##### Table of Contents





UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549





FORM 10-Q/A

(Amendment
No. 1)







|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                









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##### Table of Contents

THE MONEY TREE INC.

FORM 10-Q/A

March 25, 2008

TABLE OF CONTENTS

Index to
Financial Statements



|         |  |                                                                                                              |  |     
|-------- |  | ------------------------------------------------------------------------------------------------------------ |  | ----
|Item No. |  |                                                                                                              |  | Page
|         |  | PART I  FINANCIAL INFORMATION                                                                               |  |     
|         |  |                                                                                                             
|1        |  | Financial Statements, as restated                                                                            |  | 3   
|         |  |                                                                                                             
|         |  | Consolidated Balance Sheets as of March 25, 2008 (Unaudited) and September 25, 2007                          |  | 3   
|         |  |                                                                                                             
|         |  | Consolidated Statements of Operations for the three and six months ended March 25, 2008 and 2007 (Unaudited) |  | 4   
|         |  |                                                                                                             
|         |  | Consolidated Statements of Cash Flows for the six months ended March 25, 2008 and 2007 (Unaudited)           |  | 5   
|         |  |                                                                                                             
|         |  | Notes to Consolidated Financial Statements (Unaudited)                                                       |  | 7   
|         |  |                                                                                                             
|2        |  | Managements Discussion and Analysis of Financial Condition and Results of Operations, as restated           |  | 18  
|         |  |                                                                                                             
|3        |  | Quantitative and Qualitative Disclosures About Market Risk                                                   |  | 30  
|         |  |                                                                                                             
|4        |  | Controls and Procedures, as restated                                                                         |  | 31  
|         |  |                                                                                                             
|         |  | PART II  OTHER INFORMATION                                                                                  |  |     
|         |  |                                                                                                             
|1        |  | Legal Proceedings                                                                                            |  | 33  
|         |  |                                                                                                             
|1A       |  | Risk Factors                                                                                                 |  | 33  
|         |  |                                                                                                             
|2        |  | Unregistered Sales of Equity Securities and Use of Proceeds                                                  |  | 33  
|         |  |                                                                                                             
|3        |  | Defaults Upon Senior Securities                                                                              |  | 33  
|         |  |                                                                                                             
|4        |  | Submission of Matters to a Vote of Security Holders                                                          |  | 33  
|         |  |                                                                                                             
|5        |  | Other Information                                                                                            |  | 33  
|         |  |                                                                                                             
|6        |  | Exhibits                                                                                                     |  | 33  



1



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##### Table of Contents

PART I

EXPLANATORY NOTE

This Amendment No. 1 to this Quarterly
Report on Form 10-Q/A (Form 10-Q/A) is being filed in order to correct the previously issued historical consolidated financial statements of The Money Tree Inc. (the Company) as of March 25, 2008, and for the three and
six months ended March 25, 2008, initially filed with the Securities and Exchange Commission (the SEC) on May 9, 2008, for errors in previously reported amounts related to net finance receivables, deferred income taxes,
accumulated deficit, provision for credit losses, income tax benefit and net loss. The table below shows the amount originally reported, the amount of the adjustment, and the restated amount.



|                                          |  |             |            |   |            |   |            |             |  |   |            |  
|----------------------------------------- |  | ----------- | ---------- | - | ---------- | - | ---------- | ----------- |  | - | ---------- | -
|                                          |  | As reported |            |   | Adjustment |   |            | As restated | 
|As of March 25, 2008                      |  |             |            |   |            |   |            |             |  |   |            |  
|Finance receivables, net                  |  | $           | 76,060,824 |   |            | $ | (2,800,000 | )           |  | $ | 73,260,824 |  
|Accumulated deficit                       |  |             | (2,610,888 | ) |            |   | (2,800,000 | )           |  |   | (5,410,888 | )
|For the three months ended March 25, 2008 |  |             |            |   |            |   |            |             |  |   |            |  
|Provision for credit losses               |  |             | 927,625    |   |            |   | 2,300,000  |             |  |   | 3,227,625  |  
|Income tax expense (benefit)              |  |             | (62,336    | ) |            |   | (151,000   | )           |  |   | (213,336   | )
|Net income (loss)                         |  |             | (74,054    | ) |            |   | (2,149,000 | )           |  |   | (2,223,054 | )
|For the six months ended March 25, 2008   |  |             |            |   |            |   |            |             |  |   |            |  
|Provision for credit losses               |  |             | 2,470,298  |   |            |   | 2,800,000  |             |  |   | 5,270,298  |  
|Net income (loss)                         |  |             | (3,541     | ) |            |   | (2,800,000 | )           |  |   | (2,803,541 | )

Additionally, as a result of these matters, we are amending our evaluation of
disclosure controls and procedures in Item 4.

