DOLLAR FINANCIAL GROUP INC, 10-K405, 1999-09-28

DOLLAR FINANCIAL GROUP INC
10-K405, 1999-09-28
FUNCTIONS RELATED TO DEPOSITORY BANKING, NEC

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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-K

FOR ANNUAL AND TRANSITION REPORTS
PURSUANT TO SECTIONS 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934

For the fiscal year ended June 30, 1999

[_] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934

For the transition period from _____________ to _____________

Commission File Number 333-18221
----------------------

DOLLAR FINANCIAL GROUP, INC.
-------------------------------------------------------------
(Exact Name of Registrant as Specified in Its Charter )

New York 13-2997911
-------------------------------- ----------
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)

1436 Lancaster Avenue, Suite 210
Berwyn, Pennsylvania 19312-1288
-------------------------------- ----------
(Address of Principal Executive (Zip Code)
Offices)

Registrant's telephone number, including area code (610) 296-3400

Securities registered pursuant to Section 12(b) of the Act: None

Securities registered pursuant to Section 12(g) of the Act: None

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

Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K: [X]

There is no market for the common stock of Dollar Financial Group, Inc. and all
of such stock is held by the registrant's parent, DFG Holdings, Inc. See "Item
12 - Security Ownership of Certain Beneficial Owners and Management."

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APPLICABLE ONLY TO REGISTRANTS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS

Indicate by check mark whether the registrant has filed all documents
and reports required to be filed by Section 12, 13, or 15(d) of the Securities
Exchange Act of 1934 subsequent to the distribution of securities under a plan
confirmed by a court.

Yes No
---------- ----------

(APPLICABLE ONLY TO CORPORATE REGISTRANTS)

Indicate the number of shares outstanding of each of the registrant's
classes of common stock, as of the latest practicable date. As of September 28,
1999, 100 shares of the registrant's common stock, par value $1.00 per share,
were outstanding.

DOCUMENTS INCORPORATED BY REFERENCE

Certain information required by Part IV is incorporated by reference
to the Registrant's Registration Statement on Form S-4 (Registration No. 333-
18221) declared effective March 11, 1997, Registrant's Statement on Form 10Q
filed February 16, 1999 and Registrant's Statement on Form 8K/A filed April 26,
1999.

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DOLLAR FINANCIAL GROUP, INC.

Table of Contents

1999 Report on Form 10-K

<TABLE>
<S> <C> <C>
PART I

Item 1. Business...................................................................... 4
Item 2. Properties.................................................................... 18
Item 3. Legal Proceedings............................................................. 19
Item 4. Submission of Matters to a Vote of Security Holders........................... 19

PART II

Item 5. Market for Registrant's Common Equity and Related Stockholder Matters........ 20
Item 6. Selected Financial Data...................................................... 20
Item 7. Management's Discussion and Analysis of Financial Condition and
Results of Operations..................................................... 24
Item 7A. Quantitative and Qualitative Disclosures About Market Risk................... 35
Item 8. Financial Statements and Supplementary Data.................................. 36
Item 9. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure...................................................... 64

PART III

Item 10. Directors and Executive Officers of the Registrant........................... 64
Item 11. Executive Compensation....................................................... 66
Item 12. Security Ownership of Certain Beneficial Owners and Management............... 70
Item 13. Certain Relationships and Related Transactions............................... 70

PART IV

Item 14. Exhibits, Financial Statement Schedules and Reports on Form 8-K.............. 73
</TABLE>

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Item 1. BUSINESS

General

Dollar Financial Group, Inc., a New York corporation (the "Company" or "DFG"),
was organized in 1979 under the name Monetary Management Corporation. The
Company is a consumer financial services company operating the second largest
check cashing store network in the United States and the largest such network in
Canada and recently acquired stores in the United Kingdom. The Company provides
a diverse range of consumer financial products and services primarily consisting
of check cashing, money orders, money transfers, consumer loans and various
other related services. Certain stores also serve as distribution centers for
public assistance benefits and food stamps under government contracts. As of
June 30, 1999, the Company has a total network of 437 stores in 13 states, the
District of Columbia, Canada and the United Kingdom including 354 Company-owned
stores with revenues for the fiscal year ended June 30, 1999 of $121.0 million,
and with earnings before interest, taxes, depreciation, amortization, noncash
charges, recapitalization costs, writedown of goodwill and loss on store
closings and sales ("Adjusted EBITDA") for the fiscal year ended June 30, 1999
of $38.6 million.

The Company's primary customers are working, lower-income individuals and
families who require basic consumer financial services and are underserved by
traditional retail banking networks. The increased expense and decreased
availability of traditional retail banking services have left an increasing
number of individuals and families (estimated at 13% of U.S. households) without
banking relationships. Management believes that growth in the lower-income
segment of the population combined with the decreasing availability of
traditional retail banking services provides the Company with significant growth
opportunities.

The Company's stores currently operate under the following locally established
brand names: Almost-A-Banc(R), Any Kind Check Cashing Centers(R), C&C Check
Cashing(TM), Cash-N-Dash Check Cashing(TM), Check Mart(TM), Chex$Cashed(R),
Financial Exchange Company, Money Mart(TM), Quikcash, QwiCash(R), The Money
Shop, The Service Centers and Loan Mart(R). During the fiscal year 1999, the
Company initiated a rebranding of its stores to Money Mart.

Industry Overview

United States

The check cashing industry in the United States is highly fragmented, consisting
of approximately 7,200 stores as of May 1998, an increase from the approximately
1,350 national listings in 1986 according to American Business Information, Inc.
The Company believes it is one of only seven U.S. check cashing store networks
that have more than 100 locations, the remaining being local store networks and
single-unit operators. The Company believes that industry growth has been fueled
by several demographic and socioeconomic trends, including a decline in the
number of households with bank deposit accounts, an increase in the number of
low-paying service sector jobs, and an overall increase in the lower-income
population.

The number of families and individuals that hold bank, thrift, or savings and
loan deposit accounts has declined dramatically over the past fifteen years. In
a recent study, a leading national newspaper estimated that approximately 13% of
U.S. households do not maintain a banking relationship. The study attributes
this decline to a number of factors, including the inability of many families
and individuals to maintain the minimum account balance required by many banks
and thrifts, an increase in fees on deposit accounts with small balances, and an
increase in bank branch closings in lower-income population areas.

The increase in the fees charged by banks on deposit accounts over time has
contributed to the decline in the number of families and individuals holding
such accounts. The U.S. Public Interest Research Group has conducted a national
study which shows that, from 1993 to 1995, the annual cost to maintain a regular
checking account grew by 10% to $202, monthly maintenance fees increased 22% to
$7.11, average monthly balance requirements to avoid regular checking fees rose
30% to $1,242, and the minimum opening balance required for accounts rose 37% to
$69. The report states that these increased costs keep accounts out of reach of
many fixed-

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and lower-income consumers. In general, the findings indicate that banks have
increased their fees significantly on a real and inflation-adjusted basis .

Many banks have elected over time to close their less profitable or lower-
traffic locations. These closings have tended to occur in lower-income, urban
and minority neighborhoods. As banks continue this trend, wage earners in these
lower-income areas will have fewer, if any, convenient alternatives other than
local check cashing stores to perform basic financial transactions.

Lower-income individuals represent a large segment of the U.S. population. A
recent U.S. census survey revealed that over 40 million U.S. households have
income less than $30,000 a year. This low-wage population, from which the
Company draws most of its customers, is the fastest-growing segment of the
workforce. As the low-wage population continues to grow, the Company believes
that this population will increasingly rely on the check cashing industry and
the financial services that the Company provides as the primary source for their
consumer financial products and services.

Canada

In contrast to the domestic market, the Canadian check cashing market is
significantly more concentrated, with the Company's 181 owned and franchised
stores accounting for 60% of the total number of check cashing stores in Canada.
A 1998 survey conducted for the Company shows that a significant number of
customers choose to patronize the Company's locations because of the convenient
operating hours, fast and courteous service, and broad product offerings.

United Kingdom

In the United Kingdom ("UK"), check cashing is a relatively new and highly
fragmented business that developed with the passage of the Checks Act in 1992
which prohibits non-financial institutions from cashing checks (A check cashing
establishment is considered to be a financial institution for purposes of
compliance with the Checks Act). Traditionally, check cashing has been offered
as an "add-on" service to certain retail establishments. Management believes
that while there are between 700 - 800 listed check cashing locations in the UK,
only 125 - 175 are free-standing check cashing locations. A study conducted by
the New Policy Institute stated that 9 million people in the UK are without a
bank account. Additionally, 46% of households have annual income less than
$26,500.

Growth and Consolidation

Management believes that significant opportunities for growth exist in the check
cashing industry as a result of: (i) the growth of the lower-income population
sector; (ii) the failure of commercial banks and other traditional financial
service providers to address the needs of lower-income individuals, and; (iii)
the trend toward consolidation in the check cashing industry. Management
believes that as the lower-income population segment increases, and as trends
within the retail banking industry create a less accessible environment for
these members of society, the check cashing industry and other retail financial
services will realize a significant increase in demand for its products and
services. However, despite these growth dynamics, the Company believes that the
industry is undergoing a period of consolidation. The Company believes that
this consolidation trend has resulted from a number of factors, including; (i)
the economies of scale available to larger operators; (ii) the use of technology
as a means to better serve customers and control large store networks; (iii) the
inability of smaller operators to form the alliances necessary to deliver new
products, and; (iv) increased licensing and regulatory burdens. This
consolidation process should provide the Company, as one of the largest store
networks, with opportunities for continued growth through selective
acquisitions.

Competitive Strengths

The Company believes that it has the following competitive strengths:

Store locations in favorable demographic areas. The Company has carefully chosen
metropolitan areas with growing low-income populations. Within the markets
served by the Company, the Company's stores are located

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in desirable locations near its targeted customer base. Management adheres to a
strict set of market survey and location guidelines when selecting acquisition
targets and new store sites. The Company's store base is a mix of urban sites,
which are located in high-traffic shopping areas, and suburban sites, which are
located in strip malls near multi-family housing complexes.

High-quality customer service. As part of its retail and customer-driven
strategy, the Company focuses on providing friendly customer service in a clean
and attractive environment. Operating hours vary by location, but are typically
extended and designed to cater to those customers who, due to their work
schedules, cannot make use of "normal" banking hours. As part of its employee
training program, the Company's employees are encouraged and instructed to treat
customers in a friendly and courteous manner, which management believes results
in repeat business.

Broad offering of products and services. Company stores offer a wide range of
consumer financial products and services to meet the demands of their locale,
including check cashing, money orders, money transfers, short-term consumer
loans through its Cash `Til Payday loan program where DFG acts as an agent of a
federally chartered bank to offer unsecured short-term loans. The Company also
offers a variety of ancillary products, including photo ID, lottery tickets,
electronic tax filing, pagers, photocopy and fax services and pre-paid
telecommunication products including local and long-distance phone cards.

Economies of scale. As a result of its acquisition strategy in the United
States, Canada and the United Kingdom, the Company has reached a size that
enables it to benefit from economies of scale and to negotiate more favorable
contracts with its suppliers. In addition, the Company's market position enables
it to enter into favorable relationships with strategic partners like Western
Union. Management believes that the Company's size also allows it to gain
greater access to capital than its smaller competitors.

Management expertise. The regional managers of the Company have extensive
experience and expertise in the check cashing industry as well as other retail
industries, which the Company believes provides it with a competitive advantage.
Furthermore, the Company has been largely successful in retaining the
operational managers employed by the companies acquired in acquisitions. The
Company's senior management has extensive experience in banking, retailing and
financial services. In addition, the Company's management has significant
experience in acquiring and integrating businesses into the Company, and employs
a disciplined approach to making such acquisitions.

Well-diversified credit risk. For the twelve months ended June 30, 1999, the
Company cashed 7.5 million checks totaling $2.3 billion with an average face
value of $310. The Company actively manages its customer risk profile and
collection efforts in order to maximize check cashing revenues while maintaining
losses within a targeted range. Management has instituted control mechanisms
that it believes have been effective in managing risk, including: (i) check
verification procedures; (ii) customer identification cards; (iii) customer
files, including customer photographs, addresses, employment information and
transaction history; (iv) point-of-sale database systems; and (v) background
checks, among others. As a result, management believes that the Company is
unlikely to sustain a material credit loss from a single transaction or series
of transactions.

Although the Company believes that these competitive strengths will enable it to
achieve its strategic objectives, the Company may not be able to capitalize on
them. Changing demographics in areas surrounding the Company's stores could
negatively impact the quality of the store base. Regulatory and technological
changes could affect the products offered or the prices charged for such
products. The Company provides an extensive training program for all of its
employees, however, as the Company continues to grow, an inability to attract,
train, and recruit talented field personnel and corporate management could
negatively impact Company performance.

Strategy

The Company's business strategy is to capitalize on its competitive strengths by
increasing the revenues and profitability of its existing operations and by
continuing to grow through the acquisition of check cashing store networks and
the development of alternative store formats. Key elements of the Company's
business strategy include the following:

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Maintaining and instilling a customer-driven retail philosophy. The Company has
focused on increasing its customer base through a service-oriented approach
designed to meet the needs of working, lower-income individuals and families in
need of basic consumer financial services. The Company believes it has
differentiated itself from its competitors by focusing on customer service. The
Company offers extended operating hours in clean, well-lit, and convenient store
locations to enhance appeal and stimulate store traffic. The Company's research
indicates that, although approximately 30% of its customers have bank accounts,
its customers prefer immediate access to cash without waiting for check
clearance. In addition, the Company believes that many of its customers find
great value in their ability to cash a payroll or government check immediately,
for a fee, at a location within close proximity to their home or workplace at
nearly any time of day. The Company's surveys have indicated that over 90% of
its customers are repeat users of its services. The surveys also indicated that
the widespread availability of ATM machines does not alter a customer's decision
to "bank" at Company locations. The Company uses locally targeted advertising,
including television and radio, to promote awareness of its products and its
customer service. The Company will continue to develop ways to improve service
to its customers.

Introducing new products and services. The Company has developed a "one-stop
shop" concept to offer many consumer financial products and services to its
targeted customer base. The Company believes that its check cashing customers
enjoy the convenience of other services offered by the Company, such as the sale
of money orders, money transfer services, short-term consumer loans, as well as
a variety of related products and services that assist marginally banked or
credit-impaired customers to more effectively manage their personal finances.
As it has completed acquisitions, the Company has expanded the product and
services offerings of its newly acquired check cashing store networks and
intends to continue this strategy with future acquisitions. In particular, the
Company has continued to expand its successful Cash `Til Payday(R) short-term
loan program by adding this service to newly acquired or opened stores.

Growing through targeted acquisitions. Acquisitions have played an integral role
in the Company's growth. Since June 1994, the Company has acquired an aggregate
of over 360 owned or franchised stores. As a result of increasing industry
consolidation, the Company may be required to shift its acquisition strategy to
smaller check cashing store networks. Management will continue to seek
opportunistic acquisitions of well-managed check cashing store networks located
in areas with favorable demographics, including the southeastern and western
parts of the United States, Canada and the United Kingdom as well as profitable
check cashing stores in areas that complement the Company's existing geographic
markets.

Developing alternative retailing platforms. In an effort to capitalize more
fully on the success of its Cash `Til Payday(R) product, in September 1997 the
Company began opening stores under the name Loan Mart(TM), which offer only Cash
`Til Payday(R) unsecured short-term loans in a friendly office-like environment.
The Company's management believes the Loan Mart stores appeal to a broader
market segment than that which currently utilizes the Company's check cashing
stores. The Company currently operates 20 Loan Mart(TM) stores in the Seattle,
Fresno, and Phoenix areas and may develop stores in additional geographic areas.
Management believes that, if successful, a network of Loan Mart Stores will
allow the Company to access new customers and significantly increase the
Company's revenues and profitability. While there can be no assurance that this
new format will be successful, management believes that this and other platforms
being explored by the Company complement the strategy and operations of the
existing check cashing stores.

Capitalizing on economies of scale. Because of the scale of its operation in an
otherwise highly fragmented industry, the Company is well positioned to take
advantage of the current trend toward consolidation in the check cashing
industry. The Company believes it is able to operate more profitably than
smaller competitors as a result of its broader product offerings, greater
purchasing power, improved operating efficiencies and greater access to capital.

Managing credit risk. The Company's check cashing service consists of high
volumes of small individual transactions requiring credit risk decisions on
individual checks and customers. During the fiscal year ended June 30, 1999, the
Company cashed 7.5 million checks totaling $2.3 billion with an average face
amount of $310. The Company actively manages its customer risk profile and
collection efforts in order to maximize check cashing revenues while maintaining
losses within a targeted range. Management has instituted control mechanisms
that it believes have been effective in managing risk, including: (i) check
verification procedures;

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(ii) customer identification cards; (iii) customer files, including customer
photographs, addresses, employment information and transaction history; (iv)
point-of-sale database systems; and (v) background checks, among others. As a
result, management believes that the Company is unlikely to sustain a material
credit loss from a single transaction or series of transactions. The Company has
experienced relatively low net write-offs as a percentage of the face amount of
checks cashed. For the fiscal year ended June 30, 1999, net write-offs as a
percentage of face amount of checks cashed were 0.18%.

While the Company intends to continue to distribute public assistance benefits
pursuant to existing government contracts, management has no plans to expand
this service and expects revenues from this channel as a percentage of total
revenue to continue to decline in the future.

Customers

Based upon a 1997 consumer survey conducted in several of the Company's markets
and the Company's operating experience, the Company believes that its core
customer group is comprised of individuals between the ages of 18 and 49. The
majority of these individuals rent their home, are employed and have annual
household incomes between $10,000 and $35,000 with a median income of $22,500.
Operating experience indicates that over 90% of the customers were repeat
patrons and that over 50% use the Company's services more than 10 times. The
Company believes that consumers value attention to customer service, and their
choice of check cashing stores is influenced by the Company's convenient
locations and extended operating hours.

Based on a customer survey performed for the Company's Canadian subsidiary,
Money Mart, in 1995, the Company believes that the demographics of Money Mart
customers are similar to those of the Company's existing U.S. customers. The
survey found that approximately 80% of Money Mart's customers have annual
incomes below $30,000 and 75% are under the age of 35. Although 65% of the
surveyed customers have a bank account, these consumers continue to use Money
Mart due to the fast and courteous service and the stores' extended operating
hours.

The Company believes that many of its customers are workers or independent
contractors who receive payment on an irregular basis and generally in the form
of a check. The Company's core customer group lacks sufficient income to
accumulate assets or to build savings. These customers rely on their current
income to cover immediate living expenses and cannot afford the delays inherent
in waiting for checks to clear through the commercial banking system.
Furthermore, the Company believes that many of its customers use its check
cashing services in order to gain immediate access to cash without having to
maintain a minimum balance in a checking account and incur the cost of
maintaining a checking account. In addition, although research conducted for the
Company indicates that approximately 30% of its customers do have bank accounts,
these customers use check cashing stores because they find the locations and
extended business hours of the Company's stores more convenient than those of
banks and value the ability to receive cash immediately, without waiting for a
check to clear.

Products and Services

The Company's Retail Stores Division is responsible for DFG's check cashing and
Loan Mart(TM) store networks; the Merchant Services Division manages an
electronic benefits distribution network in New York State.

Retail Stores Division

DFG's check cashing stores provide a broad range of consumer financial products
and services to its customers at convenient locations with extended operating
hours. Customers typically use DFG's stores to cash checks (payroll, government,
and personal), receive government benefits, and utilize one or more of the
additional financial services available at most locations. In addition,
customers use a variety of ancillary products, including Cash 'Til Payday(R)
loans, lottery tickets, electronic tax filing, pagers, photocopy and fax
services and pre-paid telecommunication products including local and long-
distance phone cards.

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Check Cashing

Customers may cash all types of checks at DFG check cashing locations, including
payroll checks, government checks, and personal checks. In exchange for a
verified check, customers receive cash immediately, for a fee, and are not
required to wait several days for the check to clear. Both the customer's
identification and the validity of the check are verified by multiple sources
pursuant to the Company's standard verification procedures before any cash is
distributed. Customers are charged a fee for this service (typically a small
percentage of the face value of the check) which varies depending upon the type
of check cashed and whether or not the customer has a previous record of cashing
checks at that location. For the twelve months ended June 30, 1999, check
cashing fees averaged approximately 3.28% of the face value of checks cashed.

The following chart presents a summary of check cashing data for the periods
indicated below:

CHECK CASHING FEE SUMMARY

<TABLE>
<CAPTION>
For the Years Ended June 30,
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1995 1996 1997
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<S> <C> <C> <C>
Face amount of checks cashed...................... $510,771,000 $728,123,000 $1,878,587,000
Number of checks cashed........................... 2,132,006 3,051,037 6,492,495
Average face amount per check..................... $ 239.57 $ 238.65 $ 289.35
Average fee per check............................. $ 6.45 $ 6.65 $ 8.00
Average fees as a % of face amount................ 2.69% 2.79% 2.76%
</TABLE>

<TABLE>
<CAPTION>
For the Years Ended June 30,
---------------------------------------
1998 1999
---------------------------------------
<S> <C> <C>
Face amount of checks cashed...................... $2,301,861,000 $2,319,847,000
Number of checks cashed........................... 7,991,128 7,490,406
Average face amount per check..................... $ 288.05 $ 309.71
Average fee per check............................. $ 8.80 $ 10.14
Average fees as a % of face amount................ 3.05% 3.28%
</TABLE>

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If a check cashed by the Company is not paid for any reason, the full face value
of the check is recorded as a loss in the period during which the check was
returned. The check is then sent to the store for collection and, if it remains
uncollected, then it is sent to the Company's internal collections department,
which contacts the maker and/or payee of each returned check and, if necessary,
commences legal action. During fiscal 1999, approximately 75.3% of the face
value of checks returned during that year was ultimately collected by the
Company.

The following chart presents a summary of the Company's returned check
experience for the periods indicated below:

RETURNED CHECK EXPERIENCE

<TABLE>
<CAPTION>
For the Years Ended June 30,
-------------------------------------------------
1995 1996 1997
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<S> <C> <C> <C>
Face amount of returned checks..................... $2,006,000 $3,763,000 $9,618,000
Collections on returned checks..................... 1,203,000 2,598,000 6,411,000
Net write-offs of returned checks.................. 803,000 1,165,000 3,207,000
Collections as a percentage of returned checks..... 60.0% 69.0% 66.7%
Net write-offs as a percentage of check
cashing revenues.................................. 5.8% 5.7% 6.2%
Net write-offs as a percentage of face amount
of checks cashed.................................. 0.16% 0.16% 0.17%
</TABLE>

<TABLE>
<CAPTION>
For the Years Ended June 30,
----------------------------------
1998 1999
----------------------------------

<S> <C> <C>
Face amount of returned checks.................... $13,823,000 $16,607,000
Collections on returned checks.................... 9,908,000 12,505,000
Net write-offs of returned checks................. 3,915,000 4,102,000
Collections as a percentage of returned checks.... 71.7% 75.3%
Net write-offs as a percentage of check
cashing revenues................................. 5.6% 5.4%
Net write-offs as a percentage of face amount
of checks cashed................................. 0.17% 0.18%
</TABLE>

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Other Services and Product Extensions

In addition to check cashing, DFG customers are able to choose from a variety of
products and services when conducting business at the Company's check cashing
locations. These services include photo ID, lottery tickets, electronic tax
filing, pagers, photocopy and fax services and pre-paid telecommunications
products including local and long-distance phone cards. A survey of the
Company's customers by an independent third party revealed that over 50% of
customers use other services in addition to check cashing. Management believes
that providing these services helps to implement the Company's customer-driven
strategy by creating a "one-stop shop" atmosphere for its customers.

Among the products and services other than check cashing offered by the Company
are the following:

. Money Orders--DFG's check cashing stores exchange money orders for cash
and/or checks for a minimal fee, with an average fee and face amount of
$0.65 and $114, respectively, for the fiscal year ended June 30, 1999.
Money orders are typically used as a means of payment of rent and utility
bills for customers who do not have checking accounts. For the twelve
months ended June 30, 1999, DFG's check cashing stores sold a total of 4.3
million money orders, generating total money order revenues of $2.8
million.

. Money Transfers--Through a strategic alliance with Western Union at DFG's
check cashing stores, customers can transfer funds to any location
providing Western Union money transfer services. Western Union currently
has 23,000 agents in more than 130 countries throughout the world. DFG
receives a percentage of the fee charged by Western Union for the transfer
as its commission. For the twelve months ended June 30, 1999, the Company's
check cashing stores performed approximately 900,000 wire transfers
generating total wire transfer fees of $6.7 million.

. Cash 'Til Payday(R) Loan Program--DFG acts as an agent to offer unsecured
short-term loans to customers with established bank accounts and verifiable
employment. Loans are made for amounts up to $500, with terms of no longer
than 14 days.

