Exhibit 99.4

As used in this Exhibit 99.4, unless the context otherwise requires, the terms (i) “we,” “us,” “our” and “the Company” refer to Dollar Financial Corp. and its subsidiaries, including National Money Mart Company, (ii) “Issuer” and “Money Mart” refer solely to National Money Mart Company, (iii) “Parent” refers solely to Dollar Financial Corp., (iv) “DFG” refers solely to Dollar Financial Group, Inc., (v) “Dollar Financial U.K.” refers solely to Dollar Financial U.K. Limited, (vi) “MFS” refers to Military Financial Services, LLC and its wholly-owned subsidiaries, Dealers’ Financial Services, LLC and Dealers’ Financial Services Reinsurance Ltd., and (vii) “DFS” refers solely to Dealers’ Financial Services, LLC. Unless the context otherwise requires, the term “fiscal year” and “fiscal” refer to (a) the twelve-month period ended on June 30 of that year with respect to the Company and (b) the twelve-month period ended on December 31 of that year with respect to MFS. References to “$,” “dollars,” “United States dollars” or “U.S. dollars” refer to the lawful currency of the United States of America.

Unless otherwise indicated, or the context otherwise requires, information identified in this Exhibit 99.4 as “pro forma” gives effect to our proposed acquisition of MFS, the amendment and extension of our senior secured credit facility, the prepayment of a portion of our outstanding term loans and the proposed offering by Money Mart of $350 million aggregate principal amount of its senior notes in a private offering that is exempt from the registration requirements of the Securities Act of 1933, as amended, and the application of the net proceeds therefrom (to which we refer in this Exhibit 99.4 as “the offering” or “this offering”), or collectively, the “Transactions”. As used in this Exhibit 99.4, the term “this offering circular” refers to this Exhibit 99.4.

SUMMARY INFORMATION ABOUT DOLLAR FINANCIAL CORP. AND ITS SUBSIDIARIES

          We are a leading international financial services company serving unbanked and under-banked consumers. We believe our financial services store network is the largest network of its kind in each of Canada and the United Kingdom and the second-largest network of its kind in the United States. Our customers are typically service sector individuals who require basic financial services but, for reasons of convenience and accessibility, purchase some or all of their financial services from us rather than from banks and other financial institutions. To meet the needs of these customers, we provide a range of consumer financial products and services primarily consisting of check cashing, single-payment consumer loans, longer-term installment loans, pawn lending, debit cards, phone/gift cards, bill payment, money orders, money transfers, foreign exchange, gold buying and legal document processing services. For fiscal 2009, we generated revenue of $527.9 million and Adjusted EBITDA of $138.5 million. For a description of Adjusted EBITDA and a reconciliation to net (loss) income, see “Summary Historical and Pro Forma Consolidated Financial Data.”

 

As of September 30, 2009, our global financial services network consisted of 1,188 locations (of which 1,032 are company-owned) operating primarily as Money Mart^®, Money Shop^®, Loan Mart^®, Money Corner^®, Insta-Cheques^® and The Check Cashing Store^® in the United States, Canada, the United Kingdom and the Republic of Ireland. These locations primarily offer financial services including check cashing, single-payment consumer loans, sale of money orders, money transfer services and various other related services. Also included in this network is the Company’s Poland operation acquired in June 2009 which provides financial services to the general public through in-home loan servicing.

 

Our network includes the following platforms for delivering our financial services to the consumers in our core markets:

 

United States.  We believe we operate one of only seven U.S. check cashing store networks that have more than 100 locations, the remaining competitors being local chains and single-unit operators. As of September 30, 2009, we operated a total of 352 financial services stores in 15 states, including 99 stores in California, 104 stores in Florida, 36 stores in Arizona, 18 stores in Louisiana and 95 stores in 11 other states. We also have 39 franchised locations operating under the name “We The People” which offer retail-based legal document processing services. Our financial services store locations typically offer our full range of

financial products and services, including check cashing and short-term consumer loans. Our 38 Loan Mart stores principally offer short-term consumer loans, as well as other ancillary services depending upon location. Our U.S. business had revenues of $153.7 million for fiscal 2008, and $154.9 million for fiscal 2009. Additionally, for the fiscal quarter ended September 30, 2008, our U.S. business had revenues of $42.2 million and for the fiscal quarter ended September 30, 2009, our U.S. business had revenues of $34.2 million.

