----

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**UNITED      STATES **

**SECURITIES      AND EXCHANGE COMMISSION**

**Washington,      D.C. 20549**

**FORM      10-Q**

**R**
**QUARTERLY      REPORT PURSUANT TO SECTION 13 OR 15**
**(d**
**)      OF THE SECURITIES EXCHANGE ACT OF 1934 **

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

**THE      MONEY TREE INC.**

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

| Large                  accelerated filer £ | Accelerated                  filer £ | Non-accelerated                  filer R |
|-------------------------------------------------|-------------------------------------------|------------------------------------------|

| Class                              | Outstanding                at March 25, 2006 |
|------------------------------------|----------------------------------------------|
| Class                A, Voting     | 2,686                Shares                  |
| Class                B, Non-Voting | 26,860                Shares                 |

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**THE      MONEY TREE INC.**

**FORM      10-Q**

**March      25, 2006**

**TABLE      OF CONTENTS**

**Index      to Financial Statements**

| **Item****No.**  |                                                                                                                                             | **Page**  |
|-----------------------|--------------------------------------------------------------------------------------------------------------------------------------------------|----------------|
|                  | PART                I -                FINANCIAL INFORMATION                                                                                |           |
| 1                | Financial                Statements                                                                                                         | 2         |
|                  | Consolidated                Balance Sheets as of March 25, 2006                (Unaudited) and September 25, 2005                           | 2         |
|                  | Consolidated                Statements of Operations for the three and six                months ended March 25, 2006 and 2005 (Unaudited)  | 3         |
|                  | Consolidated                Statements of Cash Flows for the six months                ended March 25, 2006 and 2005 (Unaudited)  | 4         |
|                  | Notes                to Consolidated Financial Statements                (Unaudited)                                                        | 6         |
| 2                | Management’s                Discussion and Analysis of Financial Condition                and Results of Operations                   | 20        |
| 3                | Quantitative                and Qualitative Disclosures About Market                Risk                                                    | 34        |
| 4                | Controls                and Procedures                                                                                                      | 34        |
|                  | PART                II - OTHER INFORMATION                                                                                                  |           |
| 1                | Legal                Proceedings                                                                                                            | 35        |
| 1A                    | Risk                Factors                                                                                                                 |  35  |
| 2                | Unregistered                Sales of Equity Securities and Use of                Proceeds                                                   | 35        |
| 3                | Defaults                Upon Senior Securities                                                                                              | 35        |
| 4                | Submission                of Matters to a Vote of Security                Holders                                                           | 35        |
| 5                | Other                Information                                                                                                            | 35        |
| 6                | Exhibits                                                                                                                                    | 35        |

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**The            Money Tree Inc. and Subsidiaries**

**Consolidated      Balance Sheets**

|                                                                                                                                |   | *March                25,**2006* |        | *September                25,**2005* |   |
|-------------------------------------------------------------------------------------------------------------------------------------|--------|----------------------------------|-------------|--------------------------------------|--------|
|                                                                                                                                |   | (Unaudited)                      |        |                                 |   |
| Assets                                                                                                                              |   |                             |        |                                 |   |   |   |
|                                                                                                                                |   |                             |        |                                 |   |   |   |
| Cash                and cash equivalents                                                                                            |   | $                                | 11,168,561  |                                 | $      | 9,618,557 |   |
| Finance                receivables, net                                                                                             |   |                             | 79,920,597  |                                 |   | 77,140,790 |   |
| Other                receivables                                                                                                    |   |                             | 900,545     |                                 |   | 1,099,352 |   |
| Employee                receivables                                                                                                 |   |                             | 2,998       |                                 |   | 5,465 |   |
| Inventory                                                                                                                           |   |                             | 2,750,367   |                                 |   | 2,401,631 |   |
| Property                and equipment, net                                                                                          |   |                             | 4,888,028   |                                 |   | 4,849,775 |   |
| Deferred                income taxes                                                                                                |   |                             | 1,983,000   |                                 |   | 1,985,000 |   |
| Intangible                assets                                                                                                    |   |                             | 1,406,130   |                                 |   | 1,410,019 |   |
| Other                assets                                                                                                         |   |                             | 1,185,927   |                                 |   | 1,236,318 |   |
| Total                assets                                                                                                         |   | $                                | 104,206,153 |                                 | $      | 99,746,907 |   |
|                                                                                                                                |   |                             |        |                                 |   |   |   |
|                                                                                                                                |   |                             |        |                                 |   |   |   |
| Liabilities                and Shareholders' Equity                                                                                 |   |                             |        |                                 |   |   |   |
|                                                                                                                                |   |                             |        |                                 |   |   |   |
| Liabilities                                                                                                                         |   |                             |        |                                 |   |   |   |
| Accounts                payable and other accrued liabilities                                                                       |   | $                                | 4,030,292   |                                 | $      | 4,409,495 |   |
| Accrued                interest payable                                                                                             |   |                             | 10,147,825  |                                 |   | 9,476,662 |   |
| Senior                debt                                                                                                          |   |                             | 1,531,752   |                                 |   | 1,185,546 |   |
| Senior                subordinated debt                                                                                             |   |                             | 900,000     |                                 |   | 1,000,000 |   |
| Variable                rate subordinated debentures                                                                                |   |                             | 74,812,292  |                                 |   | 68,904,753 |   |
| Demand                notes                                                                                                         |   |                             | 10,596,785  |                                 |   | 12,867,207 |   |
| Junior                subordinated debt, related parties                                                                            |   |                             | 800,000     |                                 |   | 800,000 |   |
| Total                liabilities                                                                                                    |   |                             | 102,818,946 |                                 |   | 98,643,663 |   |
|                                                                                                                                |   |                             |        |                                 |   |   |   |
|                                                                                                                                |   |                             |        |                                 |   |   |   |
| Shareholders'                equity                                                                                                 |   |                             |        |                                 |   |   |   |
| 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 voting, no par value; 1,500,000 shares authorized,                  26,860 shares issued and outstanding   |   |                             | -           |                                 |   | - |   |
| Accumulated                deficit                                                                                                  |   |                             | (290,440    | )                                    |   | (574,403 | ) |
| Total                shareholders' equity                                                                                           |   |                             | 1,387,207   |                                 |   | 1,103,244 |   |
| Total                liabilities and shareholders' equity                                                                           |   | $                                | 104,206,153 |                                 | $      | 99,746,907 |   |

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**The            Money Tree Inc. and Subsidiaries**