Loan Stores

The Company currently operates 20 stores, operating under the Loan Mart(TM)
name, which offer only Cash `Til Payday(R) unsecured short-term loans. The
Company's management believes the stores appeal to a broader market segment than
that which currently utilizes the Company's check cashing stores. Unlike many
of the Company's check cashing customers, the Company's targeted Loan Mart(TM)
customer has, and is required to have, a bank account but experiences temporary
shortages in cash from time to time. By offering this service on a stand-alone
basis in Loan Mart(TM) stores, the Company hopes to attract this target customer
who might not otherwise utilize check cashing services. The Company acts as
agent for a national bank in administering the Cash `Til Payday(R) short-term
loan program and earns origination and service fees from such loans. These
loans usually have a maturity of two weeks. The first Loan Mart(TM) stores were
opened in late September 1997 and since then an additional 15 stores have been
opened. All of these stores are located in Seattle, Washington, Fresno,
California, or Phoenix, Arizona.

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Government Benefits Distribution

In addition to the other consumer financial products and services offered by the
Company, DFG stores in California, Washington, and Ohio provide for the
distribution of food coupons. The Company believes that many state and local
governments have elected to employ this method of distribution as a means of
reducing administrative overhead and fraud which is often prevalent when
benefits are issued through the mail. DFG's government contracts require the
Company to provide continuous, uninterrupted operation of a benefits transfer
system during normal business hours in its check cashing locations. The Company
is paid on a per-transaction basis by the contracting governmental agency. The
initial terms of these contracts range from one to five years and, in some
cases, provide the government agencies the opportunity to extend the contract
for additional periods.

A number of state and local government agencies have initiated processes to
install electronic benefits transfer systems designed to disburse public
assistance benefits directly to individuals (sometimes referred to as "EBT"
systems). The Commonwealth of Pennsylvania initiated the implementation of an
EBT system in January 1998 which was fully implemented during fiscal 1998. As a
result, all of the Company's contracts with the Commonwealth of Pennsylvania
were terminated during fiscal 1998. Revenue from these contracts included in
total revenues for the fiscal years ended June 30, 1999, 1998 and 1997 were $0.0
million, $6.8 million and $7.3 million, respectively. During the fiscal year
ended June 30, 1998, the Company signed an agreement with the Commonwealth of
Pennsylvania which provided for a payment of $2.5 million to compensate the
Company for the decline in transactional revenues during the implementation
period and to offset additional costs incurred by the Company. Management
believes the installation of such systems will not have a material adverse
effect on the Company's results of operations or financial condition.

Merchant Services Division

The Company's Merchant Services Division provides support and operating services
for the distribution of public assistance benefits through a contract with New
York State. EBT systems equip participating merchants with point-of-sale ("POS")
devices that are on-line with the contracting agency's recipient database. DFG
acts as a subcontractor to Citibank, N.A. ("Citibank") to maintain and service
Citibank's network of electronic government benefits distribution to merchants
throughout the state.

In 1988, the State of New York began issuing food stamp benefits through its
Electronic Benefits Issuance and Control System to 330,000 recipients on a
monthly basis through grocery stores and other merchants in 57 counties outside
of New York City. This package of benefits is currently distributed
electronically through POS devices located in approximately 1,200 grocery,
convenience and check cashing stores. These devices are directly connected to
the state's welfare recipient database and operate in a manner similar to ATM
machines by providing immediate verification when a recipient's magnetically
encoded card is scanned through the system.

Although Citibank provides the POS devices to the merchants, it has little
direct follow-up contact with either the distribution points or the benefits
recipients. DFG operates as a subcontractor to Citibank and is responsible for
monitoring and maintaining the network. The Company employs field agents and
administrative personnel headquartered in Albany, New York to train merchants in
the use of Citibank's POS terminals, monitor merchants for security compliance
and quality control, and maintain accounting procedures to reconcile benefit
transactions at each site. The Company is paid a fixed monthly fee for its
services. The Company's revenues under this contract were approximately $4.2
million, $3.9 million and $4.2 million for the years ended June 30, 1999, 1998
and 1997, respectively.

The Company's contract expiration date with Citibank was December 31, 1998 and
the Company negotiated an extension to the contract through June 30, 2000 with
two six-month extensions exercisable by the state. The Company has received
information from the state of New York pertaining to a statewide implementation
of EBT which contemplates completion by December 2000. Upon successful
implementation of the EBT program, the Company's existing contract with Citibank
would be terminated.

12
<PAGE>

Store Operations

Locations

The following chart sets forth the number of stores in operation as of the dates
indicated:

<TABLE>
<CAPTION>
June 30,
--------------------------------------------------
Markets 1995 1996 1997 1998 1999
- --------------------------------- --------------------------------------------------
<S> <C> <C> <C> <C> <C>
CA
Southern......................... 19 27 49 41 41
Northern......................... 13 13 73 77 79

PA
Philadelphia..................... 41 20 26 11 10
Pittsburgh....................... 14 11 11 10 10

OH
Cleveland........................ 11 11 26 24 22
Other Ohio Cities (1)............ 8 9 8 8 5

Phoenix, AZ...................... 0 8 17 16 25

TX
Dallas........................... 0 6 23 23 3
Austin........................... 0 5 5 0 0

Detroit, MI (2).................. 14 13 12 0 0
Norfolk, VA...................... 14 14 14 14 14
Seattle, WA...................... 9 9 9 15 15
Salt Lake City, UT............... 4 4 3 3 3
MD/DC............................ 0 0 4 4 4
Albuquerque, NM.................. 3 3 3 4 4
New Orleans, LA.................. 0 0 3 3 3
HI............................... 0 0 3 3 3
WI............................... 0 1 1 1 1
Franchised locations............. 0 0 3 3 3

UK............................... 0 0 0 0 11
CANADA........................... 0 0 76 86 101
Franchised locations............. 0 0 67 70 80
--------------------------------------------------
Total Stores..................... 150 154 436 416 437
==================================================
</TABLE>
-----------------------
(1) These other cities include Akron, Canton, Youngstown, and Cincinnati, Ohio.
(2) Includes a single store located in Kalamazoo, Michigan.

Management adheres to a strict set of market survey and location guidelines when
selecting acquisition targets and new store sites. The Company's store base is a
mix of urban sites, which are located in high-traffic shopping areas, and
suburban locations, which are in strip malls near multi-family housing
complexes.

13
<PAGE>

Layout and Facilities

As part of its retail and customer-driven strategy, the Company presents a clean
and attractive environment and an appealing format for its check cashing stores.
Size varies by location, but the stores are generally 1,000 to 1,400 square feet
with approximately half of that space allocated to the teller and back office
areas. There are typically three to five teller lanes available for customer
transactions.

Operating hours vary by location, but are typically extended and designed to
cater to those customers who, due to work schedules, cannot make use of "normal"
banking hours. A typical store operates from 8:00 A.M. to 8:00 P.M. during
weekdays and Saturdays and 10:00 A.M. to 5:00 P.M. on Sundays. In certain
locations, the Company operates stores on a 24-hour, seven-days-per-week basis.

Except for three owned stores, all of the Company's individual stores are
leased, generally under leases providing for an initial multi-year term and
renewal terms from one to five years. The Company generally assumes the
responsibility for required leasehold improvements, including signage, teller
partitions, alarm systems, computers, time-delayed safes, and other office
equipment. The leases relating to stores that provide government benefits
distribution typically allow for the termination of a store's lease in the event
of the loss of a material government contract.

Technology

The Company currently has an enterprise-wide transaction processing computer
network. The Company believes that this system has improved customer service by
reducing transaction time and enabling the Company to better manage returned
check losses and comply with regulatory record keeping and reporting
requirements.

The Company has implemented a Point-of-Sale ("POS") transaction processing
system comprised of a networked hardware and software package with integrated
database and reporting capabilities. Management believes that the POS system
will provide its stores with instantaneous customer information, thereby
reducing transaction time and improving the efficiency of the Company's credit
verification process. The POS system is expected to enhance the Company's
ability to offer new products and services and to improve its customer service.
During fiscal 1999, the Company spent $1.6 million to purchase the necessary
equipment and implement the POS system. Management expects to continue
enhancement of this system during fiscal 2000.

Security

All check cashing operations are exposed to two major classes of theft: robbery
and internal theft. DFG management has implemented extensive security systems,
dedicated security personnel and management information systems which address
both areas of potential loss. Management believes that its systems are among the
most effective in the industry. Total net security losses represented less than
0.84% of both total revenues and total check volume for the twelve months ended
June 30, 1999.

Most store employees operate behind bullet-resistant glass and steel partitions
and the back office, safe and computer areas are locked and closed to customers.
Each store's security measures include safes, electronic alarm systems monitored
by third parties, control over entry to teller areas, detection of entry through
perimeter openings, walls, and ceilings and the tracking of all employee
movement in and out of secured areas. In addition, as security contracts expire
and as new stores are opened, the Company is centralizing its security measures
to strengthen and improve its control over the secured areas. This centralized
system includes the following security measures in addition to those mentioned
above: identical alarm systems in all stores, remote control over alarm systems,
arming/disarming and changing user codes and mechanically and electronically
controlled time-delay safes.

14
<PAGE>

Due to the high volumes of cash, food stamps, and negotiable instruments handled
at the Company's locations, daily monitoring, unannounced audits, and immediate
response to irregularities are critical in combating theft and fraud. The
Company has an internal auditing program which includes periodic unannounced
store audits at randomly selected locations.

Advertising and Marketing

The Company is continually surveying and researching its customer trends and
purchasing patterns in order to place the most effective advertising for each
market. The Company's corporate marketing department's promotions typically
include point-of-sale materials, advertising support, and store personnel
instructions on the use of the materials. The Company also arranges cooperative
advertising for its products and services. For example, the Company does
cooperative advertising with Western Union. Store managers are also provided
with local store marketing training that sets standards for promotions and
marketing their store on a local level. A national yellow page company is
utilized to place all yellow page advertising as effectively and prominently as
possible. The Company does research into directory selection to assure effective
communication to its target customers.

Competition

The check cashing industry in the United States is highly competitive and will
become even more so as the industry consolidates. American Business Information,
Inc. has reported that as of May 1998, a total of approximately 7,200 check
cashing stores were operating in the United States.

DFG, with 437 stores, is the second largest check cashing store network in the
United States and the largest such network in Canada. ACE Cash Express, Inc.
operates the largest check cashing store network in the United States, operating
911 stores in 29 states as of June 30, 1999. Management believes that the ten
largest chains control less than 30% of the total stores which reflects the
fragmented nature of the check cashing industry.

In addition to other check cashing stores in the U.S. and Canada, DFG competes
with banks and other financial services entities, and retail businesses, such as
grocery and liquor stores, which will cash checks for their customers. Some
competitors, primarily grocery stores, do not charge a fee to cash a check.
However, these merchants provide this service to a limited number of customers
with superior credit ratings, and will typically only cash "first party" checks,
or those written on the customer's account and made payable to the store.

The Company also competes with companies that offer automated check cashing
machines, franchised kiosk units that provide check-cashing and money order
services to customers, that can be located at places such as convenience stores,
bank lobbies, grocery stores, discount retailers and shopping malls.

Regulation

The Company is subject to regulation in several of the jurisdictions in which it
operates, including jurisdictions that regulate check cashing fees, require
prompt remittance of money order proceeds to money order suppliers, or require
the registration of check cashing companies. In addition, the Company is subject
to federal and state regulation which requires the reporting and recording of
certain currency transactions and certain of the Company's operations are also
subject to federal and state regulations governing consumer protection and
lending practices.

The Department of the Treasury issued a final rule concerning the application of
the Bank Secrecy Act ("BSA") to those non-bank financial institutions called
"money servicer businesses" ("MSB's"). The rule generally applies to five
classes of financial businesses. These types of businesses include check cashers
and sellers of money orders. Registration of MSB's is required by the Money
Laundering Suppression Act of 1994. Under the final rule, MSB's must register by
December 31, 2001 and renew every two years afterwards. In addition, MSB's must
maintain a list of their agents and update the list annually with the list being
prepared by January 1, 2002 and made available for examination.

<PAGE>

The following chart presents a summary of current state fee regulations for
check cashing operations in those states where the Company's check cashing
stores are currently located:

CURRENT CHECK CASHING FEE REGULATIONS

<TABLE>
<S> <C>
California: Maximum of 3.0% fee for government and payroll checks (3.5% without specified
identification) or $3.00, whichever is greater. Permits one-time $10.00 fee to
issue identification. Ceiling fees set in 1992.

Ohio: Maximum of 3.0% fee for government checks. Ceiling fees set in 1993.

Washington, D.C.: Maximum of 5.0% fee for government and payroll checks, 7.0% fee for an insurance
check, 10.0% fee for personal checks or $4.00 whichever is greater. Ceiling
fees set in 1998.

Hawaii: Maximum of 3.0% fee for government checks, 5.0% fee for payroll checks, 10.0%
fee for personal checks or $5.00 whichever is greater. Permits one-time $10.00
fee to issue identification and no more than $5.00 for identification
replacement. Ceiling fees set in 1999.

Pennsylvania: Maximum of 2.5% for government checks, 3.0% for payroll checks and 10.0% for
personal checks. Ceiling fees set in 1998.
</TABLE>

The Company operates a total of 121 stores in California and Maryland. These
states are among those that have so-called "prompt remittance" statutes. Such
statutes specify a maximum time for the payment of proceeds from the sale of
money orders to the issuer of such money orders thereby limiting the number of
days or "float" which the Company has use of the money from the sale of such
money orders. See "Management's Discussion and Analysis of Financial Condition
and Results of Operations--Liquidity and Capital Resources."

In addition, certain states, including California, Ohio, Arizona, Pennsylvania,
Wisconsin and the District of Columbia, have enacted licensing requirements for
check cashing stores. Other states, including Ohio, require the conspicuous
posting of the fees charged by each store. A number of states, including Ohio,
also have imposed recordkeeping requirements while others require check cashing
stores to file fee schedules with the state.

The adoption of check cashing fee regulations and prompt remittance statutes in
additional jurisdictions or the reduction of maximum allowable fees in the
jurisdictions currently regulating check cashing could have an adverse effect on
the Company's business and could restrict the ability of the Company to expand
its operations into certain states. As the Company develops new products and
services in the consumer finance areas, it may become subject to additional
federal and state regulations governing those areas.

In addition to fee regulations and prompt remittance statutes, certain
jurisdictions have also (i) placed limitations on the commingling of money order
proceeds and (ii) established minimum bonding or capital requirements. The
Company's consumer lending activities are subject to certain state and federal
regulations, including, but not limited to, regulations governing lending
practices and terms, such as truth in lending and usury laws.

There can be no assurance that the Company will not be materially adversely
affected by legislation or regulations enacted in the future or that existing
regulations will not restrict the ability of the Company to continue its current
methods of operations or to expand its operations.

Federal Regulation

Pursuant to regulations promulgated under the Bank Secrecy Act by the U.S.
Treasury Department, transactions involving currency in an amount greater than
$10,000 or the purchase of monetary instruments for cash in amounts from $3,000
to $10,000 must be recorded. In general, every financial institution, including
the

16
<PAGE>

Company, must report each deposit, withdrawal, exchange of currency or other
payment or transfer, whether by, through, or to the financial institution that
involves currency in an amount greater than $10,000. In addition, multiple
currency transactions must be treated as single transactions if the financial
institution has knowledge that the transactions are by, or on behalf of, any one
person and result in either cash-in or cash-out totaling more than $10,000
during any one business day. Management believes that the Company's POS system
and employee training programs are essential to the Company's compliance with
these regulatory requirements.

In Canada, the federal government does not directly regulate the check cashing
industry nor do provincial governments impose any regulations specific to the
industry. The exception is in the Province of Quebec where check cashing stores
are not permitted to charge a fee to cash government checks.

In the United Kingdom, the Office of Fair Trading ("OFT") is responsible for
regulating competition policy and consumer protection. To date, the OFT has not
enacted any regulations specific to the industry.

Proprietary Rights

The Company has the rights to a variety of service marks relating to products or
services it provides in its stores. In addition, the Company has trademarks
relating to the various names under which the Company's stores operate. The
Company does not believe that any of its service marks or trademarks are
material to its business.

Insurance Coverage

The Company is required to maintain insurance coverage against loss, including
theft, pursuant to its contracts with several state agencies. In addition, the
Company maintains insurance coverage against criminal acts, which coverage has a
$25,000 per occurrence deductible.

Employees

As of June 30, 1999, the Company employed 2,102 persons, comprised of: (i) 139
persons employed in the Company's accounting, management information systems,
legal, and administrative departments; (ii) 1,930 persons employed by the Retail
Stores Division, including tellers, store managers, regional supervisors,
operations directors, and administrative personnel; and (iii) 33 persons
employed by the Merchant Services Division who oversee operations, coordinate
the activities of field personnel and manage the benefits distribution system in
New York State.

None of the Company's employees is represented by labor unions, and management
believes that its relations with its employees are good.

Cautionary Statement for Purposes of the "Safe Harbor" Provisions of the Private
Securities Litigation Reform Act of 1995

This report may contain certain forward-looking statements regarding the
Company's expected performance for future periods, and actual results for such
periods may materially differ. Such forward-looking statements involve risks and
uncertainties, including risks of changing market conditions in the overall
economy and the industry, consumer demand, the success of the Company's
acquisition strategy and other factors detailed from time to time in the
Company's annual and other reports filed with the Securities and Exchange
Commission.

17
<PAGE>

Item 2. PROPERTIES

The Company leases all store premises, with the exception of 3 stores, which the
Company owns. Typically, store leases have initial terms of 5 to 20 years and
contain provisions for renewal options; additional rental charges based on
revenue, and payment of real estate taxes and common area charges. With respect
to leased stores open as of June 30, 1999, the following table shows the number
of store leases expiring during the periods indicated, assuming the exercise of
the Company's renewal options:

<TABLE>
<CAPTION>
Period Number of
June 30, Leases Expiring
-------------------- ---------------------
<S> <C>
2000 88
2001 - 2004 195
2005 - 2009 62
2010 - 2014 5
2015 - 2019 1
</TABLE>

18
<PAGE>

Item 3. LEGAL PROCEEDINGS

In May 1996, a complaint was filed against the Company and one of its
subsidiaries (in the case styled Adrian Rubin v. Monetary Management Corp.,
Monetary Management Corporation, Monetary Management Holdings, Inc., Jeffrey A.
Weiss, and Donald F. Gayhardt, Phila. Co. CCP, May Term, 1996, Civil Action No.
888) relating to the acquisition in February 1995 of the assets of 19 check
cashing stores from ARI, Inc. for consideration consisting, in part, of a $2.7
million note issued by such subsidiary (which note is not guaranteed by the
Company). The seller has sued for breach of contract, breach of oral guaranty,
fraudulent inducement, negligent misrepresentation and fraudulent
misrepresentation, for which he contends he is entitled to in excess of $2.7
million, plus punitive damages and attorney's fees. The Company intends to
actively contest each of the causes of action asserted in the complaint.

On February 8, 1999, an action was commenced in the United States District Court
for the Central District of California by a consumer who had borrowed from Eagle
National Bank (the "Bank") in a payday-loan transaction. The defendants in the
action are the Company, its affiliates, the Bank and ten other unnamed
defendants, plaintiff sues on behalf of an alleged class of borrowers who,
plaintiff claims, have been overcharged in loan transactions originated and
serviced for the Bank by the Company. Plaintiff alleges violations of state and
federal usury and consumer-protection laws and seeks damages, including treble
damages under the federal racketeering statute, in an unknown amount plaintiff
alleges to be in excess of $75 million. The Company believes that it has
meritorious defenses to the action, under both federal and state law and it
intends to defend the lawsuit vigorously.

The Company is not a party to any other material litigation and is not aware of
any pending or threatened litigation, other than routine litigation and
administrative proceedings arising in the ordinary course of business, that
would have a material adverse effect on the Company.

Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

None.

19
<PAGE>

PART II

Item 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

There is no established public trading market for the Company's common stock.

DFG Holdings, Inc. is the sole owner of record as well as the beneficial owner
of all of the Company's outstanding common stock.

The Company has not declared or paid dividends since 1994. The Indenture dated
November 15, 1996 between the Company and State Street Bank and Trust Company,
as trustee (the "Indenture"), relating to the Senior Notes as well as the
Company's credit agreement contain restrictions as to the declaration and
payment of dividends. See "Item 7 - Management's Discussion and Analysis of
Financial Condition and Results of Operations" and the notes to consolidated
financial statements included elsewhere in this report.

Item 6. SELECTED FINANCIAL DATA

The selected consolidated historical financial information below should be read
in conjunction with the consolidated financial statements and notes thereto and
the information contained in "Item 7 - Management's Discussion and Analysis of
Financial Condition and Results of Operations" included elsewhere in this
report. The balance sheet and statement of operations data of the Company and as
of and for the years ended June 30, 1995, 1996, 1997, 1998 and 1999 have been
derived from historical consolidated financial statements of the Company.

20
<PAGE>

Year ended June 30,
---------------------------------------------------------------------------------
1995/(1)/ 1996/(2)/ 1997/(3)/ 1998 1999/(4)/, /(5)/
---------------------------------------------------------------------------------
(dollars in thousands, except check cashing data)
<S> <C> <C> <C> <C> <C>
Statement of Operations Data:
Revenues:
Revenues from check cashing.............. $ 13,747 $ 20,290 $ 51,928 $ 70,306 $ 76,304
Revenues from government services........ 16,966 15,936 16,141 14,311 6,753
Other revenues........................... 4,121 6,204 14,943 26,568 37,922
--------------------------------------------------------------------------------
Total revenues............................ 34,834 42,430 83,012 111,185 120,979

Store and regional expenses:
Salaries and benefits.................... 11,042 13,975 26,817 33,670 35,329
Occupancy................................ 3,122 4,031 7,951 9,656 9,609
Depreciation............................. 894 893 1,446 2,018 2,227
Other.................................... 9,577 11,709 20,452 24,002 23,764
--------------------------------------------------------------------------------
Total store and regional expenses......... 24,635 30,608 56,666 69,346 70,929

Corporate expenses........................ 4,414 5,360 8,175 12,462 13,648
Loss on store closings and sales.......... 93 4,501 381 45 103
Other depreciation and amortization....... 1,630 1,858 3,905 4,776 5,706
Interest expense.......................... 2,480 3,385 10,007 12,945 16,401
Recapitalization costs.................... - - - - 12,575
Writedown of goodwill..................... - - - 12,870 -
--------------------------------------------------------------------------------
Income (loss) before taxes and
extraordinary item....................... 1,582 (3,282) 3,878 (1,259) 1,617
Income tax provision (benefit)............ 1,022 (1,214) 2,425 5,538 3,881
--------------------------------------------------------------------------------
Income (loss) before extraordinary item... 560 (2,068) 1,453 (6,797) (2,264)
Extraordinary loss on debt extinguishment
(net of income tax benefit of $1,042 & - - (2,023) - (85)
$45)....................................
--------------------------------------------------------------------------------
Net income (loss)......................... $ 560 $ (2,068) $ (570) $ (6,797) $ (2,349)
================================================================================

Operating and Other Data:
Adjusted EBITDA (6)....................... $ 6,679 $ 7,355 $ 19,724 $ 31,526 $ 38,619
Adjusted EBITDA margin (6)................ 19.2% 17.3% 23.8% 28.4% 31.9%
Net cash provided (used) by:
Operating activities..................... 4,350 3,669 9,319 18,003 15,951
Investing activities..................... (9,615) (8,146) (75,674) (4,237) (23,471)
Financing activities..................... 11,081 7,244 99,120 (12,699) 18,269
Stores in operation at end of period...... 150 154 436 416 437

Check Cashing Data:
Face amount of checks cashed.............. $510,771,000 $728,123,000 $1,878,587,000 $2,301,861,000 $2,319,847,000
Number of checks cashed................... 2,132,006 3,051,037 6,492,495 7,991,128 7,490,406
Average face amount per check cashed...... $239.57 $238.65 $289.35 $288.05 $309.71
Average fee per check..................... $6.45 $6.65 $8.00 $8.80 $10.14
Average fee as a % of face amount......... 2.69% 2.79% 2.76% 3.05% 3.28%

Balance Sheet Data (at end of period):
Cash...................................... $ 19,778 $ 22,545 $ 55,205 $ 55,501 $ 65,782
Total assets.............................. 60,687 67,444 185,988 165,850 203,709
Total indebtedness........................ 35,496 42,530 124,991 112,675 142,166
Shareholder's equity...................... 15,775 13,707 38,560 29,454 36,334
</TABLE>

