FIRST CASH INC, S-1/A, 1996-11-19

FIRST CASH INC
S-1/A, 1996-11-19
MISCELLANEOUS RETAIL

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As filed with the Securities and Exchange Commission on November 19, 1996

Registration No. 33-86052
- ------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
POST-EFFECTIVE AMENDMENT NO. 2 TO
FORM S-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
--------------------------
FIRST CASH, INC.
(Exact name of Registrant as specified in its charter)

DELAWARE 5932 75-2237-318
-------- ---- -----------
(State or other (Primary Standard (I.R.S. Employer
jurisdiction of Industrial Classification Identification Number)
incorporation or Code Number)
organization)

690 E. Lamar Blvd., Suite 400 Copy to: Phillip E. Powell
Arlington, Texas 76011 Thomas C. Pritchard, Esq. 690 E. Lamar Blvd.,
(817) 460-3947 Brewer & Pritchard, P.C. Suite 400
(Address, including 1111 Bagby, 24th Floor Arlington, Texas
zip code, and telephone Houston, Texas 77002 76011
number, including area code Phone (713) 659-1744 (817) 460-3947
of registrant's principal Fax (713) 659-5302 (Name, address,
executive offices) including zip code and
telephone number,
including area code,
of agent for service)

Approximate date of commencement of proposed sale to the public: As soon
as practicable after this Registration Statement becomes effective.

If any of the securities being registered on this Form are to be offered
on a delayed or continuous basis pursuant to Rule 415 under the Securities Act
of 1933, check the following. X
---

The Registrant hereby amends this Registration Statement on such date
or dates as may be necessary to delay its effective date until the
Registrant shall file a further amendment which specifically states that this
Registration Statement shall thereafter become effective on such date as the
Commission, acting pursuant to said Section 8(a), may determine.

FIRST CASH, INC.
----------------

Cross-Reference Sheet
Pursuant to Rule 404(a) of Regulation C and Item 501(b)
of Regulation S-K under the Securities Act of 1933

Item Number and Caption Heading In Prospectus
---------------------------------------------
1. Forepart of Registration Statement and
Outside Front Cover Page of Prospectus Forepart of the Registration
Statement and Outside Front
Cover Page of Prospectus
2. Inside Front and Outside Back
Cover Pages of Prospectus Inside Front Cover Page of
Prospectus

3. Summary Information, Risk Factors
and Ratio of Earnings to Fixed Charges Prospectus Summary;
Investment Considerations

4. Use of Proceeds Use of Proceeds

5. Determination of Offering Price Outside Front Cover Page of
Prospectus

6. Dilution *

7. Selling Security Holders Plan of Distribution and
Selling Stockholders

8. Plan of Distribution and Selling
Stockholders Plan of Distribution and
Selling Stockholders

9. Description of the Securities
to be Registered Description of Capital Stock

10. Interests of Named Experts and
Counsel Legal Matters; Experts

11. Information with Respect to
the Registrant Recent Developments; The
Company; Business;
Management; Description of
Capital Stock; Principal
Stockholders; Price Range of
Common Stock; Dividend
Policy; Selected Financial
Information; Capitalization;
and Management's Discussion
and Analysis of Financial
Condition and Results of
Operation

12. Disclosure of Commission
Position on Indemnification
for Securities Act Liabilities *

(*) Not applicable.

ISSUANCE OF 3,602,788 SHARES OF COMMON STOCK
--------------------------------------------

This Prospectus relates to the issuance by First Cash, Inc. ("Company")
of an aggregate of (i) 1,310,162 shares of Common Stock underlying currently
exercisable warrants ("Warrants"), (ii) 192,625 shares of Common Stock
underlying currently exercisable options granted under the Company's stock
option plan ("Options"), and (iii) 2,100,001 shares of Common Stock upon
conversion of the Debentures Due 1999 and Debentures Due 2004 (collectively,
"Convertible Debentures"). See "Description of Capital Stock" and "Plan of
Distribution and Selling Stockholders." The Company will receive the exercise
price upon the exercise of the Warrants and Options, but will not receive any
proceeds upon the conversion of the Convertible Debentures. See "Use of
Proceeds." The Common Stock of the Company is traded on the Nasdaq Stock
Market under the symbol "PAWN." On November 18, 1996, the last sale price of
the Common Stock as reported on the Nasdaq Stock Market was $5.50 per share.
See "Price Range of Common Stock."

See "Investment Considerations" starting of page 5 for a discussion of
certain factors that should be considered by prospective purchasers of the
Common Stock offered hereby.

THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS
THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY
IS A CRIMINAL OFFENSE.

<TABLE>
==============================================================================
Number Price Total Discounts Proceeds
of Per Amount and to the
Shares Share Offered Commissions(1) Company(2)
- ------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Shares Underlying
Warrants 1,310,162 (3) $5,782,624 - $5,782,624
Shares Underlying
Options 192,625 (4) 895,625 - 895,625
Shares Underlying
Convertible
Debentures 2,100,001 (5) - - -
- ------------------------------------------------------------------------------
Total 3,602,788 - $6,678,249 - $6,678,249
==============================================================================
</TABLE>
(1) The Company will not pay any brokerage commissions or other direct or
indirect selling compensation in connection with this offering.
(2) Before deducting the cash expenses of this offering, estimated to be
$18,500.
(3) Of the 1,310,162 shares of Common Stock underlying the Warrants, a total
of (i) 1,033,000 shares are exercisable at $4.00 per share, (ii) 227,162
shares are exercisable at $4.625 per share, and (iii) 50,000 shares are
exercisable at $12.00 per share.
(4) Of the 192,625 shares of Common Stock underlying the options a total of
(i) 180,000 shares are exercisable at $4.625 per share and (ii) 12,625 shares
are exercisable at $5.00 per share.
(5) Of the 2,100,001 shares of Common Stock underlying the Convertible
Debentures, a total of (i) 1,600,001 shares are convertible at a price of
$4.625 per share and (ii) 500,000 shares are convertible at a price of $5.00
per share.

The date of this Prospectus is November 19, 1996
------------------------------------------------

TABLE OF CONTENTS
-----------------

Available Information Business
Prospectus Summary Management
Recent Developments Principal Stockholders
The Company Description of Capital Stock
Investment Considerations Legal Matters
Price Range of Common Stock Experts
Dividend Policy Index to the Consolidated
Capitalization Financial Statements
Selected Financial Information
Management's Discussion and
Analysis of Financial Condition
and Results of Operations

No person has been authorized to give any information or to make any
representations in connection with this offering other than those contained in
this Prospectus and, if given or made, such information or representation must
not be relied upon as having been authorized by the Company. This Prospectus
does not constitute an offer to sell, or a solicitation of an offer to
purchase, any securities other than the securities to which it relates or an
offer to or a solicitation of any person in any jurisdiction where such an
offer or solicitation would be unlawful. Neither the delivery of this
Prospectus nor any sale made hereunder shall, under any circumstances, create
an implication that there has been no change in the affairs of the Company
since the date hereof or that the information contained herein is correct as
of any time subsequent to the date hereof.

AVAILABLE INFORMATION
---------------------

The Company is subject to the informational requirements of the
Securities Exchange Act of 1934 ("Exchange Act"), and, in accordance
therewith, files reports, proxy statements and other information with the
Securities and Exchange Commission (the "SEC"). Such reports, proxy
statements and other information are available for inspection and copying at
the Public Reference Room of the SEC, 450 Fifth Street, N.W., Judiciary Plaza,
Washington, D.C. 20549; and at the Regional Offices of the SEC located at 500
West Madison Street, Suite 1400, Chicago, Illinois 60661; and at 7 World Trade
Center, New York, New York 10048. Copies of such material may be obtained
from the Public Reference Section of the SEC at 450 Fifth Street, N.W.,
Washington, D.C. 20549, at prescribed rates.

The Company has filed with the SEC in Washington, D.C. a Registration
Statement on Form S-1 (the "Registration Statement") under the Securities Act
of 1933, as amended (the "Securities Act"), with respect to the securities
offered by this Prospectus. Certain of the information contained in the
Registration Statement is omitted from this Prospectus, and reference is
hereby made to the Registration Statement and exhibits and schedules relating
thereto for further information with respect to the Company and the securities
offered by this Prospectus. Statements contained herein concerning the
provisions of any document are not necessarily complete and in each instance
reference is made to the copy of the document filed as an exhibit or schedule
to the Registration Statement. Each such statement is qualified in its
entirety by this reference. The Registration Statement and the exhibits and
schedules thereto are available for inspection at, and copies of such
materials may be obtained upon payment of the fees prescribed therefor by the
rules and regulations of the SEC, from the SEC, Public Reference Section,
Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549.

PROSPECTUS SUMMARY
------------------

The following summary is qualified in its entirety by the more detailed
information and financial statements and notes thereto appearing elsewhere in
this Prospectus.

The Company
-----------

First Cash, Inc. (the "Company") is the third largest publicly traded
pawnshop operator in the United States with 54 stores in Texas, Oklahoma,
Maryland and Washington, D.C. as of November 19, 1996. The Company's
telephone number is (817) 460-3947 and corporate offices are located at 690
East Lamar Blvd., Suite 400, Arlington, Texas 76011. The Company engages in
both consumer finance and retail sales activities. The Company provides a
convenient source for consumer loans, lending money against pledged tangible
personal property such as jewelry, electronic equipment, tools, firearms,
sporting goods and musical equipment. The Company also functions as a
retailer of previously-owned merchandise acquired in forfeited pawn
transactions and over-the-counter purchases from customers, as well as new
merchandise acquired in close-out purchases. For the fiscal year ended July
31, 1996, the Company's revenues were derived 65% from retail activities, and
35% from lending activities. The Company provides its customer base timely and
convenient access to short-term credit not generally available from commercial
banks, finance companies or other financial institutions.

Management believes the pawnshop industry is highly fragmented with
approximately 9,000 stores in the United States and is in the early stages of
achieving greater efficiencies through consolidation. The four publicly
traded pawnshop companies operate less than 8% of the total pawnshops in the
United States. Management believes significant economies of scale, increased
operating efficiencies, and revenue growth are achievable by increasing the
number of stores under operation and introducing modern merchandising
techniques, point-of-sale systems, improved inventory management and store
remodeling. The Company's objectives are to increase consumer loans and
retail sales through selected acquisitions and new store openings and to
enhance operating efficiencies and productivity. During fiscal 1996, 1995 and
1994, the Company added 7, 7 and 10 stores to its network, respectively, net
of stores sold or consolidated. See "Recent Developments."

<TABLE>
Registration of Issuance of Shares of Common Stock
--------------------------------------------------

<S> <C>
Common Stock outstanding on the date of this Prospectus..... 3,719,121 (1)
Common Stock issued upon exercise of Options, the
issuance of which is being registered hereby.............. 192,625
Common Stock issued upon exercise of Warrants, the
issuance of which is being registered hereby.............. 1,310,162
Common Stock issued upon exercise of Convertible Debentures,
the issuance of which is being registered hereby.......... 2,100,001
Use of proceeds............................................. Reduction of
outstanding
Credit Facility
and working
capital. See
"Use of Proceeds."
Nasdaq Symbol............................................... PAWN
- ------------------
</TABLE>
(1) Does not include (i) 215,625 shares issuable upon exercise of outstanding
options, of which the issuance of 192,625 shares of Common Stock underlying
the Options is being registered hereby, (ii) 3,218,412 shares issuable upon
exercise of outstanding warrants, of which the issuance of 1,310,162 shares of
Common Stock underlying the Warrants is being registered hereby, (iii)
2,100,001 shares issuable upon conversion of the Convertible Debentures. See
"Management - Stock Options and Warrants," "- Certain Transactions,"
"Description of Capital Stock - Convertible Debentures," and "- Other
Warrants."

<TABLE>
Summary Financial Information
-----------------------------
(in thousands, except per share and store data)

Year Ended July 31,
1996 1995 1994
---- ---- ----
<S> <C> <C> <C>
Income Statement Data:
- ----------------------
Total revenues......................... $ 38,023 $ 32,184 $ 20,583
Cost of goods sold and expenses........ 35,666 30,492 18,986
-------- -------- --------
Income before income taxes............. 2,357 1,692 1,597
Provision for income taxes............. 917 592 462
-------- -------- --------
Net income............................. 1,440 1,100 1,135
Dividends on preferred stock........... - - 120
-------- -------- --------
Net income attributable to common
stockholders.......................... $ 1,440 $ 1,100 $ 1,015
======== ======== ========
Net income per common share............ $ .39 $ .30 $ .27
======== ======== ========
Weighted average common
shares outstanding.................... 3,669 3,719 3,792

Operating Data:
- ---------------
Stores in operation:
Beginning of period..................... 43 36 26
Acquired................................ 7 5 10
Opened.................................. 1 2 2
Sold.................................... - - (1)
Consolidated............................ (1) - (1)
-------- -------- --------
End of period........................... 50 43 36
======== ======== ========
Pawn loans................................ $ 11,701 $ 9,158 $ 7,320
Average loan balance per store(1)......... $ 234 $ 213 $ 203
Redemption rate(2)........................ 70% 71% 73%
Average inventory per store(1)............ $ 175 $ 178 $ 167
Annualized inventory turnover............. 2.1x 2.0x 1.6x
Gross profit percentage on
merchandise sales........................ 32.7% 34.1% 32.2%
</TABLE>
<TABLE>
July 31, 1996
-------------
Balance Sheet Data: As Adjusted
- ------------------- Actual (3)(4)(5)
------ -----------
<S> <C> <C>
Working capital........................... $ 21,098 $ 27,776
Total assets.............................. 51,945 58,623
Long-term liabilities..................... 28,655 18,655
Total liabilities......................... 31,362 21,362
Stockholders' equity...................... 20,583 37,261
- ---------------
</TABLE>
(1) Calculated as loans or inventory, as appropriate, at the end of the
period divided by locations in operation at the end of the period.
(2) The redemption rate represents the percentage of loans made, including
loan renewals, with respect to which the customer either paid the outstanding
principal and accrued interest or renewed by paying all outstanding accrued
interest.
(3) Assumes issuance of (i) 192,625 shares issuable upon exercise of Options,
(ii) 1,310,162 shares issuable upon exercise of the Warrants, and (iii)
2,100,001 shares issuable upon conversion of the Convertible Debentures; the
issuance of all these shares is being registered under the Securities Act.
(4) Includes the conversion of $100,000 of Convertible Debentures, which were
converted in October 1996.
(5) Does not include 1,908,250 shares issuable upon exercise of outstanding
warrants and 23,000 shares issuable upon exercise of outstanding options, of
which the issuance is not being registered under the Securities Act.

RECENT DEVELOPMENTS
-------------------

In May 1996, the Company acquired three pawnshops in Baltimore, Maryland
in an asset purchase including fixed assets, layaways and pawn loans from an
affiliate of Mark Rothman, a principal stockholder of the Company, for an
aggregate purchase price of $2,446,000 consisting of $2,400,000 cash paid to
the seller, and legal, consulting and other fees of $46,000. In June 1996,
the Company acquired three additional pawnshops in Baltimore, Maryland in an
asset purchase including fixed assets, layaways, pawn loans and inventory from
an unaffiliated corporation for an aggregate cash purchase price of $1,662,000
consisting of $1,590,000 paid to the seller, and legal, consulting and other
fees of $72,000. The Company financed substantially all of the cash purchase
price for both of these acquisitions through its Credit Facility. The
purchase price for these acquisitions was determined based upon the volume of
annual loan and sales transactions, outstanding loan balances, inventory on
hand, and location and condition of the facilities.

In August 1996, the Company entered into a management agreement to
operate and manage pawnshops for JB Pawn, Inc., a Texas corporation. JB Pawn,
Inc. will own and provide 100% of the financing for the pawnshops, and will
incur all direct costs to operate the pawnshops, including but not limited to
payroll, store operating expenses, cost of inventory, and pawn loans. The
Company will receive a monthly management fee for each store managed, and will
provide computer support, accounting, auditing, oversight and management of
these stores. JB Pawn, Inc. is 100% owned and controlled by Mr. Jon Burke, a
brother of a director of the Company. In the event that JB Pawn, Inc.
receives an offer to purchase any of its pawnshops, the Company shall have a
first right of refusal to match such offer.

THE COMPANY
-----------

The Company is the third largest publicly traded pawnshop operator in the
United States with 54 stores in Texas, Oklahoma, Maryland and Washington, D.C.
as of November 19, 1996. The Company engages in both consumer finance and
retail sales activities. The Company provides a convenient source for
consumer loans, lending money against pledged tangible personal property such
as jewelry, electronic equipment, tools, firearms, sporting goods and musical
equipment. The Company also functions as a retailer of previously-owned
merchandise acquired in forfeited pawn transactions and over-the-counter
purchases from customers, as well as new merchandise acquired in close-out
purchases. For the fiscal year ended July 31, 1996, the Company's revenues
were derived 65% from retail activities, and 35% from lending activities. The
Company provides its customer base timely and convenient access to short-term
credit not generally available from commercial banks, finance companies or
other financial institutions.

The Company commenced operations in July 1988 with the acquisition of two
stores. The Company added two stores in each of the three following fiscal
years, 15 stores in fiscal 1992, three stores in fiscal 1993, 10 in fiscal
1994, seven in fiscal 1995 and seven in fiscal 1996. During fiscal 1994, the
Company consolidated one store in the Dallas/Fort Worth metropolitan area with
an existing store, in December 1993 the Company sold one store in the
Dallas/Fort Worth metropolitan area, and in September 1995 the Company
consolidated one store in the Mid-Atlantic area.. Of the 54 stores currently
operated by the Company, 46 were acquired and 8 were start-ups by the Company.
The Company continues to study possible acquisitions and to make contact with
possible acquisition candidates.

It is the Company's experience that after a suitable location has been
identified and a lease and licenses are obtained, a new store can be ready for
business within six weeks. The investment required to open a store includes
inventory, funds available for pawn loans, store fixtures, security systems,
and a computer system. Although the total investment varies and is difficult
to predict for each new store, it has been the Company's experience that
between $150,000 and $200,000 is required to finance new stores for the first
six months of operation. Before making an acquisition, management studies a
demographic analysis of the surrounding area, considers the number and size of
competing pawnshops, and researches local regulatory issues. Specific store
acquisition criteria include an evaluation of the volume of annual loan
transactions, outstanding loan balances, historical redemption rates, the
quality and quantity of inventory on hand, management expertise, and condition
of the facility, including lease terms. See "Recent Developments" for a
discussion of recent significant acquisitions.

The Company was formed as a Texas corporation in July 1988 and in April
1991 the Company reincorporated as a Delaware corporation. Except as
otherwise indicated, the term "Company" includes its wholly owned
subsidiaries, American Loan & Jewelry, Inc. and Famous Pawn, Inc. The
Company's principal executive offices are located at 690 E. Lamar Blvd, Suite
400, Arlington, Texas 76011, and its telephone number is (817)460-3947.

INVESTMENT CONSIDERATIONS
-------------------------

In addition to the other information contained in this Prospectus, the
following factors should be carefully considered in evaluating the Company and
its business before purchasing shares of the Common Stock offered hereby.

Recent Developments; Risk of Leverage
- -------------------------------------

As a result of the recent issuances of the Convertible Debentures,
acquisition related debt and increases in the Company's Credit Facility, the
Company's debt service requirements have been substantially increased over
historical levels. Although the Company anticipates that existing cash flows
and additional cash flows from the acquisitions partially funded by such
indebtedness will be sufficient to support current levels of Company debt,
debt service requirements will affect the profitability of the Company and may
impair its ability to raise additional capital for further acquisitions or for
capital investment in existing operations.

At July 31, 1996, the Company had $28,655,000 of long-term liabilities,
of which $27,027,000 represented long-term debt. The Company has incurred and
will continue to incur interest expense on such indebtedness. Although
interest rates have decreased over the last twelve months, interest rates may
increase in the future. As interest rates increase, management's strategy to
fund acquisitions through debt becomes more costly and may have an adverse
impact on the Company's operations. Failure to make payments when due will
result in default under and possible acceleration of one or more of the
Company's debt instruments. Management believes that the net cash flows
generated from operations will provide the Company with sufficient resources
to meet the Company's present and foreseeable liquidity and capital needs,
including those arising from debt obligations. However, in the event the
Company's cash flow so generated is insufficient for these purposes, the
Company may be required to raise additional capital. See "Management's
Discussion and Analysis of Financial Condition and Results of Operations -
Liquidity and Capital Resources".

Expansion of Business
- ---------------------

Since its inception, the Company has engaged in a series of acquisitions
and, to a lesser degree, new store openings in order to expand its business.
The Company's strategy for the near future is to emphasize expansion through
both acquisition of existing stores, which enables the Company to realize
increases in revenues and economies of scale more quickly, and opening new
stores where demographics are favorable and competition is limited. The
Company has not established definite plans to open a set number of stores or
to acquire a set number of stores during the next 12-month period. While the
Company continually looks for, and is presented with, potential acquisition
candidates, the Company has no definitive plans or commitments for further
acquisitions and is not currently negotiating any acquisitions. The Company
has no immediate plans to open any other new stores. To a significant extent,
the Company's future success is dependent upon its ability to continue to
engage in successful acquisitions and new site selections. Potential risks
associated with such a strategy are as follows:

Management of Growth

The success of the Company's growth strategy is dependent, in part, upon
the ability to maintain adequate financial controls and reporting systems, to
assimilate acquisition management into the Company's management structure, to
manage a larger operation, and to obtain additional capital upon favorable
terms. On average, a new store becomes profitable, on a basis in accordance
with generally accepted accounting principles, approximately six months after
establishment. Typically, acquired stores are profitable upon acquisition.
There can be no assurance that the Company will be able to successfully
finance acquisitions or manage a larger operation. See "Management's
Discussion and Analysis of Financial Condition and Results of Operations" and
"Business - Business Strategy."

Availability of Attractive Acquisitions

The Company competes for acquisitions with other publicly held pawnshop
companies, some of which have greater financial resources than the Company. As
of the date of this Prospectus, the Company is not evaluating any material
acquisitions. This competition could limit the availability of acquisition
candidates and increase the cost of acquisitions. See "Management's
Discussion and Analysis of Financial Condition and Results of Operations -
Liquidity and Capital Resources."

Statutory Requirements

The Company's ability to open new stores in Texas counties having a
population of more than 250,000 may be adversely affected by a law which
requires a finding of public need and probable profitability by the Texas
Consumer Credit Commissioner as a condition to the issuance or activation of
any new pawnshop license. In addition, the present statutory and regulatory
environment of some states renders expansion into those states impractical.
For example, certain states require public sale of forfeited collateral or do
not permit service charges sufficient to make pawnshop operations profitable.

Access to Capital

The Company's need for expansion capital and its ability to obtain
secured financing is complicated by the requirement in some states that it
maintain a minimum amount of certain unencumbered net assets (currently
$150,000 in Texas and $25,000 in Oklahoma) for each pawnshop location. The
ability of the Company to continue to expand through acquisitions and new
store openings is limited by access to capital.

Availability of Qualified Store Management Personnel

The Company's ability to expand may also be limited by the availability
of qualified store management personnel. While the Company seeks to train
existing qualified personnel for management positions and to create attractive
compensation packages to retain existing management personnel, there can be no
assurance that sufficient qualified personnel will be available to satisfy the
Company's needs with respect to its planned expansion.

Dependence on Key Personnel
- ---------------------------

The success of the Company is dependent upon, among other things, the
services of Phillip E. Powell, chief executive officer. The Company has
entered into an employment agreement with Mr. Powell. The loss of the
services of Mr. Powell could have a material adverse effect on the Company.
As of the date of this Prospectus, the Company has not obtained a "key-man"
life insurance policy on Mr. Powell. See "Management - Employment
Agreements."

Limited Operating History
- -------------------------

While many of the stores owned by the Company have been acquired as
operating businesses, the Company was incorporated in July 1988, and,
consequently, is subject to the uncertainties and risks associated with newly
established businesses. There can be no assurance that acquired operations
will continue to operate as efficiently as they have in the past. Moreover,
there can be no assurance that the Company will be profitable in future
periods or that it will be able to successfully manage a substantially larger
operation.