**Consolidated      Statements of Operations**

|                                                                                                                |   | *Three                  months ended March 25,* |         | *Six                  months ended March 25,* |   |
|---------------------------------------------------------------------------------------------------------------------|--------|-------------------------------------------------|--------------|-----------------------------------------------|--------|
|                                                                                                                |   | 2006                                            |         | 2005                                          |   | 2006 |   | 2005 |   |
|                                                                                                                |   | (Unaudited)                                     |         | (Unaudited)                                   |   |
|                                                                                                                |   |                                            |         |                                          |   |   |   |   |   |
| Interest                  income                                                                                    |   | $                                               | 5,064,507    |                                          | $      | 4,684,788 |   | $ | 10,292,020 |   | $ | 8,945,816 |   |
| Interest                  expense                                                                                   |   |                                            | (1,806,107   | )                                             |   | (1,552,130 | ) |   | (3,514,676 | ) |   | (3,086,848 | ) |
| Net                    interest income before provision for                    credit losses                        |   |                                            | 3,258,400    |                                          |   | 3,132,658 |   |   | 6,777,344 |   |   | 5,858,968 |   |
| Provision                  for credit losses                                                                        |   |                                            | (1,072,132   | )                                             |   | (413,653 | ) |   | (2,622,976 | ) |   | (848,041 | ) |
| Net                    interest income after provision for                    credit losses                         |   |                                            | 2,186,268    |                                          |   | 2,719,005 |   |   | 4,154,368 |   |   | 5,010,927 |   |
| Insurance                  commissions                                                                              |   |                                            | 2,548,556    |                                          |   | 2,343,637 |   |   | 5,796,929 |   |   | 4,728,721 |   |
| Commissions                    from motor club memberships from                    company owned by related parties |   |                                            | 412,753      |                                          |   | 253,687 |   |   | 976,555 |   |   | 822,799 |   |
| Income                    tax service agreement income from company                    owned by related parties     |   |                                            | 83,034       |                                          |   | 153,739 |   |   | 83,034 |   |   | 157,739 |   |
| Other                  income                                                                                       |   |                                            | 570,961      |                                          |   | 653,149 |   |   | 1,152,925 |   |   | 1,340,280 |   |
| Net                  revenue before retail sales                                                                    |   |                                            | 5,801,572    |                                          |   | 6,123,217 |   |   | 12,163,811 |   |   | 12,060,466 |   |
|                                                                                                                |   |                                            |         |                                          |   |   |   |   |   |   |   |   |   |
| Retail                  sales                                                                                       |   |                                            | 4,602,985    |                                          |   | 3,332,394 |   |   | 10,017,867 |   |   | 7,643,082 |   |
| Cost                  of sales                                                                                      |   |                                            | (2,915,339   | )                                             |   | (2,044,274 | ) |   | (6,458,504 | ) |   | (4,686,697 | ) |
| Gross                  margin on retail sales                                                                       |   |                                            | 1,687,646    |                                          |   | 1,288,120 |   |   | 3,559,363 |   |   | 2,956,385 |   |
|                                                                                                                |   |                                            |         |                                          |   |   |   |   |   |   |   |   |   |
| Net                  revenues                                                                                       |   |                                            | 7,489,218    |                                          |   | 7,411,337 |   |   | 15,723,174 |   |   | 15,016,851 |   |
| Operating                  expenses                                                                                 |   |                                            |         |                                          |   |   |   |   |   |   |   |   |   |
| Personnel                  expense                                                                                  |   |                                            | (4,295,604   | )                                             |   | (3,868,642 | ) |   | (8,480,101 | ) |   | (7,616,901 | ) |
| Facilities                  expense                                                                                 |   |                                            | (969,167     | )                                             |   | (868,456 | ) |   | (1,968,937 | ) |   | (1,779,369 | ) |
| General                  and adminstrative expenses                                                                 |   |                                            | (876,899     | )                                             |   | (904,340 | ) |   | (1,683,859 | ) |   | (1,871,628 | ) |
| Other                  operating expenses                                                                           |   |                                            | (1,581,423   | )                                             |   | (1,672,119 | ) |   | (3,075,070 | ) |   | (3,404,244 | ) |
| Total                  operating expenses                                                                           |   |                                            | (7,723,093   | )                                             |   | (7,313,557 | ) |   | (15,207,967 | ) |   | (14,672,142 | ) |
| Net                  operating income (loss)                                                                        |   |                                            | (233,875     | )                                             |   | 97,780 |   |   | 515,207 |   |   | 344,709 |   |
| Gain                    (loss) on sale of property and equipment                                                    |   |                                            | (9,849       | )                                             |   | 25,000 |   |   | (14,963 | ) |   | 25,000 |   |
| Income                  (loss) before income tax (expense) benefit                                                  |   |                                            | (243,724     | )                                             |   | 122,780 |   |   | 500,244 |   |   | 369,709 |   |
| Income                  tax (expense) benefit                                                                       |   |                                            | 97,471       |                                          |   | (12,796 | ) |   | (216,282 | ) |   | (82,915 | ) |
|                                                                                                                |   |                                            |         |                                          |   |   |   |   |   |   |   |   |   |
| Net                  income (loss)                                                                                  |   | $                                               | (146,253     | )                                             | $      | 109,984 |   | $ | 283,962 |   | $ | 286,794 |   |
|                                                                                                                |   |                                            |         |                                          |   |   |   |   |   |   |   |   |   |
| Net                    income (loss) per common share, basic and                    diluted                         |   | $                                               | (4.95        | )                                             | $      | 3.72 |   | $ | 9.61 |   | $ | 9.71 |   |
|                                                                                                                |   |                                            |         |                                          |   |   |   |   |   |   |   |   |   |
| Weighted                average shares outstanding                                                                  |   |                                            | 29,546  |                                          |   | 29,546  |   |   | 29,546  |   |   | 29,546  |   |

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**The            Money Tree Inc. and Subsidiaries**

**Consolidated      Statements of Cash Flows**

| *Six                  months ended March 25 ,*                   |   | **2006**    |        | **2005** |   |
|------------------------------------------------------------------|--------|-------------|-------------|----------|--------|
|                                                             |   | (Unaudited) |        |
| Cash                  flows from operating activities            |   |        |        |     |   |   |   |
| Net                  income                                      |   | $           | 283,962     |     | $      | 286,794 |   |
| Adjustments                  to reconcile net income to net cash |   |        |        |     |   |   |   |
| provided                  by operating activities:               |   |        |        |     |   |   |   |
| Provision                  for credit losses                     |   |        | 2,622,976   |     |   | 848,041 |   |
| Depreciation                                                     |   |        | 476,796     |     |   | 436,336 |   |
| Amortization                                                     |   |        | 3,889       |     |   | 4,095 |   |
| Deferred                  income taxes                           |   |        | 2,000       |     |   | (404,000 | ) |
| Loss                  on sale of property and equipment          |   |        | 14,963      |     |   | (25,000 | ) |
| Change                  in assets and liabilities                |   |        |        |     |   |   |   |
| Other                  receivables                               |   |        | 198,807     |     |   | 3,094,889 |   |
| Employee                  receivables                            |   |        | 2,467       |     |   | 7,401 |   |
| Inventory                                                        |   |        | (348,736    | )        |   | (180,883 | ) |
| Other                  assets                                    |   |        | 50,391      |     |   | (164,358 | ) |
| Accounts                  payable and other accrued liabilities  |   |        | (379,203    | )        |   | 488,044 |   |
| Accrued                  interest payable                        |   |        | 671,163     |     |   | 752,553 |   |
|                                                             |   |        |        |     |   |   |   |
|                                                             |   |        |        |     |   |   |   |
| Net                  cash provided by operating activities       |   |        | 3,599,475   |     |   | 5,143,912 |   |
|                                                             |   |        |        |     |   |   |   |
| Cash                  flows from investing activities            |   |        |        |     |   |   |   |
| Loans                  originated                                |   |        | (44,556,020 | )        |   | (40,066,311 | ) |
| Loans                  repaid                                    |   |        | 39,153,237  |     |   | 35,801,443 |   |
| Purchase                  of property and equipment              |   |        | (555,891    | )        |   | (575,025 | ) |
| Proceeds                  from sale of property and equipment    |   |        | 25,880      |     |   | 25,000 |   |
|                                                             |   |        |        |     |   |   |   |
|                                                             |   |        |        |     |   |   |   |
| Net                  cash used in investing activities           |   |        | (5,932,794  | )        |   | (4,814,893 | ) |
|                                                             |   |        |        |     |   |   |   |
| Cash                  flows from financing activities            |   |        |        |     |   |   |   |
| Net                  proceeds (repayments) on:                   |   |        |        |     |   |   |   |
| Senior                  debt                                     |   |        | 346,206     |     |   | (728,240 | ) |
| Senior                  subordinated debt                        |   |        | (100,000    | )        |   | (600,000 | ) |
| Demand                  notes                                    |   |        | (2,270,422  | )        |   | 1,197,003 |   |
| Proceeds-variable                  rate subordinated debentures  |   |        | 12,262,086  |     |   | 9,470,209 |   |
| Payments-variable                  rate subordinated debentures  |   |        | (6,354,547  | )        |   | (5,846,987 | ) |
|                                                             |   |        |        |     |   |   |   |
| Net                  cash provided by financing activities       |   |        | 3,883,323   |     |   | 3,491,985 |   |
|                                                             |   |        |        |     |   |   |   |
| Net                  change in cash and cash equivalents         |   |        | 1,550,004   |     |   | 3,821,004 |   |
|                                                             |   |        |        |     |   |   |   |
| Cash                  and cash equivalents, beginning of period  |   |        | 9,618,557   |     |   | 8,373,114 |   |
| Cash                  and cash equivalents, end of period        |   | $           | 11,168,561  |     | $      | 12,194,118 |   |

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**The            Money Tree Inc. and Subsidiaries**

**Consolidated      Statements of Cash Flows (continued)**

| *Six                months ended March 25,*                                                 |   | 2006        |      | 2005   |   |
|---------------------------------------------------------------------------------------------|--------|-------------|-----------|--------|--------|
|                                                                                        |   | (Unaudited) |      |
|                                                                                        |   |        |      |   |   |
| SUPPLEMENTAL                      DISCLOSURE OF CASH FLOW                      INFORMATION: |   |        |      |   |   |
|                                                                                        |   |        |      |   |   |
| Cash                paid during the period for:                                             |   |        |      |   |   |   |   |
| Interest                                                                                    |   | $           | 2,843,513 |   | $      | 2,334,296 |   |
| Income                taxes                                                                 |   | $           | 1,014,674 |   | $      | 296,697 |   |

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**The            Money Tree Inc. and Subsidiaries**

**Notes      to Consolidated Financial      Statements**

**NOTE      1 - BASIS OF PRESENTATION**

**NOTE      2 - NATURE OF BUSINESS**

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**The            Money Tree Inc. and Subsidiaries**

**Notes      to Consolidated Financial      Statements**

**NOTE      3 - RECENT ACCOUNTING PRONOUNCEMENTS**

*Accounting      for Certain Loans or Debt Securities Acquired in a Transfer*

*Accounting      Changes and Error Corrections”. *
*Accounting      Changes”*
*Reporting      Accounting Changes in Interim Financial Statements”.*