 

Canada.  In Canada, we believe we are the leading financial services company serving unbanked and under-banked consumers and we hold a significant share of that market. We estimate that the total number of outlets offering check cashing and/or single-payment consumer loans in the entire Canadian market to be 1,500. We believe that there are only two other networks of stores with over 100 locations. While we believe that we enjoy almost 30% market share by outlet in Canada, our research estimates our market share by volume of business to be significantly higher. As of September 30, 2009, there are 461 financial services stores in our Canadian network, of which 399 are operated by us and 62 are operated by franchisees in 12 of the 13 Canadian provinces and territories with 225 locations in Ontario, 83 locations in British Columbia, 72 locations in Alberta, 20 locations in Manitoba and 61 locations in the other 8 provinces and territories. All of our stores in Canada are operated under the name “Money Mart” except locations in the Province of Québec which operate under the name “Instant Cheques”. The stores in Canada typically offer check cashing, short-term consumer loans and other ancillary products and services. Our Canadian business had revenues of $279.5 million for fiscal 2008 and $236.3 million for fiscal 2009. The impact of foreign currency rates resulted in a decrease in Canadian revenues for fiscal 2009 of approximately $34.4 million versus the prior year. Additionally, for the fiscal quarter ended September 30, 2008, our Canadian business had revenues of $70.3 million and for the fiscal quarter ended September 30, 2009, our Canadian business had revenues of $64.1 million. The impact of foreign currency rates resulted in a decrease in Canadian revenues for the fiscal quarter ended September 30, 2009 of approximately $3.4 million versus the prior year.

 

United Kingdom and Republic of Ireland.  Based on information from the British Cheque Cashers Association, we believe that we have a United Kingdom market share of stores of approximately 18%. In addition, we believe that our 335 company-operated and franchised/agent stores as of September 30, 2009 account for up to 40% of the total check cashing transactions performed at check cashing stores in the United Kingdom. As of September 30, 2009, there are 335 financial services stores in our United Kingdom network, of which 280 are operated by us and 55 are operated by franchisees/agents with 286 locations in England, 24 locations in Scotland, 13 locations in Wales and 12 locations in Northern Ireland. We currently have one store in the Republic of Ireland which we opened in 2008. All of our stores in the United Kingdom and the Republic of Ireland (with the exception of certain franchises operating under the name “Cash A Cheque”) are operated under the name “Money Shop.” The stores in the United Kingdom typically offer check cashing, short-term consumer loans, pawn lending and other ancillary products and services. Our store in the Republic of Ireland offers check cashing and other ancillary products and services. In April 2009, we acquired all the shares of Express Finance Limited, a U.K. Internet-based consumer lending business. Our United Kingdom and Republic of Ireland business had revenues of $139.0 million for fiscal 2008 and $136.7 million for fiscal 2009. The impact of foreign currency rates resulted in a decrease in the United Kingdom and Ireland revenues for fiscal 2009 of approximately $32.8 million. Additionally, for the fiscal quarter ended September 30, 2008, our United Kingdom and Republic of Ireland business had revenues of $40.5 million and for the fiscal quarter ended September 30, 2009, our United Kingdom and Republic of Ireland business had revenues of $43.5 million. The impact of foreign currency rates resulted in a decrease in United Kingdom and Republic of Ireland revenues for the fiscal quarter ended September 30, 2009 of approximately $6.6 million.

 

On October 3, 2009, we purchased a merchant cash advance business in the United Kingdom. The acquired company primarily provides working capital needs to small retail businesses by providing cash advances against a percentage of future credit card sales. The purchase price for the acquired company, which currently manages a receivable portfolio of approximately $3.0 million, was $4.9 million. The acquired company is competitively positioned in a rapidly growing market. Moreover, we believe we can export and leverage this expertise to other European countries as well as our Canadian business unit.

Poland.  On June 30, 2009, we acquired a 76% interest in an established consumer lending business in Poland. The acquired company, Optima, S.A., founded in 1999 and headquartered in Gdansk, offers unsecured loans of generally 40-50 week durations with an average loan amount of $250 to $500. The loan transactions include an in-home servicing feature, whereby loan disbursement and collection activities take place in the customer’s home according to a mutually agreed-upon and pre-arranged schedule. The in-home loan servicing concept is well accepted within Poland and Eastern Europe. Customer sales and service activities are managed through an extensive network of local commission-based representatives across five provinces in Northwestern Poland.