Governmental Regulation
- -----------------------

The Company's pawnshop operations are subject to, and must comply with,
extensive regulation, supervision and licensing under various federal, state
and local statutes, ordinances and regulations. These statutes prescribe,
among other things, service charges a pawnshop may charge for lending money
and the rules of conduct that govern an entity's ability to maintain a
pawnshop license. With respect to firearm and ammunition sales, a pawnshop
must comply with the regulations promulgated by the Federal Bureau of Alcohol,
Tobacco and Firearms, a division of the Department of the Treasury ("ATF").
State regulatory agencies have broad, discretionary authority to refuse to
grant a license or to suspend or revoke any or all existing licenses of
licensees under common control if it is determined that any such licensee has
violated any law or regulation or that the management of any such licensee is
not suitable to operate pawnshops. In addition, there can be no assurance
that additional state or federal statutes or regulations will not be enacted
at some future date which could inhibit the ability of the Company to expand,
significantly decrease the service charges for lending money, or prohibit or
more stringently regulate the sale of certain goods, such as firearms, any of
which could significantly adversely affect the Company's prospects. See
"Business-Regulation."

Competition
- -----------

The Company encounters significant competition in connection with the
operation of its business. In connection with lending operations, the Company
competes with other pawnshops (owned by individuals and by large operators)
and certain financial institutions, such as consumer finance companies, which
generally lend on an unsecured as well as on a secured basis. The Company's
competitors in connection with its retail sales include numerous retail and
discount stores. Many competitors have greater financial resources than the
Company. These competitive conditions may adversely affect the Company's
revenues, profitability and ability to expand. See "Business - Competition."

Risks Related to Firearm Sales
- ------------------------------

The Company regularly engages in sales of firearms, leaving it open to
the risk of lawsuits from persons who may claim injury as a result of an
improper sale. No such claims have been asserted against the Company as of
the date hereof. The Company does not maintain insurance covering potential
risks related to the sale of firearms. While there is federal and state gun
control legislation under consideration, management does not believe such
legislation will have a material adverse effect upon the Company's business.

Risks Related to Rightful Owner Claims
- --------------------------------------

In connection with pawnshops operated by the Company, there is the risk
that acquired merchandise may be subject to claims of rightful owners.
Historically, the Company has not found these claims to have a material
adverse effect on results of operations, and, accordingly, the Company does
not maintain insurance to cover the costs of returning merchandise to its
rightful owners. The Company requires each customer obtaining a loan to
provide appropriate identification.

Shares Reserved for Issuance
- ----------------------------

The Company has 5,534,038 shares of Common Stock reserved for issuance
upon the exercise of the Options, Warrants, other outstanding warrants, and
conversion of the Convertible Debentures, with exercise and conversion prices
varying from $4.00 to $15.00 per share, and with varying exercise periods
extending to June 1, 2004. The Company is registering under the Securities
Act the issuance of an aggregate of 3,602,788 of these shares of Common Stock.
The exercise, as well as the conversion, of these securities, could have a
dilutive effect and could adversely affect the prevailing market price of the
Common Stock. See "Management - Stock Options and Warrants," "- Certain
Transactions," "Description of Capital Stock - Convertible Debentures," and "-
Other Warrants."

USE OF PROCEEDS
---------------

In the event that shares of Common Stock, the issuance of which are being
registered under the Securities Act hereunder, are issued upon exercise of all
of the Warrants and Options described herein, the Company will receive as
gross proceeds a maximum of $6,678,249, prior to deducting estimated expenses
incurred by the Company in the amount of approximately $18,500. The Company
will use any such proceeds for general working capital. As there are no
commitments from the holders of the Warrants or Options to so exercise such
securities and purchase Common Stock, there can be no assurance that any such
Options or Warrants will be exercised. The Company will not receive any cash
proceeds upon any conversion of the Convertible Debentures into Common Stock.
However, such conversion would result in the discharge of up to $9,900,000 in
long-term indebtedness, net of $100,000 which was converted in October 1996,
bearing interest at rates ranging from 7% to 10% per annum. The Company will
not pay any brokerage fees in connection with the offering. See "Plan of
Distribution and Selling Stockholders."

PRICE RANGE OF COMMON STOCK
---------------------------

The Company's Common Stock is traded in the over-the-counter market and
is quoted on the Nasdaq Stock Market under the symbol "PAWN". The following
table sets forth the quarterly high and low last sales prices per share for
the Common Stock, as reported by the Nasdaq Stock Market.

<TABLE>
Common Stock
Price Range
------------
High Low
---- ---
<S> <C> <C>
1995
First Quarter....................... $ 4.13 $ 3.50
Second Quarter...................... 4.00 3.38
Third Quarter....................... 4.00 3.00
Fourth Quarter...................... 3.75 3.00
1996
First Quarter....................... $ 4.63 $ 3.13
Second Quarter...................... 4.25 3.63
Third Quarter....................... 6.25 3.63
Fourth Quarter...................... 6.38 4.63

</TABLE>

On November 18, 1996, the last sales price for the Common Stock as
reported by Nasdaq Stock Market was $5.50 per share. On November 15, 1996,
there were approximately 86 stockholders of record of the Common Stock.

DIVIDEND POLICY
---------------

No cash dividends have been paid by the Company on the Common Stock, and
the Company does not currently intend to pay cash dividends on the Common
Stock. The current policy of the Company's Board of Directors is to retain
earnings, if any, and to provide funds for operation and expansion of the
Company's business. Such policy will be reviewed by the Board of Directors of
the Company from time to time in light of, among other things, the Company's
earnings and financial position and limitations imposed by outstanding
indebtedness. Pursuant to the terms of its line of credit with its Credit
Facility, the Company is prohibited from paying any dividends.

CAPITALIZATION
--------------

The following table sets forth the capitalization of the Company as of
July 31, 1996.

<TABLE>
Actual As Adjusted(2)(3)(4)(5)
------ -----------
(amounts in thousands)
<S> <C> <C>
Short-term debt(1).................. $ 611 $ 611
======== ========
Long-term liabilities............... $ 28,655 $ 18,655
-------- --------
Stockholders' equity:
Preferred stock, $.01 par value;
10,000,000 shares authorized;
no shares issued or outstanding... - -
Common stock, $.01 per value;
20,000,000 shares authorized;
3,697,500 and 7,321,909 shares
outstanding, respectively......... 42 78
Additional paid-in capital......... 17,611 34,253
Retained earnings.................. 5,195 5,195
Treasury stock, at cost,
470,959 shares.................... (2,265) (2,265)
-------- --------
Total stockholders' equity........ 20,583 37,261
-------- --------
Total capitalization................ $ 49,238 $ 55,916
======== ========
</TABLE>

(1) Includes the current portion of long-term debt and notes payable. See
Notes 7, 8 and 9 of Notes to Consolidated Financial Statements for information
concerning the Company's debt financing arrangements.
(2) Assumes the reduction of long-term liabilities and increase in
stockholders' equity due to the conversion of $9,900,000 of convertible
debentures, net of $100,000 which was converted in October 1996. However, due
in part to the recent market price range of the Company's common stock, there
can be no assurance that any such conversion will occur.
(3) Assumes issuance of (i) 192,625 shares issuable upon exercise of Options,
(ii) 1,310,162 shares issuable upon exercise of the Warrants, and (iii)
2,100,001 shares issuable upon the conversion of Convertible Debentures; the
issuance of all these shares is being registered under the Securities Act.
However, considering the recent market price range of the Company's Common
Stock, there can be no assurance that any such options or warrants will be
exercised.
(4) Includes the conversion of $100,000 of Convertible Debentures, which were
converted in October 1996.
(5) Does not include 1,908,250 shares issuable upon exercise of outstanding
warrants and 23,000 shares issuable upon exercise of outstanding options, of
which the issuance is not being registered under the Securities Act.

SELECTED FINANCIAL INFORMATION
------------------------------

The following table sets forth selected historical consolidated financial
data as of and for the five years ended July 31, 1996. The information below
should be read in conjunction with "Management's Discussion and Analysis of
Financial Condition and Results of Operations" and the Company's Consolidated
Financial Statements and related Notes thereto included elsewhere in this
Prospectus. All amounts shown are in thousands, except per share amounts and
certain operating data.

<TABLE>
Year Ended July 31,
1996 1995 1994 1993 1992
---- ---- ---- ---- ----
(in thousands, except per share amounts and
certain operating data)
<S> <C> <C> <C> <C> <C>
Income Statement Data:
Revenues:
Merchandise sales................ $ 24,823 $ 20,709 $ 12,174 $ 9,445 $ 5,340
Pawn service charges............. 13,149 11,298 8,279 6,251 3,359
Other............................ 51 177 130 131 107
-------- -------- -------- -------- --------
38,023 32,184 20,583 15,827 8,806
-------- -------- -------- -------- --------
Cost of goods sold and expenses:
Cost of goods sold............... 16,714 13,648 8,258 6,012 3,280
Operating expenses............... 12,573 10,678 7,356 5,656 3,040
Interest expense................. 2,124 2,116 819 434 404
Depreciation..................... 540 506 361 314 153
Amortization..................... 565 531 377 322 140
Administrative expenses.......... 3,150 3,013 1,815 1,188 603
-------- -------- -------- -------- --------
35,666 30,492 18,986 13,926 7,620
-------- -------- -------- -------- --------
Income before income taxes......... 2,357 1,692 1,597 1,901 1,186
Provision for income taxes......... 917 592 462 784 486
-------- -------- -------- -------- --------
Net income......................... 1,440 1,100 1,135 1,117 700
Dividends on preferred stock....... - - 120 124 -
-------- -------- -------- -------- --------
Net income attributable to
common stockholders.............. $ 1,440 $ 1,100 $ 1,015 $ 993 $ 700
======== ======== ======== ======== ========
Net income per common share
available to common stockholders.. $ .39 $ .30 $ .27 $ .30 $ .39
Weighted average common
shares outstanding............... 3,669 3,719 3,792 3,358 1,809
Operating Data:
Locations in operation:
Beginning of the period.......... 43 36 26 23 8
Acquisitions..................... 7 5 10 3 13
Opened........................... 1 2 2 - 2
Sold............................. - - (1) - -
Consolidated..................... (1) - (1) - -
--- --- --- --- ---
End of the period................ 50 43 36 26 23
=== === === === ===
Pawn loans......................... $ 11,701 $ 9,158 $ 7,320 $ 5,048 $ 4,021
Average loan balance per store..... $ 234 $ 213 $ 203 $ 194 $ 175
Redemption rate.................... 70% 71% 73% 73% 70%
Average inventory per store........ $ 175 $ 178 $ 167 $ 162 $ 125
Annualized inventory turnover...... 2.1x 2.0x 1.6x 1.8x 1.7x
Gross profit percentage on
merchandise sales................ 32.7% 34.1% 32.2% 36.3% 38.6%

Balance Sheet Data:
Working capital (deficit).......... $ 21,098 $ 17,027 $ 14,159 $ 3,966 $ (4,856)
Total assets....................... 51,945 43,755 37,814 27,025 22,189
Long-term liabilities.............. 28,655 22,964 18,657 392 212
Total liabilities.................. 31,362 24,808 19,804 7,278 14,508
Series A preferred stock........... - - - 2,000 -
Stockholders' equity............... 20,583 18,947 18,010 17,747 7,681

</TABLE>

(1) Comparability is affected by the net addition of 7, 7, 10, 3 and 15
stores for the fiscal years ended July 31, 1996, 1995, 1994, 1993 and 1992,
respectively, net of stores sold or consolidated. See "Recent Developments"
and Note 3 to the Notes to Consolidated Financial Statements.

MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
------------------------------------------------

General
- -------

The Company's revenues are derived primarily from service charges on pawn
loans and the sale of unredeemed goods, or "merchandise sales". Loans are
made for a 30-day term with an automatic extension of 60 days in Texas, 30
days in Oklahoma and 15 days in Maryland. Loans made in Washington, D.C. are
made for a 120-day term with no automatic extension. All loans are
collateralized by tangible personal property placed in the custody of the
Company. The annualized service charge rates on the loans are set by state
laws and range between 12% and 240% in Texas and 36% and 240% in Oklahoma,
depending on the size of the loan. Service charge rates are 144% to 240% on
an annualized basis in Maryland, with a $6 monthly minimum charge. In
Washington, D.C., loans up to $40 bear a flat $5 charge per month, while loans
over $40 bear a 60% annualized rate. In its Texas stores, the Company
recognizes service charges at the inception of the loan at the lesser of the
amount allowed by the state law for the initial 30-day term or $15, in
accordance with state law. In Oklahoma, Maryland and Washington, D.C., the
Company recognizes service charges at the inception of the loan at the amount
allowed by law for the first 30 days. Pawn service charge income applicable
to the remaining term and/or extension period is not recognized until the loan
is repaid or renewed. If a loan is not repaid prior to the expiration of the
automatic extension period, if applicable, the property is forfeited to the
Company and held for resale.

As a result of the Company's policy of accruing pawn service charges only
for the initial 30-day term, unredeemed merchandise is transferred to
inventory at a value equal to the loan principal plus one-month's accrued
interest. The Company's accounting policy defers recognition of an amount of
income equal to the amount of pawn service charges relating to the extension
period until the loan is repaid or renewed, or until the merchandise is
resold. As a result of this policy, the Company's annualized loan yield is
lower than certain of its publicly traded competitors. Conversely, this
revenue recognition policy results in inventory being recorded at a lower
value, which results in realization of a larger gross profit margin on
merchandise sales than would be realized by certain of the Company's publicly
traded competitors. This policy, in the Company's opinion, lessens the risk
that the inventory's cost will exceed its realizable value when sold.
However, if the pawn loan is repaid or renewed, or if the forfeited
merchandise is resold, the amount of income which would be recognized by the
Company or certain of its publicly traded competitors would be the same over
time.

Although the Company has had significant increases in revenues due
primarily to acquisitions and secondarily to new store openings, the Company
has also incurred increases in operating expenses attributable to the
additional stores and increases in administrative expenses attributable to
building a management team and the support personnel required by the Company's
growth. Operating expenses consist of all items directly related to the
operation of the Company's stores, including salaries and related payroll
costs, rent, utilities, equipment depreciation, advertising, property taxes,
licenses, supplies and security. Administrative expenses consist of items
relating to the operation of the corporate office, including the salaries of
corporate officers, area supervisors and other management, accounting and
administrative costs, liability and casualty insurance, outside legal and
accounting fees and stockholder-related expenses.

Presented below are selected consolidated data for the Company for the
three years ended July 31, 1996. The following table, as well as the
discussion following, should be read in conjunction with Selected Financial
Information and the Consolidated Financial Statements and notes thereto of the
Company.

<TABLE>
Year Ended July 31,
1996 1995 1994
---- ---- ----
<S> <C> <C> <C>
Income statement items as a
percent of total revenues:
Revenues:
Merchandise sales.................. 65.3% 64.3% 59.1%
Pawn service charges............... 34.6 35.1 40.2
Other.............................. .1 .6 .6
Expenses:
Operating expenses................. 33.1 33.2 35.7
Interest expense................... 5.6 6.6 4.0
Depreciation....................... 1.4 1.6 1.8
Amortization....................... 1.5 1.6 1.8
Administrative expenses............ 8.3 9.4 8.8
Gross profit as a percent of
merchandise sales................... 32.7 34.1 32.2
</TABLE>

Results of Operations
- ---------------------

Fiscal 1996 Compared to Fiscal 1995

Total revenues increased 18% to $38,023,000 for the fiscal year ended
July 31, 1996 ("Fiscal 1996") as compared to $32,184,000 for the fiscal year
ended July 31, 1995 ("Fiscal 1995"). The change resulted from an increase in
revenues of $2,433,000 generated by the 14 stores which were opened or
acquired during Fiscal 1995 and Fiscal 1996 and an increase of $4,119,000 at
the 36 stores which were in operation during all of Fiscal 1995 and Fiscal
1996. These increases were offset by a $713,000 decrease resulting from the
consolidation of a store into an existing store subsequent to August 1, 1995.
Of the $5,839,000 increase in total revenues, 70%, or $4,114,000, was
attributable to increased merchandise sales, 32%, or $1,851,000 was
attributable to increased pawn service charges, and the remaining decrease of
$126,000, or 2% was attributable to the decrease in other income. As a
percentage of total revenues, merchandise sales increased from 64.3% to 65.3%
during Fiscal 1996 as compared to Fiscal 1995, while pawn service charges
declined from 35.1% to 34.6%.

The aggregate loan balance increased 28% from $9,158,000 at July 31, 1995
to $11,701,000 at July 31, 1996. Of the $2,543,000 increase, $1,641,000 was
attributable to growth at the 42 stores in operation at July 31, 1996 and July
31, 1995, while $902,000 was attributable to the addition of 8 stores during
Fiscal 1996, net of one store consolidated.

Gross profit as a percentage of merchandise sales decreased from 34.1%
during Fiscal 1995 to 32.7% during Fiscal 1996. This decrease in the
Company's gross profit margin was primarily the result of increased jewelry
scrap sales during Fiscal 1996, which generally yield a significantly lower
margin than the Company's regular retail sales, but improve the Company's
liquidity.

Operating expenses increased 18% to $12,573,000 during Fiscal 1996
compared to $10,678,000 during Fiscal 1995, primarily as a result of the
addition of 14 stores (net) in Fiscal 1995 and Fiscal 1996, and the addition
of personnel viewed as necessary to support the increased number of store
level transactions. Administrative expenses increased 5% to $3,150,000 during
Fiscal 1996 compared to $3,013,000 during Fiscal 1995 due primarily to the
addition of personnel to supervise store operations. Interest expense
increased to $2,124,000 in Fiscal 1996 compared to $2,116,000 in Fiscal 1995
as a result of borrowings associated with expansion of the Company's store
base.

For Fiscal 1996 and 1995, the Company's effective federal income tax
rates of 39% and 35%, respectively, differed from the statutory tax rate of
34% primarily as a result of state income taxes and amortization of non
deductible intangible assets.

Fiscal 1995 Compared to Fiscal 1994

Total revenues increased 56% to $32,184,000 for the fiscal year ended
July 31, 1995 ("Fiscal 1995") as compared to $20,583,000 for the fiscal year
ended July 31, 1994 ("Fiscal 1994"). The change resulted from an increase in
revenues of $10,727,000 generated by the 19 stores which were opened or
acquired during Fiscal 1994 and Fiscal 1995 and an increase of $1,199,000 at
the 24 stores which were in operation during all of Fiscal 1994 and Fiscal
1995. These increases were offset by a $325,000 decrease resulting from the
sale of one store and the consolidation of a store into an existing store
subsequent to August 1, 1993. Of the $11,601,000 increase in total revenues,
74%, or $8,535,000, was attributable to increased merchandise sales, 26%, or
$3,019,000, was attributable to increased pawn service charges, and the
remaining increase of $47,000 was attributable to the increase in other
income. As a percentage of total revenues, merchandise sales increased from
59.1% to 64.3% during Fiscal 1995 as compared to Fiscal 1994 primarily due to
increased inventory turnover, while pawn service charges declined from 40.2%
to 35.1%, primarily due to lower service charge rates in the Company's
Maryland and Washington, D.C. stores.

The aggregate loan balance increased 25% from $7,320,000 at July 31, 1994
to $9,158,000 at July 31, 1995. Of the $1,838,000 increase, $574,000 was
attributable to growth at the 36 stores in operation at July 31, 1994, and
$1,264,000 was attributable to the addition of 7 stores during Fiscal 1995.

Gross profit as a percentage of merchandise sales increased from 32.2%
during Fiscal 1994 to 34.1% during Fiscal 1995. This increase in the
Company's gross profit margin was primarily the result of lower loan to value
ratios in the Company's Mid-Atlantic division, which results in lower
inventory costs and higher margins in that market.

Operating expenses increased 45% to $10,678,000 during Fiscal 1995
compared to $7,356,000 during Fiscal 1994, primarily as a result of the
addition of 17 stores (net) in Fiscal 1994 and Fiscal 1995, additional
personnel viewed as necessary to transact the increased number of store level
transactions, and the conversion of the Company's store computer system.
Administrative expenses increased 66% to $3,013,000 during Fiscal 1995
compared to $1,815,000 during Fiscal 1994 due to the addition of personnel to
direct the store operations, increases in the Company's internal audit staff,
an increase in the Company's liability insurance expense, and an increase in
investor relations costs in an effort to improve the Company's profile in the
investment community. Interest expense increased to $2,116,000 in Fiscal 1995
compared to $819,000 in Fiscal 1994 as a result of borrowings associated with
expansion of the Company's store base.

For Fiscal 1995, the Company's effective federal income tax rate of 35%
differed from the statutory tax rate of 34% primarily as a result of state
income taxes. The Fiscal 1994 effective tax rate of 29% differed from the
statutory tax rate of 34% due to the cumulative financial statement impact in
the amount of $131,000, which represents the tax effect of the Fiscal 1992 and
1993 amortization of intangible assets that had previously been nondeductible
for income tax purposes, but which is now deductible as a result of the tax
law change.

Liquidity and Capital Resources
- -------------------------------

The Company's operations and acquisitions during the past three years
have been financed with funds generated from operations, bank borrowings,
seller-financed indebtedness and the private placement of convertible
debentures in April and May of 1994.

The Company maintains a $20,000,000 long-term line of credit with Bank
One, Texas, NA (the "Credit Facility"). The Credit Facility bears interest
between the bank's prime lending rate and the bank's prime lending rate minus
one-half of one percent, and matures in December 1998. The Credit Facility
allows the Company to borrow funds based upon 80% of loans and service charges
receivable and 60% of inventory of the Company. As of July 31, 1996,
$14,550,000 was drawn under this Credit Facility and an additional $1,501,000
was available to the Company pursuant to the available borrowing base. The
Credit Facility requires that interest be paid monthly with the principal due
upon maturity. It is secured by substantially all of the Company's assets.
Under the terms of the Credit Facility, the Company is required to maintain
certain financial ratios and comply with certain technical covenants. The
Company was in compliance with these requirements and covenants during Fiscal
1996 and as of November 19, 1996.

In May 1996, the Company acquired three pawnshops in Baltimore, Maryland
in an asset purchase including fixed assets, layaways and pawn loans from an
unaffiliated corporation which is wholly-owned by a former employee of the
Company, for an aggregate purchase price of $2,446,000 consisting of
$2,400,000 cash paid to the seller, and legal, consulting and other fees of
$46,000. In June 1996, the Company acquired three additional pawnshops in
Baltimore, Maryland in an asset purchase including fixed assets, layaways,
pawn loans and inventory from an unaffiliated corporation for an aggregate
cash purchase price of $1,662,000 consisting of $1,590,000 paid to the seller,
and legal, consulting and other fees of $72,000. The Company financed
substantially all of the cash purchase price for both of these acquisitions
through its credit facility. The purchase price for these acquisitions was
determined based upon the volume of annual loan and sales transactions,
outstanding loan balances, inventory on hand, and location and condition of
the facilities.

As of July 31, 1996, the Company's primary sources of liquidity were
$680,000 in cash and cash equivalents, $1,783,000 in service charge
receivables, $11,701,000 in loans, $8,772,000 in inventories and $1,501,000 of
available and unused funds under the Company's Credit Facility. The Company
had working capital as of July 31, 1996 of $21,098,000 and a liabilities to
equity ratio of 1.5 to 1.

Net cash provided by operating activities of the Company during Fiscal
1996 was $1,952,000, consisting primarily of net income before non-cash
depreciation and amortization of $2,545,000, less cash used to fund the
increase of balance sheet items of $593,000. Net cash used for investing
activities during Fiscal 1996 was $7,258,000, which was comprised of cash used
for increasing pawn loans of $1,606,000, and cash paid for acquisitions and
other fixed asset additions of $5,652,000 during Fiscal 1996. Net cash
provided by financing activities was $5,720,000 during Fiscal 1996, which
consisted of net increases in the Company's debt of $5,524,000, supplemented
by cash provided from the exercise of stock options and warrants of $196,000.

