**UNITED      STATES**

**SECURITIES      AND EXCHANGE COMMISSION**

**WASHINGTON,      D.C. 20549**

**FORM      10-QSB**

| x | QUARTERLY                REPORT UNDER SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF                1934 |
|---|-----------------------------------------------------------------------------------------------------------------|

| o | TRANSITION                REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE                ACT |
|---|-----------------------------------------------------------------------------------------------|

**FREEDOM      FINANCIAL GROUP, INC.**

|  Delaware                                                                                     |   |  43-1647559                                                         |
|----------------------------------------------------------------------------------------------------|--------|--------------------------------------------------------------------------|
|  (State                or other jurisdiction of                incorporation or organization) |   |  (I.R.S.                Employer Identification                No.) |

**APPLICABLE      ONLY TO ISSUERS INVOLVED IN BANKRUPTCY**

**PROCEEDINGS      DURING THE PRECEDING FIVE YEARS**

**APPLICABLE      ONLY TO CORPORATE ISSUERS**

----

**TABLE      OF CONTENTS**

| **PART                I. - FINANCIAL INFORMATION** | **3**  |
|----------------------------------------------------|--------|
|                                               |   |   |   |
| **ITEM                1.**                         |   | **Financial                Statements** | **3** |
|                                               |   |   |   |
| **ITEM                2.**                         |   | **Management’s                Discussion and Analysis of Financial Condition and Results of                Operations** | **16** |
|                                               |   |   |   |
| **ITEM                3.**                         |   | **Controls                and Procedures** | **32** |
|                                               |   |
| **PART                II. - OTHER INFORMATION**    | **33** |
|                                               |   |   |   |
| **ITEM                1.**                         |   | **Legal                Proceedings** | **33** |
|                                               |   |   |   |
| **ITEM                2.**                         |   | **Unregistered                Sales of Equity Securities and Use of Proceeds** | **33** |
|                                               |   |   |   |
| **ITEM                3.**                         |   | **Defaults                Upon Senior Securities** | **33** |
|                                               |   |   |   |
| **ITEM                4.**                         |   | **Submission                of Matters to a Vote of Security Holders** | **33** |
|                                               |   |   |   |
| **ITEM                5.**                         |   | **Other                Information** | **33** |
|                                               |   |   |   |
| **ITEM                6.**                         |   | **Exhibits                and Reports on Form 8-K** | **34** |
|                                               |   |
| **INDEX                TO EXHIBITS**               | **34** |

----

**PART      I. - **
**FINANCIAL      INFORMATION**

**ITEM      1.  **
**Financial      Statements**

**Report      of Independent Registered Public Accounting Firm**

**/s/      BKD,**
**      LLP **

----

**FREEDOM      FINANCIAL GROUP, INC.**

**Consolidated      Balance Sheets**

|                                                                                                                                                                                                                                                                |   | **Unaudited**                      |       |                              |   |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|------------------------------------|------------|-----------------------------------|--------|
|                                                                                                                                                                                                                                                                |   | **September                  30,** |       | **December                  31,** |   |
|                                                                                                                                                                                                                                                                |   | **2006**                           |       | **2005**                          |   |
| **Assets**                                                                                                                                                                                                                                                          |   |                               |       |                              |   |   |   |
|                                                                                                                                                                                                                                                                |   |                               |       |                              |   |   |   |
| Cash                  and cash equivalents                                                                                                                                                                                                                          |   | $                                  | 1,011,559  |                              | $      | 2,192,075 |   |
| Finance                  receivables, net                                                                                                                                                                                                                           |   |                               | 10,398,481 |                              |   | 9,756,170 |   |
| Notes                  receivable, net                                                                                                                                                                                                                              |   |                               | 11,725     |                              |   | 11,725 |   |
| Repossessed                  assets                                                                                                                                                                                                                                 |   |                               | 220,750    |                              |   | 191,911 |   |
| Property                  and equipment, net                                                                                                                                                                                                                        |   |                               | 300,905    |                              |   | 308,777 |   |
| Deferred                  financing costs                                                                                                                                                                                                                           |   |                               | 157,206    |                              |   | — |   |
| Other                  assets                                                                                                                                                                                                                                       |   |                               | 170,647    |                              |   | 159,017 |   |
|                                                                                                                                                                                                                                                                |   |                               |       |                              |   |   |   |
| Total                  assets                                                                                                                                                                                                                                       |   | $                                  | 12,271,273 |                              | $      | 12,619,675 |   |
|                                                                                                                                                                                                                                                                |   |                               |       |                              |   |   |   |
| **Liabilities                  and Stockholders’ Equity**                                                                                                                                                                                                     |   |                               |       |                              |   |   |   |
|                                                                                                                                                                                                                                                                |   |                               |       |                              |   |   |   |
| **Liabilities**                                                                                                                                                                                                                                                     |   |                               |       |                              |   |   |   |
| Bank                  line of credit                                                                                                                                                                                                                                |   | $                                  | 164,689    |                              | $      | — |   |
| Accounts                  payable                                                                                                                                                                                                                                   |   |                               | 13,586     |                              |   | 40,090 |   |
| Accrued                  expenses                                                                                                                                                                                                                                   |   |                               | 112,351    |                              |   | 80,102 |   |
| Accrued                  compensation costs                                                                                                                                                                                                                         |   |                               | 42,948     |                              |   | 52,949 |   |
| Dealer                  holdbacks                                                                                                                                                                                                                                   |   |                               | 58,733     |                              |   | 106,539 |   |
| Dealer                  reserves                                                                                                                                                                                                                                    |   |                               | 40,013     |                              |   | 39,963 |   |
| Other                  liabilities                                                                                                                                                                                                                                  |   |                               | 66,138     |                              |   | — |   |
|                                                                                                                                                                                                                                                                |   |                               |       |                              |   |   |   |
| Total                  liabilities                                                                                                                                                                                                                                  |   |                               | 498,458    |                              |   | 319,643 |   |
|                                                                                                                                                                                                                                                                |   |                               |       |                              |   |   |   |
| **Stockholders’                  Equity**                                                                                                                                                                                                                     |   |                               |       |                              |   |   |   |
| Redeemable                  convertible preferred stock, $0.0001 par value; 8,994,357 shares                  authorized, issued and outstanding                                                                                                                    |   |                               | 13,798,817 |                              |   | 13,798,817 |   |
| Common                  stock, $0.0001 par value; 36,000,000 shares authorized; 10,928,252                  and                  9,965,759 shares issued and outstanding at September 30, 2006 and                  December                  31, 2005 respectively |   |                               | 1,093      |                              |   | 997 |   |
| Additional                  paid-in-capital                                                                                                                                                                                                                         |   |                               | 4,716      |                              |   | — |   |
| Retained                  earnings (deficit)                                                                                                                                                                                                                        |   |                               | (3,133,877 | )                                 |   | (2,446,970 | ) |
| Accumulated                  other comprehensive income                                                                                                                                                                                                             |   |                               | 1,102,066  |                              |   | 947,188 |   |
|                                                                                                                                                                                                                                                                |   |                               |       |                              |   |   |   |
| Total                  stockholders’ equity                                                                                                                                                                                                                   |   |                               | 11,772,815 |                              |   | 12,300,032 |   |
|                                                                                                                                                                                                                                                                |   |                               |       |                              |   |   |   |
| Total                  liabilities and stockholders’ equity                                                                                                                                                                                                   |   | $                                  | 12,271,273 |                              | $      | 12,619,675 |   |