21
<PAGE>

__________________
(1) On September 29, 1994, the Company purchased substantially all of the
assets of the check cashing operations of a company operating under the
name "Check Mart, Inc." with 24 locations in Washington, Utah, California,
and New Mexico. Total consideration for the purchase was $7.8 million,
which was funded by borrowings under the Company's existing credit facility
and a $720,000 subordinated note payable. Results of operations and cash
flows for the period from September 30, 1994 to June 30, 1995 and for the
years ended June 30, 1996 and 1997 are included in the Company's
consolidated financial statements. Approximately $6.7 million, the
acquisition cost in excess of the fair market value of the net assets
acquired, was recorded as goodwill.
(2) On September 18, 1995, the Company purchased all of the outstanding stock
or certain assets of several entities which operated 19 check cashing
stores in California, Arizona, Ohio, and Wisconsin and operated under the
name "Chex$Cashed." Total consideration for the purchase was $7.4 million,
which was funded through borrowings under the Company's existing credit
facility. Approximately $6.7 million, the excess of the purchase price over
the fair market value of identifiable net assets, was recorded as goodwill.
(3) On August 8, 1996, the Company purchased all of the outstanding common
stock of Any Kind Check Cashing Centers, Inc. and all the partnership
interests in U.S. Check Exchange Limited Partnership which together
operated 63 check cashing stores in seven states and the District of
Columbia. Total consideration for the purchase was $31.0 million, of which
$2.0 million was in the form of Holdings' common stock, plus initial
working capital of approximately $6.0 million. On August 28, 1996, the
Company acquired the assets associated with the operations of "ABC Check
Cashing" for $6.0 million in cash. ABC operated 15 check cashing centers
within the Cleveland, Ohio area. On November 15, 1996, the Company
purchased all of the outstanding common stock of National Money Mart, Inc.
which owned and operated 36 check cashing stores and franchised 107 check
cashing stores, all of which operate in Canada under the name "Money Mart."
Total consideration for the purchase was $17.7 million, of which
approximately $500,000 was in the form of Holdings' common stock, plus
initial working capital of approximately $900,000. On November 15, 1996,
the Company acquired the assets associated with the operations of Cash-N-
Dash Check Cashing, Inc. which operated 32 check cashing stores in northern
California under the name "Cash-N-Dash." Total consideration for the
purchase was $7.3 million. On November 21, 1996, the Company purchased all
the outstanding stock of C&C Check Cashing, Inc. which operated 22 check
cashing stores in northern California under the name "C&C Check Cashing."
Total consideration for the purchase was $3.8 million plus initial working
capital of approximately $500,000. On April 18, 1997, the Company purchased
all of the outstanding common stock of Canadian Capital Corporation which
operated 43 check cashing stores in Canada under a franchise agreement with
Money Mart. Total consideration for the purchase was $13.3 million plus
initial working capital of approximately $1.8 million. Each of the
acquisitions described above was accounted for under the purchase method of
accounting. Approximately $74.3 million, the acquisition costs in excess of
the fair market values of the net assets acquired, was recorded as
goodwill. The acquisitions were funded through borrowings, issuance of
Holdings Common Stock and revenue-based earn-outs totaling $1.1 million
which are payable over a period of up to four years with $0.5 million paid
through 6-30-99.
(4) On November 13, 1998, Holdings entered into an agreement and plan of
merger (the "Merger Agreement") with DFG Acquisition, Inc., ("Acquisition")
a Delaware corporation, controlled by Green Equity Investors II, L.P., a
Delaware limited partnership ("GEI II") and the stockholders of Holdings
party thereto, providing for the merger of Acquisition with and into
Holdings, with Holdings as the surviving corporation (the "Merger").
Holdings and Acquisition consummated the Merger on December 18, 1998, and
in the Merger, the senior members of management of Holdings retained
substantially all of their stock in the surviving corporation and the other
stockholders received cash in exchange for their shares of Holdings. The
Merger was accounted for as a recapitalization of Holdings.
(5) On February 10, 1999, the Company entered into an agreement to acquire all
of the outstanding shares of Instant Cash Loans Limited ("ICL") which
operated eleven stores in the United Kingdom. The aggregate purchase price
for this acquisition was $12.6 million plus initial working capital of
approximately $2.0 million and was funded with the issuance of the
Company's 10 7/8% Senior Subordinated Notes Due 2006 and a profit-based
earn-out of $3.2 million. On February 17, 1999, National Money Mart
Company, a subsidiary of the Company, entered into an Agreement to purchase
the remaining 86.5% partnership interest in its Calgary Money Mart
Partnership ("Calgary"). Calgary operated six stores in Alberta, Canada.
The aggregate purchase price for this acquisition was $5.6 million and was
funded with the issuance of the Company's 10 7/8% Senior Subordinated Notes
Due 2006.
(6) Adjusted EBITDA is earnings before interest, taxes, depreciation,
amortization, noncash charges, recapitalization costs, writedown of
goodwill and loss on store closings and sales. Adjusted EBITDA does not
represent cash flows as defined by generally accepted accounting principles
and does not necessarily indicate that cash flows are sufficient to fund
all of the Company's cash needs. Adjusted EBITDA should not be considered
in isolation or as a substitute for net income (loss), cash flows from
operating activities, or other measures of liquidity determined in
accordance with generally accepted accounting principles. The Adjusted
EBITDA margin represents Adjusted EBITDA as a percentage of revenues.
Management believes that these ratios should be reviewed by prospective
investors because the Company

<PAGE>

uses them as one means of analyzing its ability to service its debt, and
the Company understands that they are used by certain investors as one
measure of a company's historical ability to service its debt. Not all
companies calculate EBITDA in the same fashion and therefore these ratios
as presented may not be comparable to other similarly titled measures of
other companies.

23
<PAGE>

Item 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS

General

The Company has historically derived its revenues primarily from providing check
cashing services and other consumer financial products and services including
money orders, money transfers, loans, and bill payment. In addition, certain
Company stores provide for the distribution of public assistance benefits and
food coupons. For the years ended June 30, 1997, 1998 and 1999, check cashing
revenues as a percentage of total revenues approximated 62.6%, 63.2%, and 63.1%,
respectively.

The check cashing industry in the United States is highly fragmented, and has
experienced considerable growth as store locations have increased from
approximately 1,350 in 1986 to approximately 7,200 as of May 1998. The Company
believes it is one of only seven domestic check cashing store networks with more
than 100 locations. The industry is comprised of mostly local chains and single-
unit operators. The Company believes that industry growth has been fueled by
several demographic and socioeconomic trends, including a decline in the number
of households with bank deposit accounts, an increase in low-paying service
sector jobs, and an overall increase in the lower-income population.

All of the Company's acquisitions have been accounted for under the purchase
method of accounting. Therefore, the historical consolidated results of
operations include the revenues and expenses of all of the acquired companies
since their respective dates of acquisition. The comparability of the historical
financial data is significantly impacted by the timing of the Company's
acquisitions. The following table sets forth information with respect to major
acquisitions completed by the Company during the periods discussed below:

Company Number of Stores Month Acquired Purchase Price
- -----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Any Kind.................................. 63 August 1996 $ 31.0 million
ABC....................................... 15 August 1996 $ 6.0 million
Money Mart................................ 143 (1) November 1996 $ 17.7 million
Cash-N-Dash............................... 32 November 1996 $ 7.3 million
C&C....................................... 22 November 1996 $ 3.8 million
Canadian Capital Corporation.............. 43 April 1997 $ 13.3 million
Instant Cash Loans........................ 11 February 1999 $ 12.6 million
Calgary Money Mart Partnership............ 6 February 1999 $ 5.6 million
</TABLE>

_____________________
(1) Includes 107 franchised stores, of which 43 were owned by Canadian Capital
Corporation and 6 were owned by Calgary Money Mart Partnership.

This Management's Discussion and Analysis of Financial Condition and Results of
Operations solely reflects the historical results of the Company. The
aforementioned purchase price amounts do not reflect borrowings to provide for
the working capital needs of the acquired entities. The purchase prices
including working capital were as follows: $37.0 million for Any Kind, $7.5
million for ABC, $18.6 million for Money Mart, $7.3 million for Cash-N-Dash,
$4.3 million for C&C, $15.1 million for Canadian Capital Corporation, $14.6
million for Instant Cash Loans and $5.6 million for Calgary Money Mart
Partnership. The aforementioned purchase prices for Cash-N-Dash and C&C include
estimated contingent payments to the sellers of $750,000 for Cash-N-Dash
(payable over four years) and $300,000 for C&C (payable over three years) based
on future revenues. The purchase price for Instant Cash Loans includes a
potential contingent payment to the sellers of $3.2 million based on future
profitability. Any amounts paid under the earn-out contingencies for Cash-N-
Dash, C&C and Instant Cash Loans will be recorded as additional consideration of
the acquisition when the contingency is resolved, and during the twelve months
ended June 30, 1999, $181,000 in additional consideration was earned and
recorded as additional purchase price.

In November 1996, the Company issued 10-7/8% senior notes due 2006 in a private
placement (the "Offering"). In March 1997, the Company has exchanged
substantially all of the senior notes for $110.0 million 10-7/8% Series A notes
due 2006 (collectively referred to as the "Notes"), which were registered under
the Securities Act of 1933, as amended.

24
<PAGE>

The Offering generated gross proceeds of $110.0 million which were used to repay
all of the Company's existing indebtedness under its existing credit facility,
to fund the Money Mart, Cash-N-Dash, C&C, and Canadian Capital Corporation
acquisitions, and to pay related fees and expenses. The repayment of
substantially all of the Company's existing indebtedness resulted in an
extraordinary loss, net of taxes, in the second quarter of fiscal year 1997 of
approximately $2.0 million. This loss resulted from the write-off of the
deferred financing costs associated with the Company's existing credit facility.

On November 13, 1998, "Holdings", entered into an agreement and plan of merger
(the "Merger Agreement") with DFG Acquisition, Inc., ("Acquisition"), an entity
controlled by Green Equity Investors II, L.P., and the stockholders of Holdings
party thereto, providing for the merger of Acquisition with and into Holdings,
with Holdings as the surviving corporation (the "Merger"). Holdings and
Acquisition consummated the Merger on December 18, 1998, and in the Merger, the
senior members of management of Holdings retained substantially all of their
stock in the surviving corporation and the other stockholders received cash in
exchange for their shares of Holdings. Prior to the Merger between Holdings and
Acquisition, management of the Company exercised their options in Holdings which
were converted into equivalent amounts of stock. The Merger was accounted for as
a recapitalization of Holdings. Recapitalization costs consist primarily of a
non-cash change of $9.9 million relating to the exercise of Holding's options by
management and other compensation received by the chief executive officer for
services rendered in connection with the recapitalization of Holdings.

The management (other than the employment of Donald F. Gayhardt, Jr. as the
President), Board of Directors and equity ownership of the Company did not
change in the Merger and Holdings continues to own one hundred percent of the
voting securities of the Company.

In connection with the Merger, Holdings, the Company and Jeffrey Weiss, the
current chief executive officer of Holdings and the Company, entered into a new
employment agreement, dated November 13, 1998, effective concurrently with the
consummation of the Merger, pursuant to which Jeffrey Weiss will continue to
serve as the chief executive officer of Holdings and the Company. In addition
the Company, Holdings and Donald F. Gayhardt, Jr., entered into an employment
agreement, dated December 18, 1998, pursuant to which Donald F. Gayhardt, Jr.
will serve as the President of Holdings and the Company. Donald F. Gayhardt,
Jr. formerly served as the executive vice president and chief financial officer
of the Company from 1992 to 1997.

Due to the rapid growth of the Company, period-to-period comparisons of
financial data are not necessarily indicative of the results for subsequent
periods and should not be relied upon as an indicator of the future performance
of the Company.

The Company's revenues from government services as a percentage of total
revenues decreased for the years ended June 30, 1998 and 1999. The Company
expects that its revenues from the distribution of public assistance benefits
will continue to decline due to a number of factors, including a continued
reduction in the number of recipients eligible for benefits. Additionally, a
number of state and local governmental agencies have initiated processes to
install electronic benefits transfer systems designed to disburse public
assistance benefits directly to individuals (sometimes referred to as "EBT"
systems). The Commonwealth of Pennsylvania initiated an EBT system in January
1998 which was fully implemented during fiscal 1998. As a result, all of the
Company's contracts with the Commonwealth of Pennsylvania were terminated during
fiscal 1998. For the years ended June 30, 1997, 1998 and 1999, these contracts
contributed 9%, 6% and 0%, respectively, of total revenues. Management believes
the installation of such systems will not have a material adverse effect on the
Company's results of operations or financial condition. See "Government Benefits
Distribution" on page 12.

<PAGE>

Results of Operations

The following table sets forth the Company's results of operations as a
percentage of revenues for the indicated periods:

<TABLE>
<CAPTION>
Year ended June 30,
------------------------------
1997 1998 1999
------------------------------
<S> <C> <C> <C>
Statement of Operations Data:
Revenues:
Revenues from check cashing........................................... 62.6% 63.2% 63.1%
Revenues from government services..................................... 19.4 12.9 5.6
Other revenues........................................................ 18.0 23.9 31.3
------------------------------
Total revenues......................................................... 100.0 100.0 100.0

Store and regional expenses:
Salaries and benefits................................................. 32.3 30.3 29.2
Occupancy............................................................. 9.6 8.7 7.9
Depreciation.......................................................... 1.7 1.8 1.8
Other............................................................... 24.7 21.6 19.6
------------------------------
Total store and regional expenses...................................... 68.3 62.4 58.5

Corporate expenses..................................................... 9.8 11.2 11.3
Loss on store closings and sales....................................... .5 .1 .1
Other depreciation and amortization.................................... 4.7 4.2 4.7
Interest expense....................................................... 12.1 11.6 13.6
Recapitalization costs................................................. - - 10.1
Writedown of goodwill.................................................. - 11.6 -
------------------------------
Income (loss) before taxes and extraordinary item...................... 4.6 (1.1) 1.4
Income tax provision................................................... 2.9 5.0 3.2
------------------------------
Income (loss) before extraordinary item................................ 1.7 (6.1) (1.8)
Extraordinary loss on debt extinguishment (net of income tax benefit).. (2.4) - (.1)
------------------------------
Net loss............................................................... (.7)% (6.1)% (1.9)%
==============================
</TABLE>

26
<PAGE>

Year Ended June 30, 1999 Compared to the Year Ended June 30, 1998

Total revenues were $121.0 million for the year ended June 30, 1999 as compared
to $111.2 million for the year ended June 30, 1998, an increase of $9.8 million,
or 8.8%. Of this increase, $3.8 million resulted from the inclusion of the
results of operations of the entities acquired during fiscal 1999, (collectively
referred to hereafter as the "Acquisitions"). In addition, revenues increased
$3.8 million from new store opening during fiscal 1999. For stores that were
opened and owned by the Company during the entire period from July 1, 1997
through June 30, 1999, revenues increased by 11.0%. This increase resulted from
an increase in Cash `Til Payday(R) revenues of 116.9% and an increase in
revenues from check cashing of 5.3%, offset in part by a decrease in revenues
from government services of 45.6%. Government services revenues accounted for
5.6% of total revenues for the year ended June 30, 1999, a decrease from 12.9%
of total revenues for the year ended June 30, 1998. The decrease in revenues
from government services resulted primarily from the reduction in the number of
individuals receiving benefits under government programs and due to the
implementation of EBT systems. The Company receives revenue on its government
contracts based primarily on the number of transactions it executes. As state
and local government agencies implement EBT systems, the Company expects a
continuing decline in the Company's government services revenue.

Store and regional expenses were $70.9 million for the year ended June 30, 1999
as compared to $69.3 million for the year ended June 30, 1998, an increase of
$1.6 million, or 2.3%. The Acquisitions resulted in an increase in store and
regional expenses of $2.2 million. Store and regional expenses as a percentage
of revenues decreased from 62.4% in the year ended June 30, 1998 to 58.5% in the
year ended June 30, 1999. This decrease was due primarily to the continued
improvement in store level profitability.

Salaries and benefits were $35.3 million for the year ended June 30, 1999 as
compared to $33.7 million for the year ended June 30, 1998, an increase of $1.6
million, or 4.7%. The Acquisitions accounted for an increase in salaries and
benefits of $1.1 million. Salaries and benefits expenses as a percentage of
revenue decreased from 30.3% for the year ended June 30, 1998 to 29.2% for the
year ended June 30, 1999, as a result of increases in revenues from the Cash
`Til Payday(R) program and revenues from check cashing.

Occupancy expense was $9.6 million for the year ended June 30, 1999 as compared
to $9.7 million for the year ended June 30, 1998, a decrease of $100,000, or
1.0%. The Acquisitions accounted for an increase of $300,000 and the closing of
certain Pennsylvania stores due to the expiration of the government contract
with the Commonwealth of Pennsylvania accounted for a decrease of $500,000.
Occupancy expense as a percentage of revenues decreased from 8.7% for the year
ended June 30, 1998 to 7.9% for the year ended June 30, 1999, due to an increase
in same store revenues.

Depreciation expense was $2.2 million for the year ended June 30, 1999 as
compared to $2.0 million for the year ended June 30, 1998 an increase of
$200,000, or 10.0%. The Acquisitions accounted for an increase of $100,000.
Depreciation expense as a percentage of revenues remained at 1.8% for the years
ended June 30, 1998 and June 30, 1999.

Other store and regional expenses were $23.8 million for the year ended June 30,
1999 as compared to $24.0 million for the year ended June 30, 1998, a decrease
of $200,000, or .8%. The Acquisitions accounted for an increase in other store
and regional expenses of $800,000 while closisng of certain Pennsylvania stores
due to the expiration of the government contract with the Commonwealth of
Pennsylvania resulted in a decrease of $1.4 million. Other store and regional
expenses consist of bank charges, armored security costs, net returned checks,
cash and food stamp shortages, insurance, and other costs incurred by the
stores.

Corporate expenses were $13.6 million for the year ended June 30, 1999 as
compared to $12.5 million for the year ended June 30, 1998, an increase of $1.1
million, or 8.8%. This increase resulted from the additional corporate costs
associated with the Acquisitions completed during fiscal 1999. Corporate
expenses as a percentage of revenues increased from 11.2% for the year ended
June 30, 1998 to 11.3% for the year ended June 30, 1999.

Loss on store closings and sales was $103,000 for the year ended June 30, 1999
as compared to $45,000 for the year ended June 30, 1998, an increase of $58,000,
or 128.9% due to an increase in allowances for store closings.

<PAGE>

Other depreciation and amortization expenses were $5.7 million for the year
ended June 30, 1999 as compared to $4.8 million for the year ended June 30,
1998, an increase of $900,000, or 18.7%. This increase was mainly due to the
accelerated amortization of the remaining goodwill associated with the Company's
government services line of business which is being amortized over the remaining
life of the future undiscounted cash flows of the government services business.

Interest expense was $16.4 million for the year ended June 30, 1999 as compared
to $12.9 million for the year ended June 30, 1998, an increase of $3.5 million,
or 27.1%. This increase was primarily attributable to $1.9 million in commitment
fee expense associated with the Recapitalization of Holdings and the issuance of
debt to fund current acquisitions.

Recapitalization costs consist primarily of a non-cash charge of $9.9 million
relating to the exercise of Holding's options by management of the Company
immediately prior to the Merger and other compensation received by the chief
executive officer for services rendered in connection with the recapitalization
of Holdings.

Year Ended June 30, 1998 Compared to the Year Ended June 30, 1997

Total revenues were $111.2 million for the year ended June 30, 1998 as compared
to $83.0 million for the year ended June 30, 1997, an increase of $28.2 million,
or 34.0%. Of this increase, $26.5 million resulted from the inclusion of the
results of operations of the entities acquired during fiscal 1997, (collectively
referred to hereafter as the "97 Acquisitions"). The increase was offset in part
by revenues related to the sale or closing of 22 stores in Michigan, California
and Texas during fiscal 1998 which generated a decrease in revenue of $2.5
million. For stores that were opened and owned by the Company during the entire
period from July 1, 1996 through June 30, 1998, revenues increased by 15.3%.
This increase resulted from an increase in other revenues of 48.6% primarily as
a result of increased revenue from the Cash `Til Payday(R) program and an
increase in revenues from check cashing of 12.6%, offset in part by a decrease
in revenues from government services of 25.2%. Government services revenues
accounted for 12.9% of total revenues for the year ended June 30, 1998, a
decrease from 19.4% of total revenues for the year ended June 30, 1997. The
decrease in revenues from government services resulted primarily from the
reduction in the number of individuals receiving benefits under government
programs and the closure and/or sale of the stores in Michigan and California.
The Company receives revenue on its government contracts based primarily on the
number of transactions it executes. As state and local government agencies
implement EBT systems, the Company expects a continuing decline in the Company's
government services revenue.

Store and regional expenses were $69.3 million for the year ended June 30, 1998
as compared to $56.7 million for the year ended June 30, 1997, an increase of
$12.6 million, or 22.2%. The 97 Acquisitions resulted in an increase in store
and regional expenses of $13.3 million, while the 22 stores closed in fiscal
1998 resulted in a decrease in store expenses of approximately $2.3 million.
Store and regional expenses as a percentage of revenues decreased from 68.3% in
the year ended June 30, 1997 to 62.4% in the year ended June 30, 1998. This
decrease was due primarily to the continued improvement in store level
profitability.

Salaries and benefits were $33.7 million for the year ended June 30, 1998 as
compared to $26.8 million for the year ended June 30, 1997, an increase of $6.9
million, or 25.7%. The 97 Acquisitions accounted for an increase in salaries and
benefits of $6.4 million. Salaries and benefits expenses as a percentage of
revenue decreased from 32.3% for the year ended June 30, 1997 to 30.3% for the
year ended June 30, 1998, as a result of increases in revenues from the Cash
`Til Payday(R) program and revenues from check cashing.

Occupancy expense was $9.7 million for the year ended June 30, 1998 as compared
to $8.0 million for the year ended June 30, 1997, an increase of $1.7 million,
or 21.3%. The 97 Acquisitions accounted for an increase of $2.2 million and the
sale or closing of 22 stores in Michigan, California, and Texas accounted for a
decrease of $348,000. Occupancy expense as a percentage of revenues decreased
from 9.6% for the year ended June 30, 1997 to 8.7% for the year ended June 30,
1998, due to an increase in same store revenues.

Depreciation expense was $2.0 million for the year ended June 30, 1998 as
compared to $1.4 million for the year ended June 30, 1997 an increase of
$600,000, or 42.9%. The 97 Acquisitions accounted for an increase of $600,000.
Depreciation expense as a percentage of revenues increased from 1.7% for the
year ended June 30, 1997 to 1.8% for the year ended June 30, 1998.

Other store and regional expenses were $24.0 million for the year ended June 30,
1998 as compared to $20.5 million for the year ended June 30, 1997, an increase
of $3.5 million, or 17.1%. The 97 Acquisitions accounted for an increase in
other store and regional expenses of $4.2 million while store closings and sales
resulted in a

<PAGE>

decrease of $1.0 million. Other store and regional expenses consist of bank
charges, armored security costs, net returned checks, cash and food stamp
shortages, insurance, and other costs incurred by the stores.

Corporate expenses were $12.5 million for the year ended June 30, 1998 as
compared to $8.2 million for the year ended June 30, 1997, an increase of $4.3
million, or 52.4%. This increase resulted from the additional corporate costs,
primarily salaries and benefits, associated with the acquisitions completed
during fiscal 1996 and fiscal 1997. Corporate expenses as a percentage of
revenues increased from 9.8% for the year ended June 30, 1997 to 11.2% for the
year ended June 30, 1998, due primarily to expenses incurred on new business
research and development. (See footnote 15 in the attached consolidated
financial statements.)

Loss on store closings and sales was $45,000 for the year ended June 30, 1998 as
compared to $381,000 for the year ended June 30, 1997, a decrease of $336,000,
or 88.2%.

Other depreciation and amortization expenses were $4.8 million for the year
ended June 30, 1998 as compared to $3.9 million for the year ended June 30,
1997, an increase of $900,000, or 23.1%. This increase is due to the recognition
of a full year of amortization on the goodwill associated with the 97
Acquisitions.

Interest expense was $12.9 million for the year ended June 30, 1998 as compared
to $10.0 million for the year ended June 30, 1997, an increase of $2.9 million,
or 29.0%. This increase was primarily attributable to increased average
outstanding indebtedness to finance the 97 Acquisitions.

For the year ended June 30, 1998, the Company recorded a $12.9 million writedown
of goodwill related to the government services business. See page 31.

29
<PAGE>

Liquidity and Capital Resources

The Company's principal sources of cash are from operations, borrowings under
its credit facilities and sales of Holdings' common stock. The Company
anticipates its principal uses of cash will be to provide working capital,
finance capital expenditures, meet debt service requirements, finance
acquisitions, and finance loan store expansion. For the years ended June 30,
1997, 1998 and 1999, the Company had net cash provided by operating activities
of $9.3 million, $18.0 million and $16.0 million, respectively, for purchases of
property and equipment related to existing stores, recently acquired stores,
investments in technology and acquisitions. The Company's budgeted capital
expenditures, excluding acquisitions, are currently anticipated to aggregate
approximately $9.7 million during its fiscal year ending June 30, 2000, for
remodeling and relocation of certain existing stores and for opening new stores.