The profitability and liquidity of the Company is affected by the amount
of loans outstanding, which is controlled in part by the Company's loan
decisions. The Company is able to influence the frequency of forfeiture of
collateral by increasing or decreasing the amount loaned in relation to the
resale value of the pledged property. Tighter credit decisions generally
result in smaller loans in relation to the estimated resale value of the
pledged property and can thereby decrease the Company's aggregate loan balance
and, consequently, decrease pawn service charges. Additionally, small loans
in relation to the pledged property's estimated resale value tends to increase
loan redemptions and improve the Company's liquidity. Conversely, providing
larger loans in relation to the estimated resale value of the pledged property
can result in an increase in the Company's pawn service charge income. Also
larger average loan balances can result in an increase in loan forfeitures,
which increases the quantity of goods on hand and, unless the Company
increases inventory turnover, reduces the Company's liquidity. In each of the
Company's last three fiscal years, at least 70% of the amounts loaned were
either paid in full or renewed, and it is management's current intent to
maintain this ratio. The Company's renewal policy allows customers to renew
pawn loans by repaying all accrued interest on such pawn loans, effectively
creating a new loan transaction. In addition to these factors, the Company's
liquidity is affected by merchandise sales and the pace of store expansions.

Management believes that the Credit Facility, current assets and cash
generated from operations will be sufficient to accommodate the Company's
current operations for fiscal 1997. The Company has no significant capital
commitments as of November 19, 1996. The Company currently has no written
commitments for additional borrowings or future acquisitions; however, the
Company intends to continue to grow and will likely seek additional capital to
facilitate expansion. The Company will evaluate acquisitions, if any, based
upon opportunities, acceptable financing, purchase price, strategic fit and
qualified management personnel.

The Company currently intends to continue to engage in a plan of
expansion through existing store acquisitions and new store openings. While
the Company continually looks for, and is presented with, potential
acquisition candidates, the Company has no definitive plans or commitments for
further acquisitions. The Company has no immediate plans to open any other new
stores. If the Company encounters an attractive opportunity to acquire or
open a new store in the near future, the Company will seek additional
financing, the terms of which will be negotiated on a case-by-case basis. In
September and October 1996, the Company acquired four individual stores in its
Mid-Atlantic division. These acquisitions were financed with proceeds from
the Company's Credit Facility and acquisition term notes provided by the
Company's primary lender.

Forward Looking Information
- ---------------------------

Certain portions of this report contain forward-looking statements,
particularly the portion captioned "Liquidity and Capital Resources" contained
herein. Factors such as changes in regional or national economic or
competitive conditions, changes in government regulations, changes in
regulations governing pawn service charges, unforeseen litigation, changes in
interest rates or tax rates, future business decisions and other uncertainties
may cause results to differ materially from those anticipated by some of the
statements made in this report. Such factors are difficult to predict and
many are beyond the control of the Company.

Inflation
- ---------

The Company does not believe that inflation has had a material effect on
the amount of loans made or unredeemed goods sold by the Company or its
results of operation.

Seasonality
- -----------

The Company's retail business is seasonal in nature with its highest
volume of sales of unredeemed goods occurring during the second fiscal quarter
of each year and its lowest volume of sales of unredeemed goods occurring
during the first fiscal quarter of each year. The Company's lending
activities are not seasonal in nature.

BUSINESS
--------
General
- -------

Industry
- --------

The pawnshop industry in the United States is a growing industry, with
the highest concentration being in the Southeast and Southwest. The operation
of pawnshops is governed primarily by state laws, and accordingly, states that
maintain pawn laws most conducive to profitable operations have historically
seen the greatest development of pawnshops. The Company believes that the
majority of pawnshops are owned by individuals operating one to three
locations. Management further believes that the highly fragmented nature of
the industry is due among other factors to the lack of qualified management
personnel, the difficulty of developing adequate financial controls and
reporting systems, and the lack of financial resources.

In recent years, several operators have begun to develop multi-unit
chains through acquisitions and new store openings. As of November 19, 1996,
the four publicly traded pawnshop companies operated approximately 650 stores
in the United States. Accordingly, management believes that the industry is
in the early stages of consolidation.

Business Strategy
- -----------------

The Company's business plan is to continue a growth strategy of expansion
through selected acquisitions and new store openings and to enhance operating
efficiencies and productivity at both newly acquired and existing stores.

Acquisitions and New Store Openings

Because of the highly fragmented nature of the pawnshop industry and the
availability of "mom & pop" sole proprietor pawnshops willing to sell their
stores, the Company believes that acquisition opportunities as well as
favorable new store locations exist. Therefore, the Company intends to expand
through a combination of acquisitions and start-up stores.

The timing of any future acquisitions is based on identifying suitable
stores and purchasing them on terms that are viewed as favorable to the
Company. Before making an acquisition, management typically studies a
demographic analysis of the surrounding area, considers the number and size of
competing stores, and researches regulatory issues. Specific store
acquisition criteria include an evaluation of the volume of annual loan
transactions, outstanding loan balances, historical redemption rates, the
quality and quantity of inventory on hand, management expertise, and location
and condition of the facility, including lease terms.

The Company has opened nine new stores since its inception and currently
intends to open additional stores in locations where management believes
appropriate demand and other favorable conditions exist. Management seeks to
locate new stores where demographics are favorable and competition is limited.
It is the Company's experience that after a suitable location has been
identified and a lease and licenses are obtained, a new store can be ready for
business within six weeks. The investment required to open a new store
includes inventory, funds available for pawn loans, store fixtures, security
systems, and a computer system. Although the total investment varies and is
difficult to predict for each location, it has been the Company's experience
that between $150,000 and $200,000 is required to fund a new store for the
first six months of operation. Because existing stores already have an
established customer base, loan portfolio, and retail-sales business,
acquisitions generally contribute more quickly to revenues than do start-up
stores.

Store Clusters

Whether acquiring an existing store or opening a new store, the Company
seeks to establish clusters of several stores in a specific geographic area in
order to achieve certain economies of scale relative to supervision,
purchasing and marketing. In Texas, such clusters have been established in
the Dallas/Fort Worth metroplex, the Rio Grande Valley and the Corpus Christi
areas. Store clusters have also been established in the Oklahoma City,
Oklahoma area, Washington D.C. and its surrounding suburbs, and in Baltimore,
Maryland. The Company currently plans to continue its expansion in existing
markets in Texas and Maryland, and to enter new markets in other states with
favorable demographics and regulatory environments.

Enhance Productivity of Existing and Acquired Stores

The primary factors affecting the profitability of the Company's existing
store base are the level of loans outstanding, the volume of retail sales and
gross profit on retail sales, and the control of store expenses. To increase
customer traffic, which management believes is a key determinant to increasing
its stores' profitability, the Company has taken several steps to distinguish
its stores from traditional pawnshops and to make customers feel more
comfortable with the pawn-shopping experience. In addition to well-lit
parking facilities, several of the stores' exteriors display an attractive and
distinctive blue and yellow awning similar to those used by contemporary
convenience and video rental stores. The Company also has upgraded or
refurbished the interior of certain of its stores and improved merchandise
presentation by categorizing items into departments, improving the lighting
and installing better in-store signage.

Operating Controls

The Company has an organizational structure that it believes is capable
of supporting a larger, multi-state store base. Moreover, the Company has
installed an employee training program for both store and corporate-level
personnel that stresses productivity and professionalism. Each store is
computerized, and the Company has strengthened its operating and financial
controls by increasing its internal audit staff as well as the frequency of
store audit visits. Management believes that the current operating and
financial controls and systems are adequate for the Company's existing store
base and can accommodate reasonably foreseeable growth in the near-term.

Lending Activities
- ------------------

The Company loans money against the security of pledged goods. The
pledged goods are tangible personal property generally consisting of jewelry,
electronic equipment, tools, firearms, sporting goods and musical equipment.
The pledged goods provide security to the Company for the repayment of the
loan, as pawn loans cannot be made with personal liability to the borrower.
Therefore, the Company does not investigate the creditworthiness of the
borrower, relying instead on the marketability and sale value of pledged goods
as a basis for its credit decision. The Company contracts for a pawn service
charge in lieu of interest to compensate it for the loan. The statutory
service charges on loans at its Texas stores range from 12% to 240% on an
annualized basis depending on the size of the loan, and from 36% to 240% on an
annualized basis at the Company's Oklahoma stores. Loans made in the Maryland
stores bear service charges of 144% to 240% on an annualized basis. In
Washington, D.C., a flat $5 charge per month applies to all loans of up to
$40, and a 60% annualized service charge applies to loans of greater than $40.
As of July 31, 1996, the Company's average loan per pawn ticket was
approximately $77. Pawn service charges during fiscal 1996, 1995 and 1994
accounted for approximately 62%, 61% and 67%, respectively, of the Company's
total revenues (net of cost of goods sold).

At the time a pawn transaction is entered into, a pawn loan agreement,
commonly referred to as a pawn ticket, is delivered to the borrower that sets
forth, among other items, the name and address of the pawnshop, borrower's
name, borrower's identification number from his/her driver's license or other
identification, date, identification and description of the pledged goods,
including applicable serial numbers, amount financed, pawn service charge,
maturity date, total amount that must be paid to redeem the pledged goods on
the maturity date, and the annual percentage rate.

The amount the Company is willing to finance typically is based on a
percentage of the estimated sale value of the collateral. There are no
minimum or maximum loan to fair market value restrictions in connection with
the Company's lending activities. The basis for the Company's determination
of the sale value include such sources as catalogs, blue books, newspapers and
previously made similar pawn loan transactions. These sources, together with
the employees' experience in selling similar items of merchandise in
particular stores, influence the determination of the estimated sale value of
such items. The Company does not utilize a standard or mandated percentage of
estimated sale value in determining the amount to be financed. Rather, the
employee has the authority to set the percentage for a particular item and to
determine the ratio of loan amount to estimated sale value with the
expectation that, if the item is forfeited to the pawnshop, its subsequent
sale should yield a gross profit margin consistent with the Company's
historical experience. It is the Company's policy to value merchandise on a
conservative basis to avoid the risks associated with over-valuation. The
pledged property is held through the term of the loan, which is 30 days in
Texas, Oklahoma and Maryland, with an automatic extension period of 15 to 60
days depending on state laws, unless the loan is earlier paid or renewed. In
Washington, D.C., pledged property is held through the term of the loan which
is 120 days. Historically, approximately 70% of loans made have either been
paid in full or renewed. In the event the borrower does not pay or renew a
loan within 90 days in Texas, 60 days in Oklahoma, 45 days in Maryland and 120
days in Washington, D.C., the unredeemed collateral is forfeited to the
Company and becomes inventory available for general liquidation or sale in one
of the Company's stores. The Company does not record loan losses or charge
offs because if the loan is not paid, the principal amount loaned plus the 30
days of accrued pawn service charges becomes the carrying cost of the
forfeited collateral ("inventory") that is recovered by sale.

The recovery of the principal and accrued pawn service charge as well as
realization of gross profit on sales of inventory is dependent on the
Company's initial assessment of the property's estimated sale value. Improper
assessment of the sale value of the collateral in the lending function can
result in reduced marketability of the property and sale of the property for
an amount less than the principal plus accrued pawn service charge. For
fiscal 1996, 1995 and 1994, the Company's annualized yield on average loan
balance was 137%, 137% and 141%, respectively.

Retail Activities
- -----------------

The Company acquires merchandise inventory primarily through forfeited
pawn loans and purchases of used goods from the general public, and to a
lesser extent, purchases of new goods from vendors. New goods consist
primarily of merchandise which complements certain product lines, such as
jewelry and tools. Sales of inventory during fiscal 1996, 1995 and 1994
accounted for approximately 65.3%, 64.3% and 59.1%, respectively, of the
Company's total revenues for these periods. For fiscal 1996, 1995 and 1994,
the Company realized gross profit margins on merchandise sales of 32.7%, 34.1%
and 32.2%, respectively.

By operating multiple stores, the Company is able to transfer inventory
between stores to best meet consumer demand. The Company has established the
necessary internal financial controls to implement such inter-store transfers.

Merchandise acquired by the Company through defaulted pawn loans is
carried in inventory at the amount of the related pawn loan plus service
charges accrued for the initial 30-day term. Management believes that this
practice lessens the likelihood that the Company will incur significant,
unexpected inventory devaluations.

The Company does not provide financing to purchasers of its merchandise
nor does it give the prospective buyer any warranties on the merchandise
purchased. Nevertheless, the Company may, at its discretion, refund purchases
if merchandise is returned because it was damaged or not in good working order
when purchased. The Company permits its customers to purchase inventory on a
"layaway" plan. Should the customer fail to make a required payment, the item
is returned to inventory and previous payments are forfeited to the Company.

Pawnshop Operations
- -------------------

The typical Company store is a free-standing building or part of a small
retail strip shopping center with adequate, well-lit parking. Management has
established a standard store design intended to distinguish the Company's
stores from the competition. The design consists of a well-illuminated
exterior with a distinctive blue and yellow awning and a layout similar to a
contemporary convenience store or video rental store. The Company's stores
are typically open six to seven days a week from 9:00 a.m. to between 6:00
p.m. and 9:00 p.m.

The Company's recently upgraded computer system permits a store manager
or clerk to recall rapidly the cost of an item in inventory, the date it was
purchased as well as the prior transaction history of a particular customer.
It also facilitates the timely valuation of goods by showing values assigned
to similar goods in the past. The Company has networked its stores to permit
the Company's headquarters to more efficiently monitor each store's
operations, including sales, interest income, loans written and redeemed, and
changes in inventory.

The Company attempts to attract retail shoppers seeking bargain prices
through the use of seasonal promotions, special discounts for regular
customers, prominent display of impulse purchase items such as jewelry and
tools, tent sales and sidewalk sales, and a layaway purchasing plan. The
Company attempts to attract and retain pawn loan customers by lending a
competitively large percentage of the estimated sale value of items presented
for pledge and by providing quick loan, renewal and redemption service in an
appealing atmosphere.

As of November 19, 1996, the Company operated stores in the following markets:

<TABLE>
Number of
Locations
---------
<S> <C>
Texas:
------
Corpus Christi............................................. 3
Dallas/Fort Worth metropolitan area........................ 15
South Texas (Brownsville/McAllen/Harlingen/Weslaco/Pharr).. 9
Tyler...................................................... 1
--
28
--
Oklahoma:
---------
Oklahoma City.............................................. 5
--
5
--
Maryland and Washington, D.C. Metropolitan Area :
-------------------------------------------------
Maryland................................................... 19
Washington, D.C. .......................................... 2
--
21
--
Total...................................................... 54
==

</TABLE>

Each pawnshop employs a manager, one or two assistant managers, and
between one and eight sales personnel, depending upon the size, sales volume
and location of the store. The store manager is responsible for supervising
personnel and assuring that the store is managed in accordance with Company
guidelines and established policies and procedures. Each manager reports to
an area supervisor who typically oversees three to five store managers. The
Company's thirteen area supervisors have an average of seven years experience
in the pawn industry.

The Company believes that its profitability is dependent, among other
factors, upon its employees' ability to make loans that achieve optimum
redemption rates, to be effective sales people and to provide prompt and
courteous service. Therefore, the Company trains its employees through direct
instruction and on-the-job loan and sales experience. The new employee is
introduced to the business through an orientation and training program that
includes on-the-job training in lending practices, layaways, merchandise
valuation and general administration of store operations. Certain experienced
employees receive training and an introduction to the fundamentals of
management to acquire the skills necessary to advance into management
positions within the organization. Management training typically involves
exposure to income maximization, recruitment, inventory control and cost
efficiency. The Company maintains a performance-based compensation plan for
all store employees, based, among other factors, on gross profits and special
promotional contests.

Competition
- -----------

The Company encounters significant competition in connection with all
aspects of its business operations. These competitive conditions may
adversely affect the Company's revenues, profitability and ability to expand.

The Company, in connection with lending money, competes primarily with
other pawnshops. The pawnshop industry is characterized by a large number of
independent owner-operators, some of whom own and operate multiple pawnshops.
The Company believes that the primary elements of competition in the pawnshop
business are store location, the ability to lend competitive amounts on items
pawned, customer service, and management of store employees. In addition, the
Company competes with financial institutions, such as consumer finance
companies, which generally lend on an unsecured as well as on a secured basis.
Other lenders may and do lend money on terms more favorable than those offered
by the Company. Many of these competitors have greater financial resources
than the Company.

In its retail operations, the Company's competitors include numerous
retail and wholesale stores, including jewelry stores, gun stores, discount
retail stores, consumer electronics stores and other pawnshops. Competitive
factors in the Company's retail operations include the ability to provide the
customer with a variety of merchandise items at attractive prices. Many
retailers have significantly greater financial resources than the Company.

In addition, the Company faces competition in its acquisition program.
There are several other publicly held pawnshop companies, including Cash
America International, Inc. and EZCORP, Inc., that have announced active
expansion and acquisition programs as well. Management believes that the
increased competition for attractive acquisition candidates may increase
acquisition costs.

Regulation
- ----------

The Company is subject to extensive regulation, supervision and licensing
under various federal, state and local statutes, ordinances and regulations.

Texas

Pursuant to the terms of the Texas Pawnshop Act, the Texas Consumer
Credit Commission ("TCCC") has primary responsibility for the regulation of
pawnshops and enforcement of laws relating to pawnshops in Texas.

The Texas Pawnshop Act prescribes the stratified loan amounts and the
maximum allowable pawn service charges which pawnbrokers in Texas may charge
for the lending of money within each stratified range of loan amounts. The
maximum allowable pawn service charges were established and have not been
revised since 1971 when the Texas Pawnshop Act was enacted. Since 1981, the
ceiling amounts for stratification of the loan amounts to which those rates
apply have been revised and will continue to be reviewed and be subject to
annual revision on July 1 in relation to the Consumer Price Index. These
rates are reviewed and established annually. The Texas Pawnshop Act also
prescribes the maximum allowable pawn loan, which is currently $11,000. The
maximum allowable pawn service charges under the Texas Pawnshop Act for the
various loan amounts for the previous and current year are as follows:

<TABLE>
Year Ended June 30, 1996 Year Ending June 30, 1997
------------------------ -------------------------
Maximum Maximum
Allowable Allowable
Annual Annual
Amount Financed Percentage Amount Financed Percentage
Per Pawn Loan Rate Per Pawn Loan Rate
------------- ---------- ------------- ----------
<S> <C> <S> <C>
$ 1 to $ 129 240% $ 1 to $ 132 240%
$ 130 to $ 430 180% $ 133 to $ 440 180%
$ 431 to $ 1,290 30% $ 441 to $ 1,320 30%
$1,291 to $10,750 12% $1,321 to $11,000 12%
</TABLE>

In addition to establishing maximum allowable service charges and loan
ceilings, the Texas Pawnshop Act also provides for the licensing of pawnshops
and pawnshop employees. To be eligible for a pawnshop license in Texas, an
applicant must (i) be of good moral character, (ii) maintain net assets, as
defined in the Texas Pawnshop Act, of at least $150,000 readily available for
use in conducting the business of each licensed pawnshop, (iii) show that the
pawnshop will be operated lawfully and fairly in accordance with the Texas
Pawnshop Act, and (iv) show that the applicant has the financial
responsibility, experience, character and general fitness to command the
confidence of the public in its operations. In the case of a business entity,
the good moral character requirements apply to each officer, director and
holder of 5% or more of the entity's outstanding shares.

As part of the license application process, any existing pawnshop
licensee who would be affected by the granting of the proposed application may
request a public hearing at which to appear and present evidence for or
against the application. For an application for a new license in a county
with a population of 250,000 or more, the TCCC must find not only that the
applicant meets the other requirements for a license, but also that (i) there
is a public need for the proposed pawnshop and (ii) the volume of business in
the community in which the pawnshop will conduct business indicates that a
profitable operation is probable.

The TCCC may, after notice and hearing, suspend or revoke any license for
a Texas pawnshop upon finding, among other things, that (i) any fees or
charges have not been paid; (ii) the licensee violates (whether knowingly or
without the exercise of due care) any provision of the Texas Pawnshop Act or
any regulation or order thereunder; or (iii) a fact or condition exists which,
if it had existed at the time the original application was filed for a
license, would have justified the TCCC in refusing such license.

Under the Texas Pawnshop Act, a pawnbroker may not accept a pledge from a
person under the age of 18 years; make any agreement requiring the personal
liability of the borrower; accept any waiver of any right or protection
accorded a pledgor under the Texas Pawnshop Act; fail to exercise reasonable
care to protect pledged goods from loss or damage; fail to return pledged
goods to a pledgor upon payment of the full amount due; make any charge for
insurance in connection with a pawn transaction; enter into any pawn
transaction that has a maturity date of more than one month; display for sale
in storefront windows or sidewalk display cases, pistols, sword canes,
blackjacks, and certain other types of knives and similar weapons; or purchase
used or second hand personal property or accept building construction
materials as pledged goods unless a record is established containing the name,
address and identification of the seller, a complete description of the
property, including serial number, and a signed statement that the seller has
the right to sell the property.

Oklahoma

In Oklahoma, the maximum allowable service charge was established in 1972
when the Oklahoma Pawnshop Act was enacted. Under current Oklahoma law, a
pawn loan may not exceed $25,000. The maximum allowable pawn service charges
under the Oklahoma Pawnshop Act for the various loan amounts are currently as
follows:

<TABLE>
Maximum
Allowable
Annual
Amount Financed Percentage
Per Pawn Loan Rate
------------- ----------
<S> <C>
$ 1 to $ 150 240%
$ 151 to $ 250 180%
$ 251 to $ 500 120%
$ 501 to $ 1,000 60%
$1,001 to $25,000 36%
</TABLE>

In addition to establishing maximum allowable service charge and loan
ceilings, the Oklahoma Pawnshop Act also provides for the licensing of
pawnshops. To be eligible for a pawnshop license in Oklahoma, an applicant
must (i) be of good moral character, (ii) maintain net assets, as determined
by the Oklahoma Administrator of Consumer Affairs ("OACA"), of at least
$25,000, (iii) show that the pawnshop will be operated lawfully and fairly in
accordance with the Oklahoma Pawnshop Act, and (iv) not have been convicted of
any felony which directly relates to the duties and responsibilities of the
occupation of pawnbroker.

The OACA may, after notice and hearing, suspend or revoke any license for
an Oklahoma pawnshop upon finding, among other things, that (i) any fees or
charges imposed by the OACA have not been paid; (ii) the licensee violates
(whether knowingly or without exercise of due care) any provision of the
Oklahoma Pawnshop Act or any regulation or order thereunder; or (iii) a fact
or condition exists which, if it had existed at the time of the original
application was filed for a license, would have justified the OACA in refusing
such license.

Under the Oklahoma Pawnshop Act, a pawnbroker may not accept a pledge
from a person under the age of 18 years; accept any waiver of any right or
protection accorded a customer under the Oklahoma Pawnshop Act; fail to
exercise reasonable care to protect pledged goods from loss or damage; fail to
return pledged goods to a customer upon payment of the full amount due the
pawnbroker on the pawn transaction; make any charge for insurance in
connection with a pawn transaction; enter into any pawn transaction which has
a maturity date of more than one month; or accept collateral or buy
merchandise from a person unable to supply verification of identity by photo
identification by either a state-issued identification card, driver's license,
or federal government-issued identification card or by readable fingerprint of
right or left index finger on the back of the pawn or purchase receipt to be
retained for the pawnbroker's record.

Maryland

In Maryland, there is no statutory service charge schedule. The Company
charges 12% to 20% per month on loans at its Maryland stores, with a minimum
monthly charge of $6, which is consistent with service charges levied by other
pawnshops in these areas. The state of Maryland also does not prescribe any
maximum loan amounts.

Article 56 of the Annotated Code of Maryland provides for the licensing
of pawnshops. To be eligible for a pawnshop license in Maryland, an applicant
must (i) file a signed application verified under oath, (ii) provide the
Secretary of the Maryland Department of Licensing and Regulation ("MDLR") with
a detail of the applicants business dealings for the previous 36 months, (iii)
pay an application fee of $100 plus $25 for each employee, (iv) not have had a
similar license suspended, revoked, or refused in another jurisdiction, and
(v) not have been convicted of any felony, theft offense, or crime involving
moral turpitude within 3 years of the application, or any time after the
application, or employ such person.

The MDLR may, after notice and hearing, suspend or revoke any license for
a Maryland pawnshop upon finding, among other things, that (i) any fees or
charges imposed by the MDLR have not been paid, or (ii) the licensee cannot
verify that the information supplied with the original application if current.