*See      Notes to Condensed Consolidated Financial Statements.*

----

**FREEDOM      FINANCIAL GROUP, INC.**

**Consolidated      Statements of Operations**

**Unaudited**

|                                                              |   | **Three                Months Ended** |     | **Nine                Months Ended** |   |
|-------------------------------------------------------------------|--------|---------------------------------------|----------|--------------------------------------|--------|
|                                                              |   | **September****30,**                  |     | **September                30,**     |   | **September                30,** |   | **September                30,** |   |
|                                                              |   | **2006**                              |     | **2005**                             |   | **2006** |   | **2005** |   |
| **Revenues**                                                      |   |                                  |     |                                 |   |   |   |   |   |   |   |   |   |
| Interest                income                                    |   | $                                     | 685,385  |                                 | $      | 613,821 |   | $ | 2,032,608 |   | $ | 1,604,761 |   |
| Recovery                of charged-off finance receivables        |   |                                  | 14,326   |                                 |   | 22,620 |   |   | 32,640 |   |   | 100,650 |   |
| Other                income                                       |   |                                  | 86,175   |                                 |   | 21,668 |   |   | 143,064 |   |   | 72,571 |   |
|                                                              |   |                                  |     |                                 |   |   |   |   |   |   |   |   |   |
| Total                revenues                                     |   |                                  | 785,886  |                                 |   | 658,109 |   |   | 2,208,312 |   |   | 1,777,982 |   |
|                                                              |   |                                  |     |                                 |   |   |   |   |   |   |   |   |   |
| **Interest                Expense**                               |   |                                  | 24,505   |                                 |   | — |   |   | 24,505 |   |   | — |   |
|                                                              |   |                                  |     |                                 |   |   |   |   |   |   |   |   |   |
| **Revenues                After Interest Expense**                |   |                                  | 761,381  |                                 |   | 658,109 |   |   | 2,183,807 |   |   | 1,777,982 |   |
|                                                              |   |                                  |     |                                 |   |   |   |   |   |   |   |   |   |
| **Provision                for Credit Losses**                    |   |                                  | 166,178  |                                 |   | 233,559 |   |   | 708,338 |   |   | 431,847 |   |
|                                                              |   |                                  |     |                                 |   |   |   |   |   |   |   |   |   |
| **Net                Revenues After Provision for Credit Losses** |   |                                  | 595,203  |                                 |   | 424,550 |   |   | 1,475,469 |   |   | 1,346,135 |   |
|                                                              |   |                                  |     |                                 |   |   |   |   |   |   |   |   |   |
| **Operating                Expenses**                             |   |                                  | 708,726  |                                 |   | 586,618 |   |   | 2,162,376 |   |   | 1,973,210 |   |
|                                                              |   |                                  |     |                                 |   |   |   |   |   |   |   |   |   |
| **Operating                Loss**                                 |   |                                  | (113,523 | )                                    |   | (162,068 | ) |   | (686,907 | ) |   | (627,075 | ) |
|                                                              |   |                                  |          |                                 |   |  |   |   |  |   |   |   |   |
| **Nonoperating                Income**                            |   |                                  |     |                                 |   |   |   |   |   |   |   |   |   |
| Other                                                             |   |                                  | —  |                                 |   | 1,586 |   |   | — |   |   | 2,735 |   |
|                                                              |   |                                  |     |                                 |   |   |   |   |   |   |   |   |   |
| **Loss                Before Income Taxes**                       |   |                                  | (113,523 | )                                    |   | (160,482 | ) |   | (686,907 | ) |   | (624,340 | ) |
|                                                              |   |                                  |     |                                 |   |   |   |   |   |   |   |   |   |
| **Provision                for Income Taxes**                     |   |                                  | —  |                                 |   | — |   |   | — |   |   | — |   |
|                                                              |   |                                  |     |                                 |   |   |   |   |   |   |   |   |   |
| **Net                Loss**                                       |   | $                                     | (113,523 | )                                    | $      | (160,482 | ) | $ | (686,907 | ) | $ | (624,340 | ) |
|                                                              |   |                                  |     |                                 |   |   |   |   |   |   |   |   |   |
|                                                              |   |                                  |     |                                 |   |   |   |   |   |   |   |   |   |
| **Basic****and                Diluted Loss Per Share**            |   | $                                     | (0.01    | )                                    | $      | (0.02 | ) | $ | (0.06 | ) | $ | (0.06 | ) |

*See      Notes to Condensed Consolidated Financial Statements.*

----

**FREEDOM      FINANCIAL GROUP, INC.**

**Consolidated      Statements of Stockholders’ Equity**

**Unaudited**

|                                                     |   | **Redeemable**   |       |                              |   |              |   |                 |    |                    |   | **Accumulated** |   |      |       |
|----------------------------------------------------------|--------|-----------------------|------------|-----------------------------------|--------|-------------------|--------|----------------------|---------|-------------------------|--------|-----------------|--------|-----------|------------|
|                                                     |   |  **Convertible** |       |                              |   |              |   |  **Additional** |    |                    |   |  **Other** |   |      |       |
|                                                     |   |  **Preferred**   |       | **Common                  Stock** |   |  **Paid-in** |   |  **Retained**   |    | **Comprehensive**  |   |            |   |
|                                                     |   | **Stock**             |       | **Shares**                        |   | **Amount**        |   | **Capital**          |    | **Earnings**            |   | **Income**      |   | **Total** |       |
|                                                     |   |                  |       |                              |   |              |   |                 |    |                    |   |            |   |      |       |   |   |   |   |   |   |   |
| **Balance,                  December 31, 2005**          |   | $                     | 13,798,817 |                              |   | 9,965,759         |   | $                    | 997     |                    | $      | 0               |   | $         | (2,446,970 | ) | $ | 947,188 |   | $ | 12,300,032 |   |
|                                                     |   |                  |       |                              |   |              |   |                 |    |                    |   |            |   |      |       |   |   |   |   |   |   |   |
| Net                  loss                                |   |                  | —    |                              |   | —           |   |                 | — |                    |   | —         |   |      | (686,907   | ) |   | — |   |   | (686,907 | ) |
|                                                     |   |                  |       |                              |   |              |   |                 |    |                    |   |            |   |      |       |   |   |   |   |   |   |   |
| Foreign                  currency translation adjustment |   |                  | —    |                              |   | —           |   |                 | — |                    |   | —         |   |      | —    |   |   | 154,878 |   |   | 154,878 |   |
|                                                     |   |                  |       |                              |   |              |   |                 |    |                    |   |            |   |      |       |   |   |   |   |   |   |   |
| Comprehensive                  loss                      |   |                  | —    |                              |   | —           |   |                 | — |                    |   | —         |   |      | —    |   |   | — |   |   | (532,029 | ) |
|                                                     |   |                  |       |                              |   |              |   |                 |    |                    |   |            |   |      |       |   |   |   |   |   |   |   |
| Stock                  Grant                             |   |                  | —    |                              |   | 962,493           |   |                 | 96      |                    |   | 4,716           |   |      | —    |   |   | — |   |   | 4,812 |   |
|                                                     |   |                  |       |                              |   |              |   |                 |    |                    |   |            |   |      |       |   |   |   |   |   |   |   |
| **Balance,****September                  30, 2006**      |   | $                     | 13,798,817 |                              |   | 10,928,252        |   | $                    | 1,093   |                    | $      | 4,716           |   | $         | (3,133,877 | ) | $ | 1,102,066 |   | $ | 11,772,815 |   |
|                                                     |   |                  |       |                              |   |              |   |                 |    |                    |   |            |   |      |       |   |   |   |   |   |   |   |
|                                                     |   |                  |       |                              |   |              |   |                 |    |                    |   |            |   |      |       |   |   |   |   |   |   |   |
| **Balance,                  December 31, 200****4**      |   | $                     | 13,798,817 |                              |   | 9,965,759         |   | $                    | 997     |                    | $      | 0               |   | $         | (1,731,382 | ) | $ | 803,244 |   | $ | 12,871,676 |   |
|                                                     |   |                  |       |                              |   |              |   |                 |    |                    |   |            |   |      |       |   |   |   |   |   |   |   |
| Net                  loss                                |   |                  | —    |                              |   | —           |   |                 | — |                    |   | —         |   |      | (624,340   | ) |   | — |   |   | (624,340 | ) |
|                                                     |   |                  |       |                              |   |              |   |                 |    |                    |   |            |   |      |       |   |   |   |   |   |   |   |
| Foreign                  currency translation adjustment |   |                  | —    |                              |   | —           |   |                 | — |                    |   | —         |   |      | —    |   |   | 143,738 |   |   | 143,738 |   |
|                                                     |   |                  |       |                              |   |              |   |                 |    |                    |   |            |   |      |       |   |   |   |   |   |   |   |
| Comprehensive                  loss                      |   |                  | —    |                              |   | —           |   |                 | — |                    |   | —         |   |      | —    |   |   | — |   |   | (480,602 | ) |
|                                                     |   |                  |       |                              |   |              |   |                 |    |                    |   |            |   |      |       |   |   |   |   |   |   |   |
| **Balance,****September                  30, 2005**      |   | $                     | 13,798,817 |                              |   | 9,965,759         |   | $                    | 997     |                    | $      | 0               |   | $         | (2,355,722 | ) | $ | 946,982 |   | $ | 12,391,074 |   |