The Offering generated gross proceeds of $110.0 million which were used to repay
all of the Company's indebtedness under its then-existing credit facility, to
fund the Money Mart, Cash-N-Dash, C&C, and Canadian Capital Corporation
acquisitions and to pay related fees and expenses. The repayment of
substantially all of the Company's existing indebtedness resulted in an
extraordinary loss, net of taxes, of approximately $2.0 million. This loss
results from the write-off of the deferred financing costs associated with the
Company's existing credit facility.

In connection with the Merger, the Company terminated the Second Amended and
Restated Credit Agreement, dated as of November 15, 1996. The Company entered
into a new Credit Agreement, dated as of December 18, 1998 obtaining a new $160
million credit facility. The Credit Agreement provides for a revolving credit
facility of up to $70 million and two term loans aggregating up to $90 million.
The borrowings under the revolving credit facility as of June 30, 1999 were
$10.5 million. The $90 million term loans were available to fund the Company's
repurchase obligations in excess of $20 million, if any, in connection with the
change of control provision of its 10 7/8% senior notes due 2006. Repurchase
obligations in connection with the senior notes were $810,000 and as a result,
the $90 million term loan commitments expired on February 16, 1999.

Also, in connection with the Merger, the Company entered into a Purchase
Agreement dated December 18, 1998, pursuant to which the Company may issue up to
$20 million aggregate principal amount of its 10 7/8% Senior Subordinated Notes
Due 2006 (the "Senior Subordinated Notes"), to (i) fund the Company's repurchase
obligations, if any, in connection with its Senior Notes, or (ii) to finance or
refinance acquisitions of the Company. In February 1999, the Company issued
$18.1 million of its Senior Subordinated Notes to fund the purchase of ICL,
Calgary, repurchase obligations and related fees of $11.4 million, $5.6 million
and $1.1 million, respectively. Issuance costs associated with the new Credit
Agreement and the Senior Agreement and the Senior Subordinated Notes paid during
fiscal 1999 were$7.6 million.

The Company's indebtedness includes a seller subordinated note of $2.6 million
from a previous acquisition. The Company is seeking to restructure its
obligations under the original subordinated note issued to the seller as part of
the acquisition, and has ceased making principal and interest payments. As a
result, the seller has filed a complaint against the Company alleging, among
other things, breach of contract, and is seeking payment of the balance of the
note. Depending on the outcome of the complaint filed by the seller, the Company
could be required to pay the balance of the note. See "Item 3--Legal
Proceedings." The Company does not believe this would have a material impact on
its liquidity.

The Notes, new revolving credit facility and the Senior Subordinated Notes
contain certain financial and other restrictive covenants, which, among other
things, require the Company to achieve certain financial ratios, limit capital
expenditures, restrict payment of dividends and require certain approvals in the
event the Company wants to increase the borrowings.

30
<PAGE>

In connection with the Money Mart acquisition in November 1996, the Company
established an overdraft credit facility to fund peak working capital needs for
its Canadian operations. The overdraft credit facility provides for a commitment
of up to approximately $4.8 million of which $1.7 million and $0.0 were
outstanding as of June 30, 1999 and 1998, respectively. Amounts outstanding
under the facility bear interest at Canadian prime plus 0.50% and are secured by
the pledge of a cash collateral account of an equivalent balance. For the
Company's United Kingdom operations, Instant Cash Loans also has an overdraft
facility which provides for a commitment of up to approximately $1.6 million
with no outstanding balance as of June 30, 1999.

The Company is highly leveraged, and borrowings under the new revolving credit
facility and the overdraft facilities will increase the Company's debt service
requirements. Management believes that, based on current levels of operations
and anticipated improvements in operating results, cash flows from operations
and borrowings available under the revolving credit facility will enable the
Company to fund its liquidity and capital expenditure requirements for the
foreseeable future, including scheduled payments of interest on the Notes
and payment of interest and principal on the Company's other indebtedness. The
Company's belief that it will be able to fund its liquidity and capital
expenditure requirements for the foreseeable future is based upon the historical
growth rate of the Company and the anticipated benefits resulting from operating
efficiencies. Additional revenue growth is expected to be generated by increased
check cashing revenues (consistent with historical growth), and an expansion of
the Cash 'Til Payday Loan(R) Program. The Company also expects operating
expenses to increase, although the rate of increase is expected to be less than
the rate of revenue growth. Furthermore, the Company does not believe that
additional acquisitions or expansion are necessary in order for it to be able to
cover its fixed expenses, including debt service. There can be no assurance,
however, that the Company's business will generate sufficient cash flow from
operations or that future borrowings will be available under the new revolving
credit facility in an amount sufficient to enable the Company to service its
indebtedness, including the Notes, or to make anticipated capital expenditures.
It may be necessary for the Company to refinance all or a portion of its
indebtedness on or prior to maturity, under certain circumstances, but there can
be no assurance that the Company will be able to effect such refinancing on
commercially reasonable terms or at all.

Writedown of Goodwill

Statement of Financial Accounting Standards No. 121, "Accounting for the
Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed of"
("SFAS 121"), establishes accounting standards for the impairment of long-lived
assets, certain identifiable intangibles, and goodwill related to those assets
to be held and used and for long-lived assets and certain identifiable
intangibles to be disposed of. In accordance with SFAS 121, the Company reviews
for impairment of long-lived assets and related goodwill whenever events or
changes in circumstances occur which indicate that the carrying amount of an
asset may not be recoverable.

If an event or change in circumstance is present or an event or change in
circumstance indicates that the carrying amount of an asset that the Company
expects to hold and use may not be recoverable, the Company estimates the future
cash flows expected to result from the use of the asset and its eventual
disposition. If the sum of the expected undiscounted future cash flows is less
than the carrying amount of the asset, the Company recognizes an impairment loss
for the difference between the carrying amount of the asset and the estimated
fair value of the asset. The Company determines the estimated fair value of the
asset by discounting the estimated future cash flows using a discount rate
commensurate with the risks involved in the use of such asset. In estimating
future cash flows, the Company groups assets at the lowest level for which there
are identifiable cash flows. The Company groups assets between its two primary
lines of business that generate independent cash flows: check cashing and
government services.

31
<PAGE>

by May 2000. This implementation plan does not include the Company providing
additional services after May 2000. Also, during the fourth quarter of fiscal
year 1998 management of the Company concluded that the Company would not have
the opportunity to provide similar government services for the newly installed
EBT systems in either Pennsylvania or New York. Upon the occurrence of these
events, the Company determined that an impairment indicator was present.
Accordingly, the Company estimated future cash flows for the remaining
government services business and compared the undiscounted cash flows to the
carrying amount of assets and related goodwill separately identifiable with the
government services line of business. This analysis indicated that the goodwill
related to the government services business was impaired. As a result, the
Company measured the amount of impairment to be recorded by comparing the fair
value of the assets and related goodwill to the carrying value of the assets and
related goodwill. This analysis indicated that the fair value of the assets and
related goodwill was less than the carrying value by $12.9 million. Therefore,
the Company has written down the carrying value of the related goodwill by a
charge to income of $12.9 million. This charge relates to goodwill as the fixed
assets associated with the government services line of business have been fully
depreciated. The remaining unamortized goodwill of approximately $3.0 million
related to the government services business will be amortized over the estimated
remaining life of the future undiscounted cash flows associated with the
government services business.

Income Taxes

The Company's effective tax rates for fiscal 1997, 1998 and 1999 were 62.5%,
(439.9)% and 240.1%, respectively. The effective rate differs from the federal
statutory rate of 34% due to state taxes, foreign taxes, nondeductible
amortization and writeoffs of goodwill which resulted from the June 30, 1994
acquisition of the Company and several subsequent acquisitions.

Seasonality and Quarterly Fluctuations

The Company's business is seasonal due to the impact of several tax-related
services including cashing tax refund checks. Historically, the Company has
generally experienced its highest revenues and earnings during its third fiscal
quarter ending March 31 when revenues from these tax-related services peak. Due
to the seasonality of the Company's business, results of operations for any
fiscal quarter are not necessarily indicative of the results of operations that
may be achieved for the full fiscal year. In addition, quarterly results of
operations depend significantly upon the timing and amount of revenues and
expenses associated with the addition of new stores.

Impact of Inflation

The Company believes that the results of its operations are not dependent upon
the levels of inflation.

Subsequent Event

On July 7, 1999, the Company entered into an Agreement to acquire all of the
outstanding shares of Cash A Cheque Holdings Great Britain Limited ("CAC"),
which operates 44 company owned stores in the United Kingdom. The aggregate
purchase price for this acquisition was approximately $12.5 million and was
funded through excess internal cash and the Company's revolving credit facility.
For additional information with respect to the pro forma financial information
for CAC, see Registrant's Statement on Form 8K/A filed April 26, 1999.

<PAGE>

Impact of Year 2000

General Description of the Year 2000 Issue and the Nature and Effect of the Year
2000 on Information Technology (IT) and Non-IT Systems

The Year 2000 Issue is the result of computer programs being written using two
digits rather than four to define the applicable year. Any of the Company's
computer programs that have time-sensitive software may recognize a date using
"00" as the year 1900 rather than the year 2000. This could result in a system
failure or miscalculations causing disruptions of operation, including, among
other things, a temporary inability to process transactions or engage in similar
normal business activities.

Based on prior assessments, the Company determined that it would be required to
modify or replace portions of its software and certain hardware so that those
systems will properly utilize dates beyond December 31, 1999. The Company
presently believes that with modifications or replacements of existing software
and certain hardware, the Year 2000 Issue can be mitigated. However, if such
modifications and replacements are not made, or are not completed timely, the
Year 2000 Issue will not have a material impact on the operations of the
Company since the Company is not significantly dependent on technology to
provide services to its customers.

The Company's plan to resolve the Year 2000 Issue involved the following four
phases: assessment, remediation, testing and implementation. To date the Company
has fully completed its assessment of all systems that could be significantly
affected by the Year 2000. The completed assessment indicated that hardware
systems could be affected. However, the Company has determined that these
systems will not present a material exposure as it related to the Company's
service to its customers.

Timetable for Completion of Each Remaining Phase Progress in Becoming Year 2000
Compliant

The remediation and testing of hardware systems will be completed by October
1999. Full implementation is expected to be completed by the end of October
1999.

Nature and Level of Importance of Third Parties and their Exposure to the Year
2000

To date, the Company is not aware of any external agent that would materially
impact the Company's results of operations, liquidity, or capital resources.
However, the Company has no means of ensuring that external agents will be Year
2000 ready. The inability of external agents to complete their Year 2000
resolution process in a timely fashion would not materially impact the Company.

Costs

The Company does not expect the costs to be material and does not expect the
projects to have a significant impact on operations.

Risks

Management of the Company believes it has an effective program in place to
resolve the Year 2000 Issue in a timely manner. As noted above, the Company has
not yet completed all necessary phases of the Year 2000 program. In the event
that the Company does not complete the remaining phases, there would not be a
material impact on the Company's results of operations, liquidity, or capital
resources, since the Company is not significantly dependent on technology.

Contingency Plans

The Company has contingency plans for maintaining its store operations. These
plans do not involve any technological tools because the Company is not
significantly dependent on technology to provide services to its customers.

33
<PAGE>

Pending Accounting Pronouncements

In June 1998, the FASB issued Statement of Financial Accounting Standards No.
133, "Accounting for Derivative and Hedging Activities" ("SFAS 133"). SFAS 133
requires companies to record derivatives on the balance sheet as assets or
liabilities at fair value. It is effective for financial statements for fiscal
years beginning after June 15, 2000. The Company is evaluating the impact of
SFAS No. 133 on the Company's future earnings and financial position, but does
not expect it to be material.

<PAGE>

Item 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Generally

In the operations of its subsidiaries and the reporting of its consolidated
financial results, the Company is affected by changes in interest rates and
currency exchange rates. The principal risks of loss arising from adverse
changes in market rates and prices to which the Company and its subsidiaries are
exposed relate to:

. interest rates on debt
. foreign exchange rates generating translation gains and losses

Changes in interest rates and/or exchange rates have not, and are not expected
to, materially impact the consolidated financial position, results of operations
or cash flows of the Company.

The Company and its subsidiaries have no market risk sensitive instruments
entered into for "trading purposes," as such term is defined by generally
accepted accounting principles. Information contained herein relates only to
instruments entered into for purposes other than trading.

Interest Rates

The Company's outstanding indebtedness, and related interest rate risk, is
managed centrally by the office of the Chief Financial Officer of the Company by
implementing the financing strategies approved by the Company's Board of
Directors. The Company's debt consists of fixed-rate senior notes and senior
subordinated notes. The Company's revolving credit facility, overdraft credit
facilities and subordinated promissory note carry a variable rate of interest.
As most of the Company's average outstanding indebtedness carries a fixed rate
of interest, a change in interest rates is not expected to materially impact the
Company's consolidated pre-tax earnings.

Foreign Exchange Rates

Operations in the UK and Canada have exposed the Company to shifts in currency
valuations. As strategy is being finalized and policy created, precautions have
been taken should exchange rates shift. For the United Kingdom subsidiary put
options have been purchased to protect quarterly earnings in the UK against
foreign exchange fluctuations. The options were purchased for six quarters
following the acquisition of Instant Cash Loans. Each contract has a strike
price of initially 5% out of the money which is equal to 1.5344 U.S. dollars per
British Pound. Out of the money put options were purchased for the following
reasons: (1) lower cost than completely averting risk and (2) maximum downside
is limited to the difference between strike price and exchange rate at date of
purchase and price of the contracts. This strategy will continually be evaluated
as to its effectiveness and suitability to the Company.

The Canadian and the United Kingdom operations constitute approximately 354.8%
and 3.8%, respectively of the Company's fiscal year 1999 consolidated pre-tax
earnings. As currency exchange rates change, translation of the financial
results of the Canadian and United Kingdom operations into U.S. dollars will be
impacted. However, this impact has not historically been material to the
consolidated financial results of the Company, although such changes do affect
the year-to-year comparability of the operating results of the international
businesses.

The Company estimated that a 10% change in foreign exchange rates by itself
would impact reported pre-tax earnings from continuing operations by
approximately $572,000. Such impact represents nearly 35.8% and (21)% of the
Company's consolidated pre-tax earnings for fiscal year 1999 and 1998,
respectively.

<PAGE>

Item 8. FINANCIAL STATEMENTS

REPORT OF INDEPENDENT AUDITORS

The Board of Directors and Shareholders
DFG Holdings, Inc.

We have audited the accompanying consolidated balance sheets of Dollar Financial
Group, Inc. as of June 30, 1998 and 1999, and the related consolidated
statements of operations, shareholder's equity, and cash flows for each of the
three years in the period ended June 30, 1999. These financial statements are
the responsibility of the Company's management. Our responsibility is to express
an opinion on these financial statements based on our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the consolidated financial position of Dollar Financial
Group, Inc. at June 30, 1998 and 1999, and the consolidated results of its
operations and its cash flows for each of the three years in the period ended
June 30, 1999, in conformity with generally accepted accounting principles.

/s/ Ernst & Young LLP

Philadelphia, Pennsylvania
August 13, 1999

36
<PAGE>

DOLLAR FINANCIAL GROUP, INC.

CONSOLIDATED BALANCE SHEETS
(In thousands except share amounts)

<TABLE>
<CAPTION>
June 30,
----------------------------
1998 1999
----------------------------
<S> <C> <C>
Assets
Cash and cash equivalents.......................................... $ 55,501 $ 65,782
Accounts receivable................................................ 5,726 9,854
Income taxes receivable............................................ - 2,587
Prepaid expenses................................................... 1,814 2,174
Deferred income taxes.............................................. 1,070 -
Notes receivable--officers......................................... 200 2,851
Property and equipment, net of accumulated
depreciation of $4,616 and $7,546................................. 7,820 12,754
Cost assigned to contracts acquired, net of accumulated
amortization of $461 and $581..................................... 231 104
Cost in excess of net assets acquired, net of accumulated
amortization of $6,559 and $11,232................................ 87,036 96,125
Covenants not to compete, net of accumulated
amortization of $917 and $1,295................................... 786 407
Debt issuance costs, net of accumulated
amortization of $885 and $1,917................................... 4,856 9,416
Other.............................................................. 810 1,655
----------------------------
$165,850 $203,709
============================

Liabilities and shareholder's equity
Accounts payable................................................... $ 12,806 $ 12,040
Income taxes payable............................................... 2,002 2,483
Advance from money transfer agent.................................. 3,000 2,000
Accrued expenses................................................... 3,722 4,868
Accrued interest payable........................................... 2,191 3,162
Deferred tax liability............................................. - 78
Due to parent...................................................... - 578
Revolving credit facilities........................................ - 12,162
Long-term debt and subordinated notes payable...................... 2,675 20,814
10-7/8% Senior Notes due 2006...................................... 110,000 109,190
Shareholder's equity:
Common stock, $1 par value: 20,000 shares authorized;
100 shares issued and outstanding at June 30, 1998
and 1999........................................................ - -
Additional paid-in capital........................................ 40,941 50,824
Accumulated deficit............................................... (8,875) (11,224)
Accumulated other comprehensive loss.............................. (2,612) (3,266)
----------------------------
Total shareholder's equity......................................... 29,454 36,334
----------------------------
$165,850 $203,709
============================
</TABLE>

See accompanying notes.

37
<PAGE>

DOLLAR FINANCIAL GROUP, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands)

<TABLE>
<CAPTION>
Year ended June 30,
------------------------------------------------
1997 1998 1999
------------------------------------------------
<S> <C> <C> <C>
Revenues.......................................... $ 83,012 $111,185 $120,979
Store and regional expenses:
Salaries and benefits............................ 26,817 33,670 35,329
Occupancy........................................ 7,951 9,656 9,609
Depreciation..................................... 1,446 2,018 2,227
Other............................................ 20,452 24,002 23,764
------------------------------------------------
Total store and regional expenses................. 56,666 69,346 70,929
Corporate expenses................................ 8,175 12,462 13,648
Loss on store closings and sales.................. 381 45 103
Other depreciation and amortization............... 3,905 4,776 5,706
Interest expense, net of interest income of $103,
$128 and $66..................................... 10,007 12,945 16,401
Recapitalization costs............................ - - 12,575
Writedown of goodwill............................. - 12,870 -
------------------------------------------------
Income (loss) before taxes and extraordinary item. 3,878 (1,259) 1,617
Income tax provision.............................. 2,425 5,538 3,881
------------------------------------------------
Income (loss) before extraordinary item........... 1,453 (6,797) (2,264)
Extraordinary loss on debt extinguishment
(net of income tax benefit of $1,042 and $45).... (2,023) - (85)
------------------------------------------------
Net loss.......................................... $ (570) $ (6,797) $ (2,349)
================================================
</TABLE>

See accompanying notes.

38
<PAGE>

DOLLAR FINANCIAL GROUP, INC.

CONSOLIDATED STATEMENTS OF SHAREHOLDER'S EQUITY
(In thousands, except share data)

<TABLE>
<CAPTION>
Accumulated
Common Stock Additional Other Total
--------------------- Paid-in Accumulated Comprehensive Shareholder's
Shares Amount Capital Deficit Loss Equity
--------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Balance, June 30, 1996.......... 100 $ - $ 15,215 $ (1,508) $ - $ 13,707
Comprehensive loss..............
Translation adjustment
for the year ended
June 30, 1997............. (303) (303)
Net loss for the year
ended June 30, 1997....... (570) (570)
--------------
Total comprehensive loss........ (873)
Capital contribution
from parent............... 25,726 25,726
-------------------------------------------------------------------------------------
Balance, June 30, 1997.......... 100 - 40,941 (2,078) (303) 38,560
-------------------------------------------------------------------------------------
Comprehensive loss..............
Translation adjustment
for the year ended
June 30, 1998............. (2,309) (2,309)
Net loss for the year
ended June 30, 1998....... (6,797) (6,797)
--------------
Total comprehensive loss........ (9,106)
Balance, June 30, 1998.......... 100 - 40,941 (8,875) (2,612) 29,454
-------------------------------------------------------------------------------------

Comprehensive loss..............
Translation adjustment
for the year ended
June 30, 1999.......... (654) (654)
Net loss for the year
ended June 30, 1999.... (2,349) (2,349)
--------------
Total comprehensive loss........ (3,003)
Noncash compensation....... 9,883 9,883
-------------------------------------------------------------------------------------
Balance, June 30, 1999.......... 100 $ - $ 50,824 $(11,224) $ (3,266) $ 36,334
=====================================================================================
</TABLE>

See accompanying notes.

39
<PAGE>

DOLLAR FINANCIAL GROUP, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)

<TABLE>
<CAPTION>
Year ended June 30,
-------------------------------------------------
1997 1998 1999
-------------------------------------------------
<S> <C> <C> <C>
Cash flows from operating activities:
Net loss................................................................ $ (570) $ (6,797) $ (2,349)
Adjustments to reconcile net loss to net cash
provided by operating activities:
Depreciation and amortization........................................ 5,626 7,374 10,892
Loss on store closings and sales..................................... 381 45 103
Noncash recapitalization costs....................................... - - 9,883
Writedown of goodwill................................................ - 12,870 -
Extraordinary loss on debt extinguishment, net of income
tax benefit........................................................ 2,023 - 85
Deferred tax provision (benefit)..................................... 735 (265) 320
Change in assets and liabilities (net of effect of acquisitions):
(Increase) decrease in accounts receivable and income taxes
receivable........................................................ (1,717) 2,343 (3,730)
(Increase) decrease in prepaid expenses and other assets........... 612 753 (1,087)
Increase in accounts payable, income taxes payable,
accrued expenses and accrued interest payable................... 2,229 1,680 1,834
-------------------------------------------------
Net cash provided by operating activities............................... 9,319 18,003 15,951

Cash flows from investing activities:
Acquisitions, net of cash acquired...................................... (73,048) (1,870) (16,062)
Gross proceeds from sales of property and equipment..................... - 202 -
Additions to property and equipment..................................... (2,626) (2,569) (7,409)
-------------------------------------------------
Net cash used in investing activities................................... (75,674) (4,237) (23,471)

Cash flows from financing activities:
Payments on long-term debt.............................................. (66,788) - (810)
Proceeds (payments) of advance from money transfer agent................ 3,000 - (1,000)
Other debt payments..................................................... (200) (129) (30)
Net increase (decrease) in revolving credit facilities.................. 4,449 (12,187) 11,719
Proceeds from long-term debt............................................ 145,000 - 18,107
Payments of debt issuance costs......................................... (7,993) (66) (7,634)
Advance to officers..................................................... - - (2,651)
Payments of financed insurance premiums................................. - (317) (10)
Proceeds from equity contribution from parent........................... 21,652 - -
Net increase in due to parent........................................... - - 578
-------------------------------------------------
Net cash provided by (used in) financing activities..................... 99,120 (12,699) 18,269
Effect of exchange rate changes on cash and cash equivalents............ (105) (771) (468)
-------------------------------------------------
Net increase in cash and cash equivalents............................... 32,660 296 10,281
Cash and cash equivalents at beginning of year.......................... 22,545 55,205 55,501
-------------------------------------------------
Cash and cash equivalents at end of year................................ $ 55,205 $ 55,501 $ 65,782
=================================================

Supplemental disclosures of cash flow information:
Interest paid........................................................... $ 8,383 $ 12,250 $ 12,538
Income taxes paid....................................................... $ 936 $ 4,314 $ 5,503

Supplemental schedule of noncash investing and financing activities:
Capital contribution from parent in connection with
acquisition of Any Kind Check Cashing Centers, Inc..................... $ 2,000 $ - $ -
Capital contribution from parent in connection with
acquisition of Cash-N-Dash Check Cashing, Inc.......................... $ 500 $ - $ -
Capital contribution from parent in connection with
acquisition of National Money Mart, Inc................................ $ 520 $ - $ -
Receivable for exercise of stock options................................ $ 875 $ - $ -
Tax benefit from exercise of stock options.............................. $ 179 $ - $ -
Noncash recapitalization costs.......................................... $ - $ - $ 9,883
</TABLE>

See accompanying notes.

<PAGE>

DOLLAR FINANCIAL GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

June 30, 1999

1. Organization and Business

The accompanying consolidated financial statements are those of Dollar Financial
Group, Inc. (the "Company") and its wholly-owned subsidiaries. The Company is a
wholly-owned subsidiary of DFG Holdings, Inc. ("Holdings"). The activities of
Holdings consist primarily of its investment in the Company. Holdings has no
employees or operating activities.

The Company, through its subsidiaries, provides retail financial and government
contractual services to the general public through a network of 437 locations
(of which 354 are Company-owned) operating as Almost-A-Banc(R), Any Kind Check
Cashing Centers(R), C&C Check Cashing(TM), Cash-N-Dash Check Cashing(TM), Check
Mart(R), Chex$Cashed(R), Financial Exchange Company(R), Money Mart(TM),
Quikcash, QwiCash(R), The Money Shop, The Service Centers and Loan Mart(R) in
thirteen states, the District of Columbia, Canada and the United Kingdom. The
services provided at the Company's retail locations include check cashing, sale
of money orders, money transfer services, consumer loans and various other
related services. Additionally, the Company, through its merchant services
division, maintains and services the network of electronic government benefits
distribution in approximately 1,200 merchant locations throughout the State of
New York.