Under Article 56 of the Annotated Code of Maryland, a pawnbroker may not
accept a pledge from a person under the age of 18 years; prohibit any police
officer from inspecting a dealer's records during business hours; fail to
exercise reasonable care to protect pledged goods from loss or damage; fail to
return pledged goods to a customer upon payment of the full amount due the
pawnbroker on the pawn transaction; or accept collateral or buy merchandise
from a person unable to supply verification of identity by photo
identification by either a state-issued identification card, driver's license,
passport, or federal government-issued identification card and one other
corroborating form of identification.

Washington, D.C.

Pursuant to the terms of the "Act to Regulate and License Pawnbrokers in
the District of Columbia" ("Act"), the Director of the D.C. Department of
Licenses, Investigations and Inspections ("Director") has primary
responsibility for the regulation of pawnshops and enforcement of laws
relating to pawnshops in Washington, D.C..

The Act prescribes the maximum rates of interest for which a pawnbroker
may contract and which he may receive. The maximum rates are a flat $5 per
month charge on all loans of $40 or less, and a 5% per month charge on loans
of greater than $40.

In addition to establishing maximum allowable service charges and loan
ceilings, the Act also provides for the licensing of pawnshops and pawnshop
employees. To be eligible for a pawnshop license in Washington, D.C., an
applicant must submit an application to both the Director and the Washington,
D.C. Chief of Police. After an investigation has been performed by the Chief
of Police, a report of the applicant's moral character must be forwarded to
the Director who then determines whether to issue a license.

Under the Act, a pawnbroker must file an annual report to the director on
or before the fifteenth day of March of each year which must contain, among
other things, the number of redeemed and unredeemed pledges, the total amount
of cash loaned, cash balances on hand, total interest collected and any other
information requested by the Director. In addition, pawnbrokers must maintain
a pawn record ledger which details pertinent information on all loans.

Other

With respect to firearms and ammunition sales, each pawnshop must comply
with the regulations promulgated by the Department of the Treasury-Bureau of
Alcohol, Tobacco and Firearms which require each pawnshop dealing in firearms
to maintain a permanent written record of all firearms received or disposed of
and a similar record for all ammunition sales.

Under some municipal ordinances, pawnshops must provide the police
department having jurisdiction copies of all daily transactions involving pawn
loans and over-the-counter purchases. These daily transaction reports are
designed to provide the local police with a detailed description of the goods
involved including serial numbers, if any, and the name and address of the
owner obtained from a valid identification card. If these ordinances are
applicable, a copy of the transaction ticket is provided to local law
enforcement agencies for processing by the National Crime Investigative
Computer to determine rightful ownership. Goods held to secure pawn loans or
goods purchased which are determined to belong to an owner other than the
borrower or seller are subject to recovery by the rightful owners.

In connection with pawnshops operated by the Company, there is a risk
that acquired merchandise may be subject to claims of rightful owners.
Historically, the Company has not found these claims to have a material
adverse effect upon results of operations. The Company does not maintain
insurance to cover the costs of returning merchandise to its rightful owners.

There can be no assurance that additional local, state or federal
legislation will not be enacted or that existing laws and regulations will not
be amended which could have a material adverse effect on the Company's
operations and financial condition.

Employees
- ---------

The Company had approximately 429 employees as of November 5, 1996. At
that date, approximately 19 persons were employed in executive, administrative
and accounting functions. None of the Company's employees are covered by
collective bargaining agreements. The Company considers its employee
relations to be satisfactory.

Insurance
- ---------

The Company maintains fire, casualty, theft and public liability
insurance for each of its pawnshop locations in amounts management believes to
be adequate. The Company maintains workers' compensation insurance in
Maryland, Washington, D.C. and Oklahoma, as well as excess employer's
indemnification insurance in Texas. The Company is a non-subscriber under the
Texas Workers' Compensation Act and does not maintain other business risk
insurance.

Future Plans
- ------------

The Company's long-term business plan includes continuing to acquire
existing pawnshops in Texas, Maryland and the Washington, D.C. metropolitan
area, and possibly other states. The acquisitions may involve a purchase of
assets for cash or a combination of cash, Company securities and/or debt.
From time to time, the Company may also open new pawnshops where desirable
opportunities are presented.

Properties
- ----------

The Company owns the real estate and buildings for three of its pawnshops
and leases 51 pawnshop locations. Leased facilities are generally leased for
a term of two to 10 years with one or more options to renew. The Company's
existing leases expire on dates ranging between 1997 and 2010. All current
leases provide for specified periodic rental payments ranging from
approximately $1,200 to $8,000 per month. Most leases require the Company to
maintain the property and pay the cost of insurance and property taxes. The
Company believes that termination of any particular lease would not have a
material adverse effect on the Company's operations. The Company's strategy
is generally to lease, rather than purchase, space for its pawnshop locations
unless the Company finds what it believes is a superior location at an
attractive price. The Company believes that the facilities currently owned
and leased by it as pawnshop locations are suitable for such purpose. The
Company considers its equipment, furniture and fixtures to be in good
condition.

The Company currently leases approximately 8,500 square feet in
Arlington, Texas for its executive offices. The lease, which expires February
2000, currently provides for monthly rental payments of approximately $9,000.

Legal Proceedings
- -----------------

The Company is aware of no material legal proceedings pending to which it
is a party, or its property is subject. From time to time the Company is a
defendant (actual or threatened) in certain lawsuits encountered in the
ordinary course of its business, the resolution of which, in the opinion of
management, should not have a material adverse effect on the Company's
financial position.

MANAGEMENT

Executive Officers And Directors
- --------------------------------

Set forth below are the names, ages, positions and business experience of
the executive officers and directors of the Company as of the date of this
Prospectus:

<TABLE>
Name Age Position
---- --- --------
<S> <C> <C>
Phillip E. Powell 46 Chairman of the Board and
Chief Executive Officer
Rick L. Wessel 38 Chief Financial Officer,
Secretary, Treasurer and Director
J. Alan Barron 35 Chief Operating Officer
Scott Williamson 38 Senior Vice President
Richard T. Burke(1)(2) 52 Director
Joe R. Love(1)(2) 58 Director
- --------------
</TABLE>
(1) Member of the Compensation Committee.
(2) Member of the Audit Committee.

Phillip E. Powell has served as director since March 1990, served as
president from March 1990 until May 1992, and has served as chief executive
officer since May 1992. Mr. Powell has been engaged in the financial services
business for over 16 years. From April 1986 to February 1990, Mr. Powell was
an officer and director of First Savings Bank, Arlington, Texas.

Rick L. Wessel has been associated with the Company since February 1992,
has served as chief financial officer, secretary and treasurer of the Company
since May 1992, and has served as a director since November 1992. Prior to
February 1992, Mr. Wessel was employed by Price Waterhouse LLP for
approximately nine years. Mr. Wessel is a certified public accountant
licensed in Texas.

J. Alan Barron joined the Company in January 1994 as its chief operating
officer. Prior to joining the Company, Mr. Barron spent two years as chief
financial officer for a nine store privately-held pawnshop chain. Prior to
his employment as chief financial officer of this privately-held pawnshop
chain, Mr. Barron spent five years in the Fort Worth office of Price
Waterhouse LLP. Mr. Barron is a certified public accountant licensed in
Texas.

Scott Williamson joined the Company in January 1994 as its corporate
controller and in October 1994 was elected to senior vice president. Prior to
joining the Company, Mr. Williamson served as the director of internal audit
for the Dallas office of the Federal Deposit Insurance Corporation where he
was employed since 1989. From 1985 to 1989, Mr. Williamson served as vice
president and corporate audit department manager for Bright Banc Savings
Association of Dallas. Mr. Williamson also spent a total of five years in
public accounting firms, including two years with Ernst & Young. Mr.
Williamson is a certified public accountant licensed in Texas and Oklahoma.

Richard T. Burke has served as a director of the Company since December
1993. He is the founder and former chief executive officer and chairman, from
1974 to 1988, of United HealthCare Corporation. Mr. Burke remains a director
of United HealthCare Corporation, a company engaged in the managed health care
industry. From 1977 to 1987, Mr. Burke also served as chief executive officer
of Physicians Health Plan of Minnesota (now MEDICA), the largest client of
United HealthCare Corporation. He also currently serves as a director and
vice chairman of the board of directors of Education Alternatives, Inc., a
company engaged in the business of providing school management services and
products to public schools. The securities of United HealthCare Corporation
and Education Alternative, Inc. are registered pursuant to the Exchange Act.
Mr. Burke is co-owner and chief executive officer of the Phoenix Coyotes, a
professional sports franchise of the National Hockey League.

Joe R. Love has served as a director of the Company since December 1991.
Mr. Love has served as chairman and chief executive officer of Partridge
Capital Corporation, a venture capital firm, since October 1976. Since July
1989, Mr. Love has served on the board of directors of Sooner Energy
Corporation, a company engaged in oil and gas exploration and production. In
October 1996, Mr. Love became a member of the board of directors of Western
Country Clubs, Inc., a public company involved in the entertainment industry.

The Board of Directors of the Company consists of four directors divided
into three classes. At each annual meeting of stockholders, one class is
elected to hold office for a term of three years. Directors serving until the
earlier of (i) resignation or (ii) expiration of their terms at the annual
meeting of stockholders in the years indicated are as follows: 1998 - Mr.
Powell; and 1996 - Messrs. Wessel, Burke and Love. Messrs. Wessel, Burke and
Love are standing for reelection to the Board of Directors at the 1996 annual
meeting of stockholders scheduled to be held on January 16, 1997. There are
currently no directors serving in the class up for election at the 1997 annual
meeting. All officers serve at the discretion of the Board of Directors. No
family relationships exist between any director and executive officer.

Board Committees; Compensation Committee Interlocks and Insider Participation
- -----------------------------------------------------------------------------

The Board of Directors has two standing committees. The Compensation
Committee reviews compensation paid to management and recommends to the Board
of Directors appropriate executive compensation. The Audit Committee reviews
internal controls, recommends to the Board of Directors engagement of the
Company's independent certified public accountants, reviews with such
accountants the plan for and results of their examination of the consolidated
financial statements, and determines the independence of such accountants.
Messrs. Burke and Love serve as members of each of these committees.

Directors' Fees
- ---------------

For the year ended July 31, 1996, the outside directors were reimbursed
for their reasonable expenses incurred for each Board and committee meeting
attended. See "Compensation - Stock Options and Warrants" and "-Certain
Transactions" for a discussion of options and warrants issued to directors
since August 1, 1995.

Executive Compensation
- ----------------------

The following table sets forth compensation with respect to the chief
executive officer and other executive officers of the Company who received
total annual salary and bonus for the fiscal year ended July 31, 1996 in
excess of $100,000:

<TABLE>
Summary Compensation Table
--------------------------
Long-Term
Annual compensation (1) Compensation
----------------------- --------------------
Stock Warrants
Name and Principal Fiscal Options Issued
Position Year Salary Bonus (Shares)(2) (Shares)(2)
-------- ---- ------ ----- ----------- -----------
<S> <C> <C> <C> <C> <C>
Phillip E. Powell,
Chairman of the 1996 $175,000 $20,000 100,000 475,000
Board and Chief 1995 150,000 - 35,000 -
Executive Officer 1994 150,000 - - 200,000(3)

Rick L. Wessel,
Chief Financial 1996 $ 95,000 $10,000 - 255,000
Officer, Secretary 1995 85,000 - 10,000 -
and Treasurer 1994 85,000 - - 100,000(3)

J. Alan Barron, 1996 $ 95,000 $10,000 - 250,000
Chief Operating 1995 80,000 - 5,000 -
Officer 1994 80,000 - - 50,000(3)

</TABLE>
(1) Does not include certain perquisites and other benefits; however, the
Company has concluded that the aggregate amount of such personal benefits and
other compensation is less than 10% of such executive officer's annual salary.
(2) See "- Employment Agreements" and "- Stock Options and Warrants" for a
discussion of the terms of long-term compensation awards.
(3) This warrant was extended in fiscal 1996 until January 2001, and is not
reflected in the warrants issued in fiscal 1996.

Employment Agreements
- ---------------------

Mr. Powell has entered into an employment agreement with the Company
through fiscal 2000 which provides for: (i) a fiscal 1996 annual base salary
of $175,000; (ii) the right to receive incentive compensation of two percent
of income before bonuses and taxes in excess of 10% of the average equity
during each fiscal year, or lesser period during which Mr. Powell is employed;
(iii) a lump-sum payment equal to the greater of one-year base salary or the
remaining base salary that would have been paid in the initial term of
employment in the event of constructive termination of employment; and (iv) a
warrant to purchase 200,000 shares of Common Stock at an exercise price of
$4.00 per share, which in the event of a change of control or constructive
termination, Mr. Powell could cause the Company to repurchase at a price equal
to the difference between the exercise price and the exchange, sale or tender
offer price, or the closing bid price, whichever is applicable, depending upon
the triggering event. These warrants, and the underlying shares, have
piggyback registration rights. The Company has agreed to pay all expenses in
connection with such piggyback registration rights, except underwriting
discounts and commissions and Mr. Powell's legal fees. In the event Mr.
Powell voluntarily resigns or is removed for cause, the unexercised portion of
the warrant automatically becomes forfeited. This agreement contains
provisions which automatically extend the agreement for one year periods
unless earlier terminated.

Mr. Wessel has a one-year employment agreement with the Company,
substantially identical to the employment agreement described above, except
that the base salary is $95,000, Mr. Wessel is not entitled to receive
incentive compensation, and a warrant to purchase 100,000 shares of Common
Stock at an exercise price of $4.00 per share. The initial term of this
employment agreement expired on July 31, 1994; however, the agreement contains
provisions which automatically extend the agreement for one year periods
unless earlier terminated.

Stock Options and Warrants
- --------------------------

The following table shows stock options and warrant grants made to named
executive officers during fiscal 1996:

<TABLE>

Individual Grants of Stock Options and Warrant Grants Made in Fiscal 1996
-------------------------------------------------------------------------
Potential Realizable
Percentage Percentage Value at
of Total of Total Assumed Annual
Options Warrants Rates of Stock
Options Granted to Warrants Granted to Exercise Price Appreciation
Granted Employees in Granted Employees in Price Expiration for Option and
Name (Shares) Fiscal 1996 (Shares)(1) Fiscal 1996 (Per Share) Date Warrant Terms (2)
---- -------- ----------- ----------- ----------- ----------- ---- -----------------
5% 10%
----- -----
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Phillip E. Powell 100,000(3) 85% 275,000 14% $4.625 Jan. 2001 $150,000 $643,688
- - 200,000 11 15.00 July 2000 - -
Rick L. Wessel - - 105,000 5 4.625 Jan. 2001 42,000 180,233
- - 150,000 8 15.00 July 2000 - -
J. Alan Barron - - 100,000 5 4.625 Jan. 2001 40,000 171,650
- - 150,000 8 15.00 July 2000 - -

</TABLE>

(1) Excludes term extensions effected in fiscal 1996 for warrants issued in
fiscal 1994. See "-Executive Compensation."
(2) The actual value, if any, will depend upon the excess of the stock price
over the exercise price on the date of exercise, so that there is no assurance
the value realized will be at or near the present value.
(3) Expires in January 2001 and is exercisable at $4.625 per share.

<TABLE>
July 31, 1996 Stock Option and Warrant Values
---------------------------------------------
Number of Unexercised Value of Unexercised
Stock Options and Warrants In-The-Money
Shares at July 31, 1996 Stock Options and Warrants
Acquired on Value (Shares) July 31 , 1996 (l)
Name Exercise Realized Exercisable Unexercisable Exercisable Unexercisable
---- -------- -------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Phillip E. Powell - - 810,000(2) - $201,250 -
Rick L. Wessel - - 365,000(3) - 89,375 -
J. Alan Barron - - 305,000(4) - 50,625 -

</TABLE>

(1) Computed based upon the differences between aggregate fair market value
and aggregate exercise price.
(2) Includes warrants to purchase 675,000 shares at prices ranging from $4.00
to $15.00 per share and options to purchase 135,000 shares at $4.625 per
share.
(3) Includes warrants to purchase 355,000 shares at prices ranging from $4.00
to $15.00 per share and options to purchase 10,000 shares at $4.625 per share.
(4) Includes warrants to purchase 300,000 shares at prices ranging from $4.00
to $15.00 per share and options to purchase 5,000 shares at $4.625 per share.

Warrants held by other directors: On November 19, 1996, other directors
held warrants to purchase 1,173,000 shares at prices ranging from $4.00 to
$15.00 per share, extending to January 2001.

Warrants held by employees: On November 19, 1996, other employees and
third parties own warrants and options to purchase an aggregate of 781,037
shares at prices ranging from $4.00 to $15.00 per share, extending to January
2001.

The Company has not established, nor does it provide for, long-term
incentive plans or defined benefit or actuarial plans. The Company does not
grant any stock appreciation rights.

Certain Transactions
- --------------------

In May 1994, the Company acquired 100% of the issued and outstanding
common stock of Famous Pawn, Inc., which operates seven stores in the Maryland
and Washington DC metropolitan area from Mr. Rothman, who became a principal
stockholder by virtue of this transaction. The total purchase price was
$3,950,000 consisting of $1,450,000 cash and a $2,500,000 7% convertible
subordinated debenture due 2004. See "Description of Capital Stock -
Convertible Debentures." In May 1996, the Company acquired from Mr. Rothman
substantially all the assets of three stores in Baltimore, Maryland. The
total purchase price received from Mr. Rothman was $2,400,000. The purchase
price of these transactions were determined based upon the volume of annual
loan and sales transactions, outstanding loan balances, inventory on hand, and
location and condition of the facilities.

On February 1, 1992, the Company acquired 100% of the issued and
outstanding common stock of American Loan, a wholly-owned subsidiary of
American Pawn & Jewelry, Inc. ("American Pawn"). American Loan owns and
operates seven pawnshops in South Texas. The purchase price was $9,803,000,
consisting of $8,600,000 in a seller-financed note payable, 200,000 shares of
Common Stock recorded at the then market price of $5.00 per share, $89,000 in
assumed liabilities and $114,000 in cash. The purchase price was subject to
an adjustment based upon levels of pawn loans and inventory on February 3,
1993. In August 1992, the Company paid American Pawn $2,000,000 cash to
reduce its acquisition related indebtedness. On October 20, 1992, in order to
terminate the earn-out provisions of the February 1, 1992 acquisition
agreement, the Company entered into an agreement with American Pawn to further
reduce and revise the Company's acquisition indebtedness and to fix the amount
due to American Pawn in accordance with the earn-out provisions at $2,290,000.
Under the terms of the October 20, 1992 agreement, the Company (1) paid
American Pawn $3,040,000 in cash, (2) converted $2,000,000 of the indebtedness
into 250,000 shares of Series A redeemable preferred stock, which was
convertible into common stock at $8.00 per share and provided for dividends of
8%, (3) applied an outstanding receivable from American Pawn of approximately
$900,000 to the principal amount of the acquisition indebtedness, (4) conveyed
$150,000 of inventory to American Pawn, and (5) extended $2,800,000 of the
acquisition indebtedness until April 1, 1993. The extended amount was
subsequently paid in January 1993 from funds obtained through the Company's
revolving credit facility. During May 1994, the Company and American Pawn
entered into an agreement for the Company to redeem the 250,000 shares of its
Series A preferred stock held by American Pawn and repurchase 200,000 shares
of common stock of the Company held by American Pawn. The Series A preferred
stock was contractually redeemable for $2,000,000 and common stock had a
quoted market value of $800,000. As consideration for the stock, the Company
paid $2,100,000 to American Pawn, granted American Pawn a three-year warrant
to purchase 100,000 shares of the Company's common stock at $4.50 per share
and agreed to settle all amounts which the Company believed to be due from
American Pawn or its shareholders. Concurrent with this transaction, Messrs.
Charles R. Jones and C. Morgan Jones, affiliates of American Pawn and
directors of the Company, resigned from the Company's Board of Directors.

On February 1, 1992, concurrent with the acquisition of American Loan,
the Company entered into a management agreement with Charles R. Jones, an
affiliate of American Pawn and former director of the Company, to pay Mr.
Jones a management fee of $5,000 per month to assist the Company in a smooth
transition of management. This agreement was terminated as of October 31,
1992. For the fiscal years ended July 31, 1994 and 1993, the Company paid
American Pawn preferred stock dividends of $120,000 and $124,000,
respectively.

In conjunction with the acquisition of American Loan, the Company agreed
to lease the acquired locations from American Pawn. In Fiscal 1993, the
Company recorded rent expense under these leases in the amount of $420,000,
and in Fiscal 1994, the Company recorded rent expense of $350,000 under such
leases up until the date American Pawn and Mr. Jones ceased to be related
parties in May 1994.

On December 1, 1993, the Company completed a transaction with John R.
Payne, formerly a director of the Company, by which the Company (i) acquired
from Mr. Payne an aggregate of 75,000 shares of Common Stock of the Company,
(ii) retired incentive options to purchase 100,000 shares of Common Stock held
by Mr. Payne, (iii) purchased from Mr. Payne certain real estate for $35,000,
(iv) entered into a non-compete agreement with Mr. Payne, and (v) entered into
a five-year consulting agreement with Mr. Payne providing maximum compensation
in the amount of $100,000 per year for a period of five years, in exchange for
the transfer to Mr. Payne of one pawnshop location, including operating
permits, pawn loans, inventory, furniture, fixtures, equipment, a leasehold
interest in the real property underlying the location, all having a net book
value of $441,000, and a note receivable from an unaffiliated party in the
approximate amount of $48,000 including principal and accrued interest (this
transaction is referred to as the "Payne Transaction"). The store
transferred from the Company to Mr. Payne has been owned by the Company for
more than five years. The Company valued the shares of Common Stock and the
non-compete agreement at approximately $489,000 and recognized no significant
gain or loss from this transaction. The Company entered into the consulting
agreement with Mr. Payne in order to utilize his expertise in identifying,
evaluating and negotiating pawnshop acquisitions consistent with the Company's
expansion strategy.

The closing of the Payne Transaction was conditioned upon (i) the
Company's secured lender releasing the assets as collateral, (ii) obtaining a
fairness opinion from an investment banking firm that the Payne Transaction
was fair to the Company from a financial point of view, and (iii) the closing
of the sale of 590,000 shares of Common Stock by Messrs. Payne, Hudiburg and
Abbott, former directors of the Company, to six purchasers at a purchase price
of $4.00 per share pursuant to a registration statement filed by the Company.
Prior to closing, the Company obtained a fairness opinion from the Company's
financial advisor as well as a consent from its secured lender. The Company's
financial advisor advised the Board of Directors that, in its opinion, the
Payne Transaction was fair to the Company's stockholders from a financial
point of view. Upon the closing of the Payne Transaction, Messrs. Payne,
Hudiburg, Abbott, Delp and Gibson resigned as directors of the Company. None
of the resigning directors expressed a disagreement with the Company in any
matter relating to the Company's operations, policies or practices.

In December 1993 and October 1994, the Company issued to Mr. Jon Burke,
the brother of a director of the Company, Richard T. Burke, warrants to
purchase 50,000 shares and 5,000 shares, respectively, of the Company's Common
Stock at exercise prices of $4 and $4.625 per share, respectively, for
consulting services. The warrants vest over a five-year period. In fiscal
1996, the Company issued to Mr. Jon Burke a five year warrant to purchase
50,000 shares of the Company's Common Stock at an exercise price of $4.625 per
share for consulting services. In August 1996, the Company entered into a
management agreement to operate and manage pawnshops for JB Pawn, Inc., a
Texas corporation. JB Pawn, Inc. will own and provide 100% of the financing
for the pawnshops, and will incur all direct costs to operate the pawnshops,
including but not limited to payroll, store operating expenses, cost of
inventory, and pawn loans. The Company will receive a monthly management fee
for each store managed, and will provide computer support, accounting,
auditing, oversight and management of these stores. JB Pawn, Inc. is 100%
owned and controlled by Mr. Jon Burke. In the event that JB Pawn, Inc.
receives an offer to purchase any of its pawnshops, the Company shall have a
first right of refusal to match such offer.