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**The            Money Tree Inc. and Subsidiaries**

**Notes      to Consolidated Financial      Statements**

**NOTE      4 - FINANCE RECEIVABLES AND ALLOWANCE FOR CREDIT LOSSES**

|                                                                                      |   | March                25, 2006 |        | September                25, 2005 |   |
|-------------------------------------------------------------------------------------------|--------|-------------------------------|-------------|-----------------------------------|--------|
|                                                                                      |   | (Unaudited)                   |        |                              |   |
|                                                                                      |   |                          |        |                              |   |
| Finance                receivables, direct consumer                                       |   | $                             | 53,814,000  |                              | $      | 53,762,475 |   |
| Finance                receivables, consumer sales finance                                |   |                          | 11,209,447  |                              |   | 9,661,474 |   |
| Finance                receivables, auto sales finance                                    |   |                          | 31,820,506  |                              |   | 29,765,603 |   |
| Total                gross finance receivables                                            |   |                          | 96,843,953  |                              |   | 93,189,552 |   |
| Unearned                insurance commissions                                             |   |                          | (3,571,744  | )                                 |   | (3,741,947 | ) |
| Unearned                finance charges                                                   |   |                          | (11,740,935 | )                                 |   | (10,715,230 | ) |
| Accrued                interest receivable                                                |   |                          | 1,170,086   |                              |   | 1,180,436 |   |
| Unearned                discounts                                                         |   |                          | (9,923      | )                                 |   | (140,207 | ) |
| Finance                  receivables, before allowance                  for credit losses |   |                          | 82,691,437  |                              |   | 79,772,604 |   |
| Allowance                for credit losses                                                |   |                          | (2,770,840  | )                                 |   | (2,631,814 | ) |
| Finance                receivables, net                                                   |   | $                             | 79,920,597  |                              | $      | 77,140,790 |   |

|                                        |   | As                of and for the |       | As                of and for the  |   |
|---------------------------------------------|--------|----------------------------------|------------|-----------------------------------|--------|
|                                        |   | six                months ended  |       | year                ended         |   |
|                                        |   | March                25, 2006    |       | September                25, 2005 |   |
|                                        |   | (Unaudited)                      |       |                              |   |
|                                        |   |                             |       |                              |   |
| Beginning                balance            |   | $                                | 2,631,814  |                              | $      | 2,055,402 |   |
|                                        |   |                             |       |                              |   |   |   |
| Provisions                for credit losses |   |                             | 2,622,976  |                              |   | 2,767,868 |   |
|                                        |   |                             |       |                              |   |   |   |
| Charge-offs                                 |   |                             | (2,557,544 | )                                 |   | (2,300,592 | ) |
|                                        |   |                             |       |                              |   |   |   |
| Recoveries                                  |   |                             | 78,352     |                              |   | 104,404 |   |
|                                        |   |                             |       |                              |   |   |   |
| Other                                       |   |                             | (4,758     | )                                 |   | 4,732 |   |
|                                        |   |                             |       |                              |   |   |   |
| Ending                balance               |   | $                                | 2,770,840  |                              | $      | 2,631,814 |   |

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**The            Money Tree Inc. and Subsidiaries**

**Notes      to Consolidated Financial      Statements**

**NOTE      5 - INVENTORY**

|                                            |   | March                25, 2006 |      | September                25, 2005 |   |
|-------------------------------------------------|--------|-------------------------------|-----------|-----------------------------------|--------|
|                                            |   | (Unaudited)                   |      |                              |   |
|                                            |   |                          |      |                              |   |
| Used                automobiles                 |   | $                             | 2,293,066 |                              | $      | 1,900,894 |   |
| Home                furnishings and electronics |   |                          | 457,301   |                              |   | 500,737 |   |
| Total                inventory                  |   | $                             | 2,750,367 |                              | $      | 2,401,631 |   |

**NOTE      6 - ACCOUNTS PAYABLE AND OTHER ACCRUED LIABILITIES**

|                                                                |   | March                25, 2006 |      | September                25, 2005 |   |
|---------------------------------------------------------------------|--------|-------------------------------|-----------|-----------------------------------|--------|
|                                                                |   | (Unaudited)                   |      |                              |   |
|                                                                |   |                          |      |                              |   |
| Accounts                payable                                     |   | $                             | 219,787   |                              | $      | 182,994 |   |
| Insurance                payable, loan related                      |   |                          | 699,136   |                              |   | 751,317 |   |
| Accrued                payroll                                      |   |                          | 579,345   |                              |   | 578,370 |   |
| Accrued                payroll taxes                                |   |                          | 52,445    |                              |   | 44,560 |   |
| Money                orders                                         |   |                          | 956,589   |                              |   | 823,585 |   |
| Sales                tax payable                                    |   |                          | 1,250,036 |                              |   | 1,118,648 |   |
| Other                liabilities                                    |   |                          | 272,954   |                              |   | 910,021 |   |
| Total                accounts payable and other accrued liabilities |   | $                             | 4,030,292 |                              | $      | 4,409,495 |   |

----

**The            Money Tree Inc. and Subsidiaries**

**Notes      to Consolidated Financial      Statements**

**NOTE      7 - DEBT**

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   | March                25, 2006 |      | September                25, 2005 |   |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-------------------------------|-----------|-----------------------------------|--------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   | (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 2006 to 2019. The carrying value of the collateral                at                March 25, 2006 and September 25, 2005 were $3,715,487 and $2,960,186,                respectively. |   | $                             | 1,531,752 |                              | $      | 1,185,546 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   |                          |      |                              |   |   |   |
| Total                senior debt                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |   |                          | 1,531,752 |                              |   | 1,185,546 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   |                          |      |                              |   |   |   |
| Senior                subordinated debt: due to credit insurance company, unsecured, guaranteed                by a Company shareholder, interest at prime (4.5% and 4.5% at March                25,                2006 and September 25, 2005, respectively) plus 1% (8% floor, 12%                ceiling), interest payable quarterly, principal due August 5,                2007.                                                                                                                         |   |                          | 900,000   |                              |   | 1,000,000 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   |                          |      |                              |   |   |   |
| Total                senior subordinated debt                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |   |                          | 900,000   |                              |   | 1,000,000 |   |

----

**The              Money Tree Inc. and Subsidiaries**

**Notes        to Consolidated Financial        Statements**

**NOTE          7 - DEBT (continued)**

|                                                                                                                                                                                                                                                    |   |   | March                25, 2006  |   |   | September                25, 2005  |   |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------|-------------------------------------|--------|--------|-----------------------------------------|--------|
|                                                                                                                                                                                                                                                    |   |   | (Unaudited)                    |   |   |                                    |   |
| 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 2009. |   |   | 69,233,574                          |   |   | 68,904,753                              |   |
|                                                                                                                                                                                                                                                    |   |   |                                |   |   |                                    |   |
| 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 2010.                            |   |   | 5,578,718                           |   |   | -                                       |   |
|                                                                                                                                                                                                                                                    |   |   |                                |   |   |                                    |   |
| Total                subordinated debentures                                                                                                                                                                                                            |   |   | 74,812,292                          |   |   | 68,904,753                              |   |
|                                                                                                                                                                                                                                                    |   |   |                                |   |   |                                    |   |
| Demand                notes issued by The Money Tree of Georgia Inc.: due to individuals,                unsecured, interest at 4.25% to 5.0%, due on demand.                                                                                           |   |   | 3,957,337                           |   |   | 12,867,207                              |   |
|                                                                                                                                                                                                                                                    |   |   |                                |   |   |                                    |   |
| Demand                notes issued by The Money Tree Inc.: due to individuals, unsecured,                interest at 4.25% to 5.0%, due on demand.                                                                                                      |   |   | 6,639,448                           |   |   | -                                       |   |
|                                                                                                                                                                                                                                                    |   |   |                                |   |   |                                    |   |
| Total                demand notes                                                                                                                                                                                                                       |   |   | 10,596,785                          |   |   | 12,867,207                              |   |
|                                                                                                                                                                                                                                                    |   |   |                                |   |   |                                    |   |
| Junior                subordinated debt, related parties: due to a shareholder, interest                rate at                8%, due November 20, 2006.                                                                                               |   |   | 300,000                             |   |   | 300,000                                 |   |
|                                                                                                                                                                                                                                                    |   |   |                                |   |   |                                    |   |
| Junior                subordinated debt, related parties: due to a shareholder, interest                rate at                8% due June 28, 2008.                                                                                                    |   |   | 500,000                             |   |   | 500,000                                 |   |
|                                                                                                                                                                                                                                                    |   |   |                                |   |   |                                    |   |
| Total                junior subordinated debt, related parties                                                                                                                                                                                          |   |   | 800,000                             |   |   | 800,000                                 |   |
|                                                                                                                                                                                                                                                    |   |   |                                |   |   |                                    |   |
| Total                debt                                                                                                                                                                                                                               |   | $      | 88,640,829                          |   | $      | 84,757,506                              |   |