2. Significant Accounting Policies

Use of Estimates

The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the amounts reported in the consolidated financial statements and
accompanying notes. Actual results could differ from those estimates.

Principles of Consolidation

The accompanying consolidated financial statements include the accounts of the
Company and its wholly owned subsidiaries. All significant intercompany accounts
and transactions have been eliminated in consolidation.

Property and Equipment

Properties and equipment are carried at cost. Depreciation is computed using the
straight-line method over the estimated useful lives of the assets, which vary
from five to fifteen years.

Cash and Cash Equivalents

Cash includes cash in stores and demand deposits with financial institutions.
Cash equivalents are defined as short-term, highly liquid investments both
readily convertible to known amounts of cash and so near maturity that there is
insignificant risk of changes in value because of changes in interest rates.

<PAGE>

DOLLAR FINANCIAL GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

2. Significant Accounting Policies (continued)

Intangible Assets

The cost in excess of net assets acquired or goodwill is amortized using the
straight-line method over a useful life of thirty years. The carrying value of
goodwill and other intangibles is reviewed annually to determine whether the
facts and circumstances suggest that the value may be impaired. If this review
indicates that the value will not be recoverable, as determined based on
undiscounted cash flows from operations before interest, the carrying value will
be reduced to an amount determined on the basis of such discounted cash flows.
The cost assigned to acquire individual contracts with various governmental
agencies is being amortized over the remaining contractual lives of the
individual contracts, which expire on various dates through June 30, 2001.

Debt Issuance Costs

Debt issuance costs are amortized using the straight-line method over the
remaining term of the related debt (see Note 7).

Store and Regional Expenses

The direct costs incurred in operating the Company's stores and providing
services under the Company's merchant services contracts have been classified as
store expenses. Store expenses include salaries and benefits of store and
regional employees, rent and other occupancy costs, depreciation of property and
equipment, bank charges, armored security costs, net returned checks, cash and
food stamp shortages and other costs incurred by the stores. Excluded from store
operations are the corporate expenses of the Company, which include salaries and
benefits of corporate employees, professional fees and travel costs.

Returned Checks

The Company charges operations for losses on returned checks in the period such
checks are returned, since ultimate collection of these items is uncertain.
Recoveries on returned checks are credited in the period when the recovery is
received. The net expense for bad checks included in other store expenses in the
accompanying consolidated statements of operations was $3,207,000, $3,915,000
and $4,102,000 for the years ended June 30, 1997, 1998 and 1999, respectively.

Income Taxes

The Company uses the liability method to account for income taxes. Accordingly,
deferred income taxes have been determined by applying current tax rates to
temporary differences between the amount of assets and liabilities determined
for income tax and financial reporting purposes.

The Company and its subsidiaries file a consolidated federal income tax return
with Holdings.

42
<PAGE>

DOLLAR FINANCIAL GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

2. Significant Accounting Policies (continued)

Employees' Retirement Plan

Retirement benefits are provided to substantially all full-time employees who
have completed 1,000 hours of service through a defined contribution retirement
plan. The Company will match 50% of each employee's contribution, up to 8% of
the employee's annual salary. In addition, a discretionary contribution may be
made if the Company meets its financial objectives. The amount of contributions
charged to expense was $246,000, $368,000 and $423,000 for the year ended June
30, 1997, 1998 and 1999, respectively.

Advertising Costs

The Company expenses advertising costs as incurred. Advertising costs charged to
expense were $1,278,000, $2,078,000 and $3,318,000, for the years ended June 30,
1997, 1998 and 1999, respectively.

Fair Value of Financial Instruments

The carrying values of the subordinated promissory note payable and the
revolving credit facilities approximate fair values, as these obligations carry
a variable interest rate. The fair value of the Company's Senior Notes is based
on quoted market prices and the fair value of the Senior Subordinated Notes is
based on the value of the Senior Notes, (see Note 7).

Foreign Currency Translation and Transactions

National Money Mart Company ("Money Mart"), the Company's Canadian subsidiary
and Instant Cash Loans ("ICL"), the Company's United Kingdom subsidiary, operate
check cashing and financial services outlets in Canada and the United Kingdom,
respectively. The financial statements of these foreign subsidiaries have been
translated into U.S. dollars in accordance with generally accepted accounting
principles. All balance sheet accounts are translated at the current exchange
rate and income statement items are translated at the average exchange rate for
the period; resulting translation adjustments are made directly to a separate
component of shareholder's equity. Gains or losses resulting from foreign
currency transactions are included in results of operations and have been
insignificant.

43
<PAGE>

DOLLAR FINANCIAL GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

2. Significant Accounting Policies (continued)

Franchise Fees and Royalties

The Company recognizes initial franchise fees upon fulfillment of all
significant obligations to the franchisee. Royalties from franchisees are
accrued as earned. The standard franchise agreements grant to the franchisee the
right to develop and operate a store and use the associated trade names,
trademarks, and service marks within the standards and guidelines established by
the Company. Initial franchise fees included in revenues were $42,000, $177,000
and $179,000 for the years ended June 30, 1997, 1998 and 1999.

Recent Accounting Pronouncements

In June 1997, the Financial Accounting Standards Board, "FASB" issued Statement
No. 130, "Reporting Comprehensive Income." This Statement became effective for
fiscal periods beginning after December 15, 1997 with early adoption permitted.
The adoption of this Statement has had no effect on the Company's results of
operations, financial position, capital resources, or liquidity.

In June 1997, the FASB issued Statement of Financial Accounting Standards No.
131, "Disclosures about Segments of an Enterprise and Related Information"
("SFAS No. 131"). SFAS No. 131 establishes standards for the way that public
business enterprises report information about operating segments in annual
financial statements and requires that those enterprises report selected
information about operating segments in interim financial reports. It also
establishes standards for related disclosures about products and services,
geographic areas and major customers. The Company has adopted SFAS No. 131 for
fiscal year ended June 30, 1999.

In June 1998, the FASB issued Statement of Financial Accounting Standards No.
133, "Accounting for Derivative and Hedging Activities" ("SFAS 133"). SFAS 133
requires companies to record derivatives on the balance sheet as assets or
liabilities at fair value. It is effective for financial statements for fiscal
years beginning after June 15, 2001. The Company is evaluating the impact of
SFAS No. 133 on the Company's future earnings and financial position, but does
not expect it to be material.

In March 1998, the Accounting Standards Executive Committee issued Statement of
Position 98-1, Accounting for the Costs of Computer Software Developed or
Obtained for Internal Use ("SOP 98-1"). SOP 98-1 requires companies to
capitalize qualifying computer software costs incurred during the application
development stage. The Company adopted SOP 98-1 effective for fiscal year ended
June 30, 1999 with no material effect on the Company's results of operations,
financial position, capital resources or, liquidity.

44
<PAGE>

DOLLAR FINANCIAL GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

3. DFG Holdings, Inc.

As discussed in Note 1, the Company is a wholly-owned subsidiary of Holdings.
The activities of Holdings consist primarily of its investment in the Company
and the issuance of $120.6 million aggregate principal amount of 13% Senior
Discount Notes which generated gross cash proceeds of $64.0 million used in
connection with the Merger.

Recapitalization

On November 13, 1998, Holdings, entered into an agreement and plan of merger
(the "Merger Agreement") with DFG Acquisition, Inc., ("Acquisition") controlled
by Green Equity Investors II, L.P., and the stockholders of Holdings party
thereto, providing for the merger of Acquisition with and into Holdings, with
Holdings as the surviving corporation (the "Merger"). Holdings and Acquisition
consummated the Merger on December 18, 1998, and in the Merger, the senior
members of management of Holdings retained substantially all of their stock in
the surviving corporation and the other stockholders received cash in exchange
for their shares of Holdings. Prior to the Merger between Holdings and
Acquisition, management of the Company exercised their options in Holdings which
were converted into equivalent amounts of stock. The Merger was accounted for as
a recapitalization of Holdings. Recapitalization costs consist primarily of a
noncash charge of $9.9 million relating to the exercise of Holdings options by
management and other compensation received by the chief executive officer for
services rendered in connection with the recapitalization of Holdings.

The components of Holding's shareholders' equity are as follows:

Common Stock

Holdings issued 17,504.11 shares for $3,225 per share on December 18, 1998. Of
the 100,000 shares authorized, 19,823.63 shares were issued and outstanding at
June 30, 1999.

Dividends

Under the terms of the Company's new revolving credit facility discussed in Note
7, the Company is permitted to declare, pay, or make cash dividends to Holdings
under certain circumstances.

45
<PAGE>

DOLLAR FINANCIAL GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

3. DFG Holdings, Inc. (continued)

Stock Options

As part of the Merger and Recapitalization of Holdings, the then Existing Stock
Option Plan was terminated and any stock options not exercised were cancelled.
On February 15, 1999, Holdings adopted the DFG Holdings, Inc. 1999 Stock
Incentive Plan (the "Plan") whereby 1,413.32 shares of Holdings' common stock
may be awarded to employees or consultants of the Company. The awards, at the
discretion of Holdings' Board of Directors, may be issued as nonqualified stock
options or incentive stock options. Stock appreciation rights ("SAR") may also
be granted in tandem with the nonqualified stock options or the incentive stock
options. Exercise of the SARs cancels the option for an equal number of shares
and exercise of the nonqualified stock options or incentive stock options
cancels the SARs for an equal number of shares. The number of shares issued
under the Plan shall be subject to adjustment as specified in the Plan
provisions. No options may be granted after February 15, 2009. During the year
ended June 30, 1999, 979 nonqualified stock options were granted under the Plan
at an exercise price of $3,225 per share, the estimated fair market value of the
common stock at date of grant. The options are exercisable in 20% increments
annually on the first, second, third, fourth and fifth anniversary of the grant
date and have a term of ten years from the date of issuance.

Holdings has elected to follow Accounting Principles Board Opinion No. 25,
"Accounting for Stock Issued to Employees" (APB 25) and related interpretations
in accounting for its employee stock options because, as discussed below, the
alternative fair value accounting provided for under FASB Statement No. 123,
"Accounting for Stock-Based Compensation," requires use of option valuation
models that were not developed for use in valuing employee stock options. Under
APB 25, because the exercise price of the Company's employee stock options
equals the estimated market price of the underlying stock on the date of grant,
no compensation expense is recognized.

Pro forma information regarding net income and earnings per share is required by
Statement No. 123, however, the effect of applying Statement No. 123 to
Holdings' stock-based awards results in net income that is not materially
different from amounts reported.

46
<PAGE>

DOLLAR FINANCIAL GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

4. Acquisitions

The acquired entities described below (collectively referred to as the
"Acquisitions"), were accounted for by the purchase method of accounting. The
results of operations of the acquired companies are included in the Company's
statements of operations for the periods in which they were owned by the
Company. The total purchase price for each acquisition has been allocated to
assets acquired and liabilities assumed based on estimated fair values.

In August 1996, the Company purchased all of the outstanding capital stock of
Any Kind Check Cashing Centers, Inc. ("Any Kind") for an aggregate purchase
price of $31.0 million consisting of $29.0 million in cash and $2.0 million in
Holdings' common stock. A value of $2.0 million was assigned to 1,250 shares of
Holdings' common stock which were issued, based on the price per share of
Holdings' common stock which was sold to other investors in connection with the
acquisition of Any Kind, plus initial working capital of approximately $6.0
million. Any Kind operated 63 check cashing stores in seven states and the
District of Columbia. The excess of the purchase price over the fair value of
identifiable net assets acquired was $30.7 million.

In August 1996, the Company purchased certain assets and liabilities of ABC
Check Cashing Inc. ("ABC") for a purchase price of $6.0 million in cash plus
initial working capital of approximately $1.5 million. ABC operated 15 check
cashing stores in Cleveland, Ohio. The excess of the purchase price over the
fair value of identifiable net assets acquired was $5.4 million.

In November 1996, the Company acquired all of the outstanding capital stock of
Money Mart for approximately $17.7 million (of which approximately $500,000 was
in the form of Holdings' common stock) plus initial working capital of
approximately $900,000. Money Mart owned 36 check cashing stores and franchises
107 check cashing stores, all of which operate in Canada under the "Money Mart"
name. The excess of the purchase price over the fair value of identifiable net
assets acquired was $16.7 million.

In November 1996, the Company acquired substantially all of the assets of Cash-
N-Dash Check Cashing, Inc. ("Cash-N-Dash") for approximately $7.3 million,
consisting of $6.0 million in cash, the issuance to the seller of $500,000 of
Holdings' common stock, and a revenue-based earn-out of up to $750,000 payable
over four years. Cash-N-Dash operated 32 check cashing stores in northern
California under the "Cash-N-Dash" name. $368,000 has been paid under the
revenue-based earn-out contingency and recorded as additional consideration of
the acquisition. The excess of the purchase price over the fair value of
identifiable net assets acquired was $5.5 million.

In November 1996, the Company acquired C&C Check Cashing, Inc. ("C&C") pursuant
to a stock purchase agreement for approximately $3.8 million, consisting of $3.5
million in cash and a revenue-based earn-out of up to $300,000 payable over
three years, plus initial working capital of approximately $500,000. C&C
operated 22 check cashing stores in northern California under the "C&C Check
Cashing" name. $100,000 has been paid under the revenue-based earn-out
contingency and recorded as additional consideration of the acquisition. The
excess of the purchase price over the fair value of identifiable net assets
acquired was $2.7 million.

In April 1997, the Company acquired all of the outstanding stock of a company
which owned all of the operating assets of Canadian Capital Corporation
("Canadian Capital"). Canadian Capital was the largest Money Mart franchisee and
operated 43 check cashing retail stores in Ontario, Canada under the name "Money
Mart." Total consideration for the purchase was $13.3 million, plus initial
working capital of approximately $1.8 million. The excess of the purchase price
over the fair value of identifiable net assets acquired was $13.3 million.

47
<PAGE>

DOLLAR FINANCIAL GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

4. Acquisitions (continued)

On February 10, 1999, the Company entered into an agreement to acquire all of
the outstanding shares of ICL which operated eleven stores in the United
Kingdom. The aggregate purchase price for this acquisition was $12.6 million,
consisting of $9.4 million in cash and a profit-based earn out of up to $3.2
million payable over two years, plus initial working capital of $2.0 million.
The excess of the purchase price over the fair value of identifiable net assets
acquired was $8.3 million.

On February 17, 1999, the Company purchased the remaining 86.5% partnership
interest in its Calgary Money Mart Partnership ("Calgary"). Calgary operated six
stores in Alberta, Canada. The aggregate purchase price for this acquisition was
$5.6 million. The excess of the purchase price over the fair value of
identifiable net assets acquired was $5.2 million.

The acquisitions of Any Kind and ABC were financed through bank borrowings of
$35.0 million under a credit facility then existing, the issuance by Holdings of
$2.0 million of common stock to the seller of Any Kind, and the sale of $22.0
million of Holdings' common stock to affiliates of then existing Holdings
stockholders. Concurrently, with the acquisitions of Any Kind and ABC, the
Company increased and amended its existing credit facility. The cash portion of
the purchase price of the Money Mart, Cash-N-Dash, C&C, and Canadian Capital
acquisitions was financed from the net proceeds of the offering of 10-7/8%
Senior Notes due 2006 (the "Offering," see Note 7). The bank borrowings entered
into in connection with the Any Kind and ABC acquisitions were repaid with the
net proceeds of the Offering. The acquisitions of ICL and Calgary were funded
with the issuance of the Company's Senior Subordinated Notes aggregating $17.0
million.

48
<PAGE>

DOLLAR FINANCIAL GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

The following unaudited pro forma information for the years ended 1998 and 1999
presents the results of operations as if the acquisitions of ICL and Calgary had
occurred on July 1, 1997. The pro forma operating results include the results of
operations for these acquisitions for the indicated periods and reflect the
amortization of intangible assets arising from the acquisitions and increased
interest expense on acquisition debt. Pro forma results of operations are not
necessarily indicative of the results of operations that would have occurred had
the purchase been made on the date above or the results which may occur in the
future.

<TABLE>
<CAPTION>
Year ended June 30,
(Unaudited)
-------------------------------
1998 1999
-------------------------------
(dollars in thousands)
<S> <C> <C>
Total revenue....................... $ 117,591 $125,918
Loss before extraordinary item...... $ (6,619) $ (2,359)
Net loss............................ $ (6,619) $ (2,444)
</TABLE>

5. Writedown of Goodwill

During the fourth quarter of fiscal year 1998, the Commonwealth of Pennsylvania
informed the Company that all of the Commonwealth's government services
contracts would be terminated at June 30, 1998 as a result of the successful
implementation of an Electronic Benefit Transfer (EBT) system in Pennsylvania.
Additionally, during the fourth quarter of fiscal year 1998, the State of New
York presented the Company with an EBT implementation plan, which contemplates
the successful implementation of EBT within the State of New York by May 2000.
This implementation plan does not include the Company providing additional
services after May 2000. Also, during the fourth quarter of fiscal year 1998,
management of the Company concluded that the Company would not have the
opportunity to provide similar government services for the newly-installed EBT
systems in either Pennsylvania or New York. Upon the occurrence of these
events, the Company determined that an impairment indicator was present.
Accordingly, the Company estimated future cash flows for the remaining
government services business and compared the undiscounted cash flows to the
carrying amount of assets and related goodwill separately identifiable with the
government services line of business. This analysis indicated that the goodwill
related to the government services business was impaired. As a result, the
Company measured the amount of impairment to be recorded by comparing the fair
value of the assets and related goodwill to the carrying value of the assets and
related goodwill.

49
<PAGE>

DOLLAR FINANCIAL GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

This analysis indicated that the fair value of the assets and related goodwill
was less than the carrying value by $12.9 million. Therefore, Company has
written down the carrying value of the related goodwill by a charge to income of
$12.9 million. This charge relates to goodwill as the fixed assets associated
with the government services line of business have been fully depreciated. The
remaining unamortized goodwill of approximately $3.0 million related to the
government services business will be amortized over the estimated remaining life
of the future undiscounted cash flows associated with the government services
business.

6. Property and Equipment

Property and equipment at June 30, 1998 and 1999 consist of (in thousands):

<TABLE>
<CAPTION>
June 30,
--------------------
1998 1999
--------------------
<S> <C> <C>
Land ........................... $ 55 $ 55
Buildings....................... 111 118
Leasehold improvements.......... 4,995 6,424
Equipment and furniture......... 7,275 13,703
--------------------
12,436 20,300
Less accumulated depreciation... 4,616 7,546
--------------------
Total property and equipment.... $ 7,820 $ 12,754
====================
</TABLE>

50
<PAGE>

DOLLAR FINANCIAL GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

7. Senior Notes, Revolving Credit, Long-Term Debt and Subordinated Notes Payable

The Company has debt obligations at June 30, 1998 and 1999 as follows (in
thousands):

<TABLE>
<CAPTION>
June 30,
----------------------------
1998 1999
----------------------------
<S> <C> <C>
Revolving credit facility; interest at one-day Eurodollar,
as defined, plus 2.0% and 3.0% at June 30, 1998 and 1999,
respectively, (8.375% and 8.25% at June 30, 1998 and
1999, respectively) of the outstanding daily balances
payable monthly; principal due in full on June 30, 2004;
weighted average interest rate of 8.60% and 7.92% for the
years ended June 30, 1998 and 1999, respectively............ $ - $ 10,500
Canadian overdraft credit facility; interest at Canadian
prime, as defined, plus 0.50% (5.25% and 7.00% at June 30,
1998 and 1999 respectively) of the outstanding daily
balances payable monthly; weighted average interest rate of
6.30% and 5.40% for the years ended June 30, 1998 and 1999.. - 1,662
June 30, 1999............................................... - -
10-7/8% Senior Notes due November 15, 2006; interest payable
semiannually on May 15 and November 15, commencing May 15,
1997........................................................ 110,000 109,190
10-7/8% Senior Subordinated Notes due December 31, 2006;
interest payable semiannually on June 30 and December 30,
commencing June 30, 1999.................................... - 18,107
Subordinated promissory note payable; interest at bank's
Reference Rate, as defined, plus 1% (9.50% and 8.75% at
June 30, 1998 and 1999, respectively) subject to a ceiling
of 10.50% and a floor of 8.50% payable monthly; principal
repayments of $66,667 per month from March 1997 through
February 1999; weighted average interest rate of 9.50% and
9.19% for the years ended June 30, 1998 and 1999,
respectively................................................ 2,642 2,642
Other........................................................ 33 65
----------------------------
$112,675 $142,166
============================
</TABLE>

51
<PAGE>

DOLLAR FINANCIAL GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

7. Revolving Credit, Long-Term Debt and Subordinated Notes Payable (continued)

In November 1996, the Company implemented a financing plan which included the
issuance of $110.0 million of 10-7/8% senior notes due 2006 in a private
placement. In March 1997 the Company exchanged substantially all of the senior
notes for $110.0 million 10-7/8% Series A senior notes due 2006 (collectively
referred to as the "Notes"), which were registered under the Securities Act of
1933, as amended. The payment obligations under the Notes are jointly and
severally guaranteed, on a full and unconditional basis, by each of the
Company's existing subsidiaries (the "Guarantors"). There are no restrictions on
the Company's and the guarantor subsidiaries' ability to obtain funds from their
subsidiaries by dividend or by loan. Separate financial statements of each
guarantor subsidiary have not been presented because management has determined
that they would not be material to investors.

Subject to restrictions under the new credit agreement discussed below, the
Notes are redeemable at the option of the Company, in whole or in part, at any
time on or after November 15, 2001, at the following redemption prices (plus
accrued and unpaid interest thereon, if any, to the date of redemption): during
the twelve-month period beginning November 2001 - 105.438%; 2002 - 103.625%;
2003 - 101.813%; and 2004 - 100.000%. In addition, prior to November 15, 1999,
the Company may on any one or more occasions redeem up to 30% of the originally
issued principal amount of Notes at a redemption price equal to 110-7/8% of the
principal amount thereof, plus accrued and unpaid interest thereon, if any, to
the date of redemption, with the net proceeds of any initial public offering of
common stock of the Company or of Holdings (to the extent that the proceeds
thereof are contributed to the Company as common equity), provided that at least
70% of the originally issued principal amount of Notes remains outstanding
immediately after the occurrence of such redemption. Upon the occurrence of a
change of control, as defined, each holder of Notes has the right to require the
Company to repurchase all or any part of such holder's Notes at an offer price
in cash equal to 101% of the aggregate principal amount thereof, plus accrued
and unpaid interest thereon, if any, to the date of purchase.

The Offering generated gross proceeds of $110.0 million which were used to repay
all of the Company's indebtedness under its then-existing credit facility, to
fund the Money Mart, Cash-N-Dash, C&C, and Canadian Capital Corporation
acquisitions, and to pay related fees and expenses. The repayment of
substantially all of the Company's existing indebtedness resulted in an
extraordinary loss, net of taxes, of approximately $2.0 million. This loss
results from the write-off of the deferred financing costs associated with the
Company's existing credit facility.

In connection with the Merger, the Company terminated the Second Amended and
Restated Credit Agreement, dated as of November 15, 1996. The Company entered
into a new credit agreement, dated as of December 18, 1998 obtaining a new $160
million credit facility. The credit agreement provides for a revolving credit
facility of up to $70 million and two term loans aggregating up to $90 million.
The borrowings under the revolving credit facility as of June 30, 1999 were
$10.5 million. The $90 million term loans were available to fund the Company's
repurchase obligations in excess of $20 million, if any, in connection with the
change of certain provisions of the Notes. Repurchase obligations in connection
with the Notes were $810,000 and as a result, the $90 million term loan
commitments expired on February 16, 1999.

<PAGE>

DOLLAR FINANCIAL GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

7. Revolving Credit, Long-Term Debt and Subordinated Notes Payable (continued)

Amounts outstanding under the new revolving credit facility bear interest at
either (i) the higher of (a) the federal funds rate plus 0.50% per annum and (b)
the rate publicly announced by Wells Fargo, San Francisco, as its "prime rate,"
plus 1.75% at June 30, 1999, (ii) the Libor Rate (as defined therein) plus 3.00%
at June 30, 1999, or (iii) the one day Eurodollar Rate (as defined therein) plus
3.00% at June 30, 1999, determined at the Company's option. Amounts outstanding
under the new revolving credit facility are secured by a first priority lien on
substantially all properties and assets of the Company and its current and
future subsidiaries. The Company's obligations under the new revolving credit
facility are guaranteed by Holdings and each of the Company's direct and
indirect subsidiaries.