For the convenience of the reader, this Form 10-Q/A includes all of the
information contained in the original report on Form 10-Q, and no attempt has been made in this Form 10-Q/A to modify or update the disclosures presented in the original report on Form 10-Q, except as required to reflect the effects of the
restatement. The Form 10-Q/A does not reflect events occurring after the filing of the Form 10-Q or modify or update those disclosures, including the exhibits to the Form 10-Q affected by subsequent events. Information not affected by the
restatement is unchanged and reflects the disclosures made at the time of the original filing of the Form 10-Q on May 9, 2008. Accordingly, this Form 10-Q/A should be read in conjunction with our filings made with the Securities and Exchange
Commission subsequent to the filing of the original Form 10-Q, including any amendments to those filings. The following items have been amended as a result of the restatement:



| |  |  | Part IItem 1Financial Statements
| | - |  | ----------------------------------



| |  |  | Part IItem 2Managements Discussion and Analysis of Financial Condition and Results of Operations
| | - |  | ---------------------------------------------------------------------------------------------------



| |  |  | Part IIItem 4Controls and Procedures
| | - |  | --------------------------------------

Additional information about the decision to restate these financial statements can be found in our Current Report on Form 8-K, filed with the SEC on November 24, 2008 and in Note 1 to the Consolidated Financial
Statements contained herein.



2



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##### Table of Contents

Item 1  Financial Statements, as restated

The Money Tree Inc. and Subsidiaries

Consolidated Balance Sheets



|                                                                                                    |  |                |             |   |                    |   |             |  
|--------------------------------------------------------------------------------------------------- |  | -------------- | ----------- | - | ------------------ | - | ----------- | -
|                                                                                                    |  | (Restated)     |             |   |                    |  
|                                                                                                    |  | March 25, 2008 |             |   | September 25, 2007 |  
|                                                                                                    |  | (Unaudited)    |             |   |                    |  
|Assets                                                                                              |  |                |             |   |                    |   |             |  
|Cash and cash equivalents                                                                           |  | $              | 17,734,805  |   |                    | $ | 17,854,277  |  
|Finance receivables, net                                                                            |  |                | 73,260,824  |   |                    |   | 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                                                                                        |  | $              | 102,678,730 |   |                    | $ | 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                                                                                 |  |                | (5,410,888  | ) |                    |   | (2,607,347  | )
|                                                                                                    |  |                |             |   |                    |   |             |  
|Total shareholders deficit                                                                         |  |                | (3,733,241  | ) |                    |   | (929,700    | )
|                                                                                                    |  |                |             |   |                    |   |             |  
|Total liabilities and shareholders deficit                                                         |  | $              | 102,678,730 |   |                    | $ | 105,783,501 |  
|                                                                                                    |  |                |             |   |                    |   |             |  

See accompanying notes to the consolidated financial statements.



3



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The Money Tree Inc. and Subsidiaries

