corporate level |  |                                  |         |   |                                    |   |        |                |  |   | 1,279   |  
|Deferred income taxes at corporate level       |  |                                  |         |   |                                    |   |        |                |  |   | 1,163   |  
|Other assets at corporate level                |  |                                  |         |   |                                    |   |        |                |  |   | 1,876   |  
|                                               |  |                                  |         |   |                                    |   |        |                |  |   |         |  
|Consolidated Assets                            |  |                                  |         |   |                                    |   |        |                |  | $ | 105,479 |  
|                                               |  |                                  |         |   |                                    |   |        |                |  |   |         |  



12



---

##### Table of Contents

The Money Tree Inc. and Subsidiaries

Notes to Consolidated Financial Statements (Unaudited)



NOTE 12  SEGMENT FINANCIAL INFORMATION (CONTINUED)



|                                               |  |                                  |         |   |                                    |   |        |                |  |   |         |  
|---------------------------------------------- |  | -------------------------------- | ------- | - | ---------------------------------- | - | ------ | -------------- |  | - | ------- | -
|Six months ended March 25, 2007                |  | Consumer Finance& Sales Division |         |   | Automotive Finance& Sales Division |   |        | Total Segments | 
|In Thousands                                   |  | (Unaudited)                      |        
|Net revenues before retail sales               |  | $                                | 11,197  |   |                                    | $ | 228    |                |  | $ | 11,425  |  
|                                               |  |                                  |         |   |                                    |   |        |                |  |   |         |  
|Gross margin on retail sales                   |  |                                  | 1,529   |   |                                    |   | 1,962  |                |  |   | 3,491   |  
|                                               |  |                                  |         |   |                                    |   |        |                |  |   |         |  
|Segment operating expenses                     |  |                                  | (11,971 | ) |                                    |   | (1,995 | )              |  |   | (13,966 | )
|                                               |  |                                  |         |   |                                    |   |        |                |  |   |         |  
|Segment operating profit                       |  | $                                | 755     |   |                                    | $ | 195    |                |  | $ | 950     |  
|                                               |  |                                  |         |   |                                    |   |        |                |  |   |         |  
|                                               |  |                                  |        
|March 25, 2007                                 |  |                                  |         |   |                                    |   |        |                | 
|In Thousands                                   |  |                                  |         |   |                                    |   |        |                | 
|Assets                                         |  |                                  |         |   |                                    |   |        |                |  |   |         |  
|Total segment assets                           |  | $                                | 63,672  |   |                                    | $ | 27,299 |                |  | $ | 90,971  |  
|                                               |  |                                  |        
|RECONCILIATION:                                |  |                                  |         |   |                                    |   |        | March 25, 2007 | 
|                                               |  |                                  |         |   |                                    |   |        | (Thousands)    | 
|Assets:                                        |  |                                  |         |   |                                    |   |        |                |  |   |         |  
|Total assets for reportable segments           |  |                                  |         |   |                                    |   |        |                |  | $ | 90,971  |  
|                                               |  |                                  |        
|Cash and cash equivalents at corporate level   |  |                                  |         |   |                                    |   |        |                |  |   | 7,499   |  
|Other receivables at corporate level           |  |                                  |         |   |                                    |   |        |                |  |   | 965     |  
|Property and equipment, net at corporate level |  |                                  |         |   |                                    |   |        |                |  |   | 1,277   |  
|Deferred income taxes at corporate level       |  |                                  |         |   |                                    |   |        |                |  |   | 645     |  
|Other assets at corporate level                |  |                                  |         |   |                                    |   |        |                |  |   | 1,580   |  
|                                               |  |                                  |         |   |                                    |   |        |                |  |   |         |  
|Consolidated Assets                            |  |                                  |         |   |                                    |   |        |                |  | $ | 102,937 |  
|                                               |  |                                  |         |   |                                    |   |        |                |  |   |         |  



13



---

##### Table of Contents

The Money Tree Inc. and Subsidiaries

Notes to Consolidated Financial Statements (Unaudited)



NOTE 12  SEGMENT FINANCIAL INFORMATION (CONTINUED)



|                                               |  |                                  |        |   |                                    |   |        |                |  |   |         |  
|---------------------------------------------- |  | -------------------------------- | ------ | - | ---------------------------------- | - | ------ | -------------- |  | - | ------- | -
|Three months ended March 25, 2008              |  | Consumer Finance& Sales Division |        |   | Automotive Finance& Sales Division |   |        | Total Segments | 
|In Thousands                                   |  | (Unaudited)                      |       
|Net revenues before retail sales               |  | $                                | 5,176  |   |                                    | $ | 128    |                |  | $ | 5,304   |  
|                                               |  |                                  |        |   |                                    |   |        |                |  |   |         |  
|Gross margin on retail sales                   |  |                                  | 673    |   |                                    |   | 939    |                |  |   | 1,612   |  
|                                               |  |                                  |        |   |                                    |   |        |                |  |   |         |  
|Segment operating expenses                     |  |                                  | (6,041 | ) |                                    |   | (1,008 | )              |  |   | (7,049  | )
|                                               |  |                                  |        |   |                                    |   |        |                |  |   |         |  
|Segment operating profit (loss)                |  | $                                | (192   | ) |                                    | $ | 59     |                |  | $ | (133    | )
|                                               |  |                                  |        |   |                                    |   |        |                |  |   |         |  
|                                               |  |                                  |       
|March 25, 2008                                 |  |                                  |        |   |                                    |   |        |                | 
|In Thousands                                   |  |                                  |        |   |                                    |   |        |                | 
|Assets                                         |  |                                  |        |   |                                    |   |        |                |  |   |         |  
|Total segment assets                           |  | $                                | 61,511 |   |                                    | $ | 27,919 |                |  | $ | 89,430  |  
|                                               |  |                                  |       
|RECONCILIATION:                                |  |                                  |        |   |                                    |   |        | March 25, 2008 | 
|                                               |  |                                  |        |   |                                    |   |        | (Thousands)    | 
|Assets:                                        |  |                                  |        |   |                                    |   |        |                |  |   |         |  
|Total assets for reportable segments           |  |                                  |        |   |                                    |   |        |                |  | $ | 89,430  |  
|                                               |  |                                  |       
|Cash and cash equivalents at corporate level   |  |                                  |        |   |                                    |   |        |                |  |   | 10,875  |  
|Other receivables at corporate level           |  |                                  |        |   |                                    |   |        |                |  |   | 856     |  
|Property and equipment, net at corporate level |  |                                  |        |   |                                    |   |        |                |  |   | 1,279   |  
|Deferred income taxes at corporate level       |  |                                  |        |   |                                    |   |        |                |  |   | 1,163   |  
|Other assets at corporate level                |  |                                  |        |   |                                    |   |        |                |  |   | 1,876   |  
|                                               |  |                                  |        |   |                                    |   |        |                |  |   |         |  
|Consolidated Assets                            |  |                                  |        |   |                                    |   |        |                |  | $ | 105,479 |  
|                                               |  |                                  |        |   |                                    |   |        |                |  |   |         |  