In January 1994, the Company issued affiliates of Sanders Morris Mundy
Inc. a five year warrant to purchase 40,000 shares of Common Stock at $4.00
per share for consulting services. In May 1994, the Company issued Sanders
Morris Mundy, Inc. a five year warrant to purchase 162,162 shares of Common
Stock at $4.625 per share in connection with assisting in the placement of the
Debentures Due 1999. Don Sanders is an affiliate of Sanders Morris Mundy Inc.
and a principal stockholder of the Company. These warrants contain piggy-back
registration rights and the Company is effecting such registration under the
Securities Act of the issuance of underlying shares of Common Stock hereby.

In January 1992, in consideration of consulting services regarding
certain acquisitions, the Company issued to an affiliate of Mr. Love a three
year warrant to purchase 90,000 shares of Common Stock, exercisable at $5.00
per share during the first year, $5.75 per share during the second year, and
$6.25 per share during the third year. In connection therewith, the Company
granted such holder certain piggy-back registration rights. In December 1993,
this warrant was extended until December 1998 and the exercise price was
repriced to $4.00 per share throughout the term of the warrant. During the
fiscal year ended July 31, 1993, the Company paid Mr. Love $42,891 in fees for
consulting services rendered in connection with certain acquisitions. In
October 1995, the Company paid Mr. Love $75,000 in fees for consulting
services rendered in connection with certain acquisitions.

In fiscal 1996, the Company issued to affiliates of Mr. Love a warrant to
purchase (i) 200,000 shares at a price of $15.00 per share expiring in July
2000, and (ii) 125,000 shares at a price of $4.625 per share expiring in
January 2001. In addition, the Company extended warrants issued in fiscal
1994 to purchase 223,000 shares at $4.00 per share until January 2001 and
warrants issued in fiscal 1995 to purchase 25,000 shares at $4.625 per share
until January 2001. In fiscal 1996, the Company issued Mr. Richard T. Burke
warrants to purchase (i) 200,000 shares at a price of $15.00 per share
expiring in July 2000, and (ii) 125,000 shares at a price of $4.625 per share
expiring in January 2001. In addition, the Company extended warrants issued
in fiscal 1994 to purchase 250,000 shares at $4.00 per share until January
2001 and warrants issued in fiscal 1995 to purchase 25,000 shares at $4.625
per share until January 2001. In fiscal 1996, Mr. Williamson was issued a
five year warrant to purchase 75,000 shares at $15.00 per share and a five
year warrant to purchase 55,000 shares at $4.625 per share.

In April 1991, the Company adopted a policy prohibiting transactions with
its officers, directors or affiliates, unless approved by a majority of the
disinterested directors and on terms no less favorable to the Company than
could be obtained from an independent third party. The Company believes that
all prior related party transactions were on terms as favorable as could be
obtained from independent third parties.

PRINCIPAL STOCKHOLDERS
----------------------

The following table and notes thereto set forth certain information
regarding beneficial ownership of the Common Stock as of the date of this
Prospectus, by (i) each person known by the Company to beneficially own more
than 5% of the Common Stock, (ii) each of the Company's directors, (iii) named
executive officers and (iv) all directors and officers of the Company as a
group.

<TABLE>
Shares Beneficially
Officers, Directors Owned (2)
and 5% Stockholders (1) Number Percent
----------------------- ------ -------
<S> <C> <C>
Phillip E. Powell(3) 1,033,074 22.00%
Richard T. Burke(4) 850,000 19.68
Joe R. Love(5) 688,000 16.03
Rick L. Wessel(6) 535,959 12.61
Springer Run Investments, L.C.(7) 483,000 11.49
J. Alan Barron(8) 477,833 11.40
Mark Rothman(9) 427,500 10.38
Scott Williamson(10) 227,000 5.81
Don Sanders(11) 224,000 5.68
All officers and directors
as a group (6 persons) 3,811,866 54.01
</TABLE>

(1) The addresses of the persons shown in the table above who are directors
or 5% stockholders are as follows: Don Sanders, 3100 Texas Commerce Tower,
Houston, Texas 77002; all other persons and/or entities listed, 690 East Lamar
Boulevard, Suite 400, Arlington, Texas 76011. See "Management - Executive
Officers and Directors" and "-Certain Transactions" for positions with the
Company held by certain stockholders and any material relationships and
transactions within the last three years between certain stockholders of the
Company.
(2) Unless otherwise noted, each person has sole voting and investment power
over the shares listed opposite his name, subject to community property laws
where applicable. Beneficial ownership includes both outstanding shares of
Common Stock and shares of Common Stock such person has the right to acquire
within 60 days of November 22, 1996, upon exercise of outstanding convertible
debentures, warrants and options.
(3) Includes a warrant to purchase 200,000 shares at a price of $15.00 per
share to expire in July 2000, a warrant to purchase 200,000 shares at a price
of $4.00 per share to expire in January 2001, a warrant to purchase 275,000
shares at a price of $4.625 per share to expire in January 2001, a stock
option to purchase 35,000 shares at a price of $4.625 per share to expire in
November 1999, a stock option to purchase 100,000 shares at a price of $4.625
per share to expire in January 2001, 34,000 shares underlying convertible
debentures, and an option to purchase from Mr. Rothman a debenture convertible
into 133,333 shares of common stock.
(4) Includes a warrant to purchase 200,000 shares at a price of $15.00 per
share to expire in July 2000, a warrant to purchase 250,000 shares at a price
of $4.00 per share to expire in January 2001, and a warrant to purchase
150,000 shares at a price of $4.625 per share to expire in January 2001.
(5) Includes a warrant to purchase 200,000 shares at a price of $15.00 per
share to expire in July 2000, a warrant to purchase 223,000 shares at a price
of $4.00 per share to expire in January 2001, a warrant to purchase 150,000
shares at a price of $4.625 per share to expire in January 2001, and 115,000
shares of common stock all of which are beneficially owned by affiliates of
Mr. Love.
(6) Includes a warrant to purchase 150,000 shares at a price of $15.00 per
share to expire in July 2000, a warrant to purchase 100,000 shares at a price
of $4.00 per share to expire in January 2001, a warrant to purchase 105,000
shares at a price of $4.625 per share to expire in January 2001, a stock
option to purchase 10,000 shares at a price of $4.625 per share to expire in
November 1999, 33,000 shares underlying convertible debentures, and an option
to purchase from Mr. Rothman a debenture convertible into 133,334 shares of
common stock.
(7) Includes a warrant to purchase 200,000 shares at a price of $15.00 per
share to expire in July 2000, a warrant to purchase 133,000 shares at a price
of $4.00 per share to expire in January 2001, and a warrant to purchase
150,000 shares at a price of $4.625 per share to expire in January 2001 all of
which are beneficially owned by affiliates of Mr. Love.
(8) Includes a warrant to purchase 150,000 shares at a price of $15.00 per
share to expire in July 2000, a warrant to purchase 50,000 shares at a price
of $4.00 per share to expire in January 2001, a warrant to purchase 100,000
shares at a price of $4.625 per share to expire in January 2001, a stock
option to purchase 5,000 shares at a price of $4.625 per share to expire in
November 1999, 33,000 shares underlying convertible debentures, and an option
to purchase from Mr. Rothman a debenture convertible into 133,333 shares of
common stock.
(9) Includes 400,000 shares underlying convertible debentures.
(10) Includes a warrant to purchase 75,000 shares at a price of $15.00 per
share to expire in July 2000, a warrant to purchase 50,000 shares at a price
of $4.00 per share to expire in January 2001, a warrant to purchase 55,000
shares at a price of $4.625 per share to expire in January 2001, and a stock
option to purchase 5,000 shares at a price of $4.625 per share to expire in
November 1999.
(11) Includes 200,000 shares underlying convertible debentures and a warrant
to purchase 24,000 shares at a price of $4.00 per share to expire in January
1999.

DESCRIPTION OF CAPITAL STOCK
----------------------------

Common Stock
- ------------

The Company is authorized to issue 20,000,000 shares of Common Stock, par
value $.0l per share, of which 3,719,121 shares were issued and outstanding as
of the date of this Prospectus, (i) 215,625 shares are issuable upon exercise
of outstanding options, of which the issuance of 192,625 shares of Common
Stock underlying the Options is being registered under the Securities Act
hereby, (ii) 3,218,412 shares are issuable upon exercise of outstanding
warrants, of which the issuance of 1,310,162 shares underlying Warrants is
being registered under the Securities Act hereby, and (iii) 2,100,001 shares
are issuable upon conversion of the Convertible Debentures. See "Management -
Stock Options and Warrants," "- Certain Transactions", "Description of Capital
Stock - Convertible Debentures", and "- Other Warrants."

Holders of Common Stock are entitled, among other things, to one vote per
share on each matter submitted to a vote of stockholders and, in the event of
liquidation, to share ratably in the distribution of assets remaining after
payment of liabilities. Holders of Common Stock have no cumulative voting
rights, and, accordingly, the holders of a majority of the outstanding shares
have the ability to elect all of the directors. Holders of Common Stock have
no preemptive or other rights to subscribe for shares. Holders of Common
Stock are entitled to such dividends as may be declared by the Board of
Directors out of funds legally available therefor.

Preferred Stock
- ---------------

The Company is authorized to issue 10,000,000 shares of preferred stock,
from time to time, in series and with respect to each series to determine (i)
the number of shares constituting such series, (ii) the dividend rate on the
shares of each series, (iii) whether such dividends shall be cumulative and
the relation of such dividends payable on any other class or series of stock,
(iv) whether the shares of each series shall be redeemable and the terms
thereof, (v) whether the shares shall be convertible into Common Stock and the
terms thereof, (vi) the amount per share payable on each series or other
rights of holders of such shares on liquidation or dissolution of the Company,
(vii) the voting rights, if any, of shares of each series and (viii)
generally, any other designations, powers, preferences, rights and privileges
consistent with the certificate of incorporation for each series and any
qualifications, limitations or restrictions.

In October 1992, the Company issued to American Pawn 250,000 shares of
Series A Preferred Stock. In May 1994, and in connection with the preferred
stock redemption, purchased 200,000 shares of Common Stock of the Company held
by American Pawn. The shares were purchased for $2,100,000 cash, a three-year
warrant to purchase 100,000 shares of the Company's Common Stock at $4.50 per
share and the settlement of amounts which the Company believed to be due from
American Pawn or its shareholders. Concurrent with this transaction, Messrs.
Charles R. Jones and C. Morgan Jones, affiliates of American Pawn and
directors of the Company, resigned from the Company's Board of Directors. The
Company has no present intention of issuing any preferred stock in the near
future.

It is not possible to state the actual effect of the issuance of
preferred stock upon the rights of holders of Common Stock until the Board of
Directors determines the specific rights of the holders of a series of
preferred stock. However, such effects might include, among other things,
restricting dividends on Common Stock, diluting the voting power of Common
Stock, impairing the liquidation rights of Common Stock and delaying or
preventing a change in control of the Company without further action by the
stockholders.

Convertible Debentures
- ----------------------

Debentures Due 1999

In April and May 1994, the Company issued an aggregate principal amount
of $7,500,000 of subordinated convertible debentures due in 1999 ("Debentures
Due 1999"). The Debentures Due 1999 bear interest at the rate of 10% per
annum and mature in April and May 1999. Interest is payable on March 31, June
30, September 30, and December 31 of each year. The Debentures Due 1999 are
subordinated in right of payment, to the prior payment in full of all senior
indebtedness of the Company, as defined in the debenture agreement, which
includes the Credit Facility.

The Debentures Due 1999 are convertible into Common Stock, at an initial
conversion price of $4.625 per share of Common Stock, at any time prior to
maturity. The conversion price is subject to adjustment upon certain events,
including (i) the issuance by the Company of Common Stock as a dividend or
distribution on shares of Common Stock or by reclassification of its Common
Stock; (ii) subdivisions and combinations of Common Stock; (iii) the issuance
of Common Stock (except for certain excluded issuances of Common Stock) or
rights or warrants to subscribe for or purchase Common Stock at less than the
then current conversion price; or (iv) the distribution to all holders of
Common Stock of evidences of indebtedness, equity securities (other than
Common Stock) or other assets (excluding cash dividends or other distributions
from retained earnings of the Company) or rights or warrants to subscribe for
or purchase securities of the Company other than those mentioned above. In
October 1996, $100,000 of Convertible Debentures were converted into 21,621
shares of Common Stock.

The Company has the option to prepay the Debentures Due 1999, in whole,
if the price of the Common Stock trades at or above $8.10 per share for 30
consecutive days.

The Company has agreed to use its best efforts to cause a registration
statement to remain effective under the Securities Act for not less than three
years, or until at least two-thirds of all such shares have been issued
pursuant to conversion of the Debentures Due 1999, and the Company is
effecting such registration under the Securities Act hereby.

An event of default will occur under the Debentures Due 1999 if (a) there
shall be a failure to pay when due any principal of, or premium, if any, on
any of the Debentures Due 1999; (b) there shall be a failure to pay an
installment of interest on any of the Debentures Due 1999 for 15 days after
the date when due; (c) the Company shall fail to perform or observe any other
term, covenant, or agreement contained in the Debentures Due 1999 or for a
period of 30 days after written notice of such failure, requiring the Company
to remedy the same, shall have been given to the Company; (d) the Company
shall fail to pay certain final judgments in excess of $100,000; (e) the
Company shall fail to pay at maturity any indebtedness in excess of $100,000
(other than the senior indebtedness); (f) a senior indebtedness default shall
occur and continue for a period of 30 days; or (g) certain events of
bankruptcy, insolvency, or reorganization with respect to the Company shall
have occurred.

Debenture Due 2004

In May 1994, the Company issued Mark Rothman in connection with the
Famous Pawn, Inc. transaction, a $2,500,000 subordinated convertible debenture
due in 2004 ("Debenture Due 2004"). The Debenture Due 2004 bears interest at
the rate of 7% per annum, with interest payable monthly, maturing on June 1,
2004. The Debenture Due 2004 is subordinated in right of payment, to the
prior payment in full of all senior indebtedness of the Company, as defined in
the debenture agreement, which includes the Credit Facility.

The Debenture Due 2004 is convertible into Common Stock, at an initial
conversion price of $5.00 per share of Common Stock, at any time prior to
maturity. The conversion price is subject to adjustment upon certain events,
including (i) the issuance by the Company of Common Stock as a dividend or
distribution on shares of Common Stock or by reclassification of its Common
Stock; (ii) subdivisions and combinations of Common Stock; (iii) the issuance
of Common Stock (except for certain excluded issuances of Common Stock) or
rights or warrants to subscribe for or purchase Common Stock at less than the
then current conversion price; or (iv) the distribution to all holders of
Common Stock of evidences of indebtedness, equity securities (other than
Common Stock) or other assets (excluding cash dividends or other distributions
from retained earnings of the Company) or rights or warrants to subscribe for
or purchase securities of the Company other than those mentioned above. The
Company has the right to convert the Debenture Due 2004 into shares of Common
Stock if the market price is equal to or above $10 per share for ten
consecutive trading days. In the event the Company forces a conversion of the
Debenture Due 2004 into Common Stock, the Company is obligated to register
such conversion under the Securities Act. In addition, the Company has
granted the holder of the Debenture Due 2004 certain piggy-back registration
rights.

An event of default will occur under the Debenture Due 2004 if (a) there
shall be a failure to pay when due any principal of, or premium, if any, on
any of the Debenture Due 2004; (b) there shall be a failure to pay an
installment of interest on any of the Debenture Due 2004 for 15 days after the
date when due; (c) the Company shall fail to perform or observe any other
term, covenant, or agreement contained in the Debenture Due 2004 or for a
period of 30 days after written notice of such failure, requiring the Company
to remedy the same, shall have been given to the Company by the holder of the
Debenture Due 2004; (d) the Company shall fail to pay certain final judgments
in excess of $100,000; (e) the Company shall fail to pay at maturity any
indebtedness in excess of $100,000 (other than the senior indebtedness); (f) a
senior indebtedness default shall occur and continue for a period of 30 days;
or (g) certain events of bankruptcy, insolvency, or reorganization with
respect to the Company shall have occurred.

Warrants
- --------

The following table sets forth the warrants outstanding as of the date
hereof:

<TABLE>
Shares of Common Stock Exercise Expiration
Warrant Holders Underlying Warrants Price Date
- --------------- ------------------- ----- ----
<S> <C> <C> <C>
Phillip E. Powell(1) 200,000 $4.00 January 2001
Rick L. Wessel(1) 100,000 $4.00 January 2001
J. Alan Barron(1) 50,000 $4.00 January 2001
Scott Williamson(1) 50,000 $4.00 January 2001
Mary Ann Jost 15,000 $4.00 December 1998
Randy York 5,000 $4.625 January 2001
Springer Run
Investments, L.C.(1)(3) 133,000 $4.00 January 2001
Springer Run
Investments, L.C.(1)(3) 25,000 $4.625 January 2001
CH Financial Corporation(1)(3) 90,000 $4.00 January 2001
Springer Run
Investments, L.C.(1)(3)(4) 25,000 $4.625 January 2001
Roger Lockhart 15,000 $4.00 December 1998
Richard T. Burke(1) 250,000 $4.00 January 2001
Richard T. Burke(1) 25,000 $4.625 January 2001
Richard T. Burke(1)(4) 25,000 $4.625 January 2001
Jon Burke(1) 50,000 $4.00 December 1998
Jon Burke(1) 5,000 $4.625 October 1999
Sanders Morris Mundy Inc.(1) 162,162 $4.625 April 1999
Jim Breitenstine 25,000 $4.00 December 1998
Jerry Faulkner 10,000 $4.00 December 1998
Paul Page 5,000 $4.00 December 1998
Paul Page 5,000 $4.625 October 1999
William K. Woodruff & Company 50,000 $12.00 August 1997
William M. DeArman 4,000 $4.00 January 1999
John E. Drury 12,000 $4.00 January 1999
Don A. Sanders(1) 24,000 $4.00 January 1999
Richard T. Burke(4) 200,000 $15.00 July 2000
Richard T. Burke(4) 100,000 $4.625 January 2001
Phillip E. Powell(4) 275,000 $4.625 January 2001
Phillip E. Powell(4) 200,000 $15.00 July 2000
Rick L. Wessel(4) 150,000 $15.00 July 2000
Rick L. Wessel(4) 105,000 $4.625 January 2001
J. Alan Barron(4) 150,000 $15.00 July 2000
J. Alan Barron(4) 100,000 $4.625 January 2001
Scott Williamson(4) 75,000 $15.00 July 2000
Scott Williamson(4) 55,000 $4.625 January 2001
Springer Run
Investments L.C.(4) 200,000 $15.00 July 2000
Springer Run
Investments L.C.(4) 100,000 $4.625 January 2001
David Carr(4) 13,000 $4.625 January 2001
Raul Ramos(4) 13,000 $4.625 January 2001
Chris Lee(4) 14,750 $4.625 January 2001
Cynthia White(4) 17,500 $4.625 January 2001
Randy York(4) 25,000 $15.00 July 2000
Randy York(4) 15,000 $4.625 January 2001
Jon Burke(4) 50,000 $4.625 January 2001
---------
3,218,412
=========
</TABLE>

(1) See "Management - Executive Officers and Directors" and "- Certain
Transactions" for a discussion of material relationships of any of these
security holders with the Company during the last three years.
(2) See "Recent Developments", "Principal Stockholders" and "Management -
Certain Transactions" for a discussion of material relationships of this
security holder with the Company during the last three years.
(3) Springer Run Investments, L.C. and CH Financial Corporation are
affiliates of director Joe R. Love.
(4) The issuance of the shares of common stock underlying this warrant are
not being registered under the Securities Act.

All of the above-referenced warrants were issued for services rendered or
in connection with various acquisitions. See "Plan of Distribution and
Selling Stockholders."

Charter and Bylaws Provisions
- -----------------------------

Stockholders' rights and related matters are governed by the Delaware
General Corporation Law, the Company's Certificate of Incorporation and its
Bylaws. Certain provisions of the Certificate of Incorporation and Bylaws of
the Company, which are summarized below, could have the effect of delaying or
preventing a change in control of the Company. The cumulative effect of these
terms could make it more difficult for any person or entity to acquire or
exercise control of the Company and to make changes in management more
difficult.

Classified Board of Directors. The Company's Certificate of
Incorporation divides the Board of Directors into three classes, with each
class serving for a term of three years. With a classified Board of
Directors, it would generally take a majority stockholder two annual meetings
of stockholders to elect a majority of the Board of Directors. As a result, a
classified Board may discourage proxy contests for the election of directors
or purchases of a substantial block of stock because its provisions could
operate to prevent obtaining control of the Board in a relatively short period
of time.

Prohibition of Action By Written Consent. The Company's Certificate of
Incorporation prohibits the taking of action by written consent of
stockholders. Action by written consent may, in some circumstances, permit
the taking of stockholders' action opposed by the Board of Directors more
rapidly than would be possible if a meeting of stockholders were required. The
prohibition contained in the Certificate of Incorporation will restrict the
ability of controlling stockholders to take action at any time other than at
an annual meeting and will generally force a takeover bidder to negotiate
directly with the Board of Directors.

Special Meeting. Under the Company's Bylaws, special meetings of
stockholders may only be called by the Board of Directors or a committee
thereof designated with such power.

Stockholders' Proposals and Nominations. The Company's Bylaws require
that notice be given to the Board of Directors, in advance of any
stockholders' meeting, of any stockholders' proposals or nominations by any
stockholders of candidates for election as directors. These requirements may
have the effect of precluding stockholders' proposals and directors'
nominations if the proper procedures are not followed, and may discourage or
deter a third party from conducting a solicitation of proxies to elect its own
slate of directors or otherwise attempting to cause the stockholders to
consider certain matters, including issues relating to the control of the
Company.

Limitation of Directors Liability. The Company's Certificate of
Incorporation eliminates, subject to certain exceptions, the personal
liability of directors of the Company or its stockholders for monetary damages
for breaches of fiduciary duty by such directors. The Certificate of
Incorporation does not provide for the elimination of or any limitation on the
personal liability of a director for (i) any appropriation, in violation of
the directors' duties, of any business opportunity of the Company, (ii) acts
or omissions not in good faith or which involve intentional misconduct or a
knowing violation of law, (iii) unlawful corporate distributions, or (iv) any
transaction from which such director derives an improper personal benefit.
This provision of the Certificate of Incorporation will limit the remedies
available to the stockholder who is dissatisfied with a decision of the Board
of Directors protected by this provision, and such stockholder's only remedy
in that circumstance may be to bring a suit to prevent the action of the
Board. In many situations, this remedy may not be effective, for example,
when stockholders are not aware of a transaction or an event prior to Board
action in respect of such transaction or event. In these cases, the
stockholders and the Company could be injured by a Board's decision and have
no effective remedy.

Transfer Agent
- --------------

The transfer agent and registrar for the Common Stock is Registrar and
Transfer Company, Cranford, New Jersey.

Delaware Anti-Takeover Law
- --------------------------

The Company is subject to Section 203 of the Delaware General Corporation
Law ("Section 203"), which, subject to certain exceptions, prohibits a
Delaware corporation from engaging in any business combinations with any
interested stockholder for a period of three years following the date that
such stockholder became an interested stockholder, unless (i) before such date
the board of directors of the corporation approved either the business
combination or the transaction that resulted in the stockholder becoming an
interested stockholder, (ii) upon consummation of the transaction that
resulted in the stockholder becoming an interested stockholder, the interested
stockholder owned at least 85% of the voting stock of the corporation
outstanding at the time the transaction commenced, excluding for purposes of
determining the number of shares outstanding those shares owned (x) by persons
who are directors and also officers and (y) by employee stock plans in which
employee participants do not have the right to determine confidentially
whether shares held subject to the plan will be tendered in a tender or
exchange offer, or (iii) on or after such date the business combination is
approved by the board of directors and authorized at an annual or special
meeting of stockholders, and not by written consent, by the affirmative vote
of at least 66 2/3% of the outstanding voting stock which is not owned by the
interested stockholder.

Section 203 defines business combination to include (i) any merger or
consolidation involving the corporation and the interested stockholder, (ii)
any sale, lease, exchange, mortgage, transfer, pledge or other disposition
involving the interested stockholder of 10% or more of assets of the
corporation, (iii) subject to certain exceptions, any transaction that results
in the issuance or transfer by the corporation of any stock of the corporation
to the interested stockholder, (iv) any transaction involving the corporation
that has the effect of increasing the proportionate share of the stock of any
class or series of the corporation beneficially owned by the interested
stockholder or (v) the receipt by the interested stockholder of the benefit of
any loans, advances, guarantees, pledges or other financial benefits provided
by or through the corporation. In general, Section 203 defines an interested
stockholder as any entity or person beneficially owning 15% or more of the
outstanding voting stock of the corporation and any entity or person
affiliated with or controlling or controlled by such an entity or person.