Consolidated Statements of Operations



|                                                                              |  |                              |            |   |                            |   |            |                |  |   |             |   |  |   |             |  
|----------------------------------------------------------------------------- |  | ---------------------------- | ---------- | - | -------------------------- | - | ---------- | -------------- |  | - | ----------- | - |  | - | ----------- | -
|                                                                              |  | Three months ended March 25, |            |   | Six months ended March 25, |  
|                                                                              |  | (Restated)2008               |            |   | 2007                       |   |            | (Restated)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                                                   |  |                              | (3,227,625 | ) |                            |   | (955,897   | )              |  |   | (5,270,298  | ) |  |   | (2,082,599  | )
|                                                                              |  |                              |            |   |                            |   |            |                |  |   |             |   |  |   |             |  
|Net interest and fee income after provision for credit losses                 |  |                              | (424,841   | ) |                            |   | 1,849,456  |                |  |   | 455,165     |   |  |   | 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                                               |  |                              | 3,004,055  |   |                            |   | 5,524,370  |                |  |   | 7,523,069   |   |  |   | 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                                                                  |  |                              | 4,616,174  |   |                            |   | 7,126,065  |                |  |   | 11,091,811  |   |  |   | 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)                                                   |  |                              | (2,432,935 | ) |                            |   | 25,231     |                |  |   | (2,788,542  | ) |  |   | 950,073     |  
|Loss on sale of property and equipment                                        |  |                              | (3,455     | ) |                            |   | (12,188    | )              |  |   | (18,092     | ) |  |   | (21,826     | )
|                                                                              |  |                              |            |   |                            |   |            |                |  |   |             |   |  |   |             |  
|Income (loss) before income tax expense                                       |  |                              | (2,436,390 | ) |                            |   | 13,043     |                |  |   | (2,806,634  | ) |  |   | 928,247     |  
|Income tax (expense) benefit                                                  |  |                              | 213,336    |   |                            |   | 264,062    |                |  |   | 3,093       |   |  |   | (266,471    | )
|                                                                              |  |                              |            |   |                            |   |            |                |  |   |             |   |  |   |             |  
|Net income (loss)                                                             |  | $                            | (2,223,054 | ) |                            | $ | 277,105    |                |  | $ | (2,803,541  | ) |  | $ | 661,776     |  
|                                                                              |  |                              |            |   |                            |   |            |                |  |   |             |   |  |   |             |  
|Net income (loss) per common share, basic and diluted                         |  | $                            | (75.24     | ) |                            | $ | 9.38       |                |  | $ | (94.89      | ) |  | $ | 22.40       |  
|                                                                              |  |                              |            |   |                            |   |            |                |  |   |             |   |  |   |             |  

See accompanying notes to the consolidated financial statements.



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The Money Tree Inc. and Subsidiaries

Consolidated Statements of Cash Flows



|                                                                                         |  |                |             |   |      |   |             |  
|---------------------------------------------------------------------------------------- |  | -------------- | ----------- | - | ---- | - | ----------- | -
|Six months ended March 25,                                                               |  | (Restated)2008 |             |   | 2007 |  
|                                                                                         |  | (Unaudited)    |            
|Cash flows from operating activities                                                     |  |                |             |   |      |   |             |  
|Net income (loss)                                                                        |  | $              | (2,803,541  | ) |      | $ | 661,776     |  
|Adjustments to reconcile net income (loss) to net cash provided by operating activities: |  |                |             |   |      |   |             |  
|Provision for credit losses                                                              |  |                | 5,270,298   |   |      |   | 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.



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##### 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.



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##### Table of Contents

The Money Tree Inc. and Subsidiaries

Notes to Consolidated Financial Statements (Unaudited)

NOTE 1  BASIS OF PRESENTATION, AS RESTATED

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.

Restated Results of Operations and Financial Condition

The Company is restating its previously reported financial information for the three and six months ended March, 25, 2008 to correct errors in the consolidated financial statements related to the determination of net
finance receivables, deferred income taxes, accumulated deficit, provision for credit losses, income tax benefit, and net loss. In addition, the following Notes to the Consolidated Financial Statements have been restated: 4, 8, and 12. These
restated consolidated financial statements supercede the Companys previously issued consolidated financial statements reported in the Companys initial Form 10-Q filed with the SEC on May 9, 2008. These changes are summarized below:



|                                          |  |             |            |   |            |   |            |             |  |   |            |  
|----------------------------------------- |  | ----------- | ---------- | - | ---------- | - | ---------- | ----------- |  | - | ---------- | -
|                                          |  | As reported |            |   | Adjustment |   |            | As restated | 
|As of March 25, 2008                      |  |             |            |   |            |   |            |             |  |   |            |  
|Finance receivables, net                  |  | $           | 76,060,824 |   |            | $ | (2,800,000 | )           |  | $ | 73,260,824 |  
|Accumulated deficit                       |  |             | (2,610,888 | ) |            |   | (2,800,000 | )           |  |   | (5,410,888 | )
|For the three months ended March 25, 2008 |  |             |            |   |            |   |            |             |  |   |            |  
|Provision for credit losses               |  |             | 927,625    |   |            |   | 2,300,000  |             |  |   | 3,227,625  |  
|Income tax expense (benefit)              |  |             | (62,336    | ) |            |   | (151,000   | )           |  |   | (213,336   | )
|Net income (loss)                         |  |             | (74,054    | ) |            |   | (2,149,000 | )           |  |   | (2,223,054 | )
|For the six months ended March 25, 2008   |  |             |            |   |            |   |            |             |  |   |            |  
|Provision for credit losses               |  |             | 2,470,298  |   |            |   | 2,800,000  |             |  |   | 5,270,298  |  
|Net income (loss)                         |  |             | (3,541     | ) |            |   | (2,800,000 | )           |  |   | (2,803,541 | )

In the Companys review of its loan charge-off process in conjunction with the initial
Sarbanes-Oxley testing of controls and the completion of its implementation of a new accounting system for loans, the Companys management performed an extensive analysis to determine the amount of past due loans over 180 days delinquent which
had not been charged-off. The purpose of the analysis was to determine branch level controls over the determination of collectibility of past due loans. Management determined that there was not sufficient evidence to support the deferral of probable
losses inherent in these loans, especially given the change in the economy and current liquidity crisis. Accordingly, management expanded its analysis and scrutiny of delinquent loans resulting in an abnormal amount of net charge-offs in the fourth
quarter of 2008 of approximately $4.8 million. However, management has concluded that the loans charged-off in the fourth quarter of 2008 would have been charged-off in one of the first three quarters of fiscal 2008 if management had applied the
same detailed analysis at each of these quarter ends that was applied in the fourth quarter. The effect of this determination on the three and six months ended March 25, 2008 is to increase the provision for credit losses by $2.3 million and
$2.8 million, respectively.



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The Money Tree Inc. and Subsidiaries

Notes to Consolidated Financial Statements (Unaudited)



NOTE 1  BASIS OF PRESENTATION, AS RESTATED (CONTINUED)

As a result of the additional losses resulting from the increase in the provision for credit losses, management has re-evaluated the realizability of its
deferred tax assets and determined that the related valuation allowance should be increased, resulting in no change in the net deferred income tax asset as of March 25, 2008.

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.

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.



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Notes to Consolidated Financial Statements (Unaudited)



NOTE 3  RECENT ACCOUNTING PRONOUNCEMENTS (Continued)

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.

NOTE 4  FINANCE RECEIVABLES AND ALLOWANCE FOR CREDIT LOSSES, AS RESTATED

Finance receivables consisted of the following:



|                                                        |  |                |             |   |                    |   |             |  
|------------------------------------------------------- |  | -------------- | ----------- | - | ------------------ | - | ----------- | -
|                                                        |  | (Restated)     |             |   |                    |  
|                                                        |  | 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                             |  |                | (6,522,660  | ) |                    |   | (3,710,679  | )
|                                                        |  |                |             |   |                    |   |             |  
|Finance receivables, net                                |  | $              | 73,260,824  |   |                    | $ | 75,837,823  |  
|                                                        |  |                |             |   |                    |   |             |  



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Notes to Consolidated Financial Statements (Unaudited)



NOTE 4  FINANCE RECEIVABLES AND ALLOWANCE FOR CREDIT LOSSES, AS RESTATED (CONTINUED)

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



|                             |  |                                                           |            |   |                                               |   |            |                                                 |  |   |            |  
|---------------------------- |  | --------------------------------------------------------- | ---------- | - | --------------------------------------------- | - | ---------- | ----------------------------------------------- |  | - | ---------- | -
|                             |  | (Restated)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 |  |                                                           | 5,270,298  |   |                                               |   | 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               |  | $                                                         | 6,522,660  |   |                                               | $ | 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
|                                 |  |                |           |                    |   |          

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
|                                                     |  |                |           |                    |   |          



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Notes to Consolidated Financial Statements (Unaudited)



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
|                                                                                                                                                                                                                                                                                                                                                                                   |  |                |            |                    |   |           
|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, AS RESTATED

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. For the three and six months ended March 25, 2008, we increased the valuation allowance for our deferred income tax asset by $0.6 million and $0.9 million, respectively,
as restated, resulting in a difference between income taxes calculated using expected annual federal and state expected rates and actual income tax expense.