**NOTE      8 - INCOME TAXES**

----

**The              Money Tree Inc. and Subsidiaries**

**Notes        to Consolidated Financial        Statements**

**NOTE      9 - RELATED PARTY TRANSACTIONS**

**NOTE      10 - CONTINGENT LIABILITIES**

**NOTE      11 - DISCRETIONARY BONUSES**

----

**The              Money Tree Inc. and Subsidiaries**

**Notes        to Consolidated Financial        Statements**

**NOTE      12 - NET INCOME (LOSS) PER COMMON SHARE**

**NOTE      13 - SEGMENT FINANCIAL INFORMATION**

----

**The            Money Tree Inc. and Subsidiaries**

**Notes      to Consolidated Financial      Statements**

| ***Six                months ended***                         |   | Consumer                Finance     |    | Automotive                Finance   |   | Total    |   |
|---------------------------------------------------------------|--------|-------------------------------------|---------|-------------------------------------|--------|----------|--------|
| ***March                25, 2006***                           |   | &                Sales Division |    | &                Sales Division |   | Segments |   |
| **In                Thousands**                               |   | (Unaudited)                         |    |
|                                                          |   |                                |    |                                |   |     |   |
| Net                revenues before retail sales               |   | $                                   | 11,876  |                                | $      | 288      |   | $ | 12,164 |   |
|                                                          |   |                                |    |                                |   |     |   |   |   |   |
| Gross                margin on retail sales                   |   |                                | 1,361   |                                |   | 2,198    |   |   | 3,559 |   |
|                                                          |   |                                |    |                                |   |     |   |   |   |   |
| Segment                operating expenses                     |   |                                | (12,785 | )                                   |   | (2,423   | )      |   | (15,208 | ) |
| **Segment                operating profit**                   |   | $                                   | 452     |                                | $      | 63       |   | $ | 515 |   |
|                                                          |   |                                |    |                                |   |     |   |   |   |   |
|                                                          |   |                                |    |                                |   |     |   |   |   |   |
| **March                25, 2006**                        |   |                                |    |                                |   |     |   |   |   |   |
| **In                Thousands**                               |   |                                |    |                                |   |     |   |   |   |   |
| **Assets**                                                    |   |                                |    |                                |   |     |   |   |   |   |
| **Total                segment assets**                       |   | $                                   | 65,157  |                                | $      | 30,443   |   | $ | 95,600 |   |
|                                                          |   |                                |    |                                |   |     |   |   |   |   |
| **RECONCILIATION:**                                           |   |                                |    |                                |   |     |   |   | **3/25/2006** |   |
|                                                               |   |                                |    |                                |   |     |   |   | (Thousands) |   |
| **Assets:**                                                   |   |                                |    |                                |   |     |   |   |   |   |
| Total                assets for reportable segments           |   |                                |    |                                |   |     |   | $ | 95,600 |   |
|                                                          |   |                                |    |                                |   |     |   |   |   |   |
| Cash                and cash equivalents at corporate level   |   |                                |    |                                | 3,272  |     |
| Other                receivables at corporate level           |   |                                |    |                                |   |     |   |   | 901 |   |
| Employee                receivables at corporate level        |   |                                |    |                                | 3      |     |
| Property                and equipment, net at corporate level |   |                                |    |                                | 1,461  |     |
| Deferred                income taxes at corporate level       |   |                                |    |                                | 1,983  |     |
| Other                assets at corporate level                |   |                                |    |                                |   |     |   |   | 986 |   |
| Consolidated                Assets                            |   |                                |    |                                |   |     |   | $ | 104,206 |   |

----

**The            Money Tree Inc. and Subsidiaries**

**Notes      to Consolidated Financial      Statements**

|                                                            |   |                                  |    |                                  |   |     |   |
|-----------------------------------------------------------------|--------|---------------------------------------|---------|---------------------------------------|--------|----------|--------|
|                                                            |   |                                  |    |                                  |   |     |   |
| ***Six                  months ended***                         |   | Consumer                  Finance     |    | Automotive                  Finance   |   | Total    |   |
| ***March                  25, 2005***                           |   | &                  Sales Division |    | &                  Sales Division |   | Segments |   |
| **In                  Thousands**                               |   | (Unaudited)                           |    |
|                                                            |   |                                  |    |                                  |   |     |   |
| Net                  revenues before retail sales               |   | $                                     | 11,757  |                                  | $      | 303      |   | $ | 12,060 |   |
|                                                            |   |                                  |    |                                  |   |     |   |   |   |   |
| Gross                  margin on retail sales                   |   |                                  | 1,479   |                                  |   | 1,477    |   |   | 2,956  |   |
|                                                            |   |                                  |    |                                  |   |     |   |   |   |   |
| Segment                  operating expenses                     |   |                                  | (12,600 | )                                     |   | (2,072   | )      |   | (14,672 | ) |
| **Segment                  operating profit**                   |   | $                                     | 636     |                                  | $      | (292)    |        | $ | 344 |   |
|                                                            |   |                                  |    |                                  |   |     |   |   |   |   |
|                                                            |   |                                  |    |                                  |   |     |   |   |   |   |
| **March                  25, 2006**                             |   |                                  |    |                                  |   |     |   |   |   |   |
| **In                  Thousands**                               |   |                                  |    |                                  |   |     |   |   |   |   |
| **Assets**                                                      |   |                                  |    |                                  |   |     |   |   |   |   |
| **Total                  segment assets**                       |   | $                                     | 59,766  |                                  | $      | 28,142   |   | $ | 87,908 |   |
|                                                            |   |                                  |    |                                  |   |     |   |   |   |   |
| **RECONCILIATION:**                                             |   |                                  |    |                                  |   |     |   |   | **3/25/2006** |   |
|                                                                 |   |                                  |    |                                  |   |     |   |   | (Thousands)  |   |
| **Assets:**                                                     |   |                                  |    |                                  |   |     |   |   |   |   |
| Total                  assets for reportable segments           |   |                                  |    |                                  |   |     |   | $ | 87,908 |   |
|                                                            |   |                                  |    |                                  |   |     |   |   |   |   |
| Cash                  and cash equivalents at corporate level   |   |                                  |    |                                  | 87     |     |
| Other                  receivables at corporate level           |   |                                  |    |                                  |   |     |   |   | 1,809 |   |
| Employee                  receivables at corporate level        |   |                                  |    |                                  | 311    |     |
| Property                  and equipment, net at corporate level |   |                                  |    |                                  | 1,370  |     |
| Deferred                  income taxes at corporate level       |   |                                  |    |                                  | 1,664  |     |
| Other                  assets at corporate level                |   |                                  |    |                                  |   |     |   |   | 934 |   |
| Consolidated                  Assets                            |   |                                  |    |                                  |   |     |   | $ | 93,783 |   |

----

**The            Money Tree Inc. and Subsidiaries**

**Notes      to Consolidated Financial      Statements**

| ***Three                months ended***                       |   | Consumer                Finance     |         | Automotive                Finance   |   | Total              |   |
|---------------------------------------------------------------|--------|-------------------------------------|--------------|-------------------------------------|--------|--------------------|--------|
| ***March                25, 2006***                           |   | &                Sales Division |         | &                Sales Division |   | Segments           |   |
| **In                Thousands**                               |   | (Unaudited)                         |         |
|                                                          |   |                                |         |                                |   |               |   |
| Net                revenues before retail sales               |   | $                                   | 5,597        |                                | $      | 205                |   | $ | 5,802 |   |
|                                                          |   |                                |         |                                |   |               |   |   |   |   |
| Gross                margin on retail sales                   |   |                                | 649          |                                |   | 1,038              |   |   | 1,687 |   |
|                                                          |   |                                |         |                                |   |               |   |   |   |   |
| Segment                operating expenses                     |   |                                | (6,521       | )                                   |   | (1,202             | )      |   | (7,723 | ) |
| **Segment                operating profit (loss)**            |   | $                                   | (275         | )                                   | $      | 41                 |   | $ | (234 | ) |
|                                                          |   |                                |         |                                |   |               |   |   |   |   |
|                                                          |   |                                |         |                                |   |               |   |   |   |   |
| **March                25, 2006**                             |   |                                |    |                                |   |     |   |   |    |   |
| **In                Thousands**                               |   |                                |         |                                |   |               |   |   |   |   |
| **Assets**                                                    |   |                                |         |                                |   |               |   |   |   |   |
| **Total                segment assets**                       |   | $                                   | 65,157       |                                | $      | 30,443             |   | $ | 95,600 |   |
|                                                          |   |                                |         |                                |   |               |   |   |   |   |
| **RECONCILIATION:**                                           |   |                                |    |                                |   |          |   |   | **3/25/2006** |   |
|                                                          |   |                                |         |                                |   |               |   |   | (Thousands) |   |
| **Assets:**                                                   |   |                                |         |                                |   |               |   |   |   |   |
| Total                assets for reportable segments           |   |                                |         | $                                   | 95,600 |               |
|                                                          |   |                                |         |                                |   |               |   |   |   |   |
| Cash                and cash equivalents at corporate level   |   |                                |         |                                | 3,272  |               |
| Other                receivables at corporate level           |   |                                |         |                                |   |               |   |   | 901 |   |
| Employee                receivables at corporate level        |   |                                |         |                                | 3      |               |
| Property                and equipment, net at corporate level |   |                                |         |                                | 1,461  |               |
| Deferred                income taxes at corporate level       |   |                                |         |                                | 1,983  |               |
| Other                assets at corporate level                |   |                                |         |                                |   |               |   |   | 986 |   |
| Consolidated                Assets                            |   |                                |         |                                |   |               |   | $ | 104,206 |   |