*See      Notes to Condensed Consolidated Financial Statements.*

----

**FREEDOM      FINANCIAL GROUP, INC.**

**Consolidated      Statements of Cash Flows**

**Unaudited**

|                                                                                                     |   | **For                the****Nine                Months Ended****September                30,** |       |
|----------------------------------------------------------------------------------------------------------|--------|------------------------------------------------------------------------------------------------|------------|
|                                                                                                     |   | **2006**                                                                                       |       | **2005** |   |
| **Operating                Activities**                                                                  |   |                                                                                           |       |   |   |   |   |
| Net                loss                                                                                  |   | $                                                                                              | (686,907   | ) | $ | (624,340 | ) |
| Adjustments                to reconcile net loss to net cash used in operating                activities |   |                                                                                           |       |   |   |   |   |
| Depreciation                                                                                             |   |                                                                                           | 34,049     |   |   | 43,326 |   |
| Provision                for credit losses                                                               |   |                                                                                           | 708,338    |   |   | 431,847 |   |
| Deferred                discount income                                                                  |   |                                                                                           | (417,093   | ) |   | (491,606 | ) |
| Recovery                of charged-off finance receivables                                               |   |                                                                                           | 321,936    |   |   | 162,183 |   |
| Stock                grant expense                                                                       |   |                                                                                           | 4,812      |   |   | — |   |
| Amortization                of deferred financing fees                                                   |   |                                                                                           | 22,458     |   |   | — |   |
| Changes                in                                                                                |   |                                                                                           |       |   |   |   |   |
| Other                assets                                                                              |   |                                                                                           | (27,653    | ) |   | (58,957 | ) |
| Accounts                payable and accrued expenses                                                     |   |                                                                                           | (8,522     | ) |   | (223,300 | ) |
| Other                liabilities                                                                         |   |                                                                                           | (44,092    | ) |   | — |   |
| Reorganization                costs payable                                                              |   |                                                                                           | —    |   |   | (5,000 | ) |
| Net                cash used in operating activities                                                     |   |                                                                                           | (92,674    | ) |   | (765,847 | ) |
|                                                                                                     |   |                                                                                           |       |   |   |   |   |
| **Investing                Activities**                                                                  |   |                                                                                           |       |   |   |   |   |
| Purchase                of finance receivables                                                           |   |                                                                                           | (5,725,898 | ) |   | (8,933,881 | ) |
| Principal                collected on finance receivables                                                |   |                                                                                           | 4,765,350  |   |   | 3,953,024 |   |
| Payments                of dealer reserves                                                               |   |                                                                                           | (9,654     | ) |   | (14,692 | ) |
| Payments                of dealer holdbacks                                                              |   |                                                                                           | (128,393   | ) |   | (134,069 | ) |
| Principal                collected on notes receivable                                                   |   |                                                                                           | —    |   |   | 60,780 |   |
| Purchase                of property and equipment                                                        |   |                                                                                           | (16,613    | ) |   | (18,184 | ) |
| Proceeds                from sale of property and equipment                                              |   |                                                                                           | —    |   |   | 2,000 |   |
| Net                cash used in investing activities                                                     |   |                                                                                           | (1,115,208 | ) |   | (5,085,022 | ) |
|                                                                                                     |   |                                                                                           |       |   |   |   |   |
| **Financing                Activities**                                                                  |   |                                                                                           |       |   |   |   |   |
| Payment                of deferred financing costs                                                       |   |                                                                                           | (149,664   | ) |   | — |   |
| Line                of credit advances                                                                   |   |                                                                                           | 164,689    |   |   | — |   |
| Net                cash provided by financing activities                                                 |   |                                                                                           | 15,025     |   |   | — |   |
|                                                                                                     |   |                                                                                           |       |   |   |   |   |
|                                                                                                     |   |                                                                                           |       |   |   |   |   |
| **Effect                of Exchange Rate Changes on Cash and Cash                Equivalents**           |   |                                                                                           | 12,341     |   |   | 15,209 |   |
|                                                                                                     |   |                                                                                           |       |   |   |   |   |
| **Net                Decrease in Cash and Cash Equivalents**                                             |   |                                                                                           | (1,180,516 | ) |   | (5,835,660 | ) |
|                                                                                                     |   |                                                                                           |       |   |   |   |   |
| **Cash                and Cash Equivalents, Beginning of Period**                                        |   |                                                                                           | 2,192,075  |   |   | 8,779,211 |   |
|                                                                                                     |   |                                                                                           |       |   |   |   |   |
| **Cash                and Cash Equivalents, End of Period**                                              |   | $                                                                                              | 1,011,559  |   | $ | 2,943,551 |   |

*See      Notes to Condensed Consolidated Financial Statements.*

----

**FREEDOM      FINANCIAL GROUP, INC.**

**Notes      to Condensed Consolidated Financial Statements**

**Unaudited**

**Note**
**1:         **
**General**

**Note      2:  **
**Basis      of Presentation**

*Financial      Reporting by Entities in Reorganization Under the Bankruptcy      Code*

----

**Note      3:  **
**Finance      Receivables and Allowance for Credit Losses**

|                                       |   | **2006** |       | **2005** |   |
|--------------------------------------------|--------|----------|------------|----------|--------|
|                                       |   |     |       |     |   |
| Automobiles                                |   | $        | 9,426,789  |     | $      | 8,456,981 |   |
| Bulk                food                   |   |     | 480,540    |     |   | 863,167 |   |
| Equipment                leases            |   |     | 473,722    |     |   | 704,484 |   |
| Other                                      |   |     | 885,080    |     |   | 742,534 |   |
| Total                finance receivables   |   |     | 11,266,131 |     |   | 10,767,166 |   |
|                                       |   |     |       |     |   |   |   |
| Less                                       |   |     |       |     |   |   |   |
| Unearned                discount           |   |     | 431,906    |     |   | 598,768 |   |
| Allowance                for credit losses |   |     | 435,744    |     |   | 412,228 |   |
|                                       |   |     | 867,650    |     |   | 1,010,996 |   |
| Net                finance receivables     |   | $        | 10,398,481 |     | $      | 9,756,170 |   |

| 2006  |   | $      | 1,714,882  |   |
|-------|--------|--------|------------|--------|
| 2007  |   |   | 5,556,600  |   |
| 2008  |   |   | 4,228,084  |   |
| 2009  |   |   | 2,407,474  |   |
| 2010  |   |   | 721,778    |   |
| 2011  |   |   | 15,974     |   |
| Total |   | $      | 14,644,792 |   |

|                                                        |   | **2006** |     | **2005** |   |
|-------------------------------------------------------------|--------|----------|----------|----------|--------|
|                                                        |   |     |     |     |   |
| Balance,                beginning of period                 |   | $        | 447,951  |     | $      | 317,934 |   |
| Provision                charged to expense                 |   |     | 166,178  |     |   | 233,559 |   |
| Losses                charged off                           |   |     | (355,741 | )        |   | (332,569 | ) |
| Recoveries                of previously charged off amounts |   |     | 177,769  |     |   | 158,851 |   |
| Effect                of foreign currency translation       |   |     | (413     | )        |   | 12,568 |   |
| Balance,                end of period                       |   | $        | 435,744  |     | $      | 390,343 |   |

----

|                                                        |   | **2006** |       | **2005** |   |
|-------------------------------------------------------------|--------|----------|------------|----------|--------|
|                                                        |   |     |       |     |   |
| Balance,                beginning of period                 |   | $        | 412,228    |     | $      | 296,233 |   |
| Provision                charged to expense                 |   |     | 708,338    |     |   | 431,847 |   |
| Losses                charged off                           |   |     | (1,043,219 | )        |   | (652,492 | ) |
| Recoveries                of previously charged off amounts |   |     | 350,776    |     |   | 304,384 |   |
| Effect                of foreign currency translation       |   |     | 7,621      |     |   | 10,371 |   |
| Balance,                end of period                       |   | $        | 435,744    |     | $      | 390,343 |   |

**Note      4:  **
**Line      of Credit**

----

**Note      5:  **
**Redeemable      Convertible Preferred Stock**

**Note      6:  **
**Commitments**

| 2006  |   | $      | 12,613 |   |
|-------|--------|--------|--------|--------|
| 2007  |   |   | 28,052 |   |
| Total |   | $      | 40,665 |   |