14



---

##### Table of Contents

The Money Tree Inc. and Subsidiaries

Notes to Consolidated Financial Statements (Unaudited)



NOTE 12  SEGMENT FINANCIAL INFORMATION (CONTINUED)



|                                               |  |                                  |        |   |                                    |   |        |                |  |   |         |  
|---------------------------------------------- |  | -------------------------------- | ------ | - | ---------------------------------- | - | ------ | -------------- |  | - | ------- | -
|Three months ended March 25, 2007              |  | Consumer Finance& Sales Division |        |   | Automotive Finance& Sales Division |   |        | Total Segments | 
|In Thousands                                   |  | (Unaudited)                      |       
|Net revenues before retail sales               |  | $                                | 5,516  |   |                                    | $ | 8      |                |  | $ | 5,524   |  
|                                               |  |                                  |        |   |                                    |   |        |                |  |   |         |  
|Gross margin on retail sales                   |  |                                  | 590    |   |                                    |   | 1,012  |                |  |   | 1,602   |  
|                                               |  |                                  |        |   |                                    |   |        |                |  |   |         |  
|Segment operating expenses                     |  |                                  | (6,078 | ) |                                    |   | (1,023 | )              |  |   | (7,101  | )
|                                               |  |                                  |        |   |                                    |   |        |                |  |   |         |  
|Segment operating profit (loss)                |  | $                                | 28     |   |                                    | $ | (3     | )              |  | $ | 25      |  
|                                               |  |                                  |        |   |                                    |   |        |                |  |   |         |  
|                                               |  |                                  |       
|March 25, 2007                                 |  |                                  |        |   |                                    |   |        |                | 
|In Thousands                                   |  |                                  |        |   |                                    |   |        |                | 
|Assets                                         |  |                                  |        |   |                                    |   |        |                |  |   |         |  
|Total segment assets                           |  | $                                | 63,672 |   |                                    | $ | 27,299 |                |  | $ | 90,971  |  
|                                               |  |                                  |       
|RECONCILIATION:                                |  |                                  |        |   |                                    |   |        | March 25, 2007 | 
|                                               |  |                                  |        |   |                                    |   |        | (Thousands)    | 
|Assets:                                        |  |                                  |        |   |                                    |   |        |                |  |   |         |  
|Total assets for reportable segments           |  |                                  |        |   |                                    |   |        |                |  | $ | 90,971  |  
|                                               |  |                                  |       
|Cash and cash equivalents at corporate level   |  |                                  |        |   |                                    |   |        |                |  |   | 7,499   |  
|Other receivables at corporate level           |  |                                  |        |   |                                    |   |        |                |  |   | 965     |  
|Property and equipment, net at corporate level |  |                                  |        |   |                                    |   |        |                |  |   | 1,277   |  
|Deferred income taxes at corporate level       |  |                                  |        |   |                                    |   |        |                |  |   | 645     |  
|Other assets at corporate level                |  |                                  |        |   |                                    |   |        |                |  |   | 1,580   |  
|                                               |  |                                  |        |   |                                    |   |        |                |  |   |         |  
|Consolidated Assets                            |  |                                  |        |   |                                    |   |        |                |  | $ | 102,937 |  
|                                               |  |                                  |        |   |                                    |   |        |                |  |   |         |  



15



---

##### Table of Contents

|Item 2. | Managements Discussion and Analysis of Financial Condition and Results of Operations.
|------- | --------------------------------------------------------------------------------------

Forward-Looking Statements

The discussion set forth below, as well as other portions of this quarterly report, contains forward-looking statements within the meaning of federal securities law. Words such as may, will,
expect, anticipate, believe, estimate, continue, predict, or other similar words, identify forward-looking statements. Forward-looking statements include statements regarding
our managements intent, belief or current expectation about, among other things, trends affecting the markets in which we operate, our business, our financial condition and our growth strategies. Although we believe that the expectation
reflected in these forward-looking statements are based on reasonable assumptions, forward-looking statements are not guarantees of future performance and involve risks and uncertainties. Actual results may differ materially from those predicted in
the forward-looking statements as a result of various factors, including, but not limited to, those risk factors set forth in our post-effective amendment to registration statement on Form S-1 filed with the Securities and Exchange Commission on
January 23, 2008. Other factors not identified herein could also have such an effect. If any of these risk factors occur, they could have an adverse effect on our business, financial condition and results of operations. When considering
forward-looking statements keep these risks in mind. These forward-looking statements are made as of the date of this filing. You should not place undo reliance on any forward-looking statement. We are not obligated to update forward-looking
statements and will not update any forward-looking statements in this quarterly report to reflect future events or developments.

The following discussion should be read in conjunction with our unaudited consolidated financial statements and related notes and other financial data included elsewhere in this report. See also the notes to our consolidated financial
statements, Selected Consolidated Financial Data and Managements Discussion and Analysis of Financial Condition and Results of Operations contained in our annual report on Form 10-K for the year ended September 25, 2007.