----

**The            Money Tree Inc. and Subsidiaries**

**Notes      to Consolidated Financial      Statements**

| ***Three                months ended***                       |   | Consumer                Finance     |         | Automotive                Finance   |   | Total        |   |
|---------------------------------------------------------------|--------|-------------------------------------|--------------|-------------------------------------|--------|--------------|--------|
| ***March                25, 2005***                           |   | &                Sales Division |         | &                Sales Division |   | Segments     |   |
| **In                Thousands**                               |   | (Unaudited)                         |         |
|                                                          |   |                                |         |                                |   |         |   |
| Net                revenues before retail sales               |   | $                                   | 5,935        |                                | $      | 188          |   | $ | 6,123 |   |
|                                                          |   |                                |         |                                |   |         |   |   |   |   |
| Gross                margin on retail sales                   |   |                                | 631          |                                |   | 657          |   |   | 1,288 |   |
|                                                          |   |                                |         |                                |   |         |   |   |   |   |
| Segment                operating expenses                     |   |                                | (6,303       | )                                   |   | (1,010       | )      |   | (7,313 | ) |
| **Segment                operating profit (loss)**            |   | $                                   | 263          |                                | $      | (165         | )      | $ | 98 |   |
|                                                          |   |                                |         |                                |   |         |   |   |   |   |
|                                                          |   |                                |         |                                |   |         |   |   |   |   |
| **March                25, 2005**                             |   |                                |    |                                |   |    |   |   |    |   |
| **In                Thousands**                               |   |                                |         |                                |   |         |   |   |   |   |
| **Assets**                                                    |   |                                |         |                                |   |         |   |   |   |   |
| **Total                segment assets**                       |   | $                                   | 59,766       |                                | $      | 28,142       |   | $ | 87,908 |   |
|                                                          |   |                                |         |                                |   |         |   |   |   |   |
| **RECONCILIATION:**                                           |   |                                |    |                                |   |    |   |   | **3/25/2005** |   |
|                                                          |   |                                |         |                                |   |         |   |   | (Thousands) |   |
| **Assets:**                                                   |   |                                |         |                                |   |         |   |   |   |   |
| Total                assets for reportable segments           |   |                                |         |                                |   |         |   | $ | 87,908 |   |
|                                                          |   |                                |         |                                |   |         |   |   |   |   |
| Cash                and cash equivalents at corporate level   |   |                                |         |                                | 87     |         |
| Other                receivables at corporate level           |   |                                |         |                                |   |         |   |   | 1,809 |   |
| Employee                receivables at corporate level        |   |                                |         |                                | 11     |         |
| Property                and equipment, net at corporate level |   |                                |         |                                | 1,370  |         |
| Deferred                income taxes at corporate level       |   |                                |         |                                | 1,664  |         |
| Other                assets at corporate level                |   |                                |         |                                |   |         |   |   | 934 |   |
| Consolidated                Assets                            |   |                                |         |                                |   |         |   | $ | 93,783 |   |

----

**The            Money Tree Inc. and Subsidiaries**

**Notes      to Consolidated Financial      Statements**

**NOTE      14 - DEBT REGISTRATIONS**

**NOTE      15 - VOTING COMMON STOCK SALE**

**NOTE      16 - SUBSEQUENT EVENTS**

**Prepayment      of Note to Affiliate**

**Management**

----

**The            Money Tree Inc. and Subsidiaries**

**Notes      to Consolidated Financial      Statements**

**NOTE      16 - SUBSEQUENT EVENTS (continued)**

----

**Item      2. Management’s Discussion and Analysis of Financial Condition and Results of      Operations**

***Forward-Looking      Statements***

***Overview***

----

| ***Description                of Loans and Contracts***         |   |                                                                                 |       |                                                                               |   |       |   |     |       |
|-----------------------------------------------------------------|--------|--------------------------------------------------------------------------------------|------------|------------------------------------------------------------------------------------|--------|------------|--------|----------|------------|
|                                                            |   | **As                of, or for, the Three Months****Ended                March 25,** |       | **As                of, or for, the Six Months****Ended                March 25,** |   |
|                                                            |   | **2006**                                                                             |       | **2005**                                                                           |   | **2006**   |   | **2005** |       |
| ***Direct                Consumer Loans:***                     |   |                                                                                 |       |                                                                               |   |       |   |     |       |
| Number                of Loans Made to New Borrowers            |   |                                                                                 | 4,076      |                                                                               |   | 4,758      |   |     | 10,258     |   |   | 12,063 |   |
| Number                of Loans Made to Former Borrowers         |   |                                                                                 | 12,419     |                                                                               |   | 12,617     |   |     | 26,343     |   |   | 26,753 |   |
| Number                of Loans Made to Existing Borrowers       |   |                                                                                 | 22,169     |                                                                               |   | 22,605     |   |     | 47,782     |   |   | 47,788 |   |
| Total                Number of Loans Made                       |   |                                                                                 | 38,664     |                                                                               |   | 39,980     |   |     | 84,383     |   |   | 86,604 |   |
| Total                Volume of Loans Made                       |   | $                                                                                    | 19,556,446 |                                                                               | $      | 19,421,609 |   | $        | 44,062,561 |   | $ | 40,709,291 |   |
| Average                Size of Loans Made                       |   | $                                                                                    | 506        |                                                                               | $      | 486        |   | $        | 522        |   | $ | 470 |   |
| Number                of Loans Outstanding                      |   |                                                                                 | 67,245     |                                                                               |   | 63,901     |   |     | 67,245     |   |   | 63,901 |   |
| Total                of Loans Outstanding*                      |   | $                                                                                    | 48,673,419 |                                                                               | $      | 40,859,321 |   | $        | 48,673,419 |   | $ | 40,859,321 |   |
| Percent                of Loans Outstanding                     |   |                                                                                 | 53.08      | %                                                                                  |   | 51.54      | %      |     | 53.08      | % |   | 51.54 | % |
| Average                Balance on Outstanding Loans             |   | $                                                                                    | 724        |                                                                               | $      | 639        |   | $        | 724        |   | $ | 639 |   |
| ***Motor                Vehicle Installment Sales Contracts:*** |   |                                                                                 |       |                                                                               |   |       |   |     |       |   |   |   |   |
| Total                Number of Contracts Made                   |   |                                                                                 | 261        |                                                                               |   | 189        |   |     | 551        |   |   | 414 |   |
| Total                Volume of Contracts Made                   |   | $                                                                                    | 4,717,200  |                                                                               | $      | 2,953,588  |   | $        | 9,647,348  |   | $ | 6,629,127 |   |
| Average                Size of Contracts Made                   |   | $                                                                                    | 18,074     |                                                                               | $      | 15,627     |   | $        | 17,509     |   | $ | 16,012 |   |
| Number                of Contracts Outstanding                  |   |                                                                                 | 2,602      |                                                                               |   | 2,283      |   |     | 2,602      |   |   | 2,283 |   |
| Total                of Contracts Outstanding*                  |   | $                                                                                    | 31,820,506 |                                                                               | $      | 29,667,215 |   | $        | 31,820,506 |   | $ | 29,667,215 |   |
| Percent                of Total Loans and Contracts             |   |                                                                                 | 34.70      | %                                                                                  |   | 37.42      | %      |     | 34.70      | % |   | 37.42 | % |
| Average                Balance on Outstanding Contracts         |   | $                                                                                    | 12,229     |                                                                               | $      | 12,995     |   | $        | 12,229     |   | $ | 12,995 |   |
|                                                            |   |                                                                                 |       |                                                                               |   |       |   |     |       |   |   |   |   |
| ***Consumer                Sales Finance Contracts:***          |   |                                                                                 |       |                                                                               |   |       |   |     |       |   |   |   |   |
| Number                of Contracts Made to New Customers        |   |                                                                                 | 32         |                                                                               |   | 68         |   |     | 74         |   |   | 96 |   |
| Number                of Loans Made to Former Customers         |   |                                                                                 | 506        |                                                                               |   | 1,061      |   |     | 1,252      |   |   | 1,739 |   |
| Number                of Loans Made to Existing Customers       |   |                                                                                 | 466        |                                                                               |   | 345        |   |     | 1,226      |   |   | 866 |   |
| Total                Contracts Made                             |   |                                                                                 | 1,004      |                                                                               |   | 1,474      |   |     | 2,552      |   |   | 2,701 |   |
| Total                Volume of Contracts Made                   |   | $                                                                                    | 2,601,362  |                                                                               | $      | 2,258,355  |   | $        | 6,700,887  |   | $ | 5,213,669 |   |
| Number                of Contracts Outstanding                  |   |                                                                                 | 6,120      |                                                                               |   | 6,305      |   |     | 6,120      |   |   | 6,305 |   |
| Total                of Contracts Outstanding*                  |   | $                                                                                    | 11,209,447 |                                                                               | $      | 8,755,672  |   | $        | 11,209,447 |   | $ | 8,755,672 |   |
| Percent                of Total Loans and Contracts             |   |                                                                                 | 12.22      | %                                                                                  |   | 11.04      | %      |     | 12.22      | % |   | 11.04 | % |
| Average                Balance of Outstanding Contracts         |   | $                                                                                    | 1,832      |                                                                               | $      | 1,389      |   | $        | 1,832      |   | $ | 1,389 |   |