**Note      7:  **
**Loss      Per Share**

----

|                                            |   |     |     | **Weighted** |   |                         |   |
|-------------------------------------------------|--------|----------|----------|--------------|--------|------------------------------|--------|
|                                            |   |     |     | **Average**  |   | **Per                Share** |   |
|                                            |   | **Loss** |     | **Shares**   |   | **Amount**                   |   |
|                                            |   |     |     |         |   |                         |   |
| Net                loss                         |   | $        | (113,523 | )            |   | 10,928,252                   |   |   |   |   |
| Basic                and diluted loss per share |   |     |     |         |   |                         |   | $ | (0.01 | ) |

|                                            |   |     |     | **Weighted** |   |                         |   |
|-------------------------------------------------|--------|----------|----------|--------------|--------|------------------------------|--------|
|                                            |   |     |     | **Average**  |   | **Per                Share** |   |
|                                            |   | **Loss** |     | **Shares**   |   | **Amount**                   |   |
|                                            |   |     |     |         |   |                         |   |
| Net                loss                         |   | $        | (160,482 | )            |   | 9,965,759                    |   |   |   |   |
| Basic                and diluted loss per share |   |     |     |         |   |                         |   | $ | (0.02 | ) |

|                                            |   | **Loss** |     | **Weighted                Average Shares** |   | **Per                Share Amount** |   |
|-------------------------------------------------|--------|----------|----------|--------------------------------------------|--------|-------------------------------------|--------|
|                                            |   |     |     |                                       |   |                                |   |
| Net                loss                         |   | $        | (686,907 | )                                          |   | 10,896,521                          |   |   |   |   |
| Basic                and diluted loss per share |   |     |     |                                       |   |                                |   | $ | (0.06 | ) |

|                                    |   |     |     | **Weighted** |   |                         |   |
|-----------------------------------------|--------|----------|----------|--------------|--------|------------------------------|--------|
|                                    |   |     |     | **Average**  |   | **Per                Share** |   |
|                                    |   | **Loss** |     | **Shares**   |   | **Amount**                   |   |
|                                    |   |     |     |         |   |                         |   |
| Net                loss                 |   | $        | (624,340 | )            |   | 9,965,759                    |   |   |   |   |
| Basic                earnings per share |   |     |     |         |   |                         |   | $ | (0.06 | ) |

----

**Note      8:  **
**Operating      Expenses**

|                                 |   | **2006** |    | **2005** |   |
|--------------------------------------|--------|----------|---------|----------|--------|
|                                 |   |     |    |     |   |
| Salaries                and benefits |   | $        | 353,885 |     | $      | 351,014 |   |
| Professional                fees     |   |     | 104,478 |     |   | 91,887 |   |
| Other                                |   |     | 250,363 |     |   | 143,717 |   |
|                                 |   |     |    |     |   |   |   |
|                                 |   | $        | 708,726 |     | $      | 586,618 |   |

|                                 |   | **2006** |      | **2005** |   |
|--------------------------------------|--------|----------|-----------|----------|--------|
|                                 |   |     |      |     |   |
| Salaries                and benefits |   | $        | 1,138,543 |     | $      | 1,137,288 |   |
| Professional                fees     |   |     | 419,239   |     |   | 380,355 |   |
| Other                                |   |     | 604,594   |     |   | 455,567 |   |
|                                 |   |     |      |     |   |   |   |
|                                 |   | $        | 2,162,376 |     | $      | 1,973,210 |   |

**Note      9:  **
**Foreign      Operations**

|                                             |   | **2006** |    | **2005** |   |
|--------------------------------------------------|--------|----------|---------|----------|--------|
|                                             |   |     |    |     |   |
| Total                revenues                    |   | $        | 279,119 |     | $      | 258,613 |   |
|                                             |   |     |    |     |   |   |   |
| Income                (Loss) before income taxes |   |     | 25,846  |     |   | (47,103 | ) |
|                                             |   |     |    |     |   |   |   |
| Net                Income (Loss)                 |   |     | 25,846  |     |   | (47,103 | ) |

----

|                                    |   | **2006** |    | **2005** |   |
|-----------------------------------------|--------|----------|---------|----------|--------|
|                                    |   |     |    |     |   |
| Total                revenues           |   | $        | 864,215 |     | $      | 730,245 |   |
|                                    |   |     |    |     |   |   |   |
| Loss                before income taxes |   |     | (30,733 | )        |   | (81,743 | ) |
|                                    |   |     |    |     |   |   |   |
| Net                loss                 |   |     | (30,733 | )        |   | (81,743 | ) |

**Note      10:  **
**Comprehensive      **
**Income/(Loss)**

|                                                   |   | **2006** |     | **2005** |   |
|--------------------------------------------------------|--------|----------|----------|----------|--------|
|                                                   |   |     |     |     |   |
| Net                loss                                |   | $        | (113,523 | )        | $      | (160,482 | ) |
| Foreign                currency translation adjustment |   |     | (14,722  | )        |   | 207,653 |   |
|                                                   |   |     |     |     |   |   |   |
| Comprehensive                income/(loss)             |   | $        | (128,245 | )        | $      | 47,171 |   |

|                                                   |   | **2006** |     | **2005** |   |
|--------------------------------------------------------|--------|----------|----------|----------|--------|
|                                                   |   |     |     |     |   |
| Net                loss                                |   | $        | (686,907 | )        | $      | (624,340 | ) |
| Foreign                currency translation adjustment |   |     | 154,878  |     |   | 143,738 |   |
|                                                   |   |     |     |     |   |   |   |
| Comprehensive                loss                      |   | $        | (532,029 | )        | $      | (480,602 | ) |

----

**Note        11:  **
**Additional        Cash Flow Information**

----

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

**FORWARD-LOOKING      STATEMENTS**

*This      Quarterly Report on Form 10-QSB contains forward-looking statements within      the      meaning of the Private Securities Litigation Reform Act of 1995. Words such      as“intend,” “anticipate,” “believe,” “estimate,” “plan,” and “expect,” and      variations of these words and similar expressions are intended to identify      these      forward-looking statements. All statements other than statements of historical      facts contained in this report, including statements regarding our future      financial position, business strategy, budgets, projected costs and plans and      objectives of management for future operations, are considered to be      forward-looking statements. We express our expectations, beliefs or projections      in good faith and believe our expectations reflected in these forward-looking      statements are based on reasonable assumptions; however, we cannot assure you      that these expectations, beliefs or projections will prove to have been correct.      Risks, uncertainties and assumptions that could cause actual results to differ      materially from the expectations reflected in the forward-looking statements      include, among other things: (i) the risks associated with business expansion;      (ii) the ability to obtain sufficient outside debt and/or equity financing      on      terms acceptable to us in order to meet our cash requirements over the coming      12      months; (iii) our ability to compete successfully against competitors with      significantly greater financial, marketing and advertising resources than the      Company; and (iv) the risk of adverse economic conditions lessening demand      for      our products.*

*Readers      are referred to the caption “Risk Factors” appearing at the end of*
***ITEM      1, Description of Business***
*      in      our annual report on Form 10-KSB, filed on March 30, 2006, for additional      factors that may affect our forward-looking statements. In light of these risks,      uncertainties and assumptions, the forward-looking events discussed in this      Form      10-QSB might not occur. We undertake no obligation to update or revise our      forward-looking statements, whether as a result of new information, future      events or otherwise.*

***Overview***

***Reorganization      of Predecessor Under Chapter 11***

----

| December                  31, 2003  |   |   | 17 | % |
|-------------------------------------|--------|--------|----|---|
| December                  31, 2004  |   |   | 45 | % |
| March                  31, 2005     |   |   | 61 | % |
| June                  30, 2005      |   |   | 72 | % |
| September                  30, 2005 |   |   | 77 | % |
| December                  31, 2005  |   |   | 79 | % |
| March                  31, 2006     |   |   | 80 | % |
| June                  30, 2006      |   |   | 82 | % |
| September                  30, 2006 |   |   | 84 | % |

| (1)   | Consistently                acquiring an increasing volume of sub-prime automobile-secured Installment                Contracts, through our point-of-sale programs, that meet the Company’s                underwriting guidelines; |
|-----------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (2)   | Obtaining                additional outside debt and/or equity financing to meet the Company’s                future cash requirements; |
|-----------------|-----------------------------------------------------------------------------------------------------------------------------------------------|

| (3)   | Minimizing                the credit losses in the Installment Contracts portfolio;                and |
|-----------------|--------------------------------------------------------------------------------------------------------|

| (4)   | Monitoring                key performance measures, including cost per loan acquired, book-to-look                ratio (computed as the number of contracts acquired compared to the                number                of credit applications received/reviewed), turnaround time for responding                to credit applications submitted by dealers, and turnaround time                for                funding a loan package submitted by a                dealer. |
|-----------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