PLAN OF DISTRIBUTION AND SELLING STOCKHOLDERS
---------------------------------------------

This Prospectus relates to the issuance by the Company of an aggregate of
1,310,162 shares under the Warrants, the issuance of 192,625 shares under the
Options, and the issuance of 2,100,001 shares upon conversion of the
Convertible Debentures. The following tables set forth certain information
with respect to the issuance by the Company of shares of Common Stock. The
Company will not receive any cash proceeds from the conversion of the
Convertible Debentures into shares of Common Stock. The Company will receive
the exercise price upon exercise of the Warrants and Options as proceeds.

<TABLE>
Registration of Issuance of Common Stock by the Company
-------------------------------------------------------
Shares of Common
Shares of Common Shares of Common Stock Beneficially
Stock, the Issuance Stock Beneficially Owned by Warrant
of Which is Being Owned by Warrant Holder Assuming
Registered Hereby Holder as of the Date Sale of Shares,
----------------- of this Prospectus the Issuance of
------------------ Which is Being
Exercise Registered Hereby
Warrant Holder Price -----------------
-------------- -----
<S> <C> <C> <C> <C>
Phillip E. Powell(1) $4.00 200,000 1,033,074 55,741
Rick L. Wessel(1) $4.00 100,000 535,959 4,625
J. Alan Barron(1) $4.00 50,000 477,833 6,500
Scott Williamson(1) $4.00 50,000 227,000 42,000
Mary Ann Jost $4.00 15,000 15,000 -
Randy York $4.625 5,000 50,000 -
Springer Run
Investments,
L.C.(1)(2) $4.00 133,000 483,000 -
Springer Run
Investments,
L.C.(1)(2) $4.625 25,000 483,000 -
CH Financial
Corporation(1)(2) $4.00 90,000 90,000 -
Roger Lockhart $4.00 15,000 15,000 -
Richard T. Burke(1) $4.00 250,000 850,000 250,000
Richard T. Burke(1) $4.625 25,000 850,000 250,000
Jon Burke(1) $4.00 50,000 105,000 -
Jon Burke(1) $4.625 5,000 105,000 -
Sanders Morris
Mundy Inc.(1) $4.625 162,162 162,162 -
Jim Breitenstine $4.00 25,000 76,000 51,000
Jerry Falkner $4.00 10,000 10,000 -
Paul Page $4.00 5,000 10,000 -
Paul Page $4.625 5,000 10,000 -
William K. Woodruff
& Company $12.00 50,000 50,000 -
William M. DeArman $4.00 4,000 73,190 -
John E. Drury $4.00 12,000 120,108 -
Don A. Sanders(1) $4.00 24,000 224,000 -
---------
1,310,162
=========
</TABLE>

1) See "Management - Executive Officers and Directors" and "- Certain
Transactions" for a discussion of material relationships of any of these
security holders with the Company during the last three years.
(2) Springer Run Investments, L.C. and CH Financial Corporation are
affiliates of director Joe R. Love.

<TABLE>

Shares of Common
Shares of Common Shares of Common Stock Beneficially
Stock, the Issuance Stock Beneficially Owned by Option
of Which is Being Owned by Option Holder Assuming
Registered Hereby Holder as of the Date Sale of Shares,
----------------- of this Prospectus the Issuance of
------------------ Which is Being
Exercise Registered Hereby
Option Holder Price -----------------
------------- -----
<S> <C> <C> <C> <C>
Phillip E. Powell(1) $4.625 100,000 1,033,074 55,741
Richard Payne $5.00 1,625 1,625 -
Buddy Taylor $5.00 1,625 1,625 -
Tommy Abbott $5.00 2,250 2,250 -
Dan Yeager $5.00 1,125 1,125 -
John Davis $5.00 2,250 2,250 -
Gary Dollarhide $5.00 625 625 -
Jon Johnson $5.00 1,250 1,250 -
Mark Meador $5.00 1,250 1,250 -
Roy Saenz $5.00 625 625 -
Phillip E. Powell(1) $4.625 35,000 1,033,074 55,741
Rick L. Wessel(1) $4.625 10,000 535,959 4,625
J. Alan Barron(1) $4.625 5,000 477,833 6,500
Scott Williamson(1) $4.625 5,000 227,000 42,000
Cynthia White $4.625 2,500 20,000 -
Nancy Talley $4.625 1,000 3,000 -
Randy York $4.625 5,000 50,000 -
Carolyn L. Hopkins $4.625 2,000 3,000 -
David W. Carr $4.625 2,000 15,000 -
Raul Ramos $4.625 2,000 15,000 -
Jorge L. Reyes $4.625 500 500 -
Jose A. Ramirez $4.625 1,500 2,500 -
Seth R.Trotman $4.625 2,000 15,000 -
Michael K. Blair $4.625 250 250 -
Stephanie M. Jordan $4.625 375 2,375 -
Rolando Garza $4.625 250 250 -
Michael P. Keefer $4.625 250 250 -
Judson Germany III $4.625 250 250 -
Douglas G. Spray $4.625 250 250 -
Jimmy D. Martin $4.625 63 63 -
Carey T. Dulany $4.625 250 250 -
Craig A. Stamps $4.625 250 250 -
Jorge Perez $4.625 250 250 -
Sean O. Mattan $4.625 62 62 -
Federico J. Galvan $4.625 250 250 -
Steve Lee Walker $4.625 250 1,250 -
Randy B. Coffman $4.625 250 250 -
Brenda L. Villarreal $4.625 250 250 -
Jaime O. Luera $4.625 250 250 -
Michael W. Herman $4.625 250 250 -
Joe Espinoza, Jr. $4.625 250 250 -
Jose C. Freitas $4.625 250 250 -
Miguel J. Trevino $4.625 250 250 -
Marisela Anzaldua $4.625 250 250 -
Suzanna Thomen $4.625 250 250 -
Dennis Murphy $4.625 250 250 -
Christopher J. Lee $4.625 250 15,000 -
Cynthia Williams $4.625 250 250 -
Rebecca S. Salazar $4.625 250 250 -
Albert Parada $4.625 250 250 -
-------
192,625
=======
</TABLE>

<TABLE>
Shares of Common
Shares of Common Shares of Common Stock Beneficially
Stock, the Issuance Stock Beneficially Owned by Option
of Which is Being Owned by Option Holder Assuming
Registered Hereby Holder as of the Date Sale of Shares,
Convertible ----------------- of this Prospectus the Issuance of
Debenture ------------------ Which is Being
Holders Registered Hereby
- ------- -----------------
<S> <C> <C> <C>
A.J.P.V. Co. 54,054 54,054 -
Charles Allen 15,135 15,135 -
The Aurum Group
Limited Partnership 21,622 21,622 -
Donna Cason 6,487 6,487 -
Tanya Christopher 21,622 21,622 -
Morton A. Cohn 108,108 108,108 -
Thomas W. Custer 5,405 5,405 -
William M. DeArman 69,190 73,190 -
Louis Del Homme 32,432 32,432 -
John Drury 108,108 120,108 -
Wayne B. Duddlesten 21,622 21,622 -
The Duddlesten Foundation 5,405 5,405 -
J.A. Elkins, Jr. &
Margaret W. Elkins 43,243 43,243 -
Bruce Greene 5,405 5,405 -
J-All Partnership 64,865 64,865 -
J.J.P.P. Co. 54,054 54,054 -
Michael P. Lawlor 21,622 21,622 -
Robert W. Lary 32,432 32,432 -
Kenneth L. and Linda P. Lay 10,811 10,811 -
Roger P. Lindstedt 21,622 21,622 -
Nobles Family, Ltd. 6,487 6,487 -
John M. O'Quinn 64,865 64,865 -
Ross M. Patten 10,811 10,811 -
Blairmore Holdings, Inc. 54,054 54,054 -
John A. Pinto &
Janice E. Pinto 21,622 21,622 -
Leroy E. Quigley 10,811 10,811 -
Brad D. Sanders 5,405 5,405 -
Bret D. Sanders 5,405 5,405 -
Christine M. Sanders 5,405 5,405 -
Don A. Sanders(1) 200,000 224,000 -
Katherine U. Sanders 172,973 172,973 -
Laura K. Sanders 5,405 5,405 -
Susan K. Sanders 5,405 5,405 -
Stephen D. Scott 10,811 10,811 -
Sherri Spicer 32,432 32,432 -
David Towery 5,405 5,405 -
Bruce M. Van Horn 5,405 5,405 -
Bruce M. Van Horn IRA 5,405 5,405 -
Ed McAninch 21,622 21,622 -
Nolan Ryan 10,811 10,811 -
Edward L. Whalen 5,405 5,405 -
Martin B. Bernstein 21,622 21,622 -
John T. Cater IRA 10,811 10,811 -
Cockspur, Inc. 5,405 5,405 -
Luke J. Drury 10,811 10,811 -
Emilio A. Fusco &
Mary G. Fusco, JTWROS 10,811 10,811 -
Ray C. Childress, Jr. &
Kara S. Childress 21,622 21,622 -
Stephen E. Raville 21,622 21,622 -
James W. Christmas 43,243 43,243 -
Bruce Slovin 21,622 21,622 -
Michael W. Mitchell 10,811 10,811 -
George L. Ball 10,811 10,811 -
Stan Wallace 10,811 10,811 -
Alfred Tyler ,2nd 10,811 10,811 -
Mark Rothman(2) 400,000 427,500 27,500
Rick L. Wessel 33,000 535,959 4,625
Phillip E. Powell 34,000 1,033,074 55,741
J. Alan Barron 33,000 477,833 6,500
---------
2,100,001
=========
</TABLE>

(1) See "Management - Certain Transactions" and "Principal Stockholders" for
a discussion of material relationships of any of this security holders with
the Company during the last three years.
(2) See "Principal Stockholders" for a discussion of material relationships
of this security holder with the Company during the last three years.

Rule 144 governs resales of "restricted securities" for the account of
any person (other than an issuer), and restricted and unrestricted securities
for the account of an "affiliate" of the issuer. Affiliates that receive
shares of Common Stock upon the exercise of the Warrants and Options or upon
the conversion of the Convertible Debentures will be deemed to have acquired
unrestricted securities. Restricted securities generally include any
securities acquired directly or indirectly from an issuer or its affiliates
which were not issued or sold in connection with a public offering registered
under the Act. An affiliate of the issuer is any person who directly or
indirectly controls, is controlled by, or is under common control with, the
issuer. Affiliates of the Company may include its directors, executive
officers, and persons directly or indirectly owning 10% or more of the
outstanding Common Stock. Under Rule 144, unregistered resales of restricted
Common Stock cannot be made until it has been held for two years from the
later of its acquisition from the Company or an affiliate of the Company.
Thereafter, shares of Common Stock may be resold without registration subject
to Rule 144's volume limitation, aggregation, broker transaction, notice
filing requirements, and requirements concerning publicly available
information about the Company ("Applicable Requirements"). Resales by the
Company's affiliates of restricted and unrestricted Common Stock are subject
to the Applicable Requirements. The volume limitations provide that a person
(or persons who must aggregate their sales) cannot, within any three-month
period, sell more than the greater of 1% of the then outstanding shares, or
the average weekly reported trading volume during the four calendar weeks
preceding each such sale.

LEGAL MATTERS
-------------

Certain matters in connection with the issuance of shares of Common Stock
by the Company upon exercise of the Warrants and Options, upon the conversion
of the Convertible Debentures will be passed upon by Brewer & Pritchard, P.C.,
Houston, Texas.

EXPERTS
-------

The financial statements as of July 31, 1996 and 1995 and for each of the
three years in the period ended July 31, 1996 included in this Prospectus have
been so included in reliance on the report of Price Waterhouse LLP,
independent accountants, given on the authority of said firm as experts in
auditing and accounting.

INDEX TO THE CONSOLIDATED FINANCIAL STATEMENTS
----------------------------------------------

Report of Independent Accountants
Consolidated Balance Sheets
Consolidated Statements of Income
Consolidated Statements of Cash Flows
Consolidated Statements of Changes in Stockholders' Equity
Notes to Consolidated Financial Statements

REPORT OF INDEPENDENT ACCOUNTANTS
---------------------------------

To the Board of Directors and Stockholders
of First Cash, Inc.

In our opinion, the accompanying consolidated balance sheets and the
related consolidated statements of income, of cash flows and of changes in
stockholders' equity present fairly, in all material respects, the financial
position of First Cash, Inc. and its subsidiaries at July 31, 1996 and 1995,
and the results of their operations and their cash flows for each of the three
years in the period ended July 31, 1996, in conformity with generally accepted
accounting principles. 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 of these
statements in accordance with generally accepted auditing standards which
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, assessing the accounting principles
used and significant estimates made by management, and evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for the opinion expressed above.

PRICE WATERHOUSE LLP
Fort Worth, Texas
October 22, 1996

<TABLE>
FIRST CASH, INC.
CONSOLIDATED BALANCE SHEETS
---------------------------
July 31, July 31,
1996 1995
---- ----
(in thousands, except
share data)
<S> <C> <C>
ASSETS
Cash and cash equivalents.................... $ 680 $ 266
Service charges receivable................... 1,783 1,360
Loans........................................ 11,701 9,158
Inventories.................................. 8,772 7,639
Prepaid expenses and other current assets.... 869 448
-------- --------
Total current assets............... 23,805 18,871
Property and equipment, net.................. 5,647 4,648
Intangible assets, net of accumulated amort-
ization of $1,934 and $1,369,respectively.. 21,547 19,343
Other........................................ 946 893
-------- --------
$ 51,945 $ 43,755
======== ========

LIABILITIES AND STOCKHOLDERS' EQUITY
Current portion of long-term debt and
notes payable.............................. $ 611 $ 373
Accounts payable and accrued expenses........ 1,672 1,198
Income taxes payable......................... 424 273
-------- --------
Total current liabilities.......... 2,707 1,844
Revolving credit facility.................... 14,550 9,700
Long-term debt and notes payable, net of
current portion............................ 2,477 2,041
Debentures Due 1999.......................... 7,500 7,500
Debentures Due 2004.......................... 2,500 2,500
Deferred income taxes........................ 1,628 1,223
-------- --------
31,362 24,808
-------- --------
Stockholders' equity:
Preferred stock; $.01 par value; 10,000,000
shares authorized, respectively; no
shares issued or outstanding.............. - -
Common stock; $.01 par value; 20,000,000
shares authorized; 4,168,459 and 4,130,084
shares issued, respectively; 3,697,500 and
3,659,125 shares outstanding, respectively 42 42
Additional paid-in capital................. 17,611 17,415
Retained earnings.......................... 5,195 3,755
Common stock held in treasury, at cost;
470,959 shares............................ (2,265) (2,265)
-------- --------
20,583 18,947
Commitments (see Note 11)
-------- --------
$ 51,945 $ 43,755
======== ========
</TABLE>

The accompanying notes are an
integral part of these consolidated financial statements.

<TABLE>
FIRST CASH, INC.
CONSOLIDATED STATEMENTS OF INCOME
---------------------------------

Year Ended July 31,
1996 1995 1994
---- ---- ----
(in thousands, except per share amounts)
<S> <C> <C> <C>
Revenues:
Merchandise sales..................... $ 24,823 $ 20,709 $ 12,174
Pawn service charges.................. 13,149 11,298 8,279
Other................................. 51 177 130
-------- -------- --------
38,023 32,184 20,583
-------- -------- --------
Cost of goods sold and expenses:
Cost of goods sold.................... 16,714 13,648 8,258
Operating expenses.................... 12,573 10,678 7,356
Interest expense...................... 2,124 2,116 819
Depreciation.......................... 540 506 361
Amortization.......................... 565 531 377
Administrative expenses............... 3,150 3,013 1,815
-------- -------- --------
35,666 30,492 18,986
-------- -------- --------
Income before income taxes............... 2,357 1,692 1,597
Provision for income taxes............... 917 592 462
-------- -------- --------
Net income............................... 1,440 1,100 1,135
Less dividends paid on preferred stock... - - 120
-------- -------- --------
Net income attributable to
common stockholders.................... $ 1,440 $ 1,100 $ 1,015
======== ======== ========

Net income per common share available
to common stockholders................. $ .39 $ .30 $ .27

Weighted average common shares and
common stock equivalents outstanding... 3,669 3,719 3,792

</TABLE>
The accompanying notes are an
integral part of these consolidated financial statements.

<TABLE>
FIRST CASH, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
-------------------------------------

Year Ended July 31,
1996 1995 1994
---- ---- ----
(in thousands)
<S> <C> <C> <C>
Cash flows from operating activities:
Net income.................................. $ 1,440 $ 1,100 $ 1,135
Adjustments to reconcile net income to
net cash provided by (used for)
operating activities:
Depreciation and amortization............ 1,105 1,037 738
Changes in operating assets and
liabilities, net of effect of purchases
of existing stores:
Service charges receivable............... (227) (83) (204)
Inventories.............................. (899) (1,260) (1,616)
Prepaid expenses and other assets........ (474) 707 (2,080)
Accounts payable and accrued expenses.... 451 151 (1,032)
Current and deferred income taxes........ 556 723 10
-------- -------- --------
Net cash flows from operating activities 1,952 2,375 (3,049)
-------- -------- --------
Cash flows from investing activities:
Net increase in loans....................... (1,606) (601) (1,166)
Purchases of property and equipment......... (1,282) (1,063) (645)
Proceeds from sale of property and equipment - 375 -
Acquisition of existing pawnshops........... (4,370) (2,347) (2,280)
-------- -------- --------
Net cash flows from investing activities (7,258) (3,636) (4,091)
-------- -------- --------
Cash flows from financing activities:
Proceeds from debt.......................... 17,909 10,622 14,857
Proceeds from debentures.................... - - 7,500
Repayments of debt.......................... (12,385) (8,499) (13,101)
Purchase of treasury stock.................. - (963) (112)
Redemption of Series A Preferred Stock...... - - (2,000)
Dividend payments on preferred stock........ - - (120)
Proceeds from exercise of options
and warrants............................... 196 - -
-------- -------- --------
Net cash flows from financing activities 5,720 1,160 7,024
-------- -------- --------
Change in cash and cash equivalents........... 414 (101) (116)
Cash and cash equivalents at beginning of
the year..................................... 266 367 483
-------- -------- --------
Cash and cash equivalents at end of the year.. $ 680 $ 266 $ 367
======== ======== ========
</TABLE>
(Continued)

<TABLE>
FIRST CASH, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued)
-------------------------------------------------

Year Ended July 31,
1996 1995 1994
---- ---- ----
(in thousands)
<S> <C> <C> <C>
Supplemental disclosure of cash
flow information:
Cash paid during the year for:
Interest.............................. $ 2,102 $ 1,990 $ 795
======== ======== ========
Income taxes.......................... $ 361 $ 99 $ 452
======== ======== ========

Supplemental disclosure of noncash investing
and financing activities:
Noncash transactions in connection with
various pawnshop acquisitions:
Fair market value of assets acquired.. $ 4,308 $ 5,099 $ 6,921
Less issuance of common stock....... - (800) -
Less issuance of debt............... - (2,000) (2,500)
Less assumption of liabilities
and costs of acquisition........... (23) (99) (1,786)
Less inventory conveyed............. - - (355)
-------- -------- --------
Net cash paid......................... $ 4,285 $ 2,200 $ 2,280
======== ======== ========

Noncash components of transaction
with former director:
Fair market value of items received:
Non-compete agreement............... $ 170
Treasury stock...................... 319
--------
$ 489
========
Net book value of assets surrendered:
Third party receivable.............. $ 48
Pawnshop and related assets......... 441
--------
$ 489
========

Noncash transactions for the purchase of
treasury stock:
Settlement of amounts due from
American Pawn........................ $ 690
========

</TABLE>
The accompanying notes are an
integral part of these consolidated financial statements.

<TABLE>
FIRST CASH, INC.
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
----------------------------------------------------------

Additional
Common Stock Paid-in Preferred Stock Retained Treasury Stock
Shares Amount Capital Shares Amount Earnings Shares Amount Total
------ ------ ------- ------ ------ -------- ------ ------ -----
(in thousands)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Balance at July 31, 1993 3,930 $ 40 $16,248 - - $ 1,640 35 $ (181) $17,747
Purchase of
treasury stock......... - - - - - - 278 (1,121) (1,121)
Common stock
warrants issued
in connection
with debt offering..... - - 369 - - - - - 369
Net income.............. - - - - - 1,015 - - 1,015
----- ------ ------- ------ ------ -------- ------ ------- -------
Balance at July 31, 1994 3,930 40 16,617 - - 2,655 313 (1,302) 18,010
Common stock issued in
connection with
an acquisition......... 200 2 798 - - - - - 800
Purchase of
treasury stock......... - - - - - - 158 (963) (963)
Net income.............. - - - - - 1,100 - - 1,100
----- ------ ------- ------ ------ -------- ------ ------- -------
Balance at July 31, 1995 4,130 42 17,415 - - 3,755 471 (2,265) 18,947
Exercise of stock
options and warrants.... 38 - 196 - - - - - 196
Net income.............. - - - - - 1,440 - - 1,440
----- ------ ------- ------ ------ -------- ------ ------- -------
Balance at July 31, 1996 4,168 $ 42 $17,611 - - $ 5,195 471 $(2,265) $20,583
===== ====== ======= ====== ====== ======== ====== ======= =======
</TABLE>

The accompanying notes are an
integral part of these consolidated financial statements.

FIRST CASH, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
------------------------------------------

NOTE 1 - ORGANIZATION AND NATURE OF THE COMPANY
- -----------------------------------------------

First Cash, Inc. (the "Company") was incorporated in Texas on July 5,
1988 and was reincorporated in Delaware in April 1991. The Company is engaged
in acquiring, establishing and operating pawnshops which lend money on the
security of pledged tangible personal property. In addition to making short
term loans, the Company offers for resale the personal property forfeited by
the individuals on loans, as well as personal property purchased outright from
customers and vendors. As of July 31, 1996 the Company operated fifty stores.

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
- ---------------------------------------------------

The following is a summary of significant accounting policies followed in
the preparation of these financial statements.

Principles of consolidation - The accompanying consolidated financial
statements of the Company include the accounts of its wholly-owned
subsidiaries, American Loan & Jewelry, Inc. ("American Loan") and Famous Pawn,
Inc. ("Famous Pawn"). All significant intercompany accounts and transactions
have been eliminated.

Cash and cash equivalents - The Company considers any highly liquid
investments with an original maturity of three months or less to be cash
equivalents.

Loans and income recognition - Pawn loans ("loans") are made on the
pledge of tangible personal property for one month with an automatic extension
period of sixty days in Texas, thirty days in Oklahoma, and fifteen days in
Maryland. Loans are made for a period of 120 days in Washington, D.C. with no
automatic extension. In accordance with Texas state law, the Company has
recorded pawn service charges at the inception of the loan at the lesser of
the amount of interest allowed by law for the initial loan period, or $15.
Additional pawn service charges are recognized during the initial loan period
when the aggregate pawn service charges earned, determined on a constant yield
basis over the initial loan period, exceed the amount of income recognized at
the inception of the loan. Pawn service charges on loans made in Oklahoma,
Maryland and Washington, D.C. are recorded at the amount of interest allowed
by law for the first 30 days. Pawn service charges applicable to the
extension periods or additional loan periods are not recognized as income
until the loan is repaid or renewed. If the loan is not repaid, the principal
amount loaned plus accrued pawn service charges becomes the carrying value of
the forfeited collateral ("inventory") which is recovered through sale.

Layaway and deferred revenue - Interim payments from customers on layaway
sales are credited to deferred revenue and subsequently recorded as income
during the period in which final payment is received.

Inventories - Inventories represent merchandise purchased directly from
the public, merchandise acquired from forfeited loans and new merchandise
purchased from vendors. Inventories purchased directly from vendors and
customers are recorded at cost. Inventories from forfeited loans are recorded
at the amount of the loan principal plus one month's accrued pawn service
charges on the unredeemed goods. The cost of inventories is determined on the
specific identification method. Inventories are stated at the lower of cost
or market; accordingly, inventory valuation allowances are established when
inventory carrying values are in excess of estimated selling prices, net of
direct costs of disposal.