----

|                                           |   | **As                of March 25,** |       |
|------------------------------------------------|--------|------------------------------------|------------|
|                                           |   | **2006**                           |       | **2005** |   |
| ***Total                Loans and Contracts*** |   |                               |       |   |   |
| ***Outstanding                (gross):***      |   |                               |       |   |   |
|                                           |   |                               |       |   |   |
| Direct                Consumer Loans           |   | $                                  | 48,673,419 |   | $ | 40,859,321 |   |
| Motor                Vehicle Installment       |   |                               | 31,820,506 |   |   | 29,667,215 |   |
| Consumer                Sales Finance          |   |                               | 11,209,447 |   |   | 8,755,672 |   |
| Bankrupt                Accounts               |   |                               | 5,140,581  |   |   | 4,211,150 |   |
|                                           |   |                               |       |   |   |   |   |
| Total                Gross Outstanding         |   | $                                  | 96,843,953 |   | $ | 83,493,358 |   |

----

|                                                            |   | **For                the Three Months Ended****March                25,** |        | **For                the Six Months Ended****March                25,** |   |
|-----------------------------------------------------------------|--------|---------------------------------------------------------------------------|-------------|-------------------------------------------------------------------------|--------|
|                                                            |   | **2006**                                                                  |        | **2005**                                                                |   | **2006** |   | **2005** |   |
| ***Direct                Consumer Loans:***                     |   |                                                                      |        |                                                                    |   |   |   |   |   |
| Balance                - beginning                              |   | $                                                                         | 51,911,429  |                                                                    | $      | 42,682,107 |   | $ | 48,840,570 |   | $ | 38,281,888 |   |
| Loans                originated                                 |   |                                                                      | 19,556,446  |                                                                    |   | 19,421,609 |   |   | 44,062,561 |   |   | 40,709,291 |   |
| Collections                                                     |   |                                                                      | (16,721,488 | )                                                                       |   | (16,117,862 | ) |   | (30,427,482 | ) |   | (27,767,736 | ) |
| Refinances                                                      |   |                                                                      | (3,576,824  | )                                                                       |   | (3,346,179 | ) |   | (8,122,638 | ) |   | (7,321,796 | ) |
| Charge                offs                                      |   |                                                                      | (1,159,094  | )                                                                       |   | (597,254 | ) |   | (2,590,837 | ) |   | (1,391,387 | ) |
| Rebates                / other adjustments                      |   |                                                                      | (1,337,050  | )                                                                       |   | (1,183,100 | ) |   | (3,088,755 | ) |   | (1,650,939 | ) |
| Balance                - end                                    |   | $                                                                         | 48,673,419  |                                                                    | $      | 40,859,321 |   | $ | 48,673,419 |   | $ | 40,859,321 |   |
| ***Consumer                Sales Finance Contracts:***          |   |                                                                      |        |                                                                    |   |   |   |   |   |   |   |   |   |
| Balance                - beginning                              |   | $                                                                         | 10,908,574  |                                                                    | $      | 8,246,296 |   | $ | 9,661,474 |   | $ | 7,240,653 |   |
| Loans                originated                                 |   |                                                                      | 2,601,362   |                                                                    |   | 2,258,355 |   |   | 6,700,887 |   |   | 5,213,669 |   |
| Collections                                                     |   |                                                                      | (1,307,848  | )                                                                       |   | (994,537 | ) |   | (2,399,341 | ) |   | (1,815,228 | ) |
| Refinances                                                      |   |                                                                      | (644,976    | )                                                                       |   | (479,546 | ) |   | (1,801,291 | ) |   | (1,203,762 | ) |
| Charge                offs                                      |   |                                                                      | (70,168     | )                                                                       |   | (53,099 | ) |   | (189,327 | ) |   | (157,296 | ) |
| Rebates                / other adjustments                      |   |                                                                      | (277,497    | )                                                                       |   | (221,797 | ) |   | (762,955 | ) |   | (522,364 | ) |
| Balance                - end                                    |   | $                                                                         | 11,209,447  |                                                                    | $      | 8,755,672 |   | $ | 11,209,447 |   | $ | 8,755,672 |   |
| ***Motor                Vehicle Installment Sales Contracts:*** |   |                                                                      |        |                                                                    |   |   |   |   |   |   |   |   |   |
| Balance                - beginning                              |   | $                                                                         | 30,966,025  |                                                                    | $      | 30,804,348 |   | $ | 29,765,603 |   | $ | 30,557,683 |   |
| Loans                originated                                 |   |                                                                      | 4,717,200   |                                                                    |   | 2,953,588 |   |   | 9,647,348 |   |   | 6,629,127 |   |
| Collections                                                     |   |                                                                      | (3,305,544  | )                                                                       |   | (3,288,665 | ) |   | (6,326,414 | ) |   | (6,218,479 | ) |
| Refinances                                                      |   |                                                                      | -           |                                                                    |   | - |   |   | - |   |   | - |   |
| Charge                offs                                      |   |                                                                      | (241,904    | )                                                                       |   | (472,775 | ) |   | (598,804 | ) |   | (687,390 | ) |
| Rebates                / other adjustments                      |   |                                                                      | (315,271    | )                                                                       |   | (329,281 | ) |   | (667,227 | ) |   | (613,726 | ) |
| Balance                - end                                    |   | $                                                                         | 31,820,506  |                                                                    | $      | 29,667,215 |   | $ | 31,820,506 |   | $ | 29,667,215 |   |
| ***Total                Active Accounts:***                     |   |                                                                      |        |                                                                    |   |   |   |   |   |   |   |   |   |
| Balance                - beginning                              |   | $                                                                         | 93,786,028  |                                                                    | $      | 81,732,751 |   | $ | 88,267,647 |   | $ | 76,080,224 |   |
| Loans                originated                                 |   |                                                                      | 26,875,008  |                                                                    |   | 24,633,552 |   |   | 60,410,796 |   |   | 52,552,087 |   |
| Collections                                                     |   |                                                                      | (21,334,880 | )                                                                       |   | (20,401,064 | ) |   | (39,153,237 | ) |   | (35,801,443 | ) |
| Refinances                                                      |   |                                                                      | (4,221,800  | )                                                                       |   | (3,825,725 | ) |   | (9,923,929 | ) |   | (8,525,558 | ) |
| Charge                offs                                      |   |                                                                      | (1,471,166  | )                                                                       |   | (1,123,128 | ) |   | (3,378,968 | ) |   | (2,236,073 | ) |
| Rebates                / other adjustments                      |   |                                                                      | (1,929,818  | )                                                                       |   | (1,734,178 | ) |   | (4,518,937 | ) |   | (2,787,029 | ) |
| Balance                - end                                    |   | $                                                                         | 91,703,372  |                                                                    | $      | 79,282,208 |   | $ | 91,703,372 |   | $ | 79,282,208 |   |
| ***Total                Bankrupt Accounts:***                   |   |                                                                      |        |                                                                    |   |   |   |   |   |   |   |   |   |
| Balance                - beginning                              |   | $                                                                         | 5,391,788   |                                                                    | $      | 3,841,026 |   | $ | 4,921,905 |   | $ | 3,531,667 |   |
| Charge                offs                                      |   |                                                                      | (268,760    | )                                                                       |   | (92,960 | ) |   | (480,466 | ) |   | (169,654 | ) |
| Adjustments                                                     |   |                                                                      | 17,553      |                                                                    |   | 463,084 |   |   | 699,142 |   |   | 849,137 |   |
| Balance                - end                                    |   | $                                                                         | 5,140,581   |                                                                    | $      | 4,211,150 |   | $ | 5,140,581 |   | $ | 4,211,150 |   |
| Total                Gross O/S Receivables                      |   | $                                                                         | 96,843,953  |                                                                    | $      | 83,493,358 |   | $ | 96,843,953 |   | $ | 83,493,358 |   |