 

The DFS Acquisition.  On October 28, 2009, DFG entered into a purchase agreement for the proposed acquisition of MFS, which we refer to as the DFS acquisition. MFS, through its wholly-owned subsidiary, DFS, is an established business that provides services to enlisted military personnel seeking to purchase new and used vehicles. DFS markets its services through its branded Military Installment Loan and Education Services, or “MILES” program. DFS provides services to enlisted military personnel who make applications for auto loans to purchase new and used vehicles that are funded and serviced under an exclusive agreement with a major third-party national bank based in the United States. Additionally, DFS provides ancillary services such as service contracts and guaranteed asset protection, or GAP, insurance, along with consultations regarding new and used automotive purchasing, budgeting and credit and ownership training. DFS’s revenue comes from fees which are paid by the third-party national bank and fees from the sale of ancillary products such as warranty service contracts and GAP insurance coverage. DFS operates through an established network of arrangements with more than 545 franchised and independent new and used car dealerships, according to underwriting protocols specified by the third-party national bank. Importantly, as a result of its fee-based business model, DFS receives up-front payments for its services and is not exposed to balance sheet risk on any of the loans that are funded and serviced by the third-party national bank. The purchase price for the DFS acquisition is approximately $117.8 million, which includes a $6.3 million escrow to fund a portion of the sellers’ indemnification obligations, if any.

 

We believe that the DFS acquisition will provide us with an opportunity to expand into a financial services business that has historically offered relatively stable free cash flow due to the nature of its business, a stable customer base, multiple revenue streams, low operational costs and low capital requirements. While DFS currently does business in all but seven U.S. states, we believe there will be opportunities to expand geographically, increase penetration in certain markets, expand product offerings, and increase penetration of DFS’s products with more tenured enlisted military personnel with higher pay grade levels. While high levels of unemployment have significantly reduced civilian demand for automobiles and auto loans, we believe that DFS is less impacted by this trend due to the stable employment and regular wage increases provided by the U.S. military. For fiscal 2009, after giving pro forma effect to the Transactions, including the DFS acquisition, we would have had revenue of $554.6 million and Adjusted EBITDA of $155.7 million.

 

Products and Services

 

Our customers, many of whom receive income on an irregular basis or from multiple employers, are drawn to our convenient neighborhood locations, extended operating hours and high-quality customer service. Our products and services, principally our check cashing and short-term consumer loan program, provide immediate access to cash for living expenses or other needs. We principally cash payroll checks, although our stores also cash government benefit, personal and income-tax-refund checks. During fiscal 2009, we cashed 9.3 million checks with a total face amount of $4.5 billion and an average face amount of $487 per check. During fiscal 2009, we originated 4.1 million single-payment consumer loans with an average principal amount of $406 and a weighted average term of approximately 18 days. In addition, we acted as a servicer and direct lender originating approximately 6,000 longer-term installment loans with an average principal amount of $815 and a weighted average term of approximately 210 days. We strive to provide our customers with high-value ancillary services, including Western Union money order and money transfer products, electronic tax filing, reloadable VISA^® and Mastercard^® debit cards, bill payment, foreign currency exchange, pawn broking, gold buying, photo ID and prepaid local and long-distance phone services. In addition, during the twelve-month period ended September 30, 2009, DFS, through its MILES program, provided services in

connection with approximately 46,000 automobile loan applications by enlisted military personnel resulting in approximately 16,400 completed loan contracts, with an average loan amount of approximately $15,250.

 

Industry Overview

 

We operate in a sector of the financial services industry that serves the basic need of service sector individuals who need convenient access to cash and other services. This need is primarily evidenced by consumer demand for check cashing, short-term and longer-term installment loans, pawn lending, Western Union transfers, debit cards and other services. Consumers who use these services are often underserved by banks and other financial institutions.

 

Service sector individuals represent the largest part of the population in each country in which we operate; in the United States, the service sector makes up one of the fastest growing segments of the workforce. Many of these individuals, particularly in the United States, do not maintain regular banking relationships. They use services provided by our industry for a variety of reasons, including that they often:

 

 

In addition to check cashing services, under-banked consumers also require short-term and longer-term installment loans that provide cash for living and other expenses. They also may not be able to or want to obtain loans from banks as a result of:

 

 

Despite the demand for basic financial services, access to banks has become more difficult over time for many consumers. Many banks have chosen to close their less profitable or lower-traffic locations and reduced the hours they operate. Typically, these branch closings have occurred in neighborhoods where the branches have failed to attract a sufficient base of customer deposits. This trend has resulted in fewer convenient alternatives for basic financial services in many neighborhoods. Many banks have also reduced or eliminated some services that under-banked consumers desire.