Also, in connection with the Merger, the Company entered into an agreement dated
December 18, 1998, to which the Company may issue up to $20 million aggregate
principal amount of its 10 7/8% Senior Subordinated Notes Due 2006 (the "Senior
Subordinated Notes"), to (i) fund the Company's repurchase obligations, if any,
in connection with its Notes, or (ii) to finance or refinance acquisitions of
the Company. In February 1999, the Company issued $18.1 million of its Senior
Subordinated Notes to fund the purchase of ICL, Calgary, repurchase obligations
and related fees of $11.4 million, $5.6 million and $1.1 million, respectively.
Issuance costs associated with the new Credit Agreement and the Senior
Subordinated Notes paid during fiscal 1999 were $7.6 million.

The Notes, the new revolving credit facility and the Senior Subordinated Notes
contain certain financial and other restrictive covenants, which, among other
things, require the Company to achieve certain financial ratios, limit capital
expenditures, restrict payment of dividends and require certain approvals in the
event the Company wants to increase the borrowings.

In connection with the Money Mart acquisition in November 1996, the Company
established an overdraft credit facility to fund peak working capital needs for
its Canadian operations. The overdraft credit facility, which has no stated
maturity date, provides for a commitment of up to approximately $4.8 million of
which $0.0 million and $1.7 million were outstanding as of June 30, 1998 and
1999, respectively. Amounts outstanding under the facility bear interest at
Canadian prime plus 0.50% and are secured by the pledge of a cash collateral
account of an equivalent balance. For the Company's United Kingdom operations,
ICL also has an overdraft facility that bears interest at 1.25% over the lending
bank's base rate and which provides for a commitment of approximately $1.6
million with zero outstanding as of June 30, 1999.

The fair market value of the Company's fixed rate debt at June 30, 1998 and 1999
was approximately $126,024,030 and $108,098,100, respectively, based on quoted
market prices.

Interest of $8,383,000, $12,250,000, and $12,538,000 was paid for the years
ended June 30, 1997, 1998 and 1999, respectively.

53
<PAGE>

DOLLAR FINANCIAL GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

8. Income Taxes

The provision for income taxes for the years ended June 30, 1997, 1998 and 1999
consists of the following (in thousands):

<TABLE>
<CAPTION>
Year ended June 30,
----------------------------------------------------------
1997 1998 1999
----------------------------------------------------------
<S> <C> <C> <C>
Federal:
Current.............................. $ 801 $2,989 $ (226)
Deferred............................. 757 32 246
----------------------------------------------------------
1,558 3,021 20

Foreign taxes:
Current.............................. 808 2,172 3,669
Deferred............................. 9 14 51
----------------------------------------------------------
817 2,186 3,720

State:
Current.............................. 81 306 118
Deferred............................. (31) 25 23
----------------------------------------------------------
50 331 141
$2,425 $5,538 $3,881
==========================================================
</TABLE>

The significant components of the Company's deferred tax assets and liabilities
at June 30, 1998 and 1999 are as follows (in thousands):

<TABLE>
<CAPTION>
June 30,
----------------------------------------
1998 1999
----------------------------------------
<S> <C> <C>
Deferred tax assets:
Depreciation.......................................... $ 443 $ 639
Accrued compensation.................................. 105 500
Reserve for store closings............................ 199 227
Foreign Tax Credits................................... 230 230
Other................................................. 93 28
----------------------------------------
1,070 1,624
Deferred tax liabilities:
Amortization and other temporary differences.......... 532 1,702
----------------------------------------
Net deferred tax asset (liability)..................... $ 538 $ (78)
========================================
</TABLE>

54
<PAGE>

DOLLAR FINANCIAL GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

8. Income Taxes (continued)

The Company did not record any valuation allowances against deferred tax assets
at June 30, 1998. Realization was dependent on generating sufficient
taxable income prior to expiration of the loss carryforwards. Although
realization was not assured, management had determined, based on the Company's
history of earnings and its expectation for the future, that taxable income of
the Company would more likely than not be sufficient to fully utilize its
deferred income tax assets.

A reconciliation of the provision for income taxes with amounts determined by
applying the federal statutory tax rate to income (loss) before income taxes is
as follows (in thousands):

<TABLE>
<CAPTION>
Year ended June 30,
-----------------------------------------------
1997 1998 1999
-----------------------------------------------
<S> <C> <C> <C>
Tax provision at federal statutory rate................ $1,319 $ (441) $ 550
Add (deduct):
State tax provision, net of federal tax
(provision) benefit................................. 33 147 93
Foreign taxes......................................... 159 552 1,552
Writedown of goodwill................................. - 4,505 904
US tax on foreign earnings............................ - - 812
Amortization of nondeductible intangible assets....... 737 826 -
Other permanent differences........................... 177 (51) (30)
-----------------------------------------------
Tax provision at effective tax rate.................... $2,425 $5,538 $3,881
===============================================
</TABLE>

Foreign, federal and state income taxes of approximately $936,000, $4,314,000
and $5,503,000 were paid during the years ended June 30, 1997, 1998 and 1999,
respectively.

<PAGE>

DOLLAR FINANCIAL GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

9. Commitments

The Company occupies office and retail space and uses certain equipment under
operating lease agreements. Rent expense amounted to $6,239,000, $7,837,000 and
$8,305,000, for the years ended June 30, 1997, 1998 and 1999, respectively. Most
leases contain standard renewal clauses.

Minimum obligations under noncancelable operating leases for the year ended June
30 are as follows (in thousands):

Year Amount
---- ---------------

2000............................. $ 8,195
2001............................. 6,908
2002............................. 5,513
2003............................. 3,996
2004............................. 2,848
Thereafter....................... 6,967
---------------
$34,427
===============

The Company has entered into employment agreements with certain key employees
which have terms of two to five years and call for aggregate minimum annual base
salaries. The agreements also provide for annual incentive cash bonuses which
are primarily based on revenues and earnings from operations.

10. Contingent Liabilities

In the ordinary course of business, the Company is involved in certain
litigation. In the opinion of management, the ultimate resolution of such
litigation will not have a material effect on the financial condition of the
Company.

11. Contractual Agreements

The Company has contracts with various governmental agencies for benefits
distribution and retail merchant services which contributed 19%, 13% and 6% of
consolidated gross revenues for the years ended June 30, 1997, 1998 and 1999,
respectively. The Company's contracts with the Commonwealth of Pennsylvania,
which are included in this amount, contributed 9%, 6% and 0% of the revenues for
the years ended June 30, 1997, 1998 and 1999, respectively. The Company's
contract with the State of New York contributed 5%, 4% and 4% of revenues for
the years ended June 30, 1997, 1998 and 1999, respectively. Accounts receivable
at June 30, 1998 and 1999 include $2,074,000 and $2,711,000, respectively, of
amounts due from various governmental agencies. The Company does not require any
collateral on these receivables nor are these agencies considered a credit risk.
The Company's contracts for governmental benefits distribution and merchant
services distribution with state and local governments generally have initial
terms of five years and currently expire on various dates through June 30, 2001.
The contracts provide the governmental agencies the opportunity to extend the
contract for additional periods and contain clauses which allow the governmental
agencies to cancel the contract at any time, subject to 30 to 60 days' written
advance notice.

12. Credit Risk

At June 30, 1998 and 1999, the Company had twenty and twenty-three bank
accounts, respectively, in major financial institutions in the aggregate amount
of $16,625,000 and $9,053,000, respectively, which exceeded Federal Deposit
Insurance Corporation deposit protection limits. The Canadian Federal Banking
system provides customers with similar deposit insurance through the Canadian
Deposit Insurance Corporation, "CDIC". At June 30, 1998 and 1999, the Company's
Canadian subsidiary had twenty-two and fifteen bank accounts, respectively,
totaling

56
<PAGE>

DOLLAR FINANCIAL GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

$7,123,000 and $6,730,000, respectively, which exceeded CDIC limits. The United
Kingdom banking system provides (Pounds)18,000 per customer of similar
protections for certain depositors. At June 30, 1999 the Company's United
Kingdom operations had three bank accounts totaling $15,308,000 which were
excluded from the Deposit Protection Scheme administered by the Deposit
Protection Board. These financial institutions have strong credit ratings and
management believes credit risk relating to these deposits is minimal.

The Company acts as agent for a national bank in administering a consumer loan
program through certain of the Company's store locations. The loans offered
under this program generally have a two-week maturity and are referred to as
"payday loans." Under this program, the Company earns origination and servicing
fees. The national bank originated or extended approximately $57.0 and $115.5
million of loans through the Company's locations during the fiscal years ended
June 30, 1998 and 1999, respectively. Prior to July 1, 1998, the Company
indemnified the bank for certain excess credit losses, and the Company's
origination and servicing revenues were reduced by approximately $500,000 (0.9%
of origination's and extensions by the bank) in 1998 for such excess losses.
The net amount of outstanding consumer loans with respect to which the bank had
recourse to the Company, which is not included in the accompanying consolidated
balance sheet, was approximately $3.5 million at June 30, 1998. Effective July
1, 1998, the bank's recourse to the Company for excess credit losses was
eliminated.

13. Loss on Store Closings and Sales

During the fiscal year ended June 30, 1999, the Company had no material changes
recorded related to store closures.

57
<PAGE>

DOLLAR FINANCIAL GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

During fiscal year ended June 30, 1998, the Company decided to sell all of its
stores in Michigan and sell or close five locations in southern California whose
primary business was to provide services for the distribution of public
assistance benefits under existing contracts with state and local
municipalities. As a result of declining caseloads and increasing costs, the
Company determined that these locations could not provide acceptable levels of
profitability. The Company also closed five kiosks in Texas due to contractual
requirements with the Southland Corporation. Included in the accompanying
consolidated statements of operations for the years ended June 30, 1997 and
1998, are revenues of $3,196,000 and $733,000, respectively, and store expenses
of $2,972,000 and $710,000, respectively, related to these stores. The loss
related to the sale and closure of these stores was not material.

14. Geographic Segment Information

All operations for which geographic data is presented below are in one principal
industry (check cashing and ancillary services) (in thousands).

<TABLE>
<CAPTION>
United United
1997 States Canada Kingdom Total
---------------------------------------------------------------
<S> <C> <C> <C> <C>
Identifiable assets $142,381 $ 43,607 - $185,988
Sales to unaffiliated customers 74,114 8,898 - 83,012
Interest revenue 356 47 - 403
Interest expense 8,988 1,422 - 10,410
Depreciation and amortization 4,635 716 - 5,351
Income tax expense 1,608 817 - 2,425
Income (loss) before income taxes and
extraordinary item 3,001 877 - 3,878
Extraordinary loss on debt extinquishment (2,023) - - (2,023)
1998

Identifiable assets 120,100 45,750 - 165,850
Sales to unaffiliated customers 86,304 24,881 - 111,185
Interest revenue 127 1 - 128
Interest expense 9,107 3,966 - 13,073
Depreciation and amortization 4,981 1,813 - 6,794
Income (loss) before income taxes and
extraordinary item (3,925) 2,666 - (1,259)
Income tax expense 3,352 2,186 - 5,538

1999

Identifiable assets 120,235 56,177 $27,297 203,709
Sales to unaffiliated customers 89,785 29,156 2,038 120,979
Interest revenue 38 13 15 66
Interest expense 12,595 3,562 310 16,467
Depreciation and amortization 5,985 1,774 174 7,933
Income tax expense 161 3,625 95 3,881
Income (loss) before income taxes and
extraordinary item (4,035) (5) 5,657 1,617
Extraordinary loss on debt extinguishment (85) - - (85)
Noncash compensation 9,883 - - 9,883
</TABLE>

<PAGE>

DOLLAR FINANCIAL GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

15. Related Party Transactions

During the fiscal 1999, certain members of management received loans aggregating
$2.9 million which are secured by shares of Holding stock. The loans accrue
interest at a rate of 6% per year and are due and payable in full on December
18, 2004. In addition, as part of an employment agreement, the Chief Executive
Officer was issued a loan in the amount of $4.3 million to purchase additional
shares of Holdings stock. The loan accrues interest at a rate of 6% per year and
is due and payable in full on December 18, 2004. The loan is secured by a pledge
of shares in Holdings stock.

During fiscal 1997 and 1998, the Company capitalized expenditures aggregating
$913,000 on behalf of certain then existing shareholders of Holdings related to
the initial activities of a company expected to be formed ("NEWCO") by these
certain Holdings' shareholders. Pursuant to a Memorandum of Understanding
between the Company and these certain Holdings' shareholders, these expenditures
would have been converted into shares of common stock of NEWCO on a basis pari
passu with the investment by NEWCO's equity investors, which were to include
these certain shareholders. During fiscal 1998, it was determined that NEWCO
would not be formed and the Company recognized $913,000 in expense in the
accompanying consolidated statement of operations for the year ended June 30,
1998. Such expense is included in corporate expenses in the accompanying
consolidated statement of operations.

16. Subsidiary Guarantor Financial Information

As discussed in Note 7, the Company's payment obligations under the Notes are
jointly and severally guaranteed on a full and unconditional basis by all of the
Company's existing and future subsidiaries (the "Guarantors"). The subsidiaries'
guarantees rank pari passu in right of payment with all existing and future
senior indebtedness of the Guarantors, including the obligations of the
Guarantors under the New Revolving Credit Facility and any successor credit
facility. Pursuant to the Notes or Senior Subordinated Notes every direct and
indirect subsidiary of the Company, each of which is wholly owned, serves as a
guarantor of the Notes.

There are no restrictions on the Company's and the Guarantors' ability to obtain
funds from their subsidiaries by dividend or by loan. Separate financial
statements of each Guarantor have not been presented because management has
determined that they would not be material to investors. The accompanying tables
set forth the condensed consolidating balance sheet at June 30, 1999, and the
consolidating statements of operations and cash flows for the fiscal year ended
June 30, 1999 of the Company (on a parent-company basis), combined domestic
Guarantors, foreign subsidiaries and the consolidated Company.

59
<PAGE>

DOLLAR FINANCIAL GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

16. Subsidiary Guarantor Financial Information (continued)

Consolidating Balance Sheets

June 30, 1999

(In thousands)

<TABLE>
<CAPTION>
Dollar Domestic Foreign
Financial Subsidiary Subsidiary
Group, Inc. Guarantors Guarantors Eliminations Consolidated
------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Assets
Cash and cash equivalents........... $ 3,134 $ 29,056 $ 33,592 $ 0 $ 65,782
Accounts receivable................. 8,157 4,286 4,580 (7,169) 9,854
Income taxes receivable............. 2,101 486 0 0 2,587
Prepaid expenses.................... 242 1,311 621 0 2,174
Deferred income taxes............... 0 0 0 0 0
Notes receivable--Officer........... 2,851 0 0 0 2,851
Due from affiliates................. 73,905 0 0 (73,905) 0
Property and equipment, net......... 2,099 6,578 4,077 0 12,754
Costs of contacts acquired.......... 0 104 0 0 104
Costs in excess of net assets....... 0 55,851 40,274 0 96,125
acquired, net....................
Covenants not to compete............ 0 360 47 0 407
Debt issuance costs, net............ 9,416 0 0 0 9,416
Investment in subsidiaries.......... 78,687 0 0 (78,687) 0
Other............................... 942 430 283 0 1,655
------------------------------------------------------------------------------------
$ 181,534 $ 98,462 $ 83,474 $ (159,761) $ 203,709
====================================================================================

Liabilities and shareholder's
equity
Accounts payable.................... $ 31 $ 8,860 $ 3,149 $ 0 $ 12,040
Income taxes payable................ 0 0 2,483 0 2,483
Advance from money transfer agent... 2,000 0 0 0 2,000
Accrued expenses.................... 1,246 2,147 1,475 0 4,868
Accrued interest payable............ 2,226 936 7,169 (7,169) 3,162
Deferred tax liability.............. 78 0 0 0 78
Due to parent....................... 578 0 0 0 578
Due to affiliates................... 0 19,117 54,788 (73,905) 0
Revolving credit facilities......... 10,500 0 1,662 0 12,162
Long-term debt and subordinated
notes payable.................... 18,107 2,645 62 0 20,814
Senior notes due 2006............... 109,190 0 0 0 109,190
------------------------------------------------------------------------------------
143,956 33,705 70,788 (81,074) 167,375

Shareholder's equity:
Common stock....................... 0 0 0 0 0
Additional paid-in capital......... 50,824 46,614 10,797 (57,411) 50,824
Accumulated deficit................ (11,224) 18,143 3,133 (21,276) (11,224)
Foreign currency translation....... (2,022) 0 (1,244) 0 (3,266)
------------------------------------------------------------------------------------
Total shareholder's equity.......... 37,578 64,757 12,686 (78,687) 36,334
------------------------------------------------------------------------------------
$ 181,534 $ 98,462 $ 83,474 $ (159,761) $ 203,709
====================================================================================
</TABLE>

60
<PAGE>

DOLLAR FINANCIAL GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

16. Subsidiary Guarantor Financial Information (continued)

Consolidating Statements of Operations

Year ended June 30, 1999

(In thousands)

<TABLE>
<CAPTION>
Dollar Domestic Foreign
Financial Subsidiary Subsidiary
Group, Inc. Guarantors Guarantors Eliminations Consolidated
------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Revenues $ 1 $ 89,784 $ 31,194 $ 0 $ 120,979
Store and regional expenses:
Salaries and benefits.................. 0 26,240 9,089 0 35,329
Occupancy.............................. 0 7,138 2,471 0 9,609
Depreciation........................... 0 1,592 635 0 2,227
Other.................................. 0 19,143 4,621 0 23,764
------------------------------------------------------------------------------------
Total store and regional expenses........ 0 54,113 16,816 0 70,929

Corporate expenses....................... 11,269 0 2,379 0 13,648
Management fee........................... (11,269) 10,083 1,186 0 0
(Gain) loss on store closings and
sales................................... 100 (3) 6 0 103
Other depreciation and amortization...... 420 3,973 1,313 0 5,706
Recapitalization costs................... 12,575 0 0 0 12,575
Interest expense......................... 12,616 (59) 3,844 0 16,401
------------------------------------------------------------------------------------

(Loss) income before taxes and
extraordinary item...................... (25,710) 21,677 5,650 0 1,617
Income taxes (benefit) provision......... (450) 611 3,720 0 3,881
------------------------------------------------------------------------------------

(Loss) income before
extraordinary item....................... (25,260) 21,066 1,930 0 (2,264)

Extraordinary loss on debt
extinguishment.......................... (85) 0 0 0 (85)
------------------------------------------------------------------------------------

(Loss) income before equity in net
income of subsidiaries.................. (25,345) 21,066 1,930 0 (2,349)
Equity in net income of subsidiaries:
Domestic subsidiary guarantors........ 21,066 0 0 (21,066) 0
Foreign subsidiary guarantors......... 1,930 0 0 (1,930) 0
------------------------------------------------------------------------------------
Net (loss) income........................ $ (2,349) $ 21,066 $ 1,930 $ (22,996) $ (2,349)
====================================================================================
</TABLE>

61
<PAGE>

DOLLAR FINANCIAL GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

16. Subsidiary Guarantor Financial Information (continued)

Consolidating Statements of Cash Flows
Year ended June 30, 1999

(In thousands)

<TABLE>
<CAPTION>
Dollar Domestic Foreign
Financial Subsidiary Subsidiary
Group, Inc. Guarantors Guarantors Eliminations Consolidated
------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Cash flows from operating activities
Net (loss) income....................................... $ (2,349) $ 21,066 $ 1,930 $ (22,996) $ (2,349)
Adjustments to reconcile net (loss) income to net cash
(used in) provided by operating activities
Undistributed income of subsidiaries............... (22,996) 0 0 22,996 0
Depreciation and amortization...................... 3,379 5,566 1,947 0 10,892
Loss on store closings and sales................... 103 0 0 0 103
Noncash recapitalization costs.................. 9,883 0 0 0 9,883
Extraordinary loss on debt extinguishment,
net of tax.................................... 85 0 0 0 85
Deferred tax provision.......................... 258 62 0 0 320
Changes in assets and liabilities (net of effect
of acquisitions):
Increase in accounts receivable and income
taxes receivable............................ (6,864) (686) (344) 4,164 (3,730)
Increase in prepaid expenses and other........ (642) (250) (195) (1,087)
Increase (decrease) in accounts payable,
income taxes payable, accrued expenses and
accrued interest payable.................... 2,647 (295) 3,646 (4,164) 1,834
------------------------------------------------------------------------
Net cash (used in) provided by
operating activities................................... (16,496) 25,463 6,984 0 15,951
Cash flows from investing activities:
Acquisitions, net of cash acquired 0 (181) (15,881) 0 (16,062)
Additions to property and equipment..................... (1,631) (3,842) (1,936) 0 (7,409)
Net decrease in due from affiliates..................... 2,248 10,083 0 (12,331) 0
------------------------------------------------------------------------
Net cash (used in) provided by
investing activities................................... 617 6,060 (17,817) (12,331) (23,471)
Cash flows from financing activities
Payments on long term debt.............................. (810) 0 0 0 (810)
Other debt payments..................................... 0 (20) (10) 0 (30)
Repayment of advance from money transfer agent.......... (1,000) 0 0 0 (1,000)
Net decrease in revolving credit facilities............. 10,500 0 1,219 0 11,719
Proceeds from long term debt............................ 18,107 0 0 0 18,107
Payment of debt issuance costs.......................... (7,634) 0 0 0 (7,634)
Advances to officers.................................... (2,651) 0 0 0 (2,651)
Payment of financed insurance premiums.................. (10) 0 0 0 (10)
Net increase (decrease) in due to affiliates............ 578 (42,142) 29,811 12,331 578
------------------------------------------------------------------------
Net cash used in financing activities................... 17,080 (42,162) 31,020 12,331 18,269
Effect of exchange rate on cash......................... 0 0 (468) 0 (468)
------------------------------------------------------------------------
Net increase (decrease) in cash......................... 1,201 (10,639) 19,719 0 10,281
Cash at beginning of year............................... 1,933 39,695 13,873 0 55,501
------------------------------------------------------------------------
Cash at end of year..................................... $ 3,134 $ 29,056 $ 33,592 $ 0 $ 65,782
========================================================================

</TABLE>

62
<PAGE>

17. Subsequent Event

On July 7, 1999, "the Company" entered into an agreement to acquire all of
the outstanding shares of Cash A Cheque Holdings Great Britain Limited
("CAC"), which operates 44 company owned stores in the United Kingdom. The
aggregate purchase price for this acquisition was approximately $12.5
million and was funded through excess internal cash and the Company's
revolving credit facility. The agreement also includes a maximum potential
contingent payment to the sellers of $29.1 million based on future levels
of profitability.

63
<PAGE>

Item 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE

None.

PART III

Item 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

Directors and Officers

The directors and officers of Holdings and their respective ages and positions
with Holdings are set forth below:

<TABLE>
<CAPTION>
Name Age Position
- ---------------------------------- -------- ------------------------------------------------------------
<S> <C> <C>
Jeffrey Weiss..................... 56 Chairman of the Board of Directors, and Chief Executive
Officer
Donald Gayhardt................... 35 President, Director
Richard Dorfman................... 55 Executive Vice President, Chief Financial Officer,
Secretary, Director and Treasurer
Leonard Green..................... 65 Director
Jonathan Sokoloff................. 42 Director
Greg Annick....................... 35 Director
Muneer Satter..................... 39 Director
</TABLE>

The directors and officers of DFG and their respective ages and positions with
DFG are set forth below:

<TABLE>
<CAPTION>
Name Age Position
- ---------------------------------- -------- ------------------------------------------------------------
<S> <C> <C>
Jeffrey Weiss..................... 56 Chairman of the Board of Directors and
Chief Executive Officer
Donald Gayhardt................... 35 President
Richard Dorfman................... 55 Executive Vice President and Chief Financial Officer
Bernard Flaherty.................. 49 Senior Vice President and Chief Operating Officer
Peter Sokolowski.................. 38 Vice President--Finance
</TABLE>

Jeffrey Weiss has served as the Chairman, President, and Chief Executive Officer
of DFG and Holdings since the Company's acquisition by an affiliate of Bear
Stearns in May 1990. Until June 1992, Mr. Weiss was also a Managing Director at
Bear Stearns & Co. Inc. ("Bear Stearns") with primary responsibility for the
firm's investments in small to mid-sized companies, in addition to serving as
Chairman and Chief Executive Officer for several of these companies. Mr. Weiss
is the author of several popular financial guides.

Donald Gayhardt has served as President of DFG and Holdings since December 1998.
He also served as Executive Vice President and Chief Financial Officer of DFG
and Holdings from1992 to 1997. Prior to joining the company, Mr. Gayhardt was
employed by Bear Stearns from 1988 to 1993, most recently as an Associate
Director in the Principal Activities Group, where he had oversight
responsibility for the financial and accounting functions at a number of
manufacturing, distribution and retailing firms, including DFG. Prior to
joining Bear Stearns, Mr. Gayhardt held positions in the mergers and
acquisitions advisory and accounting fields.