***Recent      Developments***

----

***Critical      Accounting Policies, Judgments and Estimates***

----

----

***Selected      Financial Data***

|                                                                                                    |   | **Three                Months Ended September 30,** |      | **Nine                Months Ended****September                30,** |   |
|---------------------------------------------------------------------------------------------------------|--------|-----------------------------------------------------|-----------|----------------------------------------------------------------------|--------|
|                                                                                                    |   | **2006**                                            |      | **2005**                                                             |   | **2006** |   | **2005** |   |
| **Consolidated                Summary of Operations:**                                                  |   |                                                |      |                                                                 |   |   |   |   |   |   |   |   |   |
| Interest                income                                                                          |   | $                                                   | 685,385   |                                                                 | $      | 613,821 |   | $ | 2,032,608 |   | $ | 1,604,761 |   |
| Recovery                of charged-off finance receivables                                              |   |                                                | 14,326    |                                                                 |   | 22,620 |   |   | 32,640 |   |   | 100,650 |   |
| Other                income                                                                             |   |                                                | 86,175    |                                                                 |   | 21,668 |   |   | 143,064 |   |   | 72,571 |   |
| Total                revenues                                                                           |   |                                                | 785,886   |                                                                 |   | 658,109 |   |   | 2,208,312 |   |   | 1,777,982 |   |
|                                                                                                    |   |                                                |      |                                                                 |   |   |   |   |   |   |   |   |   |
| Interest                expense                                                                         |   |                                                | 24,505    |                                                                 |   | - |   |   | 24,505 |   |   | - |   |
| Revenues                after interest expense                                                          |   |                                                | 761,381   |                                                                 |   | 658,109 |   |   | 2,183,807 |   |   | 1,777,982 |   |
| Provision                for credit losses                                                              |   |                                                | 166,178   |                                                                 |   | 233,559 |   |   | 708,338 |   |   | 431,847 |   |
|                                                                                                    |   |                                                |      |                                                                 |   |   |   |   |   |   |   |   |   |
| Net                revenues after provision for credit losses                                           |   |                                                | 595,203   |                                                                 |   | 424,550 |   |   | 1,475,469 |   |   | 1,346,135 |   |
|                                                                                                    |   |                                                |      |                                                                 |   |   |   |   |   |   |   |   |   |
| Operating                expenses                                                                       |   |                                                | 708,726   |                                                                 |   | 586,618 |   |   | 2,162,376 |   |   | 1,973,210 |   |
|                                                                                                    |   |                                                |      |                                                                 |   |   |   |   |   |   |   |   |   |
| Operating                loss                                                                           |   |                                                | (113,523  | )                                                                    |   | (162,068 | ) |   | (686,907 | ) |   | (627,075 | ) |
|                                                                                                    |   |                                                |      |                                                                 |   |   |   |   |   |   |   |   |   |
| Non-operating                income                                                                     |   |                                                | -         |                                                                 |   | 1,586 |   |   | - |   |   | 2,735 |   |
|                                                                                                    |   |                                                |      |                                                                 |   |   |   |   |   |   |   |   |   |
| Loss                before income taxes                                                                 |   |                                                | (113,523  | )                                                                    |   | (160,482 | ) |   | (686,907 | ) |   | (624,340 | ) |
|                                                                                                    |   |                                                |      |                                                                 |   |   |   |   |   |   |   |   |   |
| Income                taxes                                                                             |   |                                                | -         |                                                                 |   | - |   |   | - |   |   | - |   |
|                                                                                                    |   |                                                |      |                                                                 |   |   |   |   |   |   |   |   |   |
| Net                loss                                                                                 |   | $                                                   | (113,523  | )                                                                    | $      | (160,482 | ) | $ | (686,907 | ) | $ | (624,340 | ) |
|                                                                                                    |   |                                                |      |                                                                 |   |   |   |   |   |   |   |   |   |
| Basic                and diluted loss per share                                                         |   | $                                                   | (0.01     | )                                                                    | $      | (0.02 | ) | $ | (0.06 | ) | $ | (0.06 | ) |
| **Other                Selected Data:**                                                                 |   |                                                |      |                                                                 |   |   |   |   |   |   |   |   |   |
| Installment                Contracts acquired during the period (total principal                amount) |   | $                                                   | 1,636,268 |                                                                 | $      | 3,171,617 |   | $ | 6,138,863 |   | $ | 9,750,545 |   |
| Purchase                price of Installment Contracts acquired                                         |   | $                                                   | 1,553,594 |                                                                 | $      | 3,002,790 |   | $ | 5,806,824 |   | $ | 9,058,592 |   |
| Percentage                of dollar amount paid to principal balance acquired                           |   |                                                | 94.9      | %                                                                    |   | 94.7 | % |   | 94.6 | % |   | 92.9 | % |
| Number                of Installment Contracts acquired during the period                               |   |                                                | 246       |                                                                 |   | 469 |   |   | 966 |   |   | 1,642 |   |
| Average                principal balance acquired                                                       |   | $                                                   | 6,652     |                                                                 | $      | 6,763 |   | $ | 6,355 |   | $ | 5,938 |   |
| Acquisition                cost per acquired Installment Contract (including                overhead)   |   | $                                                   | 887       |                                                                 | $      | 635 |   | $ | 814 |   | $ | 571 |   |
| Monthly                servicing cost per Installment Contract (including                overhead)      |   | $                                                   | 20.75     |                                                                 | $      | 20.93 |   | $ | 21.42 |   | $ | 28.19 |   |

----

|                                                            |   | **September                30,****2006** |       | **December                31, 2005** |   |
|-----------------------------------------------------------------|--------|------------------------------------------|------------|--------------------------------------|--------|
| **Consolidated                Summary of Financial Condition:** |   |                                     |       |                                 |   |   |   |
| Installment                Contracts receivable, net            |   | $                                        | 10,398,481 |                                 | $      | 9,756,170 |   |
| Total                assets                                     |   | $                                        | 12,271,273 |                                 | $      | 12,619,675 |   |
|                                                            |   |                                     |       |                                 |   |   |   |
| Total                liabilities                                |   | $                                        | 498,458    |                                 | $      | 319,643 |   |
| Total                stockholders' equity                       |   | $                                        | 11,772,815 |                                 | $      | 12,300,032 |   |

***Results      of Operations***

**Interest      Income**

|                                         |   | **For                the Three Months Ended September 30, 2006 and                2005** |       |
|----------------------------------------------|--------|------------------------------------------------------------------------------------------|------------|
|                                         |   | **2006**                                                                                 |       | **2005** |   |
|                                         |   | **Average**                                                                              |       | **Interest** |   |   |   | **Average** |   | **Interest** |   |   |   |
|                                         |   | **Balance**                                                                              |       | **Income** |   | **Yield** |   | **Balance** |   | **Income** |   | **Yield** |   |
|                                         |   |                                                                                     |       |   |   |   |   |   |   |   |   |   |   |
| **Installment                Contracts**     |   | $                                                                                        | 10,903,219 |   | $ | 675,353 |   |   | 24.78% |   | $ | 8,748,961 |   | $ | 585,368 |   |   | 26.76% |   |
| **Cash                and cash equivalents** |   |                                                                                     | 1,053,189  |   |   | 9,647 |   |   | 3.66% |   |   | 3,617,994 |   |   | 27,682 |   |   | 3.06% |   |
| **Notes                receivable**          |   |                                                                                     | 11,725     |   |   | 385 |   |   | 13.13% |   |   | 39,087 |   |   | 771 |   |   | 7.89% |   |
|                                         |   |                                                                                     |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| **Total**                                    |   | $                                                                                        | 11,968,133 |   | $ | 685,385 |   |   | 22.91% |   | $ | 12,406,042 |   | $ | 613,821 |   |   | 19.79% |   |