 

As a result of these trends, a significant number of retailers have begun to offer financial services to service sector individuals. The providers of these services are fragmented, and range from specialty finance offices to retail stores in other industries that offer ancillary services.

 

We believe that the under-banked consumer market will continue to grow as a result of a diminishing supply of competing banking services as well as underlying demographic trends. These demographic trends include an overall increase in the population and an increase in the number of self employed, small business and service sector jobs as a percentage of the total workforce.

The demographics of the typical customers for non-banking financial services vary somewhat in each of the markets in which we operate, but the trends driving the industry are generally the same. In addition, the type of store and services that appeal to customers in each market varies based on cultural, social, geographic, economic and other factors. Finally, the composition of providers of these services in each market results, in part, from the historical development and regulatory environment in that market.

 

Growth Opportunities

 

We believe that significant opportunities for growth exist in our industry as a result of:

 

 

We believe that, as the service sector population segment increases, and as trends within the retail banking industry make banking less accessible or more costly to these consumers, the industry in which we operate will see a significant increase in demand for our products and services. We also believe that the industry will continue to consolidate as a result of a number of factors, including:

 

 

This consolidation process should provide us, as operator of one of the largest store networks, with opportunities for continued growth. We also believe there are substantial growth opportunities in Europe.

 

Competition

 

United States.  The industry in which we operate in the United States is highly fragmented. According to FiSCA, there are over 11,000 neighborhood check cashing stores and according to published equity research estimates by Stephens Inc., there are over 24,000 short-term lending stores. There are several public companies in the United States with a large network of stores offering single-payment consumer loans, as well as several large pawn shop chains offering such loans in their store networks in the United States. Like check cashing, there are also many local chains and single-unit operators offering single-payment consumer loans as their principal business product.

 

Canada.  With the advent of new provincial regulation for single-payment consumer loans, we anticipate that U.S. competitors will likely enter into the Canadian market. Under the new provincial regulation, we believe we have an opportunity to leverage our multi-product platform and improve our share of the Canadian market by continuing to offer lower product pricing than a number of our competitors. Furthermore, we believe many of the less efficient mono-line operators will likely struggle under provincial regulation, which should present an opportunity for us to purchase their stores or customer accounts at attractive prices.

 

United Kingdom.  In the consumer lending market, recent research indicates that the U.K. market for small, short-term single-payment loans is served by approximately 1,650 store locations, which include check cashers, pawn brokers and home-collected credit companies and is also served by approximately 15 on-line lenders.

 

Globally.  In addition to other check cashing stores and consumer lending stores and financial services platforms in the United States, Canada, the United Kingdom, Poland and the Republic of Ireland, our industry includes banks and other financial services entities, as well as with retail businesses, such as grocery and liquor stores, which often cash checks for their customers. Some competitors, primarily grocery stores, do not

charge a fee to cash a check. However, these merchants generally provide this service to certain customers with solid credit ratings or for checks issued by highly recognized companies, or those written on the customer’s account and made payable to the store.

 

Our industry includes companies that offer automated check cashing machines and franchised kiosk units that provide check-cashing and money order services to customers, which can be located in places such as convenience stores, bank lobbies, grocery stores, discount retailers and shopping malls.

 

We believe that convenience, hours of operations and other aspects of customer service are the principal factors influencing customers’ selection of a financial services company in our industry and that the pricing of products and services is a secondary consideration.

 

Competitive Strengths

 

We believe that the following competitive strengths position us well for continued growth:

 

Leading Position in Core Markets.  We have a leading position in our core markets. As of September 30, 2009, we operate 352 company-owned stores in the United States, 399 company-owned stores in Canada, 280 company-owned stores and an Internet-based consumer lending business in the United Kingdom and one company-owned store in the Republic of Ireland. In addition, with our acquisition in June 2009 of an established consumer lending business in Poland, we service an average of 30,000 customers through in-home loan servicing. As of September 30, 2009, we had 62 and 55 foreign financial services franchised/agent locations in Canada and in the United Kingdom, respectively. Highlights of our competitive position in these core markets include the following:

 

 

Additionally, DFS, which we expect to acquire in the DFS acquisition with a portion of the proceeds from this offering, currently provides services to approximately 110 U.S. military communities covering approximately 95% of all U.S. military bases.