Overview

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

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



16



---

##### Table of Contents

Description of Loans and Contracts



|                                           |  |                                                |            |   |                                              |   |            |      |  |   |            |   |  |   |            |  
|------------------------------------------ |  | ---------------------------------------------- | ---------- | - | -------------------------------------------- | - | ---------- | ---- |  | - | ---------- | - |  | - | ---------- | -
|                                           |  | As of, or for, the Three MonthsEnded March 25, |            |   | As of, or for, the Six MonthsEnded March 25, |  
|                                           |  | 2008                                           |            |   | 2007                                         |   |            | 2008 |  |   | 2007       |  
|Direct Consumer Loans:                     |  |                                                |            |   |                                              |   |            |      |  |   |            |   |  |   |            |  
|Number of Loans Made to New Borrowers      |  |                                                | 3,299      |   |                                              |   | 3,536      |      |  |   | 8,797      |   |  |   | 9,607      |  
|Number of Loans Made to Former Borrowers   |  |                                                | 12,065     |   |                                              |   | 12,105     |      |  |   | 27,227     |   |  |   | 26,386     |  
|Number of Loans Made to Existing Borrowers |  |                                                | 27,048     |   |                                              |   | 24,894     |      |  |   | 57,076     |   |  |   | 52,714     |  
|Total Number of Loans Made                 |  |                                                | 42,412     |   |                                              |   | 40,535     |      |  |   | 93,100     |   |  |   | 88,707     |  
|Total Volume of Loans Made                 |  | $                                              | 14,434,528 |   |                                              | $ | 15,328,449 |      |  | $ | 34,375,610 |   |  | $ | 36,079,206 |  
|Average Size of Loans Made                 |  | $                                              | 340        |   |                                              | $ | 378        |      |  | $ | 369        |   |  | $ | 407        |  
|Number of Loans Outstanding                |  |                                                | 78,607     |   |                                              |   | 71,562     |      |  |   | 78,607     |   |  |   | 71,562     |  
|Total of Loans Outstanding*                |  | $                                              | 37,901,014 |   |                                              | $ | 41,419,988 |      |  | $ | 37,901,014 |   |  | $ | 41,419,988 |  
|Percent of Loans Outstanding               |  |                                                | 43.60      | % |                                              |   | 47.86      | %    |  |   | 43.60      | % |  |   | 47.86      | %
|Average Balance on Outstanding Loans       |  | $                                              | 482        |   |                                              | $ | 579        |      |  | $ | 482        |   |  | $ | 579        |  
|                                           |  |                                                |            |  
|Motor Vehicle Installment Sales Contracts: |  |                                                |            |   |                                              |   |            |      |  |   |            |   |  |   |            |  
|Total Number of Contracts Made             |  |                                                | 235        |   |                                              |   | 266        |      |  |   | 425        |   |  |   | 500        |  
|Total Volume of Contracts Made             |  | $                                              | 4,381,912  |   |                                              | $ | 4,862,360  |      |  | $ | 7,878,166  |   |  | $ | 9,114,113  |  
|Average Size of Contracts Made             |  | $                                              | 18,646     |   |                                              | $ | 18,280     |      |  | $ | 18,537     |   |  | $ | 18,228     |  
|Number of Contracts Outstanding            |  |                                                | 2,819      |   |                                              |   | 2,752      |      |  |   | 2,819      |   |  |   | 2,752      |  
|Total of Contracts Outstanding*            |  | $                                              | 32,220,882 |   |                                              | $ | 31,842,737 |      |  | $ | 32,220,882 |   |  | $ | 31,842,737 |  
|Percent of Total Loans and Contracts       |  |                                                | 37.06      | % |                                              |   | 36.79      | %    |  |   | 37.06      | % |  |   | 36.79      | %
|Average Balance on Outstanding Contracts   |  | $                                              | 11,430     |   |                                              | $ | 11,571     |      |  | $ | 11,430     |   |  | $ | 11,571     |  
|                                           |  |                                                |            |  
|Consumer Sales Finance Contracts:          |  |                                                |            |   |                                              |   |            |      |  |   |            |   |  |   |            |  
|Number of Contracts Made to New Customers  |  |                                                | 41         |   |                                              |   | 26         |      |  |   | 79         |   |  |   | 67         |  
|Number of Loans Made to Former Customers   |  |                                                | 566        |   |                                              |   | 563        |      |  |   | 1,574      |   |  |   | 1,415      |  
|Number of Loans Made to Existing Customers |  |                                                | 648        |   |                                              |   | 657        |      |  |   | 1,745      |   |  |   | 1,636      |  
|Total Contracts Made                       |  |                                                | 1,255      |   |                                              |   | 1,246      |      |  |   | 3,398      |   |  |   | 3,118      |  
|Total Volume of Contracts Made             |  | $                                              | 3,866,491  |   |                                              | $ | 3,318,790  |      |  | $ | 10,287,704 |   |  | $ | 8,444,467  |  
|Number of Contracts Outstanding            |  |                                                | 7,180      |   |                                              |   | 6,693      |      |  |   | 7,180      |   |  |   | 6,693      |  
|Total of Contracts Outstanding*            |  | $                                              | 16,813,744 |   |                                              | $ | 13,284,095 |      |  | $ | 16,813,744 |   |  | $ | 13,284,095 |  
|Percent of Total Loans and Contracts       |  |                                                | 19.34      | % |                                              |   | 15.35      | %    |  |   | 19.34      | % |  |   | 15.35      | %
|Average Balance of Outstanding Contracts   |  | $                                              | 2,342      |   |                                              | $ | 1,985      |      |  | $ | 2,342      |   |  | $ | 1,985      |  



|* | Contracts outstanding are exclusive of the following aggregate amounts of bankrupt accounts: $6,511,657 as of March 25, 2008 and $5,851,373 as of
March 25, 2007.
|- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------



17



---

##### Table of Contents

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



|                                               |  |                 |            |      |   |           
|---------------------------------------------- |  | --------------- | ---------- | ---- | - | ----------
|                                               |  | As of March 25,
|                                               |  | 2008            |            | 2007
|Total Finance Receivables Outstanding (gross): |  |                 |            |      |   |           
|Direct Consumer Loans                          |  | $               | 37,901,014 |      | $ | 41,419,988
|Motor Vehicle Installment                      |  |                 | 32,220,882 |      |   | 31,842,737
|Consumer Sales Finance                         |  |                 | 16,813,744 |      |   | 13,284,095
|Bankrupt Accounts                              |  |                 | 6,511,657  |      |   | 5,851,373 
|                                               |  |                 |            |      |   |           
|Total Gross Outstanding                        |  | $               | 93,447,297 |      | $ | 92,398,193
|                                               |  |                 |            |      |   |           

Below is a roll-forward of the balance of each category of our outstanding finance
receivables. Loans originated reflect the gross amount of loans made or purchased during the period presented inclusive of pre-computed interest, fees and insurance premiums. Collections represent cash receipts in the form of repayments made on our
loans as reflected in our Consolidated Statements of Cash Flows. Refinancings represent the amount of the pay off of loans refinanced. Charge offs represent the gross amount of loans charged off as uncollectible (charge offs are shown net of
non-file insurance receipts in our Allowance for Credit Losses). Rebates represent reductions to gross loan amounts of precomputed interest and insurance premiums resulting from loans refinanced and other loans paid off before maturity. Other
adjustments primarily represent accounts transferred to and from the department that administers bankrupt accounts.