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Notes to Consolidated Financial Statements (Unaudited)



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.

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.



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Notes to Consolidated Financial Statements (Unaudited)



NOTE 12  SEGMENT FINANCIAL INFORMATION, AS RESTATED

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.



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Notes to Consolidated Financial Statements (Unaudited)



NOTE 12  SEGMENT FINANCIAL INFORMATION, AS RESTATED (CONTINUED)



|                                               |  |                                            |         |   |                                    |   |        |                          |  |   |         |  
|---------------------------------------------- |  | ------------------------------------------ | ------- | - | ---------------------------------- | - | ------ | ------------------------ |  | - | ------- | -
|Six months ended March 25, 2008                |  | (Restated)Consumer Finance& Sales Division |         |   | Automotive Finance& Sales Division |   |        | (Restated)Total Segments | 
|In Thousands                                   |  | (Unaudited)                                |        
|Net revenues before retail sales               |  | $                                          | 7,202   |   |                                    | $ | 321    |                          |  | $ | 7,523   |  
|                                               |  |                                            |         |   |                                    |   |        |                          |  |   |         |  
|Gross margin on retail sales                   |  |                                            | 1,860   |   |                                    |   | 1,709  |                          |  |   | 3,569   |  
|                                               |  |                                            |         |   |                                    |   |        |                          |  |   |         |  
|Segment operating expenses                     |  |                                            | (11,945 | ) |                                    |   | (1,936 | )                        |  |   | (13,881 | )
|                                               |  |                                            |         |   |                                    |   |        |                          |  |   |         |  
|Segment operating profit (loss)                |  | $                                          | (2,883  | ) |                                    | $ | 94     |                          |  | $ | (2,789  | )
|                                               |  |                                            |         |   |                                    |   |        |                          |  |   |         |  
|                                               |  |                                            |        
|(Restated) March 25, 2008                      |  | (Restated)                                 |         |   |                                    |   |        | (Restated)               | 
|In Thousands                                   |  |                                            |         |   |                                    |   |        |                          | 
|Assets                                         |  |                                            |         |   |                                    |   |        |                          |  |   |         |  
|Total segment assets                           |  | $                                          | 58,711  |   |                                    | $ | 27,919 |                          |  | $ | 86,630  |  
|                                               |  |                                            |        
|RECONCILIATION:                                |  |                                            |         |   |                                    |   |        | (Restated)March 25, 2008 | 
|                                               |  |                                            |         |   |                                    |   |        | (Thousands)              | 
|Assets:                                        |  |                                            |         |   |                                    |   |        |                          |  |   |         |  
|Total assets for reportable segments           |  |                                            |         |   |                                    |   |        |                          |  | $ | 86,630  |  
|                                               |  |                                            |        
|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                            |  |                                            |         |   |                                    |   |        |                          |  | $ | 102,679 |  
|                                               |  |                                            |         |   |                                    |   |        |                          |  |   |         |  



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Notes to Consolidated Financial Statements (Unaudited)



NOTE 12  SEGMENT FINANCIAL INFORMATION, AS RESTATED (CONTINUED)



|                                               |  |                                  |         |   |                                    |   |        |                |  |   |         |  
|---------------------------------------------- |  | -------------------------------- | ------- | - | ---------------------------------- | - | ------ | -------------- |  | - | ------- | -
|Six months ended March 25, 2007                |  | Consumer Finance& Sales Division |         |   | Automotive Finance& Sales Division |   |        | TotalSegments  | 
|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 |  
|                                               |  |                                  |         |   |                                    |   |        |                |  |   |         |  



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The Money Tree Inc. and Subsidiaries

Notes to Consolidated Financial Statements (Unaudited)