 

Diversified Product and Geographic Mix.  Our stores offer a wide range of consumer financial products and services to meet the demands of their respective locales, including check cashing, short-term consumer loans, money orders and money transfer services. We also provide high-value ancillary products and services, including Western Union money order and money transfer products, electronic tax filing, bill payment, foreign currency exchange, reloadable VISA^® and MasterCard^® brand debit cards, pawn broking, gold buying, photo ID and prepaid local and long-distance phone services. For fiscal 2009, the revenue contribution by our check cashing operations was 31.2%, our consumer lending operations was 52.1% and our other products and services was 16.7%. Additionally, for the fiscal quarter ended September 30, 2009, the revenue contribution by our check cashing operations was 26.7%, our consumer lending operations was 55.7% and our other products and services was 17.6%. In addition to our product diversification, our business is diversified geographically. For fiscal 2009, our U.S. operations generated 29.4% of our total revenue, our Canadian operations generated 44.7% of our total revenue and our United Kingdom operations generated 25.9% of our total revenue. For the fiscal quarter ended September 30, 2009, our U.S. operations generated 24.1% of our total revenue, our Canadian operations generated 45.2% of our total revenue and our United Kingdom operations generated 30.7% of our total revenue. Our broad product and geographic mix provides a diverse stream of revenue growth opportunities that we believe distinguishes us from others in the industry. In addition, upon the completion of the DFS acquisition, we will offer services to enlisted U.S. military personnel who make application for auto loans to purchase new and used vehicles. DFS’s revenue comes from fees which are paid by a third-party national bank and fees from the sale of ancillary products such as warranty service contracts and GAP insurance coverage. After giving pro forma effect to the DFS acquisition, the fee-based income of

DFS would have generated approximately 14.7% of our U.S. revenue for fiscal 2009 and 17.4% of our U.S. revenue for the fiscal quarter ended September 30, 2009.

 

Diversification and Management of Credit Risk.  Our revenue is generated through a high volume of small-dollar financial transactions, and therefore our exposure to loss from a single customer transaction is minimal. In addition, we actively manage our customer risk profile and collection efforts in order to maximize our consumer lending and check cashing revenues while maintaining losses within an expected range. We have instituted control mechanisms that have been effective in managing risk. Such mechanisms, among others, include the daily monitoring of initial return rates with respect to payments made on our consumer loan portfolio. We have implemented predictive scoring models that limit or eliminate the amount of loans we offer to customers who statistically would likely be unable to repay their loan. As a result, we believe that we are less likely to sustain a material credit loss from a series of transactions or launch of a new product. We historically have experienced relatively low net write-offs as a percentage of the face amount of checks cashed. For fiscal 2009, in our check cashing business, net write-offs as a percentage of the face amount of checks cashed were 0.29% as compared to the prior year’s rate of 0.31%. With respect to loans funded directly by us, net write-offs as a percentage of originations were 3.1% for fiscal 2009 as compared to the prior year’s rate of 2.9%.

 

High-Quality Customer Service.  We commissioned a consumer research study in 2009 that told us that our customer satisfaction scores are well over 90%. We adhere to a strict set of market survey and location guidelines when selecting store sites in order to ensure that our stores are placed in desirable locations near our customers. We believe that our customers appreciate this convenience, as well as the flexible and extended operating hours that we typically offer, which are often more compatible with our customers’ work schedules. We provide our customers with a clean, attractive and secure environment in which to transact their business. We believe that our friendly and courteous customer service at both the store level and through our centralized support centers is a competitive advantage.

 

Management Expertise.  We have a highly experienced and motivated management team at both the corporate and operational levels. Our CEO and CFO each have more than 20 years experience with retail financial services companies serving unbanked and underbanked consumers. Our senior management team is very tenured and also has extensive experience in the financial services industry and multi-unit retail operations. Collectively, this team has demonstrated the ability to grow our business through their operational leadership, strategic vision, and experience in selecting and integrating acquisitions. Since 1990, we have completed more than 90 acquisitions that added over 780 company-owned financial services stores to our network, as well as new products, lending platforms, and expansion into additional countries, with a continuing focus on serving the service sector workforce.