18



---

##### Table of Contents

|                                           |  |                                     |             |   |                                   |   |             |      |  |   |             |   |  |   |             |  
|------------------------------------------ |  | ----------------------------------- | ----------- | - | --------------------------------- | - | ----------- | ---- |  | - | ----------- | - |  | - | ----------- | -
|                                           |  | For the Three Months EndedMarch 25, |             |   | For the Six Months EndedMarch 25, |  
|                                           |  | 2008                                |             |   | 2007                              |   |             | 2008 |  |   | 2007        |  
|Direct Consumer Loans:                     |  |                                     |             |   |                                   |   |             |      |  |   |             |   |  |   |             |  
|Balance - beginning                        |  | $                                   | 41,477,349  |   |                                   | $ | 46,005,060  |      |  | $ | 40,719,291  |   |  | $ | 46,071,669  |  
|Finance receivables originated             |  |                                     | 14,434,528  |   |                                   |   | 15,328,449  |      |  |   | 34,375,610  |   |  |   | 36,079,206  |  
|Collections                                |  |                                     | (13,141,047 | ) |                                   |   | (14,301,982 | )    |  |   | (25,286,328 | ) |  |   | (27,466,213 | )
|Refinances                                 |  |                                     | (3,263,506  | ) |                                   |   | (3,796,298  | )    |  |   | (7,903,072  | ) |  |   | (9,076,541  | )
|Charge offs, gross                         |  |                                     | (859,943    | ) |                                   |   | (910,202    | )    |  |   | (2,253,612  | ) |  |   | (1,926,506  | )
|Rebates / other adjustments                |  |                                     | (746,367    | ) |                                   |   | (905,039    | )    |  |   | (1,750,875  | ) |  |   | (2,261,627  | )
|                                           |  |                                     |             |   |                                   |   |             |      |  |   |             |   |  |   |             |  
|Balance - end                              |  | $                                   | 37,901,014  |   |                                   | $ | 41,419,988  |      |  | $ | 37,901,014  |   |  | $ | 41,419,988  |  
|                                           |  |                                     |             |   |                                   |   |             |      |  |   |             |   |  |   |             |  
|                                           |  |                                     |             |  
|Consumer Sales Finance Contracts:          |  |                                     |             |   |                                   |   |             |      |  |   |             |   |  |   |             |  
|Balance - beginning                        |  | $                                   | 16,543,773  |   |                                   | $ | 13,069,814  |      |  | $ | 14,466,682  |   |  | $ | 11,813,566  |  
|Finance receivables originated             |  |                                     | 3,866,491   |   |                                   |   | 3,318,790   |      |  |   | 10,287,703  |   |  |   | 8,444,467   |  
|Collections                                |  |                                     | (1,898,264  | ) |                                   |   | (1,548,679  | )    |  |   | (3,517,767  | ) |  |   | (2,887,849  | )
|Refinances                                 |  |                                     | (1,041,020  | ) |                                   |   | (898,896    | )    |  |   | (2,824,155  | ) |  |   | (2,404,568  | )
|Charge offs, gross                         |  |                                     | (248,883    | ) |                                   |   | (309,127    | )    |  |   | (487,841    | ) |  |   | (764,799    | )
|Rebates / other adjustments                |  |                                     | (408,353    | ) |                                   |   | (347,807    | )    |  |   | (1,110,878  | ) |  |   | (916,722    | )
|                                           |  |                                     |             |   |                                   |   |             |      |  |   |             |   |  |   |             |  
|Balance - end                              |  | $                                   | 16,813,744  |   |                                   | $ | 13,284,095  |      |  | $ | 16,813,744  |   |  | $ | 13,284,095  |  
|                                           |  |                                     |             |   |                                   |   |             |      |  |   |             |   |  |   |             |  
|                                           |  |                                     |             |  
|Motor Vehicle Installment Sales Contracts: |  |                                     |             |   |                                   |   |             |      |  |   |             |   |  |   |             |  
|Balance - beginning                        |  | $                                   | 31,895,347  |   |                                   | $ | 31,568,578  |      |  | $ | 32,259,968  |   |  | $ | 31,280,840  |  
|Finance receivables originated             |  |                                     | 4,381,912   |   |                                   |   | 4,862,360   |      |  |   | 7,878,167   |   |  |   | 9,114,113   |  
|Collections                                |  |                                     | (3,519,681  | ) |                                   |   | (3,795,836  | )    |  |   | (6,859,026  | ) |  |   | (7,190,380  | )
|Refinances                                 |  |                                     |            |   |                                   |   |            |      |  |   |            |   |  |   |            |  
|Charge offs, gross                         |  |                                     | (310,416    | ) |                                   |   | (344,529    | )    |  |   | (615,100    | ) |  |   | (631,539    | )
|Rebates / other adjustments                |  |                                     | (226,280    | ) |                                   |   | (447,836    | )    |  |   | (443,127    | ) |  |   | (730,297    | )
|                                           |  |                                     |             |   |                                   |   |             |      |  |   |             |   |  |   |             |  
|Balance - end                              |  | $                                   | 32,220,882  |   |                                   | $ | 31,842,737  |      |  | $ | 32,220,882  |   |  | $ | 31,842,737  |  
|                                           |  |                                     |             |   |                                   |   |             |      |  |   |             |   |  |   |             |  
|                                           |  |                                     |             |  
|Total Active Accounts:                     |  |                                     |             |   |                                   |   |             |      |  |   |             |   |  |   |             |  
|Balance - beginning                        |  | $                                   | 89,916,469  |   |                                   | $ | 90,643,452  |      |  | $ | 87,445,941  |   |  | $ | 89,166,075  |  
|Loans originated                           |  |                                     | 22,682,931  |   |                                   |   | 23,509,599  |      |  |   | 52,541,480  |   |  |   | 53,637,786  |  
|Collections                                |  |                                     | (18,558,992 | ) |                                   |   | (19,646,497 | )    |  |   | (35,663,121 | ) |  |   | (37,544,442 | )
|Refinances                                 |  |                                     | (4,304,526  | ) |                                   |   | (4,695,194  | )    |  |   | (10,727,227 | ) |  |   | (11,481,109 | )
|Charge offs, gross                         |  |                                     | (1,419,242  | ) |                                   |   | (1,563,858  | )    |  |   | (3,356,553  | ) |  |   | (3,322,844  | )
|Rebates / other adjustments                |  |                                     | (1,381,000  | ) |                                   |   | (1,700,682  | )    |  |   | (3,304,880  | ) |  |   | (3,908,646  | )
|                                           |  |                                     |             |   |                                   |   |             |      |  |   |             |   |  |   |             |  
|Balance - end                              |  | $                                   | 86,935,640  |   |                                   | $ | 86,546,820  |      |  | $ | 86,935,640  |   |  | $ | 86,546,820  |  
|                                           |  |                                     |             |   |                                   |   |             |      |  |   |             |   |  |   |             |  
|                                           |  |                                     |             |  
|Total Bankrupt Accounts:                   |  |                                     |             |   |                                   |   |             |      |  |   |             |   |  |   |             |  
|Balance - beginning                        |  | $                                   | 6,367,294   |   |                                   | $ | 5,823,878   |      |  | $ | 6,115,375   |   |  | $ | 5,618,931   |  
|Charge offs, gross                         |  |                                     | (119,370    | ) |                                   |   | (149,467    | )    |  |   | (298,710    | ) |  |   | (317,032    | )
|Adjustments                                |  |                                     | 263,733     |   |                                   |   | 176,962     |      |  |   | 694,992     |   |  |   | 549,474     |  
|                                           |  |                                     |             |   |                                   |   |             |      |  |   |             |   |  |   |             |  
|Balance - end                              |  | $                                   | 6,511,657   |   |                                   | $ | 5,851,373   |      |  | $ | 6,511,657   |   |  | $ | 5,851,373   |  
|                                           |  |                                     |             |   |                                   |   |             |      |  |   |             |   |  |   |             |  
|Total Gross Outstanding Receivables        |  | $                                   | 93,447,297  |   |                                   | $ | 92,398,193  |      |  | $ | 93,447,297  |   |  | $ | 92,398,193  |  
|                                           |  |                                     |             |   |                                   |   |             |      |  |   |             |   |  |   |             |  