----

|                                                    |   | **Six                Months Ended March 25,** |        |
|---------------------------------------------------------|--------|-----------------------------------------------|-------------|
|                                                    |   | **2006**                                      |        | **2005** |   |
| ***Loans                Originated:***                  |   |                                          |        |   |   |   |   |
| Direct                consumer loans                    |   | $                                             | 44,062,561  |   | $ | 40,709,291 |   |
| Consumer                sales finance                   |   |                                          | 6,700,887   |   |   | 5,213,669 |   |
| Motor                vehicle installment sales          |   |                                          | 9,647,348   |   |   | 6,629,127 |   |
| Total                gross loans originated             |   |                                          | 60,410,796  |   |   | 52,552,087 |   |
| Non-cash                items included in gross loans * |   |                                          | (15,854,776 | ) |   | (12,485,776 | ) |
| Loans                originated - cash flows            |   | $                                             | 44,556,020  |   | $ | 40,066,311 |   |
|                                                    |   |                                          |        |   |   |   |   |
| ***Loans                Repaid:***                      |   |                                          |        |   |   |   |   |
| Collections                                             |   |                                          |        |   |   |   |   |
| Direct                consumer loans                    |   | $                                             | 30,427,482  |   | $ | 27,767,736 |   |
| Consumer                sales finance                   |   |                                          | 2,399,341   |   |   | 1,815,228 |   |
| Motor                vehicle installment sales          |   |                                          | 6,326,414   |   |   | 6,218,479 |   |
| Loans                repaid - cash flows                |   | $                                             | 39,153,237  |   | $ | 35,801,443 |   |

***Segments      and Seasonality***

|   | · | consumer                finance and sales; and |
|--------|--------|------------------------------------------------|

|   | · | automotive                finance and sales. |
|--------|--------|----------------------------------------------|

***Net        Interest Margin***

----

|                                                                                                                                                                                                                                                       |   | **As                of, or for, the Three Months****Ended                March 25,** |       | **As                of, or for, the Six Months****Ended                March 25,** |   |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------------------------------------------------------------------------------------|------------|------------------------------------------------------------------------------------|--------|
|                                                                                                                                                                                                                                                       |   | **2006**                                                                             |       | **2005**                                                                           |   | **2006** |   | **2005** |   |
|                                                                                                                                                                                                                                                       |   |                                                                                 |       |                                                                               |   |   |   |   |   |
| Average                net finance receivables                (1)                                                                                                                                                                                          |   | $                                                                                    | 83,338,160 |                                                                               | $      | 71,826,101 |   | $ | 82,796,276 |   | $ | 71,312,151 |   |
| Average                notes payable                (2)                                                                                                                                                                                                    |   | $                                                                                    | 88,398,870 |                                                                               | $      | 79,629,488 |   | $ | 87,477,358 |   | $ | 78,357,960 |   |
|                                                                                                                                                                                                                                                       |   |                                                                                 |       |                                                                               |   |   |   |   |   |   |   |   |   |
| Interest                income                                                                                                                                                                                                                             |   | $                                                                                    | 4,208,780  |                                                                               | $      | 3,716,823 |   | $ | 8,345,338 |   | $ | 6,954,694 |   |
| Loan                fee income                                                                                                                                                                                                                             |   | $                                                                                    | 855,727    |                                                                               | $      | 967,965 |   | $ | 1,946,682 |   | $ | 1,991,122 |   |
| Total                interest and fee income                                                                                                                                                                                                               |   | $                                                                                    | 5,064,507  |                                                                               | $      | 4,684,788 |   | $ | 10,292,020 |   | $ | 8,945,816 |   |
| Interest                expense                                                                                                                                                                                                                            |   | $                                                                                    | 1,806,107  |                                                                               | $      | 1,552,130 |   | $ | 3,514,676 |   | $ | 3,086,848 |   |
|                                                                                                                                                                                                                                                       |   |                                                                                 |       |                                                                               |   |   |   |   |   |   |   |   |   |
| Net                interest income before provision for credit losses                                                                                                                                                                                      |   | $                                                                                    | 3,258,400  |                                                                               | $      | 3,132,658 |   | $ | 6,777,344 |   | $ | 5,858,968 |   |
| Average                interest rate earned (annualized)                                                                                                                                                                                                   |   |                                                                                 | 24.3       | %                                                                                  |   | 26.1 | % |   | 24.9 | % |   | 25.1 | % |
| Average                interest rate paid (annualized)                                                                                                                                                                                                     |   |                                                                                 | 8.2        | %                                                                                  |   | 7.8 | % |   | 8.0 | % |   | 7.9 | % |
| Net                interest rate spread (annualized)                                                                                                                                                                                                       |   |                                                                                 | 16.1       | %                                                                                  |   | 18.3 | % |   | 16.8 | % |   | 17.2 | % |
| Net                interest margin (annualized)                (3)                                                                                                                                                                                         |   |                                                                                 | 15.6       | %                                                                                  |   | 17.4 | % |   | 16.4 | % |   | 16.4 | % |
|                                                                                                                                                                                                                                                       |   |                                                                                 |       |                                                                               |   |   |   |   |   |   |   |   |   |
|                                                                                                                                                                                                                                                       |   |                                                                                 |       |                                                                               |   |   |   |   |   |   |   |   |   |
| (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***

|                                                                   |   | **As                of, or for, the Three Months****Ended                March 25,** |       | **As                of, or for, the Six Months****Ended                March 25,** |   |
|------------------------------------------------------------------------|--------|--------------------------------------------------------------------------------------|------------|------------------------------------------------------------------------------------|--------|
|                                                                   |   | **2006**                                                                             |       | **2005**                                                                           |   | **2006** |   | **2005** |   |
| ***Direct                Consumer Loans and Consumer***                |   |                                                                                 |       |                                                                               |   |   |   |
| ***Sales                Finance Contracts:***                          |   |                                                                                 |       |                                                                               |   |   |   |   |   |
|                                                                   |   |                                                                                 |       |                                                                               |   |   |   |   |   |
| Average                net finance receivables                         |   | $                                                                                    | 55,323,582 |                                                                               | $      | 46,057,022 |   | $ | 55,168,708 |   | $ | 45,341,081 |   |
|                                                                   |   |                                                                                 |       |                                                                               |   |   |   |   |   |   |   |   |   |
| Charge                offs - direct consumer                           |   | $                                                                                    | 1,159,094  |                                                                               | $      | 597,254 |   | $ | 2,590,837 |   | $ | 1,391,387 |   |
| Charge                offs - consumer sales finance                    |   | $                                                                                    | 70,168     |                                                                               | $      | 53,099 |   | $ | 189,327 |   | $ | 157,296 |   |
| Charge                offs - bankruptcy                                |   | $                                                                                    | 268,760    |                                                                               | $      | 92,960 |   | $ | 480,466 |   | $ | 169,654 |   |
| Total                gross charge offs                                 |   | $                                                                                    | 1,498,022  |                                                                               | $      | 743,313 |   | $ | 3,260,630 |   | $ | 1,718,337 |   |
| Recoveries                (all direct consumer)                        |   | $                                                                                    | (651,362   | )                                                                                  | $      | (668,866 | ) | $ | (1,380,241 | ) | $ | (1,329,787 | ) |
| Charge                offs, net                                        |   | $                                                                                    | 846,660    |                                                                               | $      | 74,447 |   | $ | 1,880,389 |   | $ | 388,550 |   |
| Percent                  of net charge offs to average receivables     |   |                                                                                 | 1.5        | %                                                                                  |   | 0.2 | % |   | 3.4 | % |   | 0.9 | % |
|                                                                   |   |                                                                                 |       |                                                                               |   |   |   |   |   |   |   |   |   |
| ***Motor                  Vehicle Installment Sales******Contracts***: |   |                                                                                 |       |                                                                               |   |   |   |   |   |   |   |   |   |
|                                                                   |   |                                                                                 |       |                                                                               |   |   |   |   |   |   |   |   |   |
| Average                outstanding finance receivables                 |   | $                                                                                    | 28,014,578 |                                                                               | $      | 25,769,079 |   | $ | 27,627,568 |   | $ | 25,971,070 |   |
|                                                                   |   |                                                                                 |       |                                                                               |   |   |   |   |   |   |   |   |   |
| Charge                offs, gross                                      |   | $                                                                                    | 241,904    |                                                                               | $      | 472,775 |   | $ | 598,804 |   | $ | 687,390 |   |
| Recoveries                                                             |   | $                                                                                    | -          |                                                                               | $      | - |   | $ | - |   | $ | - |   |
| Charge                offs, net                                        |   | $                                                                                    | 241,904    |                                                                               | $      | 472,775 |   | $ | 598,804 |   | $ | 687,390 |   |
| Percent                  of net charge offs to average receivables     |   |                                                                                 | 0.9        | %                                                                                  |   | 1.8 | % |   | 2.2 | % |   | 2.6 | % |
|                                                                   |   |                                                                                 |       |                                                                               |   |   |   |   |   |   |   |   |   |
| ***Total                Receivables:***                                |   |                                                                                 |       |                                                                               |   |   |   |   |   |   |   |   |   |
|                                                                   |   |                                                                                 |       |                                                                               |   |   |   |   |   |   |   |   |   |
| Average                outstanding finance receivables                 |   | $                                                                                    | 83,338,160 |                                                                               | $      | 71,826,101 |   | $ | 82,796,276 |   | $ | 71,312,151 |   |
|                                                                   |   |                                                                                 |       |                                                                               |   |   |   |   |   |   |   |   |   |
| Charge                offs, gross                                      |   | $                                                                                    | 1,739,926  |                                                                               | $      | 1,216,088 |   | $ | 3,859,434 |   | $ | 2,405,727 |   |
| Recoveries                (all direct consumer)                        |   | $                                                                                    | (651,362   | )                                                                                  | $      | (668,866 | ) | $ | (1,380,241 | ) | $ | (1,329,787 | ) |
| Charge                offs, net                                        |   | $                                                                                    | 1,088,564  |                                                                               | $      | 547,222 |   | $ | 2,479,193 |   | $ | 1,075,940 |   |
| Percent                  of net charge offs to average receivables     |   |                                                                                 | 1.3        | %                                                                                  |   | 0.8 | % |   | 3.0 | % |   | 1.5 | % |