Richard Dorfman has served as Executive Vice President and Chief Financial
Officer since July 1997. Prior to joining the Company, Mr. Dorfman served as
Chief Financial Officer of American Appliance for eight years. Prior to joining
American Appliance, Mr. Dorfman had twenty years of experience in financial
management within the retail industry.

<PAGE>

Bernard Flaherty joined DFG in May 1995 as Vice President--Store Operations. Mr.
Flaherty's 24 years of multi-unit retail experience includes both operations and
marketing responsibilities. Prior to joining the Company, Mr. Flaherty served as
Vice President of Sales/Marketing for Coastal Mart, Inc. for two years. Prior to
that, Mr. Flaherty had an extensive 20-year career with The Southland
Corporation.

Peter Sokolowski has been Vice President--Finance of DFG since June 1991 and has
overall responsibility for the Company's accounting systems and controls, as
well as financial management. Prior to joining the Company, Mr. Sokolowski
worked in various financial positions in the commercial banking industry.

Leonard Green has been a director of Holdings since December 1998. He has been
an executive officer of LGP, a merchant banking firm that managed GEI, since the
formation of LGP and GEI in 1994. Mr. Green has been, individually or through a
corporation, a partner in a merchant banking firm affiliated with LGP. Prior to
1989, Mr. Green had been a partner of Gibbons, Green, van Amerongen for more
than five years. Mr. Green is also a director of several private companies.

Jonathan D. Sokoloff has been a director of Holdings since December 1998. Mr.
Sokoloff has been an executive officer of LGP since its formation in 1994. Mr.
Sokoloff was previously a Managing Director at Drexel Burnham Lambert
Incorporated. Mr. Sokoloff is also a director of Twinlab Corporation, Gart
Sports Company and several private companies.

Greg J. Annick has been a director of Holdings since December 1998. He has been
an executive officer, of LGP, a merchant banking firm that manages GEI, since
the formation of LGP and GEI in 1994. He joined a merchant banking firm
affiliated with LGP as an associate in 1989, became a principal in 1993, and
through a corporation became a partner in 1994. From 1988 to 1989, Mr. Annick
was an associate with the merchant banking firm of Gibbons, Green, van
Amerongen. Before that time, Mr. Annick was a financial analyst in mergers and
acquisitions with Goldman, Sachs & Co. Mr. Annick is also a director of several
private companies.

Muneer Satter has been a director of Holdings since December 1998. Mr. Satter
has been a director of Holdings since December 1998. He is a Managing Director
in Goldman Sachs' Principal Investment Area (PIA) in New York. Prior to this
assignment, he was head of PIA in Europe and was based in London. He joined the
firm in 1988 and became a managing director in 1996. He earned a B.A. from
Northwestern University and a J.D. and an M.B.A. from Harvard Law School and
Harvard Graduate School of Business Administration, respectively.

65
<PAGE>

Item 11. EXECUTIVE COMPENSATION

The following table sets forth information with respect to the compensation of
the Chief Executive Officer and each of the other executive officers of the
Company who had annual compensation in fiscal year 1999 in excess of $100,000
(the "Named Executive Officers"):

Summary Compensation Table
<TABLE>
<CAPTION>
Long-Term
Compensation
Annual Compensation Awards
----------------------------------------------------
Other Annual Securities
Name and Compensation Underlying All Other
Principal Position Year Salary Bonus Options (#) (3) Compensation
- -----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Jeffrey Weiss............... 1999 $575,385 $715,425 $ 367,815(1) - $ 1,683,462(4)
Chairman and 1998 400,000 400,000 105,122(1) - 8,356
Chief Executive Officer 1997 400,000 200,000 139,651(1) 1,575 6,344

Donald Gayhardt............. 1999 117,692 169,047 - 399 -
President 1998 - - - - -
1997 160,000 96,000 - 150 4,525

Richard Dorfman(2).......... 1999 183,846 80,000 - 40 3,196
Executive Vice President 1998 156,116 25,000 - 200 6,500
and Chief Financial 1997 - - - - -
Officer

Bernard Flaherty............ 1999 153,462 67,005 - 40 3,570
Senior Vice President and 1998 140,000 53,200 - 100 4,758
Chief Operating Officer 1997 109,616 10,000 - 100 2,990
</TABLE>

- ----------------------------
(1) For 1999, amount includes $200,000 for a loan to the named executive where
the Company has waived repayment. For 1998 and 1997, amounts include
$43,224 and $44,706, respectively, paid for life insurance premiums on
policies where the Company was not the named beneficiary. Perquisites and
other personal benefits provided to each other Named Executive Officer did
not exceed the lesser of $50,000 or 10% of the total salary and bonus for
such Named Executive Officer.
(2) Mr. Dorfman joined the Company in July 1997.
(3) The amounts shown in this column represent stock options with respect to
shares of Holdings' common stock which were issued in each fiscal year.
(4) Amount represents a fee paid to the named executive in connection with the
Merger and recapitalization of Holdings.

The following table sets forth information concerning options to purchase
Holdings' common stock held by each of the Named Executive Officers as of the
fiscal year ended June 30, 1999.

66
<PAGE>

Option/SAR Grants in Last Fiscal Year (1)

Potential Realizable Value at Assumed
Annual Rates of Stock Price Appreciation for
Individual Grants Option Term
----------------------------------------------------------------------------------------------------------------------------------
Number of % of Total
Securities Options/SARs
Underlying Granted to Exercise or
Options/SARs Employees in Base Price Expiration
Name Granted (#) Fiscal Year ($/Sh) Date 5%($) 10%($)
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Donald Gayhardt 399 40.76% $ 3,225 December 2008 $ 809,246 $2,050,788
Richard Dorfman 40 4.09% 3,225 February 2009 81,127 205,593
Bernard Flaherty 40 4.09% 3,225 February 2009 81,127 205,593
</TABLE>

-----------------------
(1) No SARs were granted in the last fiscal year.

Aggregated Option Exercises in Last Fiscal Year
and Fiscal Year-End Option Values

<TABLE>
<CAPTION>
Shares Number of Securities Underlying Value of Unexercised
Acquired Value Unexercised Options at Fiscal In-the-Money Options at Fiscal
Name on Exercise Realized Year End Year End (1)
- -------------------- ---------------------------------------------------------------------------------------------------------
Exercisable/Unexercisable Exercisable/Unexercisable
<S> <C> <C> <C> <C>
Jeffrey Weiss....... 4,200 $8,400,000 0/0 $0/$0
Donald Gayhardt 150 243,750 43/356 $0/$0
Richard Dorfman..... 200 325,000 0/40 $0/$0
Bernard Flaherty.... 200 295,000 0/40 $0/$0
</TABLE>

- --------------------
(1) An assumed fair market value of $3,225 per share was used to calculate the
value of the options. As the shares are not traded in an established public
market, the value assigned is based on the price received in the most recent
equity transaction among shareholders.

67
<PAGE>

Employment Agreements

Jeffrey Weiss

Mr. Weiss, Chairman and Chief Executive Officer of Holdings and DFG, is employed
pursuant to an Employment Agreement (the "Weiss Agreement") dated as of November
13, 1998, between Mr. Weiss, DFG, and Holdings (DFG and Holdings being
collectively referred to herein as the "Employer"). The Weiss Agreement provides
for an annual base salary of $500,000, to be reviewed bi-annually and may be
increased at the discretion of the Board of Directors of Holdings. In addition,
Mr. Weiss is eligible to receive an annual bonus and incentive compensation,
contingent upon the Employer achieving 100% of its targeted results (with
certain adjustments to the extent the Employer achieves results short of or in
excess of its targeted results). The total compensation paid or caused to be
paid to Mr. Weiss with respect to any fiscal year, including salary, bonuses and
annual incentive compensation shall not exceed $1,200,000. Under certain
circumstances, Mr. Weiss is entitled to the payment of a severance benefit equal
to the discounted value of any unpaid base salary for the term of the agreement.

The Weiss Agreement also provides for a five-year term, commencing on December
19, 1998, unless it is otherwise terminated pursuant to its terms. Mr. Weiss is
eligible to participate in all fringe benefit programs of the Employer offered
from time to time to its senior management employees.

Pursuant to the Weiss Agreement, Mr. Weiss has agreed that effective upon
termination, and in consideration for the payment of the compensation and other
benefits paid pursuant to the agreement, he will not compete with the Employer
within the United States, Canada or any other country in which the Company now
or hereafter conducts business for a period of two years.

Donald Gayhardt

Mr. Gayhardt, President of Holdings and DFG, is employed pursuant to an
Employment Agreement (the "Gayhardt Agreement") dated as of December 18, 1998,
between Mr. Gayhardt, DFG, and Holdings (DFG and Holdings being collectively
referred to herein as the "Employer"). The Gayhardt Agreement provides for an
annual base salary of $225,000, to be reviewed bi-annually and may be increased
at the discretion of the Board of Directors of Holdings. In addition, Mr.
Gayhardt is eligible to receive an annual bonus and incentive compensation,
contingent upon the Employer achieving 100% of its targeted results (with
certain adjustments to the extent the Employer achieves results short of or in
excess of its targeted results). The total compensation paid or caused to be
paid to Mr. Gayhardt with respect to any fiscal year, including salary, bonuses
and annual incentive compensation shall not exceed $495,000. Under certain
circumstances, Mr. Gayhardt is entitled to a severance payment in an amount up
to one year's base salary plus the pro rated portion of any bonus payments
earned.

The Gayhardt Agreement also provides for a two-year term, commencing on December
18, 1998, unless it is otherwise terminated pursuant to its terms. Mr. Gayhardt
is eligible to participate in all fringe benefit programs of the Employer
offered from time to time to its senior management employees. Pursuant to the
Gayhardt Agreement, Mr. Gayhardt was granted options to purchase up to two
percent (2%) of the Class A Common Stock of Holdings and such options shall vest
over a five (5) year period in equal monthly installments.

Pursuant to the Gayhardt Agreement, Mr. Gayhardt has agreed that effective upon
termination, and in consideration for the payment of the compensation and other
benefits paid pursuant to the agreement, he will not compete with the Employer
within the United States, Canada or any other country in which the Company now
or hereafter conducts business for a period of two years.

Richard Dorfman

Mr. Dorfman, Executive Vice President and Chief Financial Officer of Holdings
and DFG, is employed pursuant to an Employment Agreement (the "Dorfman
Agreement") dated as of July 21, 1997, between Mr. Dorfman and the Employer. The
Dorfman Agreement provides for an annual base salary of $165,000, to be adjusted
upward annually at the discretion of DFG. In addition, Mr. Dorfman is eligible
to receive an annual bonus in an amount

68
<PAGE>

equal to $25,000 with respect to the fiscal year ending June 30, 1998, in an
amount equal to $35,000 with respect to the fiscal year ending June 30, 1999,
and in an amount equal to $45,000 with respect to the fiscal year ending June
30, 2000, contingent upon the Employer achieving 100% of its targeted results
(with certain adjustments to the extent the Employer achieves results short of
or in excess of its targeted results). Under certain circumstances, Mr. Dorfman
is entitled to the payment of a severance benefit equal to the sum of one year's
base salary.

The Dorfman Agreement also provides for a three-year term, terminating on the
third anniversary of the date of the Employment Agreement. Pursuant to the
Dorfman Agreement, Mr. Dorfman was granted nonqualified options to acquire up to
200 shares of Holdings' common stock. Mr. Dorfman is eligible to participate in
all fringe benefit programs of the Employer offered from time to time to its
senior management employees.

Pursuant to the Dorfman Agreement, Mr. Dorfman has agreed that effective upon
termination, and in consideration for the payment of a severance benefit, he
will not compete with the Employer within the United States for a period of two
years.

69
<PAGE>

Item 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

All of the issued and outstanding shares of capital stock of the Company are
owned by Holdings.

The following table sets forth as of June 30, 1999 the number of shares of
Holdings' common stock owned beneficially by (a) each person that is the
beneficial owner of more than 5% of Holdings' common stock, (b) all directors
and nominees, (c) the Named Executive Officers, and (d) all directors and
executive officers as a group. The address of each officer and director is c/o
the Company unless otherwise indicated. As of such date, there were a total of
19,823.63 shares of Holdings' common stock outstanding.

<TABLE>
<CAPTION>
Beneficial Owner Number Percent
---------------- ------------- -----------
<S> <C> <C>
Green Equity Investors II, L.P................................... 13,014.94 65.65%
11111 Santa Monica Boulevard
Los Angeles, California 90025
Jeffrey Weiss 3,058.99 15.43
GS Mezzanine Partners, L.P. and
GS Mezzanine Partners Offshore, L.P. and associates......... 2,150.45 10.85
85 Broad Street
New York, New York 10004
Donald Gayhardt (1).............................................. 207.79 1.05
Richard Dorfman.................................................. 106.71 .54
Bernard Flaherty................................................. 106.30 .54
All directors and officers as a group (9 persons)................ 3,655.50 18.40
</TABLE>

- -----------------------
(1) Includes options to purchase 43.23 shares of Holdings' common stock which
are currently exercisable.

Item 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

Stockholders Agreement

Holdings entered into a Stockholders Agreement dated November 13, 1998 (the
"Stockholders Agreement") with certain stockholders signatory thereto (the
"Stockholders"), including Green Equity Investors II, L.P. (the "Purchaser"),
certain Executives of the Company (individually, the "Executive Stockholder",
and collectively, the "Executive Stockholders"), GS Mezzanine Partners, L.P. and
GS Mezzanine Partners Offshore, L.P. collectively, "GS Mezzanine"). Subsequent
to November 13, 1998 certain additional stockholders including Ares Leveraged
Investment Fund, L.P. and Ares Leveraged Investment Fund II, L.P.,
(collectively "Ares"), C.I., and Sheila Jeffrey, Bridge Street Fund 1998, L.P.
and Stone Street Fund 1998, L.P. (collectively the "Additional Stockholders")
agreed to be bound by the terms of the Stockholders Agreement. The Stockholders
Agreement shall terminate ten (10) years from the date of the Stockholders
Agreement (the "Termination Date") with certain provisions terminating on the
date of a Public Offering Event which occurs prior to the Termination Date.

Transfer Restrictions

The Stockholders Agreement provides, among other things, for certain
restrictions on the disposition of Holdings' common stock. Unless a transfer of
Holdings' common stock which is subject to the Stockholders Agreement is made in
accordance with the terms of such agreement, such transfer will be void and of
no force or effect.

Holdings' common stock may be transferred subject to the terms and conditions of
the Stockholders Agreement. Any shares of Holdings' common stock which are
subsequently transferred to a non-Stockholder transferee will remain subject to
the terms and conditions of the Stockholders Agreement.

Tag-Along and First Option Rights

If, at any time, the Purchaser proposes to enter into an agreement to sell or
otherwise dispose of for value shares of Holdings in excess of at least twenty
percent (20%) of the then outstanding shares (the "Tag-Along Sale") then the
Executives shall be afforded the opportunity to participate proportionately in
such Tag-Along Sale. This provision does not apply to certain transactions as
defined in the Stockholders Agreement. If, at any time, any Executive desires to
sell for cash all or any part of such shares held by such Executive, the Selling
Executive shall provide notice to each of (i) the Purchaser or its assigns and
(ii) Holdings (the "Potential Buyer") of the desire to sell for cash such
shares. Upon receiving notice, each Potential Buyer shall have the option to
purchase all, but not less than all, of such shares on the same terms and
conditions. If more than one Potential Buyer has exercised their option, the
priority shall first fall to the Purchaser.

Repurchase of Shares

Upon the termination of employment of an Executive Stockholder by reason of his
death or permanent disability (an "Option Event"), Holdings and the Purchaser
(with priority to Holdings) shall have the right and option to repurchase all of
the shares then owned by the Executive Shareholder. The price shall be at the
fair market value of the shares at the time of the Option Event as determined
pursuant to the terms of the Stockholders Agreement.

70
<PAGE>

will have the option to purchase all or any portion of the shares owned by such
Management Shareholder. Upon notice from Holdings, the remaining Management
Shareholder will have the right to purchase all or any portion of the shares
which were not purchased by Holdings. The purchase price of shares purchased
pursuant to both mandatory and optional repurchases will be the fair market
value of such shares as determined pursuant to the Shareholders Agreement.
Holdings will not be obligated to make any repurchase, nor will it have the
right to do so, to the extent any such repurchase would result in a violation of
applicable law or any contract to which Holdings is a party.

Registration Rights

The Shareholders Agreement also provides for demand and incidental (or
"piggyback") registration rights. The Purchaser demand registration rights
pursuant to which, on the earlier (i) the date that is 90 days after the first
registration of shares of Holdings' common stock under the Securities Act and
(ii) the second anniversary of the Stockholders Agreement the Purchaser may make
a written request of Holdings to register all or part of such Purchaser's
Holdings' common stock. Each remaining Stockholder may then elect to include its
shares of Holdings' common stock in the demand registration. The Purchaser is
entitled to three demand registrations.

If Holdings proposes to register any equity securities under the Securities Act,
it must include in such registration all shares of Holdings' common stock which
the Stockholders request to have registered, subject to the condition that not
all of the shares may be registered if only a reduced number can be sold without
having a material adverse effect on the offering.

Additional Shareholder Rights

If the Purchaser agrees to sell all or substantially all of its shares to a
third party, then the Purchaser may demand that the Executive Stockholders sell
all, but not less than all, of the Holdings' share held by them at the same
price and on the same terms and conditions.

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<PAGE>

Grant of Proxy

Each Stockholder has agreed to vote their shares so that (1) so long as Jeffrey
Weiss is the Chief Executive Officer of Holdings he is elected to the board of
directors of Holding and (2) so long as Purchaser owns directly or indirectly
twenty percent (20%) or more of the then outstanding stock of Holdings the
Purchaser shall be entitled to elect the remaining members of the boards of
directors.

Loan to an Officer/Director

During fiscal 1999, certain members of management received loans aggregating
$2.9 million wich are secured by shares of Holding stock. The loans accrue
interest at a rate of 6% per year and are due and payable in full on December
18, 2004. In addition, as part of an employment agreement Jeffrey Weiss was
issued a loan in the amount of $4.3 million to purchase additional shares of
Holdings stock. The loan accrues interest at a rate of 6% per year and is due
and payable in full on December 18, 2004. The loan is secured by a pledge of
shares in Holdings stock.

Management Agreement

Pursuant to the terms of a Management Services Agreement among the Purchasers,
Holdings and the Company, Holdings has agreed to pay the Purchaser an annual
management fee equal to 1.6% of the total sum invested by the Purchaser in
Holdings.

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Item 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K

(a)(1) and (2) List of Financial Statements and Schedules

Financial Statements: The following consolidated financial statements are
submitted in response to Item 14(a)(1):

<TABLE>
<CAPTION>
Dollar Financial Group, Inc. Page
----
<S> <C>
Report of Independent Auditors............................................................... 36
Consolidated Balance Sheets, June 30, 1998 and 1999.......................................... 37
Consolidated Statements of Operations, years ended June 30, 1997, 1998 and 1999.............. 38
Consolidated Statements of Shareholder's Equity, years ended June 30, 1997, 1998 and 1999.... 39
Consolidated Statements of Cash Flows, years ended June 30, 1997, 1998 and 1999.............. 40
Notes to Consolidated Financial Statements................................................... 41
</TABLE>

All Financial Statement Schedules for which provision is made in the applicable
accounting regulation of the Securities and Exchange Commission are omitted
because such schedules are not required under the related instructions, are
inapplicable, or the required information is given in the financial statements.

[The remainder of this page intentionally left blank.]

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<PAGE>

<TABLE>
<CAPTION>
(a)(3) Exhibits
Exhibit No. Description of Document
--------------- -----------------------
<S> <C>
3.1 (a)(i) Certificate of Incorporation of Dollar Financial Group, Inc. (Incorporated by reference to
Exhibit 3.1 to the Registrant's Statement on Form S-4 (Registration #333-18221) declared
effective March 11, 1997)
(a)(ii) Certificate of Change of Dollar Financial Group, Inc. (Incorporated by reference to Exhibit
3.1 to the Registrant's Statement on Form S-4 (Registration #333-18221) declared effective
March 11, 1997)
(a)(iii) Certificate of Change of Certificate of Incorporation of Dollar Financial Group, Inc.
(Incorporated by reference to Exhibit 3.1 to the Registrant's Statement on Form S-4
(Registration #333-18221) declared effective March 11, 1997)
(a)(iv) Certificate of Amendment of the Certificate of Incorporation of Dollar Financial Group,
Inc. (Incorporated by reference to Exhibit 3.1 to the Registrant's Statement on Form S-4
(Registration #333-18221) declared effective March 11, 1997)
(b)(i) Articles of Incorporation of Albuquerque Investments, Inc. (Incorporated by reference to
Exhibit 3.1 to the Registrant's Statement on Form S-4 (Registration #333-18221) declared
effective March 11, 1997)
(c)(i) Articles of Incorporation of Any Kind Check Cashing Centers, Inc. (Incorporated by
reference to Exhibit 3.1 to the Registrant's Statement on Form S-4 (Registration #333-
18221) declared effective March 11, 1997)
(c)(ii) Articles of Amendment to the Articles of Incorporation of Any Kind Check Cashing Centers,
Inc. (Incorporated by reference to Exhibit 3.1 to the Registrant's Statement on Form S-4
(Registration #333-18221) declared effective March 11, 1997)
(d)(i) Articles of Incorporation of Check Mart of Louisiana, Inc. (Incorporated by reference to
Exhibit 3.1 to the Registrant's Statement on Form S-4 (Registration #333-18221) declared
effective March 11, 1997)
(e)(i) Certificate of Incorporation of Check Mart of New Jersey, Inc. (Incorporated by reference
to Exhibit 3.1 to the Registrant's Statement on Form S-4 (Registration #333-18221) declared
effective March 11, 1997)
(f)(i) Articles of Incorporation of Check Mart of New Mexico, Inc. (Incorporated by reference to
Exhibit 3.1 to the Registrant's Statement on Form S-4 (Registration #333-18221) declared
effective March 11, 1997)
(f)(ii) Articles of Amendment to the Articles of Incorporation of Check Mart of New Mexico, Inc.
(Incorporated by reference to Exhibit 3.1 to the Registrant's Statement on Form S-4
(Registration #333-18221) declared effective March 11, 1997)
(g)(i) Articles of Incorporation of Check Mart of Pennsylvania, Inc. (Incorporated by reference to
Exhibit 3.1 to the Registrant's Statement on Form S-4 (Registration #333-18221) declared
effective March 11, 1997)
(h)(i) Articles of Incorporation of Check Mart of Texas, Inc. (Incorporated by reference to
Exhibit 3.1 to the Registrant's Statement on Form S-4 (Registration #333-18221) declared
effective March 11, 1997)
(i)(i) Articles of Incorporation of Check Mart of Utah, Inc. (Incorporated by reference to Exhibit
3.1 to the Registrant's Statement on Form S-4 (Registration #333-18221) declared effective
March 11, 1997)
(i)(ii) Articles of Amendment to the Articles of Incorporation of Check Mart of Utah, Inc.
(Incorporated by reference to Exhibit 3.1 to the Registrant's Statement on Form S-4
(Registration #333-18221) declared effective March 11, 1997)
(j)(i) Articles of Incorporation of Check Mart of Washington, Inc. (Incorporated by reference to
Exhibit 3.1 to the Registrant's Statement on Form S-4 (Registration #333-18221) declared
effective March 11, 1997)
(j)(ii) Articles of Amendment of Check Mart of Washington, Inc. (Incorporated by reference to
Exhibit 3.1 to the Registrant's Statement on Form S-4 (Registration #333-18221) declared
effective March 11, 1997)
</TABLE>