19



---

##### Table of Contents

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



|                                                      |  |                            |             |   |      |   |             |  
|----------------------------------------------------- |  | -------------------------- | ----------- | - | ---- | - | ----------- | -
|                                                      |  | Six Months Ended March 25, |            
|                                                      |  | 2008                       |             |   | 2007 |  
|Finance Receivables Originated:                       |  |                            |             |   |      |   |             |  
|Direct consumer                                       |  | $                          | 34,375,610  |   |      | $ | 36,079,206  |  
|Consumer sales finance                                |  |                            | 10,287,704  |   |      |   | 8,444,467   |  
|Motor vehicle installment sales                       |  |                            | 7,878,166   |   |      |   | 9,114,113   |  
|                                                      |  |                            |             |   |      |   |             |  
|Total gross finance receivables originated            |  |                            | 52,541,480  |   |      |   | 53,637,786  |  
|Non-cash items included in gross finance receivables* |  |                            | (14,185,060 | ) |      |   | (15,541,200 | )
|                                                      |  |                            |             |   |      |   |             |  
|Finance receivables originated - cash flows           |  | $                          | 38,356,420  |   |      | $ | 38,096,586  |  
|                                                      |  |                            |             |   |      |   |             |  
|                                                      |  |                           
|Finance Receivables Repaid:                           |  |                            |             |   |      |   |             |  
|Collections                                           |  |                            |             |   |      |   |             |  
|Direct consumer                                       |  | $                          | 25,286,328  |   |      | $ | 27,466,213  |  
|Consumer sales finance                                |  |                            | 3,517,767   |   |      |   | 2,887,849   |  
|Motor vehicle installment sales                       |  |                            | 6,859,026   |   |      |   | 7,190,380   |  
|                                                      |  |                            |             |   |      |   |             |  
|Finance receivables repaid - cash flows               |  | $                          | 35,663,121  |   |      | $ | 37,544,442  |  
|                                                      |  |                            |             |   |      |   |             |  



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

Segments and Seasonality

We segment our business
operations into the following two segments:



| |  |  | consumer finance and sales; and
| | - |  | -------------------------------



| |  |  | automotive finance and sales.
| | - |  | -----------------------------

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

The automotive finance and sales segment is comprised exclusively of used vehicle sales and their related financing. We typically experience our strongest financial performance for the automotive finance and sales
segment during our second fiscal quarter ending March 25 when demand for used cars is at its highest. Please refer to Note 12 in the Notes to Consolidated Financial Statements for a breakdown of our operations by segment.

Net Interest Margin

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



20



---

##### Table of Contents

may charge. Differences also exist in the interest rates that we earn on the various components of our finance receivable portfolio.

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

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



|                                                               |  |                                                |            |   |                                              |   |            |      |  |   |            |   |  |   |            |  
|-------------------------------------------------------------- |  | ---------------------------------------------- | ---------- | - | -------------------------------------------- | - | ---------- | ---- |  | - | ---------- | - |  | - | ---------- | -
|                                                               |  | As of, or for, the Three MonthsEnded March 25, |            |   | As of, or for, the Six MonthsEnded March 25, |  
|                                                               |  | 2008                                           |            |   | 2007                                         |   |            | 2008 |  |   | 2007       |  
|Average net finance receivables(1)                             |  | $                                              | 80,135,788 |   |                                              | $ | 78,716,789 |      |  | $ | 80,192,195 |   |  | $ | 79,433,641 |  
|Average notes payable(2)                                       |  | $                                              | 87,545,341 |   |                                              | $ | 86,783,740 |      |  | $ | 87,929,858 |   |  | $ | 87,106,029 |  
|                                                               |  |                                                |            |  
|Interest income                                                |  | $                                              | 3,765,409  |   |                                              | $ | 3,769,238  |      |  | $ | 7,356,562  |   |  | $ | 7,636,775  |  
|Loan fee income, excluding delinquency fees                    |  |                                                | 1,083,754  |   |                                              |   | 982,042    |      |  |   | 2,480,793  |   |  |   | 2,249,110  |  
|                                                               |  |                                                |            |   |                                              |   |            |      |  |   |            |   |  |   |            |  
|Total interest and fee income                                  |  |                                                | 4,849,163  |   |                                              |   | 4,751,280  |      |  |   | 9,837,355  |   |  |   | 9,885,885  |  
|Interest expense                                               |  |                                                | 2,046,379  |   |                                              |   | 1,945,927  |      |  |   | 4,111,892  |   |  |   | 3,886,996  |  
|                                                               |  |                                                |            |   |                                              |   |            |      |  |   |            |   |  |   |            |  
|Net interest and fee income before provision for credit losses |  | $                                              | 2,802,784  |   |                                              | $ | 2,805,353  |      |  | $ | 5,725,463  |   |  | $ | 5,998,889  |  
|                                                               |  |                                                |            |   |                                              |   |            |      |  |   |            |   |  |   |            |  
|Average interest rate earned (annualized)                      |  |                                                | 24.2       | % |                                              |   | 24.1       | %    |  |   | 24.5       | % |  |   | 24.9       | %
|                                                               |  |                                                |            |  
|Average interest rate paid (annualized)                        |  |                                                | 9.4        | % |                                              |   | 9.0        | %    |  |   | 9.4        | % |  |   | 8.9        | %
|                                                               |  |                                                |            |  
|Net interest rate spread (annualized)                          |  |                                                | 14.9       | % |                                              |   | 15.2       | %    |  |   | 15.2       | % |  |   | 16.0       | %
|Net interest margin (annualized)(3)                            |  |                                                | 14.0       | % |                                              |   | 14.3       | %    |  |   | 14.3       | % |  |   | 15.1       | %



|(1) | Averages are computed using month-end balances of finance receivables (net of unearned interest/fees, unearned
insurance commissions, and unearned discounts) during the period presented.
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(2) | Averages are computed using month-end balances of interest bearing debt during the period presented.
|--- | ----------------------------------------------------------------------------------------------------

|(3) | Net interest margin represents net interest income (before provision for credit losses) divided by the average net
finance receivables.
|--- | ---------------------------------------------------------------------------------------------------------------------------------------

Analysis of Allowance for Credit Losses

An allowance for credit losses is maintained to account for the probable losses inherent in the finance receivable portfolio. The
allowance is calculated based upon managements estimate of the expected collectability of loans outstanding based upon a variety of factors, including, without limitation, periodic analysis of the loan portfolio, historic loan loss experience,



21



---

##### Table of Contents

borrowers ability to repay and collateral considerations. We maintain an allowance for credit losses at a level that we consider adequate to provide
for probable losses based on historical ratios of charge-offs to average notes receivable.

The following table shows these
ratios of charge offs to average notes receivable for the categories of our finance receivables. The average net finance receivables are computed using monthly balances, net of unearned interest, unearned insurance commissions and unearned
discounts. Charge offs are shown at gross amounts as presented in the receivable roll-forward on page 19. Recoveries represent receipts from non-file insurance claims and cash recoveries.