NOTE 12  SEGMENT FINANCIAL INFORMATION, AS RESTATED (CONTINUED)



|                                               |  |                                            |        |   |                                    |   |        |                          |  |   |         |  
|---------------------------------------------- |  | ------------------------------------------ | ------ | - | ---------------------------------- | - | ------ | ------------------------ |  | - | ------- | -
|Three months ended March 25, 2008              |  | (Restated)Consumer Finance& Sales Division |        |   | Automotive Finance& Sales Division |   |        | (Restated)Total Segments | 
|In Thousands                                   |  | (Unaudited)                                |       
|Net revenues before retail sales               |  | $                                          | 2,876  |   |                                    | $ | 128    |                          |  | $ | 3,004   |  
|                                               |  |                                            |        |   |                                    |   |        |                          |  |   |         |  
|Gross margin on retail sales                   |  |                                            | 673    |   |                                    |   | 939    |                          |  |   | 1,612   |  
|                                               |  |                                            |        |   |                                    |   |        |                          |  |   |         |  
|Segment operating expenses                     |  |                                            | (6,041 | ) |                                    |   | (1,008 | )                        |  |   | (7,049  | )
|                                               |  |                                            |        |   |                                    |   |        |                          |  |   |         |  
|Segment operating profit (loss)                |  | $                                          | (2,492 | ) |                                    | $ | 59     |                          |  | $ | (2,433  | )
|                                               |  |                                            |        |   |                                    |   |        |                          |  |   |         |  
|                                               |  |                                            |       
|(Restated) March 25, 2008                      |  | (Restated)                                 |        |   |                                    |   |        | (Restated)               | 
|In Thousands                                   |  |                                            |        |   |                                    |   |        |                          | 
|Assets                                         |  |                                            |        |   |                                    |   |        |                          |  |   |         |  
|Total segment assets                           |  | $                                          | 58,711 |   |                                    | $ | 27,919 |                          |  | $ | 86,630  |  
|                                               |  |                                            |       
|RECONCILIATION:                                |  |                                            |        |   |                                    |   |        | (Restated)March 25, 2008 | 
|                                               |  |                                            |        |   |                                    |   |        | (Thousands)              | 
|Assets:                                        |  |                                            |        |   |                                    |   |        |                          |  |   |         |  
|Total assets for reportable segments           |  |                                            |        |   |                                    |   |        |                          |  | $ | 86,630  |  
|                                               |  |                                            |       
|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                            |  |                                            |        |   |                                    |   |        |                          |  | $ | 102,679 |  
|                                               |  |                                            |        |   |                                    |   |        |                          |  |   |         |  



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The Money Tree Inc. and Subsidiaries

Notes to Consolidated Financial Statements (Unaudited)



NOTE 12  SEGMENT FINANCIAL INFORMATION, AS RESTATED (CONTINUED)



|                                               |  |                                  |        |   |                                    |   |        |                |  |   |         |  
|---------------------------------------------- |  | -------------------------------- | ------ | - | ---------------------------------- | - | ------ | -------------- |  | - | ------- | -
|Three months ended March 25, 2007              |  | Consumer Finance& Sales Division |        |   | Automotive Finance& Sales Division |   |        | TotalSegments  | 
|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 |  
|                                               |  |                                  |        |   |                                    |   |        |                |  |   |         |  



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Item 2. Managements Discussion and Analysis of Financial Condition
and Results of Operations, as restated

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:



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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.
|- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------



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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.



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|                                           |  |                                     |             |   |                                   |   |             |      |  |   |             |   |  |   |             |  
|------------------------------------------ |  | ----------------------------------- | ----------- | - | --------------------------------- | - | ----------- | ---- |  | - | ----------- | - |  | - | ----------- | -
|                                           |  | For the Three MonthsEnded March 25, |             |   | For the Six MonthsEnded March 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  |  
|                                           |  |                                     |             |   |                                   |   |             |      |  |   |             |   |  |   |             |  



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



22



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##### Table of Contents

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,
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.



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##### Table of Contents

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 21. 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        | %

As of March 25, 2008 and September 25, 2007, our allowance for credit
losses was $6.5 million, as restated, and $3.7 million, respectively. This increase was attributable to additional provisions for credit losses during the three and six months ended March 25, 2008 in order maintain the allowance for credit
losses at a level adequate to provide for probable losses inherent in our finance receivable portfolio.



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##### Table of Contents

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       | %



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##### 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, as restated

Net revenues were $11.1 million, as restated, 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 $3.8 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, as restated

Provision for credit losses was $5.3 million, as restated, 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
$2.9 million, as restated, were to increase the allowance for credit losses to a level sufficient to account for probable losses inherent in the finance receivable portfolio.