----

***Delinquency      Information***

|                                                               |   | **As                of March 25, 2006**  |       |
|--------------------------------------------------------------------|--------|------------------------------------------|------------|
|                                                               |   | **Direct                Consumer Sales** |       | **Consumer                Sales Finance Contracts** |   | **Motor                Vehicle Installment Sales Contracts** |   | **Bankruptcy                Accounts** |   | **Total** |   |
| Gross                Loans and Contracts                           |   |                                     |       |   |   |   |   |   |   |   |   |
| Receivables                                                        |   | $                                        | 48,673,419 |   | $ | 11,209,447 |   | $ | 31,820,506 |   | $ | 5,140,581 |   | $ | 96,843,953 |   |
| Loans                and Contracts 60 - 90 days past due           |   | $                                        | 574,626    |   | $ | 121,298 |   | $ | - |   | $ | 238,884 |   | $ | 934,808 |   |
| Percentage                of Outstanding                           |   |                                     | 1.2        | % |   | 1.1 | % |   | 0.0 | % |   | 4.6 | % |   | 1.0 | % |
| Loans                  and Contracts greater than 90 days past due |   | $                                        | 9,366,171  |   | $ | 2,589,943 |   | $ | 20,317 |   | $ | 2,800,757 |   | $ | 14,777,188 |   |
| Percentage                of Outstanding                           |   |                                     | 19.2       | % |   | 23.1 | % |   | 0.1 | % |   | 54.5 | % |   | 15.3 | % |
| Loans                  and Contracts greater than 60 days past due |   | $                                        | 9,940,797  |   | $ | 2,711,241 |   | $ | 20,317 |   | $ | 3,039,641 |   | $ | 15,711,996 |   |
| Percentage                of Outstanding                           |   |                                     | 20.4       | % |   | 24.2 | % |   | 0.1 | % |   | 59.1 | % |   | 16.2 | % |

----

|                                                                    |   | **As                of March 25, 2005**  |       |
|-------------------------------------------------------------------------|--------|------------------------------------------|------------|
|                                                                    |   | **Direct                Consumer Sales** |       | **Consumer                Sales Finance Contracts** |   | **Motor                Vehicle Installment Sales Contracts** |   | **Bankruptcy                Accounts** |   | **Total** |   |
| Gross                Loans and Contracts                                |   |                                     |       |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Receivables                                                             |   | $                                        | 40,859,321 |   | $ | 8,755,672 |   | $ | 29,667,215 |   | $ | 4,211,150 |   | $ | 83,493,358 |   |
|                                                                    |   |                                     |       |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Loans                and Contracts 60 - 90 days past                due |   | $                                        | 558,708    |   | $ | 98,920 |   | $ | - |   | $ | 185,985 |   | $ | 843,613 |   |
| Percentage                of Outstanding                                |   |                                     | 1.4        | % |   | 1.1 | % |   | 0.0 | % |   | 4.4 | % |   | 1.0 | % |
|                                                                    |   |                                     |       |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Loans                and Contracts greater than                         |   |                                     |       |   |   |   |   |   |   |   |   |   |   |   |   |   |
| 90                days past due                                         |   | $                                        | 9,079,394  |   | $ | 2,162,440 |   | $ | - |   | $ | 2,367,505 |   | $ | 13,609,339 |   |
| Percentage                of Outstanding                                |   |                                     | 22.2       | % |   | 24.7 | % |   | 0.0 | % |   | 56.2 | % |   | 16.3 | % |
|                                                                    |   |                                     |       |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Loans                and Contracts greater than                         |   |                                     |       |   |   |   |   |   |   |   |   |   |   |   |   |   |
| 60                days past due                                         |   | $                                        | 9,638,102  |   | $ | 2,261,360 |   | $ | - |   | $ | 2,553,490 |   | $ | 14,452,952 |   |
| Percentage                of Outstanding                                |   |                                     | 23.6       | % |   | 25.8 | % |   | 0.0 | % |   | 60.6 | % |   | 17.3 | % |

***Results      of Operations***

***Comparison      of Six Months Ended March 25, 2006 and 2005***

***Net      Revenues***

***Net      Interest Income Before Provision for Credit Losses***

----

***Provision      for Credit Losses***

***Insurance      and Other Products***

***Gross      Margin on Retail Sales***

***Operating      Expenses***

***Comparison      of Three Months Ended March 25, 2006 and 2005***

***Net      Revenues***

----

***Net      Interest Income Before Provision for Credit Losses***

***Provision      for Credit Losses***

***Insurance      and Other Products***

***Gross      Margin on Retail Sales***

***Operating      Expenses***

----

***Liquidity      and Capital Resources***

***General***

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

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

|   | · | pay                operating expenses; and |
|--------|--------|--------------------------------------------|

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

----

***Debentures      and Demand Notes***

***Hurricane      Katrina Update***

***Recent      Accounting Pronouncements***

***Voting      Common Stock Sale***

----

***Critical      Accounting Policies***

----

***Impact      of Inflation and General Economic Conditions***

**Item      3. Quantitative and Qualitative Disclosures About Market      Risk**

**Item      4. Controls and Procedures **

----

**PART      II - OTHER INFORMATION **

**Item      1. Legal Proceedings**

**Item      1A. Risk      Factors**

**Item      2. Unregistered Sales of Equity Securities and Use of      Proceeds**

**Item      3. Defaults Upon Senior Securities**

**Item      4. Submission of Matters to a Vote of Security      Holders**

**Item      5. Other Information**

**Item      6. Exhibits**

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

----

**SIGNATURES**

|                                             |                                                               |                                                                                                                                                                                                                                                                                                                                                                                                                       |
|--------------------------------------------------|--------------------------------------------------------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                             | THE              MONEY TREE              INC.                      |
|                                        |                                                          |                                                                                                                                                                                                                                                                                                                                                                                                                  |
| Date: May              9,              2006 |                                                               | /s/ Vance              R.              Martin                                                             |
|                                             | Vance R. Martin                                                    |
|                                             | Chief              Executive Officer (Principal Executive Officer) |
|                                             | (through              April 15, 2006)                              |

|                                                 |            |                                                                                                                                                                                                                                                                                                                                                                                                                                      |
|------------------------------------------------------|-----------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| Date: May                9,                2006 |            | /s/                W. Derek                Martin                                                                             |
|                                                 | W. Derek Martin |
|                                                 | President       |
|                                                 |            |

|                                                     |                                                                                    |                                                                                                                                                                                                                                                                                                                                                                                                     |
|----------------------------------------------------------|-----------------------------------------------------------------------------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| Date: May                  9,                  2006 |                                                                                    | /s/                  Steven P.                  Morrison                                                         |
|                                                     | Steven P. Morrison                                                                      |
|                                                     | Chief                  Financial Officer (Principal Financial                  Officer) |