|                                                            |  |                                                |            |   |                                              |   |            |      |  |   |            |   |  |   |            |  
|----------------------------------------------------------- |  | ---------------------------------------------- | ---------- | - | -------------------------------------------- | - | ---------- | ---- |  | - | ---------- | - |  | - | ---------- | -
|                                                            |  | As of, or for, the Three MonthsEnded March 25, |            |   | As of, or for, the Six MonthsEnded March 25, |  
|                                                            |  | 2008                                           |            |   | 2007                                         |   |            | 2008 |  |   | 2007       |  
|Direct Consumer Loans and Consumer Sales Finance Contracts: |  |                                                |            |   |                                              |   |            |      |  |   |            |   |  |   |            |  
|Average net finance receivables                             |  | $                                              | 53,968,894 |   |                                              | $ | 53,091,307 |      |  | $ | 54,141,898 |   |  | $ | 53,880,912 |  
|                                                            |  |                                                |            |  
|Charge offs - direct consumer                               |  | $                                              | 859,943    |   |                                              | $ | 910,202    |      |  | $ | 2,253,612  |   |  | $ | 1,926,506  |  
|Charge offs - consumer sales finance                        |  |                                                | 248,883    |   |                                              |   | 309,127    |      |  |   | 487,841    |   |  |   | 764,799    |  
|Charge offs - bankruptcy                                    |  |                                                | 119,370    |   |                                              |   | 149,467    |      |  |   | 298,710    |   |  |   | 317,032    |  
|                                                            |  |                                                |            |   |                                              |   |            |      |  |   |            |   |  |   |            |  
|Total gross charge offs                                     |  |                                                | 1,228,196  |   |                                              |   | 1,368,796  |      |  |   | 3,040,163  |   |  |   | 3,008,337  |  
|Recoveries (all direct consumer)                            |  |                                                | (527,500   | ) |                                              |   | (667,016   | )    |  |   | (1,173,724 | ) |  |   | (1,425,862 | )
|                                                            |  |                                                |            |   |                                              |   |            |      |  |   |            |   |  |   |            |  
|Charge offs, net                                            |  | $                                              | 700,696    |   |                                              | $ | 701,780    |      |  | $ | 1,866,439  |   |  | $ | 1,582,475  |  
|Percent of net charge offs to average receivables           |  |                                                | 1.3        | % |                                              |   | 1.3        | %    |  |   | 3.4        | % |  |   | 2.9        | %
|                                                            |  |                                                |            |  
|Motor Vehicle Installment Sales Contracts:                  |  |                                                |            |   |                                              |   |            |      |  |   |            |   |  |   |            |  
|Average outstanding finance receivables                     |  | $                                              | 26,166,894 |   |                                              | $ | 25,625,482 |      |  | $ | 26,050,298 |   |  | $ | 25,552,729 |  
|                                                            |  |                                                |            |  
|Charge offs, gross                                          |  | $                                              | 310,416    |   |                                              | $ | 344,529    |      |  | $ | 615,100    |   |  | $ | 631,539    |  
|Recoveries                                                  |  |                                                |           |   |                                              |   |           |      |  |   |           |   |  |   |           |  
|                                                            |  |                                                |            |   |                                              |   |            |      |  |   |            |   |  |   |            |  
|Charge offs, net                                            |  | $                                              | 310,416    |   |                                              | $ | 344,529    |      |  | $ | 615,100    |   |  | $ | 631,539    |  
|Percent of net charge offs to average receivables           |  |                                                | 1.2        | % |                                              |   | 1.3        | %    |  |   | 2.4        | % |  |   | 2.5        | %
|                                                            |  |                                                |            |  
|Total Receivables:                                          |  |                                                |            |   |                                              |   |            |      |  |   |            |   |  |   |            |  
|Average outstanding finance receivables                     |  | $                                              | 80,135,788 |   |                                              | $ | 78,716,789 |      |  | $ | 80,192,196 |   |  | $ | 79,433,641 |  
|                                                            |  |                                                |            |  
|Charge offs, gross                                          |  | $                                              | 1,538,612  |   |                                              | $ | 1,713,325  |      |  | $ | 3,655,263  |   |  | $ | 3,639,876  |  
|Recoveries (all direct consumer)                            |  |                                                | (527,500   | ) |                                              |   | (667,016   | )    |  |   | (1,173,724 | ) |  |   | (1,425,862 | )
|                                                            |  |                                                |            |   |                                              |   |            |      |  |   |            |   |  |   |            |  
|Charge offs, net                                            |  | $                                              | 1,011,112  |   |                                              | $ | 1,046,309  |      |  | $ | 2,481,539  |   |  | $ | 2,214,014  |  
|Percent of net charge offs to average receivables           |  |                                                | 1.3        | % |                                              |   | 1.3        | %    |  |   | 3.1        | % |  |   | 2.8        | %



22



---

##### Table of Contents

As of March 25, 2008 and September 25, 2007, our allowance for credit losses
was $3.7 million.

Delinquency Information

Our delinquency levels reflect, among other factors, changes in the mix of loans in the portfolio, the quality of receivables, the success
of collection efforts, bankruptcy trends and general economic conditions. The delinquency information in the following tables is computed on the basis of the amount past due in accordance with the original payment terms of the loan (contractual
method). We use the contractual method for all external reporting purposes. Management closely monitors delinquency using this method to measure the quality of our loan portfolio and the probability of credit loss. We also use other tools, such as a
recency report, which shows the date of the last full contractual payment received on the loan, to determine a particular customers willingness to pay. For example, if a delinquent customer has made a recent payment, we may decide to delay
more serious collection measures, such as repossession of collateral. However, such a payment will not change the non-accrual status of the account until all of the principal and interest amounts contractually due are brought current (we receive one
or more full contractual payments and the account is less than 60 days contractually delinquent), at which time we believe future payments are reasonably assured. Below is certain information relating to the delinquency status of each category of
our receivables for the quarters ended March 25, 2008 and 2007:



|                                                  |  |                      |            |   |                                |   |            |                                        |  |   |                    |   |  |       |           |   |  |   |            |  
|------------------------------------------------- |  | -------------------- | ---------- | - | ------------------------------ | - | ---------- | -------------------------------------- |  | - | ------------------ | - |  | ----- | --------- | - |  | - | ---------- | -
|                                                  |  | As of March 25, 2008 |           
|                                                  |  | DirectConsumerSales  |            |   | ConsumerSales FinanceContracts |   |            | Motor VehicleInstallmentSalesContracts |  |   | BankruptcyAccounts |   |  | Total |          
|Gross Loans and Contracts Receivables             |  | $                    | 37,901,014 |   |                                | $ | 16,813,744 |                                        |  | $ | 32,220,882         |   |  | $     | 6,511,657 |   |  | $ | 93,447,297 |  
|Loans and Contracts 60 - 90 days past due         |  | $                    | 631,544    |   |                                | $ | 258,309    |                                        |  | $ | 29,753             |   |  | $     | 170,864   |   |  | $ | 1,090,470  |  
|Percentage of Outstanding                         |  |                      | 1.7        | % |                                |   | 1.5        | %                                      |  |   | 0.1                | % |  |       | 2.6       | % |  |   | 1.2        | %
|Loans and Contracts greater than 90 days past due |  | $                    | 10,979,004 |   |                                | $ | 3,474,018  |                                        |  | $ | 111,930            |   |  | $     | 3,856,930 |   |  | $ | 18,421,882 |  
|Percentage of Outstanding                         |  |                      | 29.0       | % |                                |   | 20.7       | %                                      |  |   | 0.3                | % |  |       | 59.2      | % |  |   | 19.7       | %
|Loans and Contracts greater than 60 days past due |  | $                    | 11,610,548 |   |                                | $ | 3,732,327  |                                        |  | $ | 141,683            |   |  | $     | 4,027,794 |   |  | $ | 19,512,352 |  
|Percentage of Outstanding                         |  |                      | 30.6       | % |                                |   | 22.2       | %                                      |  |   | 0.4                | % |  |       | 61.9      | % |  |   | 20.9       | %