----

|                                         |   | **For                the Nine Months Ended September 30, 2006 and 2005** |       |
|----------------------------------------------|--------|--------------------------------------------------------------------------|------------|
|                                         |   | **2006**                                                                 |       | **2005** |   |
|                                         |   | **Average**                                                              |       | **Interest** |   |   |   | **Average** |   | **Interest** |   |   |   |
|                                         |   | **Balance**                                                              |       | **Income** |   | **Yield** |   | **Balance** |   | **Income** |   | **Yield** |   |
|                                         |   |                                                                     |       |   |   |   |   |   |   |   |   |   |   |
| **Installment                Contracts**     |   | $                                                                        | 10,633,303 |   | $ | 1,990,409 |   |   | 24.89% |   | $ | 6,930,311 |   | $ | 1,490,134 |   |   | 28.67% |   |
| **Cash                and cash equivalents** |   |                                                                     | 1,435,853  |   |   | 41,079 |   |   | 3.81% |   |   | 5,648,626 |   |   | 110,912 |   |   | 2.62% |   |
| **Notes                receivable**          |   |                                                                     | 11,725     |   |   | 1,120 |   |   | 12.74% |   |   | 56,712 |   |   | 3,715 |   |   | 8.73% |   |
|                                         |   |                                                                     |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| **Total**                                    |   | $                                                                        | 12,110,881 |   | $ | 2,032,608 |   |   | 22.38% |   | $ | 12,635,649 |   | $ | 1,604,761 |   |   | 16.93% |   |

|                                                   |   | **For                the Three Months Ended September 30, 2006 Compared to the Three Months                Ended September 30, 2005** |    |
|--------------------------------------------------------|--------|---------------------------------------------------------------------------------------------------------------------------------------|---------|
|                                                   |   | **Volume**                                                                                                                            |    | **Rate** |   | **Total** |   |
| Increase                (decrease) in interest income: |   |                                                                                                                                  |    |   |   |   |   |   |   |   |
| Installment                Contracts                   |   | $                                                                                                                                     | 128,819 |   | $ | (38,834 | ) | $ | 89,985 |   |
| Cash                and cash equivalents               |   |                                                                                                                                  | (24,983 | ) |   | 6,947 |   |   | (18,036 | ) |
| Notes                receivable                        |   |                                                                                                                                  | (7,645  | ) |   | 7,260 |   |   | (385 | ) |
|                                                   |   |                                                                                                                                  |    |   |   |   |   |   |   |   |
| Total                Interest Income                   |   | $                                                                                                                                     | 96,191  |   | $ | (24,627 | ) | $ | 71,564 |   |

----

|                                                   |   | **For                the Nine Months Ended September 30, 2006 Compared to the Nine Months                Ended                September 30, 2005** |     |
|--------------------------------------------------------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------|----------|
|                                                   |   | **Volume**                                                                                                                                         |     | **Rate** |   | **Total** |   |
| Increase                (decrease) in interest income: |   |                                                                                                                                               |     |   |   |   |   |   |   |   |
| Installment                Contracts                   |   | $                                                                                                                                                  | 662,478  |   | $ | (162,203 | ) | $ | 500,275 |   |
| Cash                and cash equivalents               |   |                                                                                                                                               | (180,356 | ) |   | 110,522 |   |   | (69,834 | ) |
| Notes                receivable                        |   |                                                                                                                                               | (6,152   | ) |   | 3,558 |   |   | (2,594 | ) |
|                                                   |   |                                                                                                                                               |     |   |   |   |   |   |   |   |
| Total                Interest Income                   |   | $                                                                                                                                                  | 475,970  |   | $ | (48,123 | ) | $ | 427,847 |   |

**Provision      for Credit Losses**

**Operating      Expenses**

|                                 |   | **Three                Months Ended September 30,** |    |
|--------------------------------------|--------|-----------------------------------------------------|---------|
|                                 |   | **2006**                                            |    | **2005** |   | **Percent                Change** |   |
|                                 |   |                                                |    |   |   |   |   |
| Salaries                and benefits |   | $                                                   | 353,885 |   | $ | 351,014 |   |   | 0.8% |   |
| Professional                fees     |   |                                                | 104,478 |   |   | 91,887 |   |   | 13.7% |   |
| Other                                |   |                                                | 250,363 |   |   | 143,717 |   |   | 74.2% |   |
| Total                                |   | $                                                   | 708,726 |   | $ | 586,618 |   |   | 20.8% |   |

----

|                                 |   | **Nine                Months Ended September 30,** |      |
|--------------------------------------|--------|----------------------------------------------------|-----------|
|                                 |   | **2006**                                           |      | **2005** |   | **Percent                Change** |   |
|                                 |   |                                               |      |   |   |   |   |
| Salaries                and benefits |   | $                                                  | 1,138,543 |   | $ | 1,137,288 |   |   | 0.1% |   |
| Professional                fees     |   |                                               | 419,239   |   |   | 380,355 |   |   | 10.2% |   |
| Other                                |   |                                               | 604,594   |   |   | 455,567 |   |   | 32.7% |   |
| Total                                |   | $                                                  | 2,162,376 |   | $ | 1,973,210 |   |   | 9.6% |   |

----

***Financial      Condition***

**Installment      Contracts Portfolio**

|                                       |   | **September                30, 2006** |      | **December                31, 2005** |   |
|--------------------------------------------|--------|---------------------------------------|-----------|--------------------------------------|--------|
|                                       |   | **United                States**      |      | **Canada**                           |   | **Total** |   | **United                States** |   | **Canada** |   | **Total** |   |
| Automobiles                                |   | $                                     | 7,712,586 |                                 | $      | 1,714,203 |   | $ | 9,426,789 |   | $ | 6,828,324 |   | $ | 1,628,657 |   | $ | 8,456,981 |   |
| Equipment                leases            |   |                                  | -         |                                 |   | 473,722 |   |   | 473,722 |   |   | - |   |   | 704,484 |   |   | 704,484 |   |
| Bulk                food                   |   |                                  | -         |                                 |   | 480,540 |   |   | 480,540 |   |   | - |   |   | 863,167 |   |   | 863,167 |   |
| Other                                      |   |                                  | -         |                                 |   | 885,080 |   |   | 885,080 |   |   | - |   |   | 742,534 |   |   | 742,534 |   |
| Total                                      |   |                                  | 7,712,586 |                                 |   | 3,553,545 |   |   | 11,266,131 |   |   | 6,828,324 |   |   | 3,938,842 |   |   | 10,767,166 |   |
|                                       |   |                                  |      |                                 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Less                                       |   |                                  |      |                                 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Unearned                discount           |   |                                  | 291,855   |                                 |   | 140,051 |   |   | 431,906 |   |   | 390,979 |   |   | 207,789 |   |   | 598,768 |   |
| Allowance                for credit losses |   |                                  | 241,173   |                                 |   | 194,571 |   |   | 435,744 |   |   | 199,558 |   |   | 212,670 |   |   | 412,228 |   |
| Net                                        |   | $                                     | 7,179,558 |                                 | $      | 3,218,923 |   | $ | 10,398,481 |   | $ | 6,237,787 |   | $ | 3,518,383 |   | $ | 9,756,170 |   |