26



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##### 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.

Income tax expense

Income tax expense was $0.0 million and $0.3 million for
the six months ended March 25, 2008 and 2007, respectively. For the six months ended March 25, 2008, we increased the valuation allowance for our deferred income tax asset by $0.9 million, as restated, resulting in a difference between
income taxes calculated using expected annual federal and state expected rates and actual income tax expense.

Comparison of Three Months Ended March 25, 2008 and 2007

Net Revenues, as restated

Net revenues were $4.6 million, as restated, and $7.1 million for the three months ended March 25, 2008 and
2007, respectively. An increase in interest expense and the provision for credit losses, along with a decrease in commissions earned on insurance products was 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, as restated

Provision for credit losses was $3.2 million, as restated, and $0.9 million for the three months ended March 25, 2008 and 2007,
respectively. Finance receivables charged off and recoveries of charged off loans were approximately the same in each of these periods. Additional provisions for credit losses of $2.3 million, as restated, were to increase the allowance for credit
losses to a level sufficient to account for probable losses inherent in the finance receivable portfolio.



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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 decreased 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.

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 decrease $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 as personnel required to travel.

Income tax expense (benefit), as restated

Income tax
expense (benefit) was $(0.2) million, as restated, and $0.3 million for the three months ended March 25, 2008 and 2007, respectively. For the three months ended March 25, 2008, we increased the valuation allowance for our deferred income
tax asset by $0.6 million, as restated, resulting in a difference between income taxes calculated using expected annual federal and state expected rates and actual income tax expense.

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;
| | - |  | -------------------------------------------------------



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



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

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

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

Cash and cash equivalents increased 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 loan 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.



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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.

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



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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, as restated

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.

In connection with the presentation of the 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 ended March 25, 2008. In this original evaluation, our principal executive officer and principal financial officer
concluded that the design and operation of our disclosure controls and procedures were effective as of March 25, 2008.

In connection with the amendment to our financial statements described in the introductory Explanatory Note and items 1 and 2 of this Amendment No. 1, we re-evaluated the effectiveness of the design and operation of our disclosure
controls and procedures as of the end of the fiscal quarter ended March 25, 2008. In connection therewith, we identified a material weakness in internal control over financial reporting. We have determined the Company did not maintain effective
controls over the process utilized to evaluate the collectibility of delinquent finance receivables. We believe this control deficiency resulted in a misstatement of net finance receivables, deferred income taxes, accumulated deficit, provision for
credit losses, income tax benefit and net loss. Solely as a result of this material weakness, we concluded that our disclosure controls were not effective as of March 25, 2008.

In light of the material weakness described above we performed additional analyses and other procedures related to delinquent finance
receivables to ensure that our consolidated financial statements included in this Form 10-Q/A were prepared in accordance with generally accepted accounting principals (GAAP) in all material respects.

To remedy the material weaknesses identified above, the Company has implemented the following measures, including, among other things:



| |  |  | Enhanced accountability to personnel responsible for determining loan collectibility, and
| | - |  | -----------------------------------------------------------------------------------------



| |  |  | The development of a plan to utilize a more objective process or trigger for loan charge-offs that will generally result in charging off all loans greater than
180 days past due, with the exceptions documented as to the rationale for deferring charge-off.
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Management believes that the implementation of these changes will allow them to improve internal controls over financial reporting and enable them to evaluate such controls. Management will continue to assess the actions necessary to
maintain effective controls over the process utilized to evaluate the collectibility of delinquent finance receivables.



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Changes in Internal Control Over Financial Reporting

Other than as set forth in this Amendment No. 1, 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.



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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 Officer 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



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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.                                  
|                  |  | 
|December 17, 2008 |  |  |  | /s/ Bradley D. Bellville                             
|Date              |  |  |  | Bradley D. Bellville                                 
|                  |  |  |  | President (Principal Executive Officer)              
|                  |  | 
|December 17, 2008 |  |  |  | /s/ Steven P. Morrison                               
|Date              |  |  |  | Steven P. Morrison                                   
|                  |  |  |  | Chief Financial Officer (Principal Financial Officer)



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