Property and equipment - Property and equipment are recorded at cost.
Depreciation is determined on the straight-line method based on estimated
useful lives of thirty-one years for buildings and five to ten years for
equipment. The costs of improvements on leased stores are capitalized as
leasehold improvements and are amortized on the straight-line method over the
applicable lease period, or useful life if shorter.

Maintenance and repairs are charged to expense as incurred; renewals and
betterments are charged to the appropriate property and equipment accounts.
Upon sale or retirement of depreciable assets, the cost and related
accumulated depreciation is removed from the accounts, and the resulting gain
or loss is included in the results of operations in the period retired.

Intangible assets - Intangible assets consist of the excess of purchase
price over net assets acquired and non-compete agreements. Excess purchase
price over net assets acquired is being amortized on a straight-line basis
over an estimated useful life of forty years and payments relative to non
compete agreements are amortized over their estimated useful lives ranging
from two to ten years. The Company's amortization policy is reviewed annually
by the Board of Directors to determine if any change is appropriate.
Management of the Company periodically evaluates the carrying value of the
excess purchase price over the net tangible assets of businesses acquired to
determine that no diminution in carrying value has occurred by comparing a
multiple of current earnings before income taxes on an undiscounted basis to
the net carrying value of the related intangibles. The multiple used in this
evaluation is consistent with the Company's acquisition model and is
determined based upon a discount to the historical trading multiple of the
Company's common stock. Upon any such diminution in value, an appropriate
amount would be charged to earnings.

Fair value of financial instruments - The fair value of financial
instruments is determined by reference to various market data and other
valuation techniques, as appropriate. Unless otherwise disclosed, the fair
values of financial instruments approximate their recorded values, due
primarily to their short-term nature.

Income taxes - The Company uses the liability method of computing
deferred income taxes on all material temporary differences. Temporary
differences are the differences between the reported amounts of assets and
liabilities and their tax bases.

Advertising - The Company expenses the costs of advertising the first
time the advertising takes place. Advertising expense for the fiscal years
ended July 31, 1996, 1995 and 1994 was $165,000, $225,000 and $150,000,
respectively.

Earnings per share - Primary earnings per common share is calculated
using the modified treasury stock method as defined by Accounting Principles
Board Opinion #15 ("APB 15"), which requires a dual computation. The first
computation divides net income available to common shareholders by the
weighted average shares of common stock outstanding during the period. The
second computation requires all common stock equivalents, whether dilutive or
anti-dilutive, be included in an aggregate computation, however, the number of
common shares assumed to be repurchased into treasury is limited to 20% of the
number of common shares outstanding at the end of the period. The remaining
excess proceeds are then assumed to first retire outstanding debt, and second,
to purchase certain "risk-free" securities. Pursuant to APB 15, if the result
of the aggregate computation is dilutive, when compared to the first
computation, its result must be reported as earnings per share; otherwise, the
result of the first computation is reported. For earnings per share purposes,
the preferred stock as well as all convertible debt outstanding during the
periods presented are not considered common stock equivalents since the
effective yields exceeded 66.67% of the average Aa corporate bond yield at the
dates of issuance. In computing primary earnings per share attributable to
common stockholders, preferred stock dividends are deducted from net income.
Fully diluted earnings per share is not presented since the assumed conversion
of both the preferred shares and convertible debentures would be either anti
dilutive or result in dilution of less than 3%.

Pervasiveness of estimates - The preparation of financial statements in
conformity with generally accepted accounting principles requires management
to make estimates and assumptions that affect the reported amounts of assets
and liabilities, and related revenues and expenses and disclosure of gain and
loss contingencies at the date of the financial statements. Actual results
could differ from those estimates.

New accounting pronouncements - In October 1995, the Financial Accounting
Standards Board ("FASB") issued Financial Accounting Standard No. 123,
"Accounting for Stock-Based Compensation" ("FAS 123"), which is effective for
fiscal years beginning after December 15, 1995. Effective August 1, 1996, the
Company will adopt FAS 123 establishing financial accounting and reporting
standards for stock-based employee compensation plans. The pronouncement
defines a fair value based method of accounting for an employee stock option
or similar equity instrument and encourages all entities to adopt that method
of accounting for all of their employee stock option compensation plans.
However, it also allows an entity to continue to measure compensation cost for
those plans using the intrinsic value based method of accounting as prescribed
by Accounting Principles Board Opinion No. 25, Accounting for Stock Issued to
Employees ("APB 25"). Entities electing to remain with the accounting in APB
25 must make pro forma disclosures of net income and earnings per share as if
the fair value based method of accounting defined in FAS 123 had been applied.
The Company will account for stock-based employee compensation plans under the
intrinsic method pursuant to APB 25 and will make the disclosures in the
footnotes as required by FAS 123.

In March 1995, the FASB issued Financial Accounting Standard No. 121,
"Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets
to Be Disposed Of" ("FAS 121"), which is effective for fiscal years beginning
after December 15, 1995. Effective August 1, 1996, the Company will adopt FAS
121, which requires that long-lived assets (i.e., property, plant and
equipment and intangible assets) will be reviewed for impairment whenever
events or changes in circumstances indicate that the net book value of the
asset may not be recoverable. An impairment loss will be recognized if the
sum of the expected future cash flows (undiscounted and before interest) from
the use of the asset is less than the net book value of the asset. Generally,
the amount of the impairment loss is measured as the difference between the
net book value of the assets and the estimated fair value of the related
assets.

NOTE 3 - BUSINESS ACQUISITIONS
- ------------------------------

In October 1994, the Company acquired five pawnshops in Maryland and the
Washington, D.C. Metropolitan area in an asset purchase including fixed
assets, layaways, deposits, pawn loans and inventory from five unaffiliated
corporations, four of which received cash and the fifth corporation, National
Trade Center, Inc. received a combination of cash, stock and a note payable.
The five pawnshops and related assets were acquired for a purchase price of
$5,099,000 consisting of $2,200,000 cash, a five year unsecured $2,000,000
promissory note with principal and interest payable monthly at the rate of 7%
per annum, the issuance of 200,000 shares of the Company's Common Stock valued
at the then market price of $4 per share, and assumed liabilities, legal,
accounting and transaction fees of $99,000. The Company financed
substantially all of the cash purchase price through its credit facility. The
purchase price of the transaction was determined based upon the volume of
annual loan and sales transactions, outstanding loan balances, inventory on
hand, and location and condition of the facilities.

In May 1994, the Company acquired 100% of the issued and outstanding
common stock of Famous Pawn, which operates seven stores in the Maryland and
Washington, D.C. metropolitan area, from an unaffiliated third party. The
total purchase price was $3,950,000 consisting of $1,450,000 cash and a
$2,500,000 7% Convertible Subordinated Debenture Due 2004. The Company
incurred legal, accounting and transaction fees of $174,000 in conjunction
with the acquisition.

The following unaudited pro forma summary data for the year ended July
31, 1995 and 1994 (in thousands, except per share amounts) combines the
results of operations of the Company, Famous Pawn, Inc. and National Trade
Center, Inc. as if the acquisitions had occurred as of August 1, 1993, after
giving effect to certain adjustments, including increased interest expense on
acquisition debt, increased depreciation and amortization expense on assets
acquired, and the related income tax effects. The unaudited pro forma Fiscal
1995 and 1994 results do not necessarily represent results which would have
occurred if the Company had acquired Famous Pawn, Inc. and National Trade
Center, Inc. on August 1, 1993, nor are they necessarily indicative of the
results of future consolidated operations.

<TABLE>
Pro Forma Pro Forma
1995 1994
---- ----
(unaudited) (unaudited)
<S> <C> <C>
Revenues........................... $ 32,670 $ 28,024
Net income......................... 1,111 1,357
Net income per share............... $ .30 $ .34
</TABLE>

In January 1994, the Company acquired from unaffiliated parties certain
assets of two pawnshops in Oklahoma City. The purchase price was $100,000
cash, and commissions and legal costs of the acquisitions amounted to $17,000.
In May 1994, the Company acquired, in three separate transactions, one
pawnshop each in Corpus Christi, Weslaco and Dallas, Texas. The aggregate
purchase price was $854,000, consisting of $495,000 cash and inventory of
$359,000. Related commissions and legal costs aggregated $44,000. In
addition, the Company acquired pawn licenses in Brownsville and Laredo for a
combined purchase price of $56,000.

All of these acquisitions have been accounted for using the purchase
method of accounting. Accordingly, the purchase price was allocated to assets
and liabilities acquired based upon their estimated fair market values at the
dates of acquisition. The excess purchase price over the fair market value of
the net tangible assets acquired and identifiable intangible assets has been
recorded as goodwill. Goodwill and other intangible assets, net of
accumulated amortization, resulting from acquisitions was $21,547,000 and
$19,343,000 as of July 31, 1996 and 1995, respectively. The results of
operations of the acquired companies are included in the consolidated
financial statements from their respective dates of acquisition. In connection
with these acquisitions, the Company entered into 2 to 10 year non-compete
agreements with the former owners.

NOTE 4 - RELATED PARTY TRANSACTIONS
- -----------------------------------

On February 1, 1992, the Company acquired 100% of the issued and
outstanding common stock of American Loan, a wholly-owned subsidiary of
American Pawn & Jewelry, Inc. ("American Pawn"). American Loan owns and
operates seven pawnshops in South Texas. The purchase price was $9,803,000,
consisting of $8,600,000 in a seller-financed note payable, 200,000 shares of
Common Stock recorded at the then market price of $5 per share, $89,000 in
assumed liabilities and $114,000 in cash. During fiscal 1993, $2,000,000 of
the seller-financed note was converted into 250,000 shares of Series A
preferred stock. During May 1994, the Company and American Pawn entered into
an agreement for the Company to redeem the 250,000 shares of its preferred
stock held by American Pawn, repurchase 200,000 shares of common stock of the
Company held by American Pawn and recover amounts the Company believed were
due to it from American Pawn or its shareholders. The Series A preferred
stock was contractually redeemable for $2,000,000, and the common stock had a
quoted market value of $800,000. As consideration, the Company paid
$2,100,000 to American Pawn, granted American Pawn a three-year warrant to
purchase 100,000 shares of the Company's common stock at $4.50 per share and
agreed to settle amounts approximating $668,000 which the Company had incurred
on behalf of American Pawn or its shareholders, of which $544,000 had been
recorded as store operating and administrative expense and $124,000 had been
recorded as a receivable in the Company's financial statements. Upon reaching
an agreement with American Pawn, the Company recorded the recovery of these
costs by reducing store operating and administrative expense by an aggregate
of $544,000, which, net of taxes, increased net income for the fourth quarter
of fiscal 1994 by approximately $343,000. Concurrent with this transaction,
Messrs. Charles R. Jones and C. Morgan Jones, affiliates of American Pawn and
directors of the Company, resigned from the Company's Board of Directors. For
the fiscal year ended July 31, 1994, the Company paid American Pawn preferred
stock dividends of $120,000.

In conjunction with the acquisition of American Loan, the Company agreed
to lease the acquired locations from American Pawn. The commitments relating
to such leases are included in the lease commitments in Note 11 to these
financial statements. As discussed in Note 3, the Company repurchased all of
the Series A Preferred Stock and all of the Common Stock held by American
Pawn, and Mr. Jones resigned as a director of the Company effective May 6,
1994. Thus, after May 6, 1994, American Pawn and Mr. Jones ceased to be
related parties. During fiscal 1994, the Company recorded rent expense of
$350,000 under such leases up until the date American Pawn and Mr. Jones
ceased to be related parties.

On December 1, 1993, the Company completed a transaction with John R.
Payne, formerly a director of the Company, by which the Company (i) acquired
from Mr. Payne an aggregate of 75,000 shares of Common Stock of the Company,
(ii) retired incentive options to purchase 100,000 shares of Common Stock held
by Mr. Payne, (iii) purchased from Mr. Payne certain real estate for $35,000,
(iv) entered into a non-compete agreement with Mr. Payne, and (v) entered into
a five-year consulting agreement with Mr. Payne providing maximum compensation
in the amount of $100,000 per year for a period of five years, in exchange for
the transfer to Mr. Payne of one pawnshop location, including operating
permits, pawn loans, inventory, furniture, fixtures, equipment, a leasehold
interest in the real property underlying the location, all having a net book
value of $441,000, and a note receivable from an unaffiliated party in the
approximate amount of $48,000 including principal and accrued interest (this
transaction is referred to as the "Payne Transaction"). The store
transferred from the Company to Mr. Payne had been owned by the Company for
more than five years. The Company valued the shares of Common Stock and the
non-compete agreement at approximately $489,000 and recognized no significant
gain or loss from this transaction. The Company entered into the consulting
agreement with Mr. Payne in order to utilize his expertise in identifying,
evaluating and negotiating pawnshop acquisitions consistent with the Company's
expansion strategy. During fiscal 1996, the Company prepaid the remainder of
the consulting agreement with Mr. Payne, $242,000 of which is reflected in
other assets in the Company's balance sheet as of July 31, 1996.

The closing of the Payne Transaction was conditioned upon (i) the
Company's secured lender releasing the assets as collateral, (ii) obtaining a
fairness opinion from an investment banking firm that the Payne Transaction
was fair to the Company from a financial point of view, and (iii) the closing
of the sale of 590,000 shares of Common Stock by Messrs. Payne, Hudiburg and
Abbott, former directors of the Company, to six purchasers at a purchase price
of $4 per share pursuant to a registration statement filed by the Company.
Prior to closing, the Company obtained a fairness opinion from the Company's
financial advisor as well as a consent from its secured lender. The Company's
financial advisor advised the Board of Directors that, in its opinion, the
Payne Transaction was fair to the Company's stockholders from a financial
point of view. Upon the closing of the Payne Transaction, Messrs. Payne,
Hudiburg, Abbott, Delp and Gibson resigned as directors of the Company. None
of the resigning directors expressed a disagreement with the Company in any
matter relating to the Company's operations, policies or practices.

In December 1993, October 1994 and January 1996, the Company issued to
Mr. Jon Burke, the brother of a director of the Company, Mr. Richard T. Burke,
warrants to purchase 50,000 shares, 5,000 shares and 50,000 shares,
respectively, of the Company's Common Stock at exercise prices of $4, $4.625
and $4.625 per share, respectively, for consulting services to be provided
through January 2001. The warrants vest over a five-year period. During
fiscal 1996, the Company paid to Joe R. Love, a director of the Company, a
consulting fee of $75,000 for services rendered in connection with certain
acquisitions.

NOTE 5 - PROPERTY AND EQUIPMENT
- -------------------------------

Property and equipment consist of the following (in thousands):

<TABLE>
July 31, July 31,
1996 1995
---- ----
<S> <C> <C>
Land...................................... $ 719 $ 369
Buildings................................. 1,002 456
Leasehold improvements.................... 1,792 1,628
Furniture, fixtures and equipment......... 4,192 3,721
-------- --------
7,705 6,174
Less: accumulated depreciation........... (2,058) (1,526)
-------- --------
$ 5,647 $ 4,648
======== ========
</TABLE>

NOTE 6 - ACCOUNTS PAYABLE AND ACCRUED EXPENSES
- ----------------------------------------------

Accounts payable and accrued expenses consist of the following (in
thousands):

<TABLE>
July 31, July 31,
1996 1995
---- ----
<S> <C> <C>
Accounts payable.......................... $ 147 $ 168
Accrued wages............................. 650 360
Layaway deposits.......................... 534 401
Sales tax payable......................... 113 96
Other..................................... 228 173
-------- --------
$ 1,672 $ 1,198
======== ========
</TABLE>

NOTE 7 - REVOLVING CREDIT FACILITY
- ----------------------------------

On July 29, 1994, the Company entered into a long-term line of credit
facility ("Credit Facility") with a bank in the amount of $20,000,000 which
replaced the Company's previous revolving credit facility. At July 31, 1996,
$14,550,000 was outstanding under this Credit Facility and an additional
$1,501,000 was available to the Company pursuant to the available borrowing
base. Amounts outstanding bear interest at a variable rate which fluctuates
between the bank's prime lending rate and the prime lending rate minus one
half percent. Amounts available under the Credit Facility are limited to the
sum of 60% of inventory and 80% of loans and service charges receivable of the
Company. The Credit Facility is scheduled to mature on December 1, 1997.
Under the terms of the Credit Facility, the Company is required to maintain

certain financial ratios and comply with certain technical covenants. As of
July 31, 1996, the Company was in compliance with such covenants. The Company
is required to pay an annual commitment fee of 1/8 of 1% on the average daily
unused portion of the Credit Facility commitment. The Company is prohibited
from paying dividends to its stockholders. Substantially all of the
unencumbered assets of the Company have been pledged as collateral against
indebtedness under the Credit Facility.

NOTE 8 - LONG-TERM DEBT AND NOTES PAYABLE
- -----------------------------------------

Long-term debt and notes payable consist of the following (in thousands):

<TABLE>
July 31, July 31,
1996 1995
---- ----
<S> <C> <C>
Note payable to a bank; bearing interest at 9.3%;
monthly principal and interest payments of
$5,257 until maturity at December 1, 2000;
secured by real estate........................... $ 564 $ 572
Note payable to a bank; bearing interest at 9%;
monthly principal and interest payments of
$5,518 until maturity at April 1, 2001;
secured by real estate........................... 538 -
Note payable to an unrelated corporation;
bearing interest at 7%; monthly principal and
interest payments of $39,604 until maturity at
October 1, 1999; unsecured....................... 1,443 1,742
Unsecured demand note payable to an individual;
bearing interest at 7%; interest payable
monthly in installments of $583.................. 100 100
Note payable to a bank; bearing interest at 9.3%;
monthly principal and interest payments of
$14,504, until maturity at July 1, 1999;
secured by equipment............................. 443 -
-------- --------
3,088 2,414
Less: current portion............................. (611) (373)
-------- --------
$ 2,477 $ 2,041
======== ========
</TABLE>

Long-term debt and notes payable are scheduled to mature as follows (in
thousands):

<TABLE>
Fiscal
------
<S> <C>
1997..................... $ 611
1998..................... 601
1999..................... 649
2000..................... 255
2001..................... 972
------
$3,088
======
</TABLE>

Interest expense related to indebtedness to former officers and directors
was approximately $247,000 for fiscal 1994.

NOTE 9 - CONVERTIBLE SUBORDINATED DEBENTURES
- --------------------------------------------

In April 1994, the Company completed the private placement of $7,500,000
of 10% Convertible Subordinated Debentures Due 1999. The debentures are
convertible into 1,621,622 shares of Common Stock, which represents a
conversion price of $4.625 per share, at the option of the debenture holders,
or may be prepaid in whole by the Company if the price of the Company's Common
Stock trades at or above $8.10 for 30 consecutive days. These debentures are
subordinated to the Credit Facility and are unsecured. A default under the
terms of the Company's Credit Facility also results in default under the
provisions of these debentures. Interest on the debentures is payable
quarterly at March 31, June 30, September 30 and December 31, and principal is
due in 1999, if not previously converted into Common Stock. Debt issue costs
of $934,000 were incurred in this transaction and are included in other assets
on the accompanying consolidated balance sheet, net of accumulated
amortization of $280,000, $160,000 and $40,000 at July 31, 1996, 1995 and
1994, respectively. As of July 31, 1996, the fair market value of these
debentures is estimated to be $7,703,000.

In conjunction with the acquisition of Famous Pawn, the Company issued
$2,500,000 of 7% Convertible Subordinated Debentures Due 2004 to the former
sole shareholder of Famous Pawn. The debentures may be converted into 500,000
shares of Common Stock at the option of the debenture holder on or after June
1, 1997, which represents a conversion price of $5 per share, or may be
prepaid in whole by the Company if the price of the Company's Common Stock
trades at or above $10 per share for 10 consecutive trading days on or after
June 1, 1997. These debentures are subordinated to the Credit Facility and
are unsecured. A default under the terms of the Company's Credit Facility
also results in default under the provisions of these debentures. Interest on
the debentures is payable monthly, and principal is due 2004, if not
previously converted into Common Stock. As of July 31, 1996, the fair market
value of these debentures is estimated to be $2,375,000.

NOTE 10 - INCOME TAXES
- ----------------------

Components of the provision for income taxes consist of the following (in
thousands):

<TABLE>
For the year ended July 31,
1996 1995 1994
---- ---- ----
<S> <C> <C> <C>
Current:
Federal.............................. $ 446 $ 40 $ 154
State................................ 67 46 38
-------- -------- --------
513 86 192
Deferred............................... 404 506 270
-------- -------- --------
$ 917 $ 592 $ 462
======== ======== ========
</TABLE>

The Company has no deferred tax assets. The principal current and non
current deferred tax liabilities consist of the following at July 31, 1996 and
1995 (in thousands):

<TABLE>
July 31, July 31,
1996 1995
---- ----
<S> <C> <C>
Deferred tax liabilities:
Intangible asset amortization.......... $ 989 $ 766
Depreciation........................... 466 356
State income taxes..................... 106 70
Service charges receivable............. 48 35
Other.................................. 67 31
-------- --------
Net deferred tax liability............. $ 1,676 $ 1,258
======== ========

Reported as:
Current liabilities - income
taxes payable......................... $ 48 $ 35
Non-current liabilities - deferred
income taxes.......................... 1,628 1,223
-------- --------
Net deferred tax liability............. $ 1,676 $ 1,258
======== ========
</TABLE>

The provision for income taxes differs from the amounts determined by
applying the expected federal statutory tax rate to income before income
taxes. The following is a reconciliation of such differences (in thousands):

<TABLE>
For the year ended July 31,
1996 1995 1994
---- ---- ----
<S> <C> <C> <C>
Tax at the federal statutory rate........ $ 801 $ 575 $ 543
Nondeductible amortization of
intangible assets....................... 34 34 -
State income taxes, net of federal
tax benefit............................. 67 52 25
Amortization of intangible assets........ - - (131)
Other, net............................... 15 (69) 25
-------- -------- --------
$ 917 $ 592 $ 462
======== ======== ========
</TABLE>

In August 1993, the Revenue Reconciliation Act of 1993 (the "1993 Act")
was enacted which contained provisions allowing the Company to deduct the
amortization of intangible assets acquired in connection with acquisitions
made by the Company subsequent to July 25, 1991. The Company has
approximately $19,080,000 of intangible assets which will qualify for
straight-line amortization over fifteen years for both federal and state
income tax purposes. The Company amortizes these intangible assets over forty
year periods for financial reporting purposes. The reconciling item entitled
"Amortization of intangible assets" in the table above for fiscal 1994
represents the amortization of intangible assets in fiscal 1993 and Fiscal
1992 which was nondeductible for income tax purposes prior to passage of the
1993 Act.

NOTE 11 - COMMITMENTS AND CONTINGENCIES
- ---------------------------------------

The Company leases certain of its pawnshop facilities and computer
equipment under operating leases with terms ranging from two to ten years.
Most facility leases contain renewal and/or purchase options. Remaining
future minimum rentals due under non-cancelable operating leases are as
follows (in thousands):

<TABLE>
Fiscal
------
<S> <C>
1997.................... $ 2,058
1998.................... 1,885
1999.................... 1,681
2000.................... 1,351
2001.................... 1,063
Thereafter.............. 1,393
--------
$ 9,431
========

</TABLE>
Rent expense under such leases was $2,070,000, $1,964,000 and $1,186,000
for fiscal years 1996, 1995 and 1994, respectively.

NOTE 12 - EMPLOYEE STOCK OPTION PLAN AND OUTSTANDING WARRANTS
- -------------------------------------------------------------

On May 2, 1991, the Company sold 900,000 shares of Common Stock and
450,000 warrants to purchase 450,000 shares of Common Stock for net proceeds
of $3,581,000. Each warrant initially entitled the holder to purchase one
share of Common Stock for $6 per share. Prior to June 1, 1996, the Company
received $120,000 for the exercise of 20,000 warrants. The remaining 430,000
warrants expired on June 1, 1996.