----

**Asset      Quality**

|                                  |   | **September                30, 2006** |      |
|---------------------------------------|--------|---------------------------------------|-----------|
|                                  |   | **United                States**      |      | **Canada** |   | **Total** |   |
|                                  |   | **Amount**                            |      | **Pct.** |   | **Amount** |   | **Pct.** |   | **Amount** |   | **Pct.** |   |
|                                  |   |                                  |      |   |   |   |   |   |   |   |   |   |   |
| Installment                Contracts  |   | $                                     | 7,712,586 |   |   | 100% |   | $ | 3,553,545 |   |   | 100% |   | $ | 11,266,131 |   |   | 100% |   |
|                                  |   |                                  |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Period                of delinquency: |   |                                  |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| 30                - 59 days           |   | $                                     | 710,702   |   |   | 9.21% |   | $ | 69,886 |   |   | 1.97% |   | $ | 780,588 |   |   | 6.93% |   |
| 60                - 89 days           |   |                                  | 366,758   |   |   | 4.76% |   |   | 47,286 |   |   | 1.33% |   |   | 414,044 |   |   | 3.68% |   |
| 90                - 119 days          |   |                                  | 184,512   |   |   | 2.39% |   |   | 48,629 |   |   | 1.37% |   |   | 233,141 |   |   | 2.07% |   |
|                                  |   |                                  |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total                                 |   | $                                     | 1,261,972 |   |   | 16.36% |   | $ | 165,801 |   |   | 4.67% |   | $ | 1,427,773 |   |   | 12.67% |   |

|                                  |   | **December                31, 2005** |      |
|---------------------------------------|--------|--------------------------------------|-----------|
|                                  |   | **United                States**     |      | **Canada** |   | **Total** |   |
|                                  |   | **Amount**                           |      | **Pct.** |   | **Amount** |   | **Pct.** |   | **Amount** |   | **Pct.** |   |
|                                  |   |                                 |      |   |   |   |   |   |   |   |   |   |   |
| Installment                Contracts  |   | $                                    | 6,828,324 |   |   | 100% |   | $ | 3,938,842 |   |   | 100% |   | $ | 10,767,166 |   |   | 100% |   |
|                                  |   |                                 |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Period                of delinquency: |   |                                 |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| 30                - 59 days           |   | $                                    | 499,705   |   |   | 7.32% |   | $ | 62,377 |   |   | 1.58% |   | $ | 562,082 |   |   | 5.22% |   |
| 60                - 89 days           |   |                                 | 155,349   |   |   | 2.28% |   |   | 42,591 |   |   | 1.08% |   |   | 197,940 |   |   | 1.84% |   |
| 90                - 119 days          |   |                                 | 104,842   |   |   | 1.54% |   |   | 36,139 |   |   | 0.92% |   |   | 140,981 |   |   | 1.31% |   |
|                                  |   |                                 |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total                                 |   | $                                    | 759,896   |   |   | 11.13% |   | $ | 141,107 |   |   | 3.58% |   | $ | 901,003 |   |   | 8.37% |   |

----

|                                                                                                          |   | **Three                Months Ended****September                30, 2006** |      | **Three                Months Ended****September                30, 2005** |   |
|---------------------------------------------------------------------------------------------------------------|--------|----------------------------------------------------------------------------|-----------|----------------------------------------------------------------------------|--------|
|                                                                                                          |   | **United                States**                                           |      | **Canada**                                                                 |   | **Total** |   | **United                States** |   | **Canada** |   | **Total** |   |
|                                                                                                          |   |                                                                       |      |                                                                       |   |   |   |   |   |   |   |   |   |
| Installment                Contracts, net of unearned discounts, end of period                                |   | $                                                                          | 7,420,731 |                                                                       | $      | 3,413,494 |   | $ | 10,834,225 |   | $ | 6,095,749 |   | $ | 3,402,541 |   | $ | 9,498,290 |   |
|                                                                                                          |   |                                                                       |      |                                                                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Installment                Contracts, net of unearned discounts, average during the period                (1) |   | $                                                                          | 7,363,929 |                                                                       | $      | 3,539,289 |   | $ | 10,903,218 |   | $ | 5,571,111 |   | $ | 3,177,850 |   | $ | 8,748,961 |   |
|                                                                                                          |   |                                                                       |      |                                                                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Gross                charge-offs                                                                              |   | $                                                                          | 295,687   |                                                                       | $      | 60,054 |   | $ | 355,741 |   | $ | 249,738 |   | $ | 82,831 |   | $ | 332,569 |   |
| Recoveries                                                                                                    |   |                                                                       | 137,583   |                                                                       |   | 40,186 |   |   | 177,769 |   |   | 125,881 |   |   | 32,970 |   |   | 158,851 |   |
|                                                                                                          |   |                                                                       |      |                                                                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net                charge-offs                                                                                |   | $                                                                          | 158,104   |                                                                       | $      | 19,868 |   | $ | 177,972 |   | $ | 123,857 |   | $ | 49,861 |   | $ | 173,718 |   |
|                                                                                                          |   |                                                                       |      |                                                                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net                charge-offs as a % of avg. contracts during the period,                annualized          |   |                                                                       | 8.59      | %                                                                          |   | 2.25 | % |   | 6.53 | % |   | 8.89 | % |   | 6.28 | % |   | 7.94 | % |

| (1)                - Average is based on month-end                balances |
|----------------------------------------------------------------------------|

|                                                                                                          |   | **Nine                Months Ended****September                30, 2006** |      | **Nine                Months Ended****September                30, 2005** |   |
|---------------------------------------------------------------------------------------------------------------|--------|---------------------------------------------------------------------------|-----------|---------------------------------------------------------------------------|--------|
|                                                                                                          |   | **United                States**                                          |      | **Canada**                                                                |   | **Total** |   | **United                States** |   | **Canada** |   | **Total** |   |
|                                                                                                          |   |                                                                      |      |                                                                      |   |   |   |   |   |   |   |   |   |
| Installment                Contracts, net of unearned discounts, end of period                                |   | $                                                                         | 7,420,731 |                                                                      | $      | 3,413,494 |   | $ | 10,834,225 |   | $ | 6,095,749 |   | $ | 3,402,541 |   | $ | 9,498,290 |   |
|                                                                                                          |   |                                                                      |      |                                                                      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Installment                Contracts, net of unearned discounts, average during the period                (1) |   | $                                                                         | 6,993,974 |                                                                      | $      | 3,669,329 |   | $ | 10,663,303 |   | $ | 4,091,902 |   | $ | 2,838,409 |   | $ | 6,930,311 |   |
|                                                                                                          |   |                                                                      |      |                                                                      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Gross                charge-offs                                                                              |   | $                                                                         | 801,429   |                                                                      | $      | 241,790 |   | $ | 1,043,219 |   | $ | 484,203 |   | $ | 168,289 |   | $ | 652,492 |   |
| Recoveries                                                                                                    |   |                                                                      | 274,810   |                                                                      |   | 75,966 |   |   | 350,776 |   |   | 219,159 |   |   | 85,225 |   |   | 304,384 |   |
|                                                                                                          |   |                                                                      |      |                                                                      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net                charge-offs                                                                                |   | $                                                                         | 526,619   |                                                                      | $      | 165,824 |   | $ | 692,443 |   | $ | 265,044 |   | $ | 83,064 |   | $ | 384,108 |   |
|                                                                                                          |   |                                                                      |      |                                                                      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net                charge-offs as a % of avg. contracts during the period,                annualized          |   |                                                                      | 10.04     | %                                                                         |   | 6.03 | % |   | 8.66 | % |   | 8.64 | % |   | 3.90 | % |   | 7.38 | % |

| (1)                - Average is based on month-end                balances |
|----------------------------------------------------------------------------|

----

**Item      2, MANAGEMENT’S DISCUSSION AND ANALYSIS**
***Critical      Accounting Policies, Judgments and Estimates***

----

**Item      2, MANAGEMENT’S DISCUSSION AND ANALYSIS**
***Critical      Accounting Policies and Judgments***

|                                                  |   | **Three                Months Ended****September                30, 2006** |     | **Three                Months Ended****September                30, 2005** |   |
|-------------------------------------------------------|--------|----------------------------------------------------------------------------|----------|----------------------------------------------------------------------------|--------|
|                                                  |   | **United                States**                                           |     | **Canada**                                                                 |   | **Total** |   | **United                States** |   | **Canada** |   | **Total** |   |
|                                                  |   |                                                                       |     |                                                                       |   |   |   |   |   |   |   |   |   |
| Balance                at beginning of period         |   | $                                                                          | 236,147  |                                                                       | $      | 211,804 |   | $ | 447,951 |   | $ | 153,954 |   | $ | 163,980 |   | $ | 317,934 |   |
|                                                  |   |                                                                       |     |                                                                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Charge-offs                                           |   |                                                                       | (295,687 | )                                                                          |   | (60,054 | ) |   | (355,741 | ) |   | (249,738 | ) |   | (82,831 | ) |   | (332,569 | ) |
| Recoveries                                            |   |                                                                       | 137,583  |                                                                       |   | 40,186 |   |   | 177,769 |   |   | 125,881 |   |   | 32,970 |   |   | 158,851 |   |
|                                                  |   |                                                                       |          |                                                                       |   |  |   |   |  |   |   |  |   |   |  |   |   |  |   |
| Net                charge-offs                        |   |                                                                       | (158,104 | )                                                                          |   | (19,868 | ) |   | (177,972 | ) |   | (123,857 | ) |   | (49,861 | ) |   | (173,718 | ) |
|                                                  |   |                                                                       |     |                                                                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Provision                for credit losses            |   |                                                                       | 163,130  |                                                                       |   | 3,048 |   |   | 166,178 |   |   | 158,871 |   |   | 74,688 |   |   | 233,559 |   |
|                                                  |   |                                                                       |     |                                                                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Effect                of foreign currency translation |   |                                                                       | -        |                                                                       |   | (413 | ) |   | (413 | ) |   | - |   |   | 12,568 |   |   | 12,568 |   |
|                                                  |   |                                                                       |     |                                                                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Balance                at end of period               |   | $                                                                          | 241,173  |                                                                       | $      | 194,571 |   | $ | 435,744 |   | $ | 188,968 |   | $ | 201,375 |   | $ | 390,343 |   |