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<TABLE>
<CAPTION>
(a)(3) Exhibits
Exhibit No. Description of Document
--------------- -----------------------
<S> <C>
(k)(i) Articles of Incorporation of Check Mart of Washington, D.C., Inc. (Incorporated by
reference to Exhibit 3.1 to the Registrant's Statement on Form S-4 (Registration #333-
18221) declared effective March 11, 1997)
(l)(i) Articles of Incorporation of Check Mart of Wisconsin, Inc. (Incorporated by reference to
Exhibit 3.1 to the Registrant's Statement on Form S-4 (Registration #333-18221) declared
effective March 11, 1997)
(m)(I) Certificate of Incorporation of DFG Warehousing Co., Inc. (Incorporated by reference to
Exhibit 3.1 to the Registrant's Statement on Form S-4 (Registration #333-18221) declared
effective March 11, 1997)
(n)(i) Articles of Incorporation of Dollar Financial Insurance Corp. (Incorporated by reference to
Exhibit 3.1 to the Registrant's Statement on Form S-4 (Registration #333-18221) declared
effective March 11, 1997)
(o)(i) Certificate of Incorporation of Dollar Insurance Administration Corp. (Incorporated by
reference to Exhibit 3.1 to the Registrant's Statement on Form S-4 (Registration #333-
18221) declared effective March 11, 1997)
(p)(i) Articles of Incorporation of Financial Exchange Company of Michigan, Inc. (Incorporated by
reference to Exhibit 3.1 to the Registrant's Statement on Form S-4 (Registration #333-
18221) declared effective March 11, 1997)
(p)(ii) Certificate of Amendment to the Articles of Incorporation of Financial Exchange Company of
Michigan, Inc. (Incorporated by reference to Exhibit 3.1 to the Registrant's Statement on
Form S-4 (Registration #333-18221) declared effective March 11, 1997)
(q)(i) Articles of Incorporation of Financial Exchange Company of Ohio, Inc. (Incorporated by
reference to Exhibit 3.1 to the Registrant's Statement on Form S-4 (Registration #333-
18221) declared effective March 11, 1997)
(q)(ii) Certificate of Amendment by Incorporator (Incorporated by reference to Exhibit 3.1 to the
Registrant's Statement on Form S-4 (Registration #333-18221) declared effective March 11,
1997)
(q)(iii) Certificate of Amendment (by Shareholders) (Incorporated by reference to Exhibit 3.1 to the
Registrant's Statement on Form S-4 (Registration #333-18221) declared effective March 11,
1997)
(r)(i) Certificate of Incorporation of Financial Exchange Company of Pennsylvania, Inc.
(Incorporated by reference to Exhibit 3.1 to the Registrant's Statement on Form S-4
(Registration #333-18221) declared effective March 11, 1997)
(r)(ii) Amendment "1" to Certificate of Incorporation of Financial Exchange Company of
Pennsylvania, Inc. (Incorporated by reference to Exhibit 3.1 to the Registrant's Statement
on Form S-4 (Registration #333-18221) declared effective March 11, 1997)
(r)(iii) Amendment "2" to Certificate of Incorporation of Financial Exchange Company of
Pennsylvania, Inc. (Incorporated by reference to Exhibit 3.1 to the Registrant's Statement
on Form S-4 (Registration #333-18221) declared effective March 11, 1997)
(s)(i) Certificate of Incorporation of Financial Exchange Company of Pittsburgh, Inc.
(Incorporated by reference to Exhibit 3.1 to the Registrant's Statement on Form S-4
(Registration #333-18221) declared effective March 11, 1997)
(t)(i) Certificate of Incorporation of Financial Exchange Company of Virginia, Inc. (Incorporated
by reference to Exhibit 3.1 to the Registrant's Statement on Form S-4 (Registration #333-
18221) declared effective March 11, 1997)
(u)(i) Articles of Incorporation of L.M.S. Development Corporation (Incorporated by reference to
Exhibit 3.1 to the Registrant's Statement on Form S-4 (Registration #333-18221) declared
effective March 11, 1997)
</TABLE>

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<TABLE>
<CAPTION>
(a)(3) Exhibits
Exhibit No. Description of Document
--------------- -----------------------
<S> <C>
(v)(i) Articles of Incorporation of Monetary Management Corp. (Incorporated by reference to
Exhibit 3.1 to the Registrant's Statement on Form S-4 (Registration #333-18221) declared
effective March 11, 1997)
(w)(I) Certificate of Incorporation of Monetary Management Corporation of Pennsylvania, Inc.
(Incorporated by reference to Exhibit 3.1 to the Registrant's Statement on Form S-4
(Registration #333-18221) declared effective March 11, 1997)
(x)(i) Articles of Incorporation of Monetary Management of California, Inc. (Incorporated by
reference to Exhibit 3.1 to the Registrant's Statement on Form S-4 (Registration #333-
18221) declared effective March 11, 1997)
(y)(i) Articles of Incorporation of Monetary Management of Maryland, Inc. (Incorporated by
reference to Exhibit 3.1 to the Registrant's Statement on Form S-4 (Registration #333-
18221) declared effective March 11, 1997)
(z)(i) Certificate of Incorporation of Monetary Management of New York, Inc. (Incorporated by
reference to Exhibit 3.1 to the Registrant's Statement on Form S-4 (Registration #333-
18221) declared effective March 11, 1997)
(aa)(I) Articles of Incorporation of Pacific Ring Enterprises, Inc. (Incorporated by reference to
Exhibit 3.1 to the Registrant's Statement on Form S-4 (Registration #333-18221) declared
effective March 11, 1997)
(bb)(i) Limited Partnership Certificate and Agreement of U.S. Check Exchange Limited Partnership
(Incorporated by reference to Exhibit 3.1 to the Registrant's Statement on Form S-4
(Registration #333-18221) declared effective March 11, 1997)
(bb)(ii) First Amendment to Certificate and Agreement of Limited Partnership of U.S. Check Exchange
Limited Partnership (Incorporated by reference to Exhibit 3.1 to the Registrant's Statement
on Form S-4 (Registration #333-18221) declared effective March 11, 1997)
(bb)(iii) Second Amendment Certificate of Limited Partnership (Incorporated by reference to Exhibit
3.1 to the Registrant's Statement on Form S-4 (Registration #333-18221) declared effective
March 11, 1997)
(cc)(I) Articles of Incorporation of QTV Holdings, Inc. (Incorporated by reference to Exhibit 3.1
to the Registrant's Statement on Form S-4 (Registration #333-18221) declared effective
March 11, 1997)
3.2 (a)(i) Bylaws of Dollar Financial Group, Inc. (Incorporated by reference to Exhibit 3.2 to the
Registrant's Statement on Form S-4 (Registration #333-18221) declared effective March 11,
1997)
(b)(i) Bylaws of Albuquerque Investments, Inc. (Incorporated by reference to Exhibit 3.2 to the
Registrant's Statement on Form S-4 (Registration #333-18221) declared effective March 11,
1997)
(c)(i) Bylaws of Any Kind Check Cashing Centers, Inc. (Incorporated by reference to Exhibit 3.2 to
the Registrant's Statement on Form S-4 (Registration #333-18221) declared effective March
11, 1997)
(d)(i) Bylaws of Check Mart of Louisiana, Inc. (Incorporated by reference to Exhibit 3.2 to the
Registrant's Statement on Form S-4 (Registration #333-18221) declared effective March 11,
1997)
(e)(i) Bylaws of Check Mart of New Jersey, Inc. (Incorporated by reference to Exhibit 3.2 to the
Registrant's Statement on Form S-4 (Registration #333-18221) declared effective March 11,
1997)
(f)(i) Bylaws of Check Mart of New Mexico, Inc. (Incorporated by reference to Exhibit 3.2 to the
Registrant's Statement on Form S-4 (Registration #333-18221) declared effective March 11,
1997)
(g)(i) Bylaws of Check Mart of Pennsylvania, Inc. (Incorporated by reference to Exhibit 3.2 to the
Registrant's Statement on Form S-4 (Registration #333-18221) declared effective March 11,
1997)
(h)(i) Bylaws of Check Mart of Texas, Inc. (Incorporated by reference to Exhibit 3.2 to the
Registrant's Statement on Form S-4 (Registration #333-18221) declared effective March 11,
1997)
(i)(i) Bylaws of Check Mart of Utah, Inc. (Incorporated by reference to Exhibit 3.2 to the
Registrant's Statement on Form S-4 (Registration #333-18221) declared effective March 11,
1997)
(j)(i) Bylaws of Check Mart of Washington, Inc. (Incorporated by reference to Exhibit 3.2 to the
Registrant's Statement on Form S-4 (Registration #333-18221) declared effective March 11,
1997)
(k)(i) Bylaws of Check Mart of Washington, D.C., Inc. (Incorporated by reference to Exhibit 3.2 to
the Registrant's Statement on Form S-4 (Registration #333-18221) declared effective March
11, 1997)
</TABLE>

76
<PAGE>

<TABLE>
<CAPTION>
(a)(3) Exhibits
Exhibit No. Description of Document
--------------- -----------------------
<S> <C>
(l)(i) Bylaws of Check Mart of Wisconsin, Inc. (Incorporated by reference to Exhibit 3.2 to the
Registrant's Statement on Form S-4 (Registration #333-18221) declared effective March 11,
1997)
(m)(i) Bylaws of DFG Warehousing Co., Inc. (Incorporated by reference to Exhibit 3.2 to the
Registrant's Statement on Form S-4 (Registration #333-18221) declared effective March 11,
1997)
(n)(i) Bylaws of Dollar Financial Insurance Corp. (Incorporated by reference to Exhibit 3.2 to the
Registrant's Statement on Form S-4 (Registration #333-18221) declared effective March 11,
1997)
(o)(i) Bylaws of Dollar Insurance Administration Corp. (Incorporated by reference to Exhibit 3.2
to the Registrant's Statement on Form S-4 (Registration #333-18221) declared effective
March 11, 1997)
(p)(i) Bylaws of Financial Exchange Company of Michigan, Inc. (Incorporated by reference to
Exhibit 3.2 to the Registrant's Statement on Form S-4 (Registration #333-18221) declared
effective March 11, 1997)
(q)(i) Code of Regulations of Financial Exchange Company of Ohio, Inc. (Incorporated by reference
to Exhibit 3.2 to the Registrant's Statement on Form S-4 (Registration #333-18221) declared
effective March 11, 1997)
(r)(i) Bylaws of Financial Exchange Company of Pennsylvania, Inc. (Incorporated by reference to
Exhibit 3.2 to the Registrant's Statement on Form S-4 (Registration #333-18221) declared
effective March 11, 1997)
(s)(i) Bylaws of Financial Exchange Company of Pittsburgh, Inc. (Incorporated by reference to
Exhibit 3.2 to the Registrant's Statement on Form S-4 (Registration #333-18221) declared
effective March 11, 1997)
(t)(i) Bylaws of Financial Exchange Company of Virginia, Inc. (Incorporated by reference to
Exhibit 3.2 to the Registrant's Statement on Form S-4 (Registration #333-18221) declared
effective March 11, 1997)
(u)(i) Bylaws of L.M.S. Development Corporation (Incorporated by reference to Exhibit 3.2 to the
Registrant's Statement on Form S-4 (Registration #333-18221) declared effective March 11,
1997)
(v)(i) Bylaws of Monetary Management Corp. (Incorporated by reference to Exhibit 3.2 to the
Registrant's Statement on Form S-4 (Registration #333-18221) declared effective March 11,
1997)
(w)(i) Bylaws of Monetary Management Corporation of Pennsylvania, Inc. (Incorporated by reference
to Exhibit 3.2 to the Registrant's Statement on Form S-4 (Registration #333-18221) declared
effective March 11, 1997)
(x)(i) Bylaws of Monetary Management of California, Inc. (Incorporated by reference to Exhibit 3.2
to the Registrant's Statement on Form S-4 (Registration #333-18221) declared effective
March 11, 1997)
(y)(i) Bylaws of Monetary Management of Maryland, Inc. (Incorporated by reference to Exhibit 3.2
to the Registrant's Statement on Form S-4 (Registration #333-18221) declared effective
March 11, 1997)
(y)(ii) Amended and Restated Bylaws of Monetary Management of Maryland, Inc. (Incorporated by
reference to Exhibit 3.2 to the Registrant's Statement on Form S-4 (Registration #333-
18221) declared effective March 11, 1997)
(z)(i) Bylaws of Monetary Management of New York, Inc. (Incorporated by reference to Exhibit 3.2
to the Registrant's Statement on Form S-4 (Registration #333-18221) declared effective
March 11, 1997)
(aa)(i) Bylaws of Pacific Ring Enterprises, Inc. (Incorporated by reference to Exhibit 3.2 to the
Registrant's Statement on Form S-4 (Registration #333-18221) declared effective March 11,
1997)
(bb)(i) Bylaws of QTV Holdings, Inc. (Incorporated by reference to Exhibit 3.2 to the Registrant's
Statement on Form S-4 (Registration #333-18221) declared effective March 11, 1997)
4.1 Indenture, dated as of November 15, 1996, among the Company, the Guarantors, and Fleet
National Bank, as Trustee (Incorporated by reference to Exhibit 4.1 to the Registrant's
Statement on Form S-4 (Registration #333-18221) declared effective March 11, 1997)
4.2 Form of Notes (included in Exhibit 4.1) (Incorporated by reference to Exhibit 4.2 to the
Registrant's Statement on Form S-4 (Registration #333-18221) declared effective March 11,
1997)
4.3 A/B Exchange Registration Rights Agreement, dated as of November 15, 1996, by and among the
Company, the Guarantors, and the Initial Purchasers (Incorporated by reference to Exhibit
4.3 to the Registrant's Statement on Form S-4 (Registration #333-18221) declared effective
March 11, 1997)
</TABLE>

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<TABLE>
<CAPTION>
(a)(3) Exhibits
Exhibit No. Description of Document
--------------- -----------------------
<S> <C>
10.1 (a) Asset Purchase Agreement, dated January 9, 1995, by and among the Company, Happy's Check
Cashing, and Adrian Rubin (Incorporated by reference to Exhibit 10.1(a) to the
Registrant's Statement on Form S-4 (Registration #333-18221) declared effective March 11,
1997)
(b) Amendment No. 1 to the Asset Purchase Agreement, dated February 20, 1995, by and among the
Company, Happy's Check Cashing, Chase Money Loan, Inc., and Adrian Rubin (Incorporated by
reference to Exhibit 10.1(b) to the Registrant's Statement on Form S-4 (Registration #333-
18221) declared effective March 11, 1997)
10.2 Purchase Agreement, dated July 28, 1995, by and among Monetary Management Corporation, NCCI
Corporation, Larry M. Senderhauf, E. Rick Safford, and Fred T. Kampo, Jr. (Incorporated by
reference to Exhibit 10.2 to the Registrant's Statement on Form S-4 (Registration #333-
18221) declared effective March 11, 1997)
10.3 (a) Site License and Services Agreement, dated April 30, 1996, by and between the Company and
The Southland Corporation (Incorporated by reference to Exhibit 10.3(a) to the
Registrant's Statement on Form S-4 (Registration #333-18221) declared effective March 11,
1997)
(b) Asset Purchase Agreement, dated April 30, 1996, by and between the Company and The
Southland Corporation (Incorporated by reference to Exhibit 10.3(b) to the Registrant's
Statement on Form S-4 (Registration #333-18221) declared effective March 11, 1997)
10.4 Employment Agreement, dated as of November 13, 1998, between the Company, DFG Holdings,
Inc., and Jeffrey Weiss (Incorporated by reference to Exhibit 10.4 to the Registrant's
Statement on Form 10Q (Registration #333-18221) declared effective December 31, 1998)
10.5 Employment Agreement, dated as of December 18, 1998, between the Company, DFG Holdings,
Inc., and Donald F. Gayhardt (Incorporated by reference to Exhibit 10.5 to the
Registrant's Statement on Form 10Q (Registration #333-18221) declared effective December
31, 1998)
10.6* Employment Agreement, dated as of July 21, 1997 between the Company, DFG Holdings, Inc.,
and Richard S. Dorfman
10.7 Amended and Restated Shareholders Agreement, dated August 8, 1996, among WPG Corporate
Development Associates IV, L.P., WPG Corporate Development Associates IV (Overseas), L.P.,
the individual fund shareholders signatory thereto, the GHB Charitable Trust #1, Jeffrey
Weiss, Donald F. Gayhardt, Pegasus Partners L.P., PAG Dollar Investors, the warrant
holders signatory thereto, General Electric Capital Corporation, and DFG Holdings, Inc.
(Incorporated by reference to Exhibit 10.7 to the Registrant's Statement on Form S-4
(Registration #333-18221) declared effective March 11, 1997)
10.8 Purchase Agreement, dated as of August 8, 1996, by and among the Company, DFG Holdings,
Inc., Any Kind Check Cashing Centers, Inc., the shareholders signatory thereto, U.S. Check
Exchange Limited Partnership, the limited partners signatory thereto, and George H.
Brimhall (Incorporated by reference to Exhibit 10.8 to the Registrant's Statement on Form
S-4 (Registration #333-18221) declared effective March 11, 1997)
10.9 Asset Purchase Agreement, dated August 28, 1996, by and among Financial Exchange Company of
Ohio, Inc., ABC Check Cashing, Inc., and the shareholder signatory thereto (Incorporated
by reference to Exhibit 10.9 to the Registrant's Statement on Form S-4 (Registration #333-
18221) declared effective March 11, 1997)
10.10 Asset Purchase Agreement, dated as of October 22, 1996, by and among the Company, Cash-N-
Dash Check Cashing, Inc., and the shareholders signatory thereto (Incorporated by
reference to Exhibit 10.10 to the Registrant's Statement on Form S-4 (Registration #333-
18221) declared effective March 11, 1997)
10.11 Stock Purchase Agreement, dated as of October 22, 1996, by and among the Company, Manor
Investment Co. Inc., and the shareholders signatory thereto (Incorporated by reference to
Exhibit 10.11 to the Registrant's Statement on Form S-4 (Registration #333-18221) declared
effective March 11, 1997)
</TABLE>

78
<PAGE>

<TABLE>
<CAPTION>
(a)(3) Exhibits
Exhibit No. Description of Document
--------------- -----------------------
<S> <C>
10.12 Amended and Restated Purchase Agreement, dated as of October 23, 1996, by and among Dollar
Financial Canada Ltd., DFG Holdings, Inc., National Money Mart, Inc., and the shareholders
signatory thereto (Incorporated by reference to Exhibit 10.12 to the Registrant's
Statement on Form S-4 (Registration #333-18221) declared effective March 11, 1997)
10.13 Credit Agreement, dated as of December 18, 1998, among the Company, DFG Holdings, Inc. the
lenders from time to time party thereto, Wells Fargo Bank, National Association, as
administrative agent, First Union Capital Markets and Wells Fargo as arrangers, First
Union National Bank, as syndication agent, and U.S. Bank National Association, as
documentation agent (Incorporated by reference to Exhibit 10.13 to the Registrant's
Statement on Form 10Q (Registration #333-18221) declared effective December 31, 1998)
10.14 Purchase Agreement, dated as of March 31, 1997, among Dollar Financial Group, Inc., Dollar
Financial Canada, LTD., Canadian Capital Corporation, Dollar Ontario LTD. And Gus E.
Baril, Leslie A. Baril and the Baril Family Trust. The schedules to the Purchase Agreement
and the exhibits thereto have been omitted. The Company will furnish supplementally to the
Commission any of the schedules or exhibits upon request
10.15 DFG Holdings, Inc. Stock Incentive Plan****
10.16 Termination Agreement, dated June 30, 1997 re: Donald F. Gayhardt, Jr.****
10.17 Pledge and Security Agreement, dated as of December 18, 1998, among the Company, Wells
Fargo Bank, National Association, as administrative agent for itself and the Lenders under
the Credit Agreement (Incorporated by reference to Exhibit 10.17 to the Registrant's
Statement on Form 10Q (Registration #333-18221) declared effective December 31, 1998)
10.18 Subordination Agreement, dated as of December 18, 1998, among the Company, DFG Holdings,
Inc., and Wells Fargo Bank, National Association, as administrative agent for itself and
the Lenders under the Credit Agreement (Incorporated by reference to Exhibit 10.18 to the
Registrant's Statement on Form 10Q (Registration #333-18221) declared effective December
31, 1998)
10.19 Supplemental Security Agreement (Trademarks), dated as of December 18, 1998, among the
Company and Wells Fargo Bank, National Association, as administrative agent for itself and
the Lenders under the Credit Agreement (Incorporated by reference to Exhibit 10.19 to the
Registrant's Statement on Form 10Q (Registration #333-18221) declared effective December
31, 1998)
10.20 Purchase Agreement, dated as of December 18, 1998, among the Company, GS Mezzanine
Partners, L.P., GS Mezzanine Partners Offshore, L.P., Stone Street Fund 1998, L.P. Bridge
Street Fund 1998, L.P., Ares Leveraged Investment Fund, L.P., and Ares Leveraged
Investment Fund II, L.P., relating the the $20,000,000 aggregate principal amount of 10
7/8% Senior Subordinated Notes Due 2006 (Incorporated by reference to Exhibit 10.20 to the
Registrant's Statement on Form 10Q (Registration #333-18221) declared effective December
31, 1998)
10.21 Exchange and Registration Rights Agreement, dated as of December 18, 1998, among the
Company, GS Mezzanine Partners, L.P., GS Mezzanine Partners, L.P., GS Mezzanine Partners
Offshore, L.P., Stone Street Fund 1998, L.P., Bridge Street Fund 1998, L.P., Ares
Leveraged Investment Fund, L.P., and Ares Leveraged Investment Fund II, L.P., relating to
the $20,000,000 aggregate principal amount of 10 7/8% Senior Subordinated Notes Due 2006
(Incorporated by reference to Exhibit 10.21 to the Registrant's Statement on Form 10Q
(Registration #333-18221) declared effective December 31, 1998)
10.22 Secured Note, dated December 18, 1998, made by Jeffrey Weiss in favor of the Company
(Incorporated by reference to Exhibit 10.22 to the Registrant's Statement on Form 10Q
(Registration #333-18221) declared effective December 31, 1998)
10.23 Pledge Agreement, dated December 18, 1998, between the Company and Jeffrey Weiss
(Incorporated by reference to Exhibit 10.23 to the Registrant's Statement on Form 10Q
(Registration #333-18221) declared effective December 31, 1998)
</TABLE>

79
<PAGE>

<TABLE>
<CAPTION>
(a)(3) Exhibits
Exhibit No. Description of Document
--------------- -----------------------
<S> <C>
10.24 Agreement for the sale and purchase of shares of Instant Cash Loans, LTD. dated February
10, 1999 with Dollary Financial Group, Inc., DFG Acquisition, LTD., Henry Hallam, Rachel
Hallam and shareholders signatory thereto (Incorporated by reference to Exhibit 10.24 of
the Registrant's Form 8K/A filed April 26, 1999, declared effective February 25, 1999)
10.25 Purchase Agreement dated February 17, 1999 by and among National Money mart Company (a
subsidiary of Dollar Financial Group, Inc.), King Mortgage LTD. and Denis Wilner to
purchase the remaining 86.5% partnership interest in Calgary Money Mart Partnership
(Incorporated by reference to Exhibit 10.25 of the Registrant's Form 8K/A filed April 26,
1999, declared effective February 25, 1999)
21.1 Subsidiaries of the Registrant (Incorporated by reference to Exhibit 21.1 to the
Registrant's Statement on Form 10Q (Registration #333-18221) declared effective December
31, 1998)
27.1 Financial Data Schedule for the fiscal year ended June 30, 1999, which is being submitted
electronically to the Securities and Exchange Commission for information purposes only**
</TABLE>

80
<PAGE>

___________________
* Management contracts or compensatory plans or arrangements required to be
filed as exhibits to this Form 10-K by Item 601 of Regulation S-K.
** Filed herewith.
*** Filed previously. Portions of this agreement have been omitted pursuant to
Rule 406 under the Securities Act of 1933, as amended, and have been filed
confidentially with the Securities and Exchange Commission.
**** Filed previously.

(b) Financial Statement Schedules

None.

81
<PAGE>

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the Registrant named below has duly caused this report to be signed
on its behalf by the undersigned, thereunto duly authorized, in the City of
Berwyn, Commonwealth of Pennsylvania on September 28, 1999.

DOLLAR FINANCIAL GROUP, INC.

By: /s/ RICHARD S. DORFMAN
----------------------
Richard S. Dorfman
Executive Vice President
and Chief Financial Officer

DOLLAR FINANCIAL GROUP, INC.

<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ JEFFREY A. WEISS Chairman of the Board of Directors, September 28, 1999
- -----------------------------------
Jeffrey A. Weiss President, and Chief Executive Officer
(principal executive officer)

/s/ RICHARD S. DORFMAN Executive Vice President and Chief September 28, 1999
- -----------------------------------
Richard S. Dorfman Financial Officer (principal financial and
accounting officer)
</TABLE>

<PAGE>

<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
FINANCIAL STATEMENTS CONTAINED IN THE BODY OF THE ACCOMPANYING FORM 10-K AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000

<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> JUN-30-1999
<PERIOD-END> JUN-30-1999
<CASH> 65,782
<SECURITIES> 0
<RECEIVABLES> 12,441
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 80,397
<PP&E> 20,300
<DEPRECIATION> 7,546
<TOTAL-ASSETS> 203,709
<CURRENT-LIABILITIES> 25,209
<BONDS> 130,004
0
0
<COMMON> 0
<OTHER-SE> 36,334
<TOTAL-LIABILITY-AND-EQUITY> 203,709
<SALES> 0
<TOTAL-REVENUES> 120,979
<CGS> 0
<TOTAL-COSTS> 70,929
<OTHER-EXPENSES> 32,032
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 16,401
<INCOME-PRETAX> 1,617
<INCOME-TAX> 3,881
<INCOME-CONTINUING> (2,264)
<DISCONTINUED> 0
<EXTRAORDINARY> (85)
<CHANGES> 0
<NET-INCOME> (2,349)
<EPS-BASIC> 0
<EPS-DILUTED> 0

</TABLE>