23



---

##### Table of Contents

|                                                  |  |                      |            |   |                                |   |            |                                        |  |   |                    |   |  |       |           |   |  |   |            |  
|------------------------------------------------- |  | -------------------- | ---------- | - | ------------------------------ | - | ---------- | -------------------------------------- |  | - | ------------------ | - |  | ----- | --------- | - |  | - | ---------- | -
|                                                  |  | As of March 25, 2007 |           
|                                                  |  | DirectConsumerSales  |            |   | ConsumerSales FinanceContracts |   |            | Motor VehicleInstallmentSalesContracts |  |   | BankruptcyAccounts |   |  | Total |          
|Gross Loans and Contracts Receivables             |  | $                    | 41,419,988 |   |                                | $ | 13,284,095 |                                        |  | $ | 31,842,737         |   |  | $     | 5,851,373 |   |  | $ | 92,398,193 |  
|Loans and Contracts 60 - 90 days past due         |  | $                    | 540,369    |   |                                | $ | 137,402    |                                        |  | $ | 11,843             |   |  | $     | 200,772   |   |  | $ | 890,386    |  
|Percentage of Outstanding                         |  |                      | 1.3        | % |                                |   | 1.0        | %                                      |  |   | 0.0                | % |  |       | 3.4       | % |  |   | 1.0        | %
|Loans and Contracts greater than 90 days past due |  | $                    | 10,568,511 |   |                                | $ | 2,797,097  |                                        |  | $ | 26,608             |   |  | $     | 3,264,466 |   |  | $ | 16,656,682 |  
|Percentage of Outstanding                         |  |                      | 25.5       | % |                                |   | 21.1       | %                                      |  |   | 0.1                | % |  |       | 55.8      | % |  |   | 18.0       | %
|Loans and Contracts greater than 60 days past due |  | $                    | 11,108,880 |   |                                | $ | 2,934,499  |                                        |  | $ | 38,451             |   |  | $     | 3,465,238 |   |  | $ | 17,547,068 |  
|Percentage of Outstanding                         |  |                      | 26.8       | % |                                |   | 22.1       | %                                      |  |   | 0.1                | % |  |       | 59.2      | % |  |   | 19.0       | %

Results of Operations

Comparison of Six Months Ended March 25, 2008 and 2007

Net Revenues

Net revenues were $13.9 million and $14.9 million for the six months ended March 25, 2008 and 2007, respectively. Increases in interest expense and the provision for credit losses as well as decreases in
commissions earned on the sale of insurance products and other ancillary products to customers resulted in the $1.0 million decrease in net revenues.

Net Interest and Fee Income Before Provision for Credit Losses

Net interest
and fee income before provision for credit losses was $5.7 million and $6.0 million for six months ended March 25, 2008 and 2007, respectively. During the first half of fiscal year 2008, gross interest and fee income decreased $0.1 million to
$9.8 million. Interest expense was $4.1 million and $3.9 million for the six-month periods ended March 25, 2008 and 2007, respectively. Interest associated with variable rate subordinated debentures outstanding, which increased $3.3 million
since March 25, 2007, resulted in the increase in interest expense.

Provision for Credit Losses

Provision for credit losses was $2.5 million and $2.1 million for six months ended March 25, 2008 and 2007,
respectively. Finance receivables charged off were approximately the same as the previous year, while recoveries of charge offs decreased by approximately $0.3 million. Additional provisions for credit losses of $0.1 million resulted from an
increase in the allowance for credit losses over the same period last year.



24



---

##### Table of Contents

Insurance and Other Products

Income from commissions on insurance products and motor club memberships decreased $0.4 million, to $5.8 million from $6.2 million for the
six months ended March 25, 2008 and 2007, respectively. Although the volume of finance receivables originated decreased slightly during this six-month period compared to last year, we originated a greater volume of sales finance contracts and a
lower volume of direct consumer loans. Sales finance contracts generally carry fewer insurance products than direct consumer loans resulting in lower commissions earned. Other income including delinquency fees were approximately $0.1 million lower
than the same period last year.

Gross Margin on Retail Sales

Gross margins on retail sales were $3.6 million and $3.5 million for six months ended March 25, 2008 and 2007, respectively. Margins
in the consumer segment in the first half of this year were up $0.3 million over the same period last year while margins in the automotive segment were down $0.2 million. Sales in the consumer segment were approximately $0.7 million higher than last
year while vehicle sales were down approximately $0.9 million.

Operating Expenses

Operating expenses were $13.9 million and $14.0 million for six months ended March 25, 2008 and 2007, respectively. Personnel
expense, facilities expense and general and administrative expenses were approximately the same as last year. Other operating expenses were down approximately 10% due to decreased level of spending for advertising, postage, and other solicitation
costs. Decreases in automotive, lodging and meals expense were a result of a decrease in the number of personnel required to travel.

Comparison of Three Months Ended March 25, 2008 and 2007

Net
Revenues

Net revenues were $6.9 million and $7.1 million for the three months ended March 25, 2008 and 2007,
respectively. An increase in interest expense along with a decrease in commissions earned on insurance products were the primary factors in the decrease in net revenues.

Net Interest and Fee Income Before Provision for Credit Losses

Net interest and fee income before provision for credit losses was $2.8 million for each of the three month periods ended March 25, 2008 and 2007. During the second quarter of fiscal year 2008, gross interest and fee income increased
$0.1 million over the second quarter of 2007. Interest expense was $2.0 million and $1.9 million for the three-month periods ended March 25, 2008 and 2007, respectively.

Provision for Credit Losses

Provision for credit losses
was $0.9 million for each of the three month periods ended March 25, 2008 and 2007. Finance receivables charged off and recoveries of charged off loans were approximately the same in each of these periods.

Insurance and Other Products

Income from commissions on insurance products and motor club memberships were $2.8 million and $3.0 million for the three months ended March 25, 2008 and 2007, respectively, a decrease of approximately $0.2
million. Although the volume of finance receivables originated decreased during this three-month period compared to last year, we originated a greater volume of sales finance contracts and a lower volume of direct consumer loans. Sales finance
contracts generally carry fewer insurance products than direct consumer loans resulting in lower commissions earned. Other income and delinquency fees were down slightly in the second quarter of this fiscal year compared to the same period last
year.



25



---

##### Table of Contents

Gross Margin on Retail Sales

Gross margins on retail sales were $1.6 million for each of the three month periods ended March 25, 2008 and 2007. Sales in the
automotive segment for the three-month period in 2008 were down from the same period last year by $0.3 million while margins decreased $0.1 million. Sales and margins in the consumer segment were up $0.1 million in the three months this year over
last year.

Operating Expenses

Operating expenses were $7.0 million and $7.1 million for three months ended March 25, 2008 and 2007, respectively. Personnel expenses were approximately $0.1 million higher during the
second quarter of fiscal year 2008 as compared to 2007. Other operating expenses were down approximately $0.2 million (12%) due to a decreased level of spending for advertising, postage, and other solicitation costs. Decreases in automotive,
lodging and meals expense were a result of a decrease in the number of personnel required to travel.