|                                                  |   | **Nine                Months Ended****September                30, 2006** |     | **Nine                Months Ended****September                30, 2005** |   |
|-------------------------------------------------------|--------|---------------------------------------------------------------------------|----------|---------------------------------------------------------------------------|--------|
|                                                  |   | **United                States**                                          |     | **Canada**                                                                |   | **Total** |   | **United                States** |   | **Canada** |   | **Total** |   |
|                                                  |   |                                                                      |     |                                                                      |   |   |   |   |   |   |   |   |   |
| Balance                at beginning of period         |   | $                                                                         | 199,558  |                                                                      | $      | 212,670 |   | $ | 412,228 |   | $ | 139,921 |   | $ | 156,312 |   | $ | 296,233 |   |
|                                                  |   |                                                                      |     |                                                                      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Charge-offs                                           |   |                                                                      | (801,429 | )                                                                         |   | (241,790 | ) |   | (1,043,219 | ) |   | (484,203 | ) |   | (168,289 | ) |   | (652,492 | ) |
| Recoveries                                            |   |                                                                      | 274,810  |                                                                      |   | 75,966 |   |   | 350,776 |   |   | 219,159 |   |   | 85,225 |   |   | 304,384 |   |
|                                                  |   |                                                                      |          |                                                                      |   |  |   |   |  |   |   |  |   |   |  |   |   |  |   |
| Net                charge-offs                        |   |                                                                      | (526,619 | )                                                                         |   | (165,824 | ) |   | (692,443 | ) |   | (265,044 | ) |   | (83,064 | ) |   | (348,108 | ) |
|                                                  |   |                                                                      |     |                                                                      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Provision                for credit losses            |   |                                                                      | 568,234  |                                                                      |   | 140,104 |   |   | 708,338 |   |   | 314,091 |   |   | 117,756 |   |   | 431,847 |   |
|                                                  |   |                                                                      |     |                                                                      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Effect                of foreign currency translation |   |                                                                      | -        |                                                                      |   | 7,621 |   |   | 7,621 |   |   | - |   |   | 10,371 |   |   | 10,371 |   |
|                                                  |   |                                                                      |     |                                                                      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Balance                at end of period               |   | $                                                                         | 241,173  |                                                                      | $      | 194,571 |   | $ | 435,744 |   | $ | 188,968 |   | $ | 201,375 |   | $ | 390,343 |   |

----

***Liquidity      and Capital Resources***

----

***Off-Balance      Sheet Arrangements***

| 2006  |   | $      | 12,613 |   |
|-------|--------|--------|--------|--------|
| 2007  |   |   | 28,052 |   |
| Total |   | $      | 40,665 |   |

----

**ITEM      3.  **
**Controls      and Procedures**
** **

----

**PART      II.**
** **
**-      OTHER INFORMATION**

**ITEM      1.  **
**Legal      Proceedings**
** **

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

**PART      I, ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS**
***Recent      Developments***

**ITEM      3.  **
**Defaults      Upon Senior Securities**

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

**ITEM      5.  **
**Other Information**

----

**ITEM      6.  **
**Exhibits      and Reports on Form 8-K**

**INDEX      TO EXHIBITS**

| **Exhibit****Number**     |   | **Description**                                                                                                                                                                                             |
|---------------------------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                      |   |                                                                                                                                                                                                        |
| 2.1                (a)    |   | Corrected                Trustee’s Amended Plan of Reorganization                                                                                                                                     |
| 2.2                (a)    |   | Disclosure                Statement for Trustee’s Amended Plan of Reorganization                                                                                                                      |
| 3.1                (a)    |   | First                Amended and Restated Certificate of Incorporation                                                                                                                                      |
| 3.1.1                (a)  |   | Certificate                of Amendment to Certificate of Incorporation                                                                                                                                     |
| 3.2                (a)    |   | Bylaws                                                                                                                                                                                                      |
| 3.2.1                (a)  |   | Amendment                to Bylaws                                                                                                                                                                          |
| 4.1                (a)    |   | Amended                and Restated Trust Agreement of Freedom Financial Group I Statutory                Trust                                                                                             |
| 10.1                (a)   |   | Employment                Agreement with Jerald L. Fenstermaker                                                                                                                                             |
| 10.1.1                (e) |   | Extension                of Employment Agreement with Jerald L. Fenstermaker                                                                                                                                |
| 10.2                (a)   |   | Investment                Banking Agreement with Milestone Advisors, LLC                                                                                                                                    |
| 10.3                (a)   |   | Unanimous                Consent of the Board of Directors Adopting Executive Management Stock                Bonus Plan                                                                                    |
| 10.4                (a)   |   | Office                Lease - 3058 East Elm                                                                                                                                                                 |
| 10.5                (b)   |   | Purchase                and Sale Agreement, dated April 7, 2003, between Freedom Financial                Group,                Inc. (as Seller) and The Cadle Company (as Buyer)                           |
| 10.6                (b)   |   | Commercial                Real Estate Purchase Contract, dated May 9, 2003, between Freedom                Financial Group, Inc. (as Seller) and New Life Church of God (as                Buyer)           |
| 10.7                (b)   |   | Real                Estate Sale Contract, dated June 4, 2003, between Donald D. Bass                and Don                W. Bass (as Buyers) and Freedom Financial Group, Inc. (as                Seller) |
| 10.8                (b)   |   | Application                and Order by Bankruptcy Court Approving Employment of Biltmore                Associates                                                                                         |
| 10.9                (d)   |   | Revolving                Credit Loan and Security Agreement                                                                                                                                                 |
| 10.10                (d)  |   | Promissory                Note                                                                                                                                                                              |
| 10.11                (d)  |   | Stock                Pledge Agreement                                                                                                                                                                       |
| 10.12                (d)  |   | Warrant                for 300,000 shares of common stock                                                                                                                                                   |
| 10.13                (d)  |   | Warrant                for 200,000 shares of common stock                                                                                                                                                   |
| 10.14                (d)  |   | Warrant                for 136,778 shares of common stock                                                                                                                                                   |
| 10.15                (d)  |   | Warrant                for 91,185 shares of common stock                                                                                                                                                    |
| 11.1                      |   | Statement                Re: Computation of Per Share Earnings - See Note 7 to Condensed                Consolidated Financial Statements                                                                   |
| 14.1                (c)   |   | Code                of Ethics                                                                                                                                                                               |
| 31.1                      |   | Certification                of Chief Executive Officer Under Section 302 of the Sarbanes-Oxley                Act of                2002                                                                   |
| 31.2                      |   | Certification                of Chief Financial Officer Under Section 302 of the Sarbanes-Oxley                Act of                2002                                                                   |
| 32.1                      |   | Certifications                of the Chief Executive Officer and Chief Financial Officer under                Section                906 of the Sarbanes-Oxley Act of                2002                   |

----

----

**SIGNATURES**

|                                                    |                                                                                        |                                    |
|---------------------------------------------------------|---------------------------------------------------------------------------------------------|-----------------------------------------|
|                                                    | **FREEDOM                FINANCIAL GROUP, INC.**                                            |
|                                               |                                                                                   |                               |
| Date:               November              10, 2006 | By:                                                                               | /s/              Jerald L. Fenstermaker |
|                                                    | Jerald                L. Fenstermaker, President and Chief Executive                Officer |

|                                                    |                                                                |                              |
|---------------------------------------------------------|---------------------------------------------------------------------|-----------------------------------|
| Date:               November              10, 2006 | By:                                                       | /s/              Daniel F. Graham |
|                                                    | Daniel              F. Graham, Chief Financial              Officer |

----