On October 30, 1990, the Company's Board of Directors adopted the 1990
Stock Option Plan (the "Plan"). The Plan provides for the issuance of
incentive stock options and non-qualified stock options to key employees and
directors of the Company. The total number of shares of Common Stock
authorized and reserved for issuance under the Plan is 250,000 shares. The
exercise price for each stock option granted under the Plan may not be less
than the fair market value of the Common Stock on the date of the grant,
unless, in the case of incentive stock options, the optionee owns greater than
10% of the total combined voting power of all classes of capital stock of the
Company, in which case the exercise price may not be less than 110% of the
fair market value of the Common Stock on the date of the grant. Unless
otherwise determined by the Board, options granted under the Plan have a
maximum duration of five years and vest in up to four equal installments,
commencing on the first anniversary of the date of grant. As of July 31,
1996, options to purchase 40,000 shares of Common Stock were available for
grant under the Plan. Options to purchase 133,281 shares were fully vested at
July 31, 1996.

The Company also issues warrants to purchase shares of Common Stock to
certain key members of management, to members of the Board of Directors who
are not employees or officers of the Company and to outside consultants and
advisors in connection with various acquisitions, debt offerings and
consulting engagements.

Stock option and warrant activity from July 31, 1993 through July 31,
1996 is summarized in the accompanying chart.

<TABLE>
Aggregate Aggregate
Exercise Exercised Exercise Exercised
Options Price Value Warrants Price Value
------- ----- ----- -------- ----- -----
<S> <C> <C> <C> <C> <C> <C>
July 31, 1993.......... 232,625 $5 $1,163,125 590,355 $5 to $12 $ 4,852,130
Granted................ - - - 1,370,162 $4 to $5 5,681,999
Cancelled.............. (113,250) $5 (566,250) (365,000) $5 to $10 (3,200,000)
-------- ---------- --------- -----------
July 31, 1994.......... 119,375 $5 596,875 1,595,517 $4 to $12 7,334,129
Granted................ 96,500 $4 5/8 446,313 65,000 $4 5/8 300,625
Cancelled.............. (14,250) $4 5/8 to $5 (67,172) (210,000) $4 to $6 (1,040,000)
-------- ---------- --------- -----------
July 31, 1995.......... 201,625 $4 5/8 to $5 976,016 1,450,517 $4 to $12 6,594,754
Granted................ 117,000 $4 5/8 541,125 1,908,250 $4 5/8 to $15 19,200,656
Cancelled.............. (108,625) $4 5/8 to $5 (539,891) (125,355) $6 (752,130)
Exercised.............. (3,375) $5 (16,875) (15,000) $4 (60,000)
-------- ---------- --------- -----------
July 31, 1996.......... 206,625 $4 5/8 to $5 $ 960,375 3,218,412 $4 to $15 $24,983,280
======== ========== ========= ===========
</TABLE>

NOTE 13 - FIRST CASH 401(k) PLAN
- --------------------------------

The First Cash 401(k) Plan (the "Plan") is provided by the Company for
all full-time employees who have been employed with the Company for one year.
Under the Plan, a participant may contribute up to 15% of earnings, with the
Company matching the first 3% at a rate of 50%. The employee contributions
are paid to a corporate trustee and invested in various funds. Company
contributions are invested in its common stock, and contributions made to
participants' accounts become fully vested upon completion of five years of
service. The total Company contributions to the Plan were $34,000 for fiscal
1996.

PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
--------------------------------------

Item 13. Other Expenses of Issuance and Distribution
- ----------------------------------------------------

The following table sets forth the estimated expenses to be incurred in
connection with the distribution of the securities being registered. The
expenses shall be paid by the Company.

<TABLE>
<S> <C>
Filing Fee for Registration Statement............. $ 10,000.00
NASD Filing Fee................................... -
Printing, Engraving and Mailing Fees.............. 500.00
Legal Fees and Expenses........................... 5,000.00
Accounting Fees and Expenses...................... 3,000.00
Blue Sky Fees and Expenses........................ -
Transfer Agent Fees............................... -
Miscellaneous..................................... -
------------
Total............................................. $ 18,500.00
============

</TABLE>
Item 14. Indemnification of Directors and Officers
- --------------------------------------------------

Article X of the Certificate of Incorporation of the Company provides for
indemnification of officers, directors, agents and employees of the Company as
follows:

(a) Each person who was or is made a party or is threatened to be made a
party to or is involved in any action, suit or proceeding, whether civil,
criminal, administrative or investigative (hereinafter a "proceeding"), by
reason of the fact that he or she, or a person of whom he or she is the legal
representative, is or was a director or officer of the Corporation or is or
was serving at the request of the Corporation as a director, officer, employee
or agent of another corporation or of a partnership, joint venture, trust or
other enterprise, including service with respect to employee benefit plans,
whether the basis of such proceeding is alleged action in an official capacity
as a director, officer, employee or agent or in any other capacity while
serving as a director, officer, employee or agent or in any other capacity
while serving as a director, officer, employee or agent, shall be indemnified
and held harmless by the Corporation to the fullest extent authorized by the
law, as the same exists or may hereafter be amended (but, in the case of any
such amendment, only to the extent that such amendment permits the Corporation
to provide broader indemnification rights than said law permitted the
Corporation to provide prior to such amendment), against all expense liability
and loss (including attorneys' fees, judgments, fines, ERISA excise taxes or
penalties and amounts paid or to be paid in settlement) reasonably incurred or
suffered by such person in connection therewith and such indemnification shall
continue as to a person who has ceased to be a director, officer, employee or
agent and shall inure to the benefit of his or her heirs, executors and
administrators: provided, however, that, except as provided in paragraph (b)
hereof, the Corporation shall indemnify and such person seeking
indemnification in connection with a proceeding (or part thereof) initiated by
such person only if such proceeding (or part thereof) was authorized by the
Board of Directors of the Corporation. The right to indemnification conferred
in this Article shall be a contract right and shall include the right to be
paid by the Corporation the expenses incurred in defending
any such proceeding in advance of its
final disposition: provided, however, that, if the law requires, the payment
of such expenses incurred by a director or officer in his or her capacity as a
director or officer (and not in any other capacity in which service was or is
rendered by such person while a director or officer, including, without
limitation, service to an employee benefit plan) in advance of the final
disposition of a proceeding shall be made only upon delivery to the
Corporation of an undertaking, by or on behalf of such director or officer, to
repay all amounts so advanced if it shall ultimately be determined that such
director or officer is not entitled to be indemnified under this Article or
otherwise. The Corporation may, by action of its Board of Directors, provide
indemnification to employees and agents of the Corporation with the same scope
and effect as the foregoing indemnification of directors and officers.

(b) If a claim under paragraph (a) of this Article is not paid in full by the
Corporation within thirty days after a written claim has been received by the
Corporation, the claimant may, at any time thereafter, bring suit against the
Corporation to recover the unpaid amount of the claim and, if successful in
whole or in part, the claimant shall be entitled to be paid also the expense
of prosecuting such claim. It shall be a defense to any such action (other
than an action brought to enforce a claim for expenses incurred in defending
any proceeding in advance of its final disposition where the required
standards of conduct which make it permissible under law for the Corporation
to indemnify the claimant for the amount claimed, but the burden of proving
such defense shall be on the Corporation. Neither the failure of the
Corporation (including its Board of Directors, independent legal counsel, or
its stockholders) to have made a determination prior to the commencement of
such action that indemnification of the claimant is proper in the
circumstances because he or she has met the applicable standard of conduct set
forth in the law, nor an actual determination by the Corporation (including
its Boards of Directors, independent legal counsel, or its stockholders) that
the claimant has not met such applicable standard of conduct, shall be a
defense to the action or create a presumption that the claimant has not met
the applicable standard of conduct.

(c) The right to indemnification and the payment of expenses incurred in
defending a proceeding in advance of its final disposition conferred in this
Article shall not be exclusive of any other right which any person may have or
hereafter acquire under any statute, provision of the Certificate of
Incorporation, bylaw, agreement, vote of stockholders or disinterested
directors or otherwise.

(d) The Corporation may maintain insurance, at its expense, to protect itself
and any director, officer, employee or agent of the Corporation or another
corporation, partnership, joint venture, trust or other enterprise against any
such expense, liability or loss, whether or not the Corporation would have the
power to indemnify such person against such expense, liability or loss under
the law.

The foregoing discussion of the Company's Certificate of Incorporation,
and of the Delaware General Corporation Law is not intended to be exhaustive
and is qualified in its entirety by such Certificate of Incorporation and
Statutes, respectively.

Item 15. Recent Sales of Unregistered Securities
- -------------------------------------------------

All share numbers have been adjusted for reverse splits and reflect
shares of Common Stock issued upon conversion of preferred stock.

In January 1992, the Company issued a three-year warrant to an affiliate
of Mr. Love to purchase 90,000 shares of Common Stock at a price of $5.00 per
share during the first year, $5.75 per share during the second year, and $6.25
per share during the third year, in consideration of consulting services. In
December 1993, Mr. Love's warrant was extended until January 1998 and the
exercise price was set at $4.00 per share.

In May 1992, the Company issued five-year warrants to each of Messrs.
Powell and Wessel to purchase 200,000 and 75,000 shares, respectively, of
Company Common Stock at an exercise price of $10.00 per share, in
consideration for entering into employment agreements. In December 1993, the
exercise price of these warrants were reduced to $4.00 per share, the term was
extended until December 1998, and Mr. Wessel's warrant was increased to
100,000 shares.

In December 1993, the Company issued five year warrants to purchase a
total of 908,000 shares at an exercise price of $4.00 per share for services
rendered.

In May 1994, the Company issued five year warrants to purchase a total of
312,162 shares at exercise prices varying from $4.625 to $4.50 per share.

In October 1994, the Company issued 200,000 shares of Common Stock in
connection with an acquisition.

In October 1994, the Company issued five year warrants to purchase a
total of 65,000 shares and five year options to purchase a total of 96,500
shares at an exercise price of $4.625 per share, for services rendered.

During fiscal 1996, the Company issued five year warrants to purchase a
total of 1,908,250 shares at exercise prices varying from $4.625 to $15.00 per
share for services rendered.

During fiscal 1996, the Company issued five year options to purchase a
total of 117,000 shares at an exercise price of $4.625 per share.

During fiscal 1996, the Company issued 38,375 shares of Common Stock
relating to the exercise of various options and warrants.

In August 1996, the company issued a five year option to purchase 9,000
shares at an exercise price of $4.75 per share.

In October 1996, the Company issued 21,621 shares of Common Stock
relating to the conversion of certain Convertible Debentures.

In each instance described herein, the issuance of shares was exempt from
registration under the Securities Act of 1933 under Section 4(2) thereof as a
transaction by an issuer not involving any public offering. In each instance,
the purchaser had a pre-existing relationship with the Registrant or its
founder, the offers and sales were made without any public solicitation, the
certificates bear restrictive legends and appropriate stop transfer
instructions have been or will be given to the transfer agent. No underwriter
was involved in the transactions and no commissions were paid.

Item 16. Exhibits and Financial Statement Schedules
- ---------------------------------------------------

(a) The following exhibits are filed as part of this Registration Statement:

Exhibit No. Identification of Exhibit
1.4(3) Form of William K. Woodruff & Co. Warrant
3.1(6) Amended Certificate of Incorporation
3.2(5) Amended Bylaws
4.2a(3) Common Stock Specimen
5.0(13) Opinion Regarding Legality
10.3(2) Registrant's Stock Option Plan and Form of Option
10.3(a)(2) Amended Stock Option Agreement -- Phillip E. Powell
10.5(2) Lease of Registrant's Pawnshop located at South Hampton
10.6(2) Lease of Registrant's Pawnshop located at River Oaks
10.7(3) Lease of Registrant's Pawnshop located at S. Cooper
10.8(3) Employment Agreement -- Phillip E. Powell
10.15(3) Employment Agreement -- Rick L. Wessel
10.16(3) Warrant Agreement -- Phillip E. Powell
10.18(3) Warrant Agreement -- Rick L. Wessel
10.20(3) Lease of Registrant's Pawnshop located at Thornton in Dallas,
Texas
10.21(3) Lease of Registrant's Pawnshop located at MacArthur in Oklahoma
City
10.22(3) Lease of Registrant's Pawnshop located at Portland in Oklahoma
City
10.23(3) Lease of Registrant's Pawnshop located at Tyler, Texas
10.24(3) Lease of Registrant's Pawnshop located at James Avenue in Ft.
Worth, Texas
10.25(3) Lease of Registrant's Pawnshop located at Brown Trail in
Bedford, Texas
10.26(3) Lease of Registrant's Pawnshops located at Hurst and Euless,
Texas
10.27(3) Lease of Registrant's Pawnshop located at Mexico Blvd. In
Brownsville, Texas
10.28(3) Lease of Registrant's Pawnshop located at S. 23rd Street in
McAllen, Texas
10.29(3) Lease of Registrant's Pawnshop located at E. 14th Street in
Brownsville, Texas
10.30(3) Lease of Registrant's Pawnshop located at W. Tyler in Harlingen,
Texas
10.31(3) Lease of Registrant's Pawnshop located at Morgan in Corpus
Christi, Texas
10.32(3) Lease of Registrant's Pawnshop located at N. 10th in McAllen,
Texas
10.33(3) Lease of Registrant's Pawnshop located at Ayers in Corpus
Christi, Texas
10.34(3) Acquisition Agreement -- Dallas Pawn and Gun
10.35(3) Acquisition Agreement -- Pete's Pawn and Music
10.36(3) Acquisition Agreement -- Sid's E-Z Money Pawn Shop
10.37(3) Acquisition Agreement -- Granny's Pawn and Mercantile
10.38(3) Acquisition Agreement -- The Happy Hocker
10.39(3) Acquisition Agreement -- D&B Pawn Shop and Hurst Pawn Shop
10.40(3) Acquisition Agreement -- Try Us Pawn Shop
10.41(3) Acquisition Agreement -- American Loan & Jewelry, Inc.
10.42(3) Supplement to Acquisition Agreement -- American Loan & Jewelry,
Inc.
10.43(4) Lease of Registrant's Pawnshop located at Garland, Texas
10.44(5) Amendment No. 1 to Acquisition Agreement - American Loan &
Jewelry, Inc.
10.45(6) Acquisition Agreement - First Cash Auto Pawn
10.46(6) Lease of Registrant's Pawnshop located at 5519 S.E. 15th Street
in Del City, OK
10.47(1) Acquisition Agreement - Chapel Jewelry & Loan
10.48(1) Acquisition Agreement - Outta Pawn Outlet
10.49(8) Asset Purchase Agreement Between Mr. Payne and the Company
10.50(8) Agreement with Partridge Capital Corporation
10.51(8) First Amendment to Second Amended and Restated Loan Agreement
dated 11/10/93.
10.52(8) Fairness Opinion dated November 19, 1993 in connection with the
Asset Sale
10.53(8) NationsBank consent to Asset Sale
10.54(7) Repurchase of First Cash, Inc. Stock from American Pawn &
Jewelry, Inc.
10.55(7) Acquisition of Famous Pawn, Inc.
10.56(9) Audited Financial Statements of Famous Pawn, Inc. for the ten
and one-half months ended May 15, 1994.
10.57(10) Acquisition Agreement of Five Pawnshops from Jeff Gerhoff.
10.58(10) Loan Agreement between First Cash, Inc. and Bank One, Texas,
National Association, dated July 28, 1994.
11.0(11) Computation of Earnings Per Share for the Year Ended July 31,
1995.
16.0(2) Letter regarding change in certifying accountant
21.0(10) Subsidiaries
23.1(13) Consent of Counsel (contained in Exhibit 5.0)
23.2(13) Consent of Price Waterhouse LLP, independent accountants
24.0(12) Power of Attorney to sign Registration Statement and amendments
(contained in the Registration Statement)

(1) Filed as an exhibit to the Company's Registration Statement on Form S-1
(No. 33-61544) and incorporated herein by reference.
(2) Filed as an exhibit to the Company's Registration Statement on Form S-18
(No. 33-37760-FW) and incorporated herein by reference.
(3) Filed as an exhibit to the Company's Registration Statement on Form S-1
(No. 33-48436) and incorporated herein by reference.
(4) Filed as an exhibit to the Annual Report on Form 10-K for the fiscal
year ended July 31, 1992 (File No. 0 - 19133) and incorporated herein by
reference.
(5) Filed as an exhibit to the Quarterly Report on Form 10-Q for the quarter
ended October 31, 1992 (File No. 0 - 19133) and incorporated herein by
reference.
(6) Filed as an exhibit to the Quarterly Report on Form 10-Q for the quarter
ended January 31, 1993 (File No. 0 - 19133) and incorporated herein by
reference.
(7) Filed as an exhibit to the Quarterly Report on Form 10-Q for the quarter
ended April 30, 1994 (File No. 0 - 19133) and incorporated herein by
reference.
(8) Filed as an exhibit to the Company's Registration Statement on Form S-1
(No. 33-70592) and incorporated herein by reference.
(9) Filed as an exhibit to Form 8-K dated July 29, 1994.
(10) Filed as an exhibit to the Annual Report on Form 10-K for the fiscal
year ended July 31, 1994 (File No. 0 - 19133) and incorporated herein by
reference.
(11) Filed as an exhibit to the Annual Report on Form 10-K for the fiscal
year ended July 31, 1995 (File No. 0 - 19133) and incorporated herein by
reference.
(12) Filed as an exhibit to the Company's original filing of this
Registration Statement of Form S-1 (No. 33-86052)
(13) Filed herein.

(b) All schedules are omitted because they are not applicable or the required
information is shown in the financial statements or notes thereto.

Item 17. Undertakings
- -----------------------

Insofar as indemnification for liabilities under the Securities Act of
1933 may be permitted to the directors, officers and controlling persons of
the Registrant pursuant to the provisions of the Registrant's Certificate of
Incorporation, Bylaws, the Delaware General Corporation Law, or otherwise, the
Registrant has been advised that, in the opinion of the Securities and
Exchange Commission, such indemnification is against public policy as
expressed in the Act and, therefore, is unenforceable. In the event that a
claim for indemnification against such liabilities (other than the payment by
the Registrant of expenses incurred or paid by a director, officer, or
controlling person in the successful defense of any action, suit or
proceeding) is asserted by such director, officer, or controlling person in
connection with the securities being registered, the Registrant will, unless
in the opinion of its counsel controlling precedent has settled the matter,
submit to a court of appropriate jurisdiction the question whether such
indemnification is against public policy as expressed in the Securities Act
and will be governed by the final adjudication of the issue.

1. For purposes of determining any liability under the Securities Act of
1933, the information omitted from the form of prospectus filed as part of
this Registration Statement in reliance upon Rule 430A and contained in a form
of prospectus filed by the Registrant pursuant to Rule 424(b)(1) or (4), or
497(h) under the Act shall be deemed to be part of this Registration Statement
as of the time it was declared effective.

2. For the purpose of determining any liability under the Securities Act
of 1933, each post effective amendment that contains a form of prospectus
shall be deemed to be a new Registration Statement relating to the securities
offered therein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.

The Registrant further undertakes:

A. That, for purposes of determining any liability under the Securities
Act, the information omitted from the form of prospectus filed by the
Registrant pursuant to Rule 424(b)(1) or(4) or 497(h) under the Securities
Act shall be deemed to be part of the Registration Statement as of the
time it was declared effective.

B. To file, during any period in which offers or sales are being made, a
post-effective amendment to this Registration Statement.

(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;

(ii) To reflect in the prospectus any facts or events arising after the
effective date of the Registration Statement (or the most recent post
effective amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in the
Registration Statement;

(iii) To include any material information with respect to the plan of
distribution not previously disclosed in the Registration Statement or any
material change to such information in the Registration Statement; and

(iv) To remove from registration by means of a post-effective amendment any
of the securities being registered which remain unsold at the termination of
the offering.

C. That, for purposes of determining any liability under the Securities
Act, each post-effective amendment that contains a form of prospectus shall be
deemed to be a new Registration Statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to
be the initial bona fide offering thereof

SIGNATURES
----------

Pursuant to the requirements of the Securities Act of 1933, as amended,
the Registrant has duly caused this Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the city of
Arlington, State of Texas on the 19th day of November, 1996.

First Cash, Inc.

By:\\s\\Rick L. Wessel
------------------------------------
Rick L. Wessel, Principal Accounting Officer

Pursuant to the requirements of the Securities Act of 1933, as amended,
this Registration Statement has been signed below by the following persons in
the capacities and on the dates indicated:

<TABLE>
Signature Capacity Date
- --------- -------- ----
<S> <C> <C>
Phillip E. Powell Chairman of the Board and November 19, 1996
- ------------------ Chief Executive Officer
Phillip E. Powell*

Rick L. Wessel Chief Financial Officer, Secretary November 19, 1996
- ------------------ Treasurer and Director
Rick L. Wessel

Richard T. Burke Director November 19, 1996
- ------------------
Richard T. Burke*

Joe R. Love Director November 19, 1996
- ------------------
Joe R. Love*
</TABLE>

*By://s//Rick L. Wessel
- ------------------------
Phillip E. Powell or Rick L. Wessel
Attorney-In-Fact

Exhibit 5.0

November 15, 1996

Mr. Phillip E. Powell
First Cash, Inc.
690 East Lamar Blvd., Suite 400
Arlington, Texas 76011

Dear Mr. Powell:

As counsel for First Cash, Inc., a Delaware corporation ("Company"), you
have requested our firm to render this opinion in connection with Post
Effective Amendment No. 2 to the Registration Statement of the Company on Form
S-1 filed under the Securities Act of 1933, as amended ("Act"), filed with the
Securities and Exchange Commission relating to the registration of the
issuance of an aggregate of (i) 1,310,162 shares of common stock, $.01 par
value ("Common Stock") underlying currently exercisable warrants ("Warrants"),
(ii) 192,625 shares of Common Stock underlying currently exercisable options
granted under the Company's stock option plan ("Option"), and (iii) 2,100,001
shares of Common Stock upon conversion of the Debentures Due 1999 and
Debentures Due 2004 (collectively, "Convertible Debentures").

We are familiar with the registration statement and the registration
contemplated thereby. In giving this opinion, we have reviewed the
registration statement and such other documents and certificates of public
officials and of officers of the Company with respect to the accuracy of the
factual matters contained therein as we have felt necessary or appropriate in
order to render the opinions expressed herein. In making our examination, we
have assumed the genuineness of all signatures, the authenticity of all
documents presented to us as originals, the conformity to original documents
of all documents presented to us as copies thereof, and the authenticity of
the original documents from which any such copies were made, which assumptions
we have not independently verified.

Based upon all the foregoing, we are of the opinion that:

1. The Company is a corporation duly organized, validly existing and in good
standing under the laws of the State of Delaware.

2. The Company is duly qualified to transact the business in which it is
engaged and is in good standing as a foreign corporation in the
jurisdictions in which the Company conducts its business.

3. The shares of Common Stock underlying the Warrants to be issued upon
exercise of such Warrants are validly authorized and, upon exercise of the
Warrants in accordance with their terms, will be validly issued, fully
paid and nonassessable.

4. The shares of common Stock underlying the Options to be issued upon
exercise of such Options are validly authorized and, upon exercise of the
Options in accordance with their terms, will be validly issued, fully paid
and nonassessable.

5. The shares of Common stock underlying the Convertible Debentures to be
issued upon conversion of such Convertible Debentures are validly
authorized and, upon conversion of the Convertible Debentures in
accordance with their terms, will be validly issued, fully paid and
nonassessable.

We consent to the use in the registration statement of the reference to
Brewer & Pritchard, P.C. under the heading "Legal Matters."

Letter to Mr. Phillip E. Powell
November 15, 1996
Page 2

This opinion is conditioned upon the registration statement being
declared effective and upon compliance by the Company with all applicable
provisions of the Act and such state securities rules, regulations and laws as
may be applicable.

Very truly yours,
Brewer & Pritchard, P.C.

Exhibit 23.2

CONSENT OF INDEPENDENT ACCOUNTANTS

We hereby consent to the use in the Prospectus constituting part of this
Post-Effective Amendment No. 2 to the Registration Statement on Form S-1 of
our report dated October 22, 1996 relating to the consolidated financial
statements of First Cash, Inc. and its subsidiaries as of July 31, 1995 and
1996 and for the three years ended July 31, 1996, which appears in such
Prospectus. We also consent to the reference to us under the heading
"Experts" in such Prospectus.

PRICE WATERHOUSE LLP
Fort Worth, Texas
November 15, 1996