Liquidity and
Capital Resources

General

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

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



| |  |  | meet all of our debenture and demand note redemption obligations;
| | - |  | -----------------------------------------------------------------



| |  |  | pay interest on all of our debentures and demand notes;
| | - |  | -------------------------------------------------------



| |  |  | pay operating expenses; and
| | - |  | ---------------------------



| |  |  | fund consumer finance loan demand and used automobile vehicle inventory.
| | - |  | ------------------------------------------------------------------------

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

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



26



---

##### Table of Contents

Cash and cash equivalents increased to $17.7 million at March 25, 2008 from $16.7
million at March 25, 2007. Cash and cash equivalents decreased $0.1 million during the six months ended March 25, 2008. During the first half of fiscal 2008, the primary sources of cash were net cash provided by operating activities of
$4.0 million. Net cash used in financing activities was $1.1 million. Although we issued $7.6 million in debentures, we redeemed $6.8 million of debentures and had a net decrease in demand notes of $1.8 million. Cash and cash equivalents increased
$3.8 million during the six months ended March 25, 2007 primarily as a result of net cash being provided by operating activities. Net cash used in investing activities was $0.8 million as a result of loans originated exceeding loans repaid by
$0.6 million. Proceeds from the sale of debentures exceeded redemptions of debentures by $1.4 million, however demand note redemptions exceeded sales of demand notes by $1.6 million and other components of debt were reduced by $0.6 million resulting
in a $0.7 million increase in net cash used in financing activities.

During 2008, we expect to continue to use a
significant amount of net offering proceeds we raise from the sale of Debentures and Demand Notes to fund redemption obligations and pay interest on our securities. We will use any remaining net offering proceeds to fund our consumer loan demand,
purchase used automobiles, and to fund the other company activities.

Debentures and Demand Notes

During the six months ended March 25, 2008, we (1) received gross proceeds of $7.6 million from the sales of debentures, and
(2) paid $6.8 million for redemption of debentures and $1.8 million for net redemptions of demand notes for us and our subsidiary, The Money Tree of Georgia, Inc. As of March 25, 2008, we and this subsidiary had $82.6 million of debentures
and $4.2 million of demand notes outstanding compared to $81.9 million of debentures and $6.0 million of demand notes outstanding, as of September 25, 2007.

Recent Accounting Pronouncements

Recent accounting pronouncements have been
issued that may have a future effect on operations. Refer to Note 3 to the unaudited consolidated financial statements for a discussion of these pronouncements and their possible effects.

Critical Accounting Policies

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

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



27



---

##### Table of Contents

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

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

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

We have not substantially changed any aspect of our overall approach in the application of the foregoing policies.
There have been no material changes in assumptions or estimation techniques utilized as compared to previous years.

Impact of
Inflation and General Economic Conditions

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



|Item 3. | Quantitative and Qualitative Disclosures About Market Risk
|------- | ----------------------------------------------------------

Our profitability and financial performance are sensitive to changes in the U.S. Treasury yields and the spread between the effective rate of interest we receive on customer loans and the
interest rates we pay on our borrowings. Our finance income is generally not sensitive to fluctuations in market interest rates. The primary exposure that we face is changes in interest rates on our borrowings. A substantial and sustained increase
in market interest rates would likely adversely affect our growth and profitability since we will be required to increase the interest rates we pay to holders of debentures at the end of each interest adjustment period. We would also face pressure
to increase interest rates on our demand notes to stay competitive. The overall objective of our interest rate risk management strategy is to mitigate the effects of changing interest rates on our interest expense through the utilization of
short-term variable rate debt and medium and long term fixed rate debt. We have not entered into any derivative instruments to manage our interest rate risk. Please see Note 7 in the notes to our unaudited consolidated financial statements for
information on our debt, including maturities and interest rates.



|Item 4. | Controls and Procedures
|------- | -----------------------

Evaluation of Disclosure Controls and Procedures

The Company maintains disclosure controls and procedures
(as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934) that are designed to ensure that information required to be disclosed in the Companys reports under the Exchange Act is recorded, processed, summarized and
reported within the time periods specified in the rules and forms of the Securities and Exchange Commission, and that such information is accumulated and communicated to the Companys management, including its principal executive officer and
principal financial officer, as appropriate, to allow timely decisions regarding required disclosures.



28



---

##### Table of Contents

In connection with the presentation of this Form 10-Q, management, under the supervision
and with the participation of our principal executive officer and principal financial officer, evaluated the effectiveness of the design and operation of our disclosure controls and procedures as of the end of the fiscal quarter which is the subject
of this Quarterly Report. Based on this evaluation, our principal executive officer and principal financial officer have concluded that the design and operation of our disclosure controls and procedures are effective as of March 25, 2008.

Changes in Internal Control Over Financial Reporting

There have been no changes in our internal control over financial reporting during the quarter ended March 25, 2008, that have materially affected, or are reasonably likely to materially
affect, the Companys internal control over financial reporting.



29



---

##### Table of Contents

PART II  OTHER INFORMATION



|Item 1. | Legal Proceedings
|------- | -----------------

We were not involved in any material legal proceedings during the quarter ended March 25, 2008 requiring disclosure under item 103 of Regulation S-K.



|Item 1A. | Risk Factors
|-------- | ------------

In addition to the other information set forth in this report, you should carefully consider the factors discussed in Part I, Item 1A. Risk Factors in our Annual Report on Form 10-K for the year ended September 25, 2007,
which could materially affect our business, financial condition or future results. The risks described in our Annual Report on Form 10-K are not the only risks facing our Company. Additional risks and uncertainties not currently known to us or that
we currently deem to be immaterial also may materially adversely affect our business, financial condition and/or operating results.



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

None.



|Item 3. | Defaults Upon Senior Securities
|------- | -------------------------------

None.



|Item 4. | Submission of Matters to a Vote of Security Holders.
|------- | ----------------------------------------------------

None.



|Item 5. | Other Information
|------- | -----------------

None.



|Item 6. | Exhibits
|------- | --------



|     |  |                                                                                                                                
|---- |  | -------------------------------------------------------------------------------------------------------------------------------
|31.1 |  | Certification of Principal Executive Officers pursuant to Section 302 of The Sarbanes-Oxley Act of 2002                        
|     | 
|31.2 |  | Certification of Principal Financial Officer pursuant to Section 302 of The Sarbanes-Oxley Act of 2002                         
|     | 
|32.1 |  | Certifications of Chief Executive Officer and Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002



30



---

##### Table of Contents

SIGNATURES

Pursuant to the requirements of the Securities Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.



|            |  |  |  |                                                      
|----------- |  |  |  | -----------------------------------------------------
|            |  |  |  | THE MONEY TREE INC.                                  
|            |  | 
|May 9, 2008 |  |  |  | /s/ Bradley D. Bellville                             
|Date        |  |  |  | Bradley D. Bellville                                 
|            |  |  |  | President (Principal Executive Officer)              
|            |  | 
|May 9, 2008 |  |  |  | /s/ Steven P, Morrison                               
|Date        |  |  |  | Steven P. Morrison                                   
|            |  |  |  | Chief Financial Officer (Principal Financial Officer)



31