 

Business Strategy

 

Our business strategy is designed to capitalize on our competitive strengths and enhance our leading market positions. Key elements of our strategy include:

 

Growing Through Disciplined Network Expansion.  We intend to continue to grow our network through the addition of new stores, acquisitions and expansion of financial services platforms, while adhering to a disciplined selection process. In order to optimize our expansion, we carefully assess potential markets by analyzing demographic, competitive and regulatory factors, site selection and availability and growth potential. We seek to add locations that offer check cashing, consumer lending, debit cards, foreign currency, pawn lending, gold buying and other services or a combination of any of these products and services. In fiscal 2009, we entered into Poland, our fifth country, with the acquisition of 76% of Optima, S.A., a company that offers unsecured loans with payment terms of generally 40 — 50 week durations with an average loan amount of $250 to $500. Also during fiscal 2009, we acquired an established profitable U.K. Internet-based consumer lending business which was immediately accretive to earnings. The acquired company is competitively positioned in a rapidly growing market and further expands our expertise within the Internet lending arena. Moreover, we believe we can export and leverage this expertise to other European countries as well as our Canadian business unit. We continue to actively seek to acquire targeted competitor operations in selected

expansion markets in the United States, Canada, the United Kingdom, Europe and Latin America and attractive financial services businesses like DFS.

 

Introducing Related Products and Services.  We believe that our check cashing and consumer lending customers enjoy the convenience of other high value products and services offered by us. These products and services enable our customers to manage their personal finances more effectively. For example, in fiscal 2004, we introduced reloadable VISA^® brand debit cards, and, in fiscal 2005, we introduced VISA^® brand gift cards. In fiscal 2006, we introduced an installment loan program in the United States and the United Kingdom. In fiscal 2008, we launched an Internet single-payment loan site for residents of the United Kingdom and plan to expand to other geographic areas over time. During fiscal 2009 we began gold buying services in the United Kingdom, Canada and the United States. We believe this can be a high growth area while gold prices remain relatively high. The addition of the U.K. Internet-based consumer lending business also adds to our product offerings. Our product development department continues to develop and test additional new products and services for our customers.

 

Capitalizing on our Enhanced Network and System Capabilities.  With our network of 1,188 stores as of September 30, 2009, we believe we are well positioned to capitalize on economies of scale. Our centralized core support functions, including collections, call center, field operations and service, loan processing and tax filing enable us to generate efficiencies by improving collections and purchasing power with our vendors. Our proprietary systems are used to further improve our customer relations and loan servicing activities, as well as to provide a highly efficient means to manage our internal reporting requirements as well as regulatory compliance efforts. We plan to continue to take advantage of these efficiencies to enhance network and store-level profitability.

 

Maintaining our Customer-Driven Retail Philosophy.  We strive to maintain our customer-service-oriented approach and meet the basic financial service needs of our service sector customers. This dedication to service helps to explain our high 90%+ customer satisfaction scores. We believe our approach differentiates us from many of our competitors and is a key tenet of our employee training programs. We offer extended operating hours in clean, attractive and secure store locations to enhance appeal and stimulate store traffic. In certain markets, we operate stores that are open 24 hours a day. To ensure customer satisfaction, we periodically send anonymous market researchers posing as shoppers to our stores to measure customer service performance. We plan to continue to develop ways to improve our performance, including incentive programs to reward employees for exceptional customer service.

 

Community Involvement and Ethics.  We strengthen relationships with our business partners through ethical behavior and with our customers through community involvement. In March of 2007 we were honored to be named the fourth most trustworthy public company in the United States by Audit Integrity, who ranked firms on exhibiting the “highest degree of accounting transparency and fair dealing to stake holders during 2006.” We have also encouraged the management of each of our stores to involve themselves with their respective local communities. From these efforts we provide hundreds of thousands of dollars in charitable donations every year. In Canada, over the last 5 years we have raised well over $1.0 million dollars for Easter Seals through our sponsorship of the 24 Hour Relay.

 

Regulation

 

We are subject to regulation by foreign, federal and state governments that affects the products and services we provide. In general, this regulation is designed to protect consumers who deal with us and not to protect the holders of our securities, including our common stock. In particular, we are subject to the regulations described below as well as currency reporting regulations, regulations regarding our legal document processing services business, privacy regulation and other regulations described in our Annual Report on Form 10-K for the fiscal year 2009.

 

Regulation of Check Cashing

 

To date, regulation of check cashing fees in the United States has occurred on the state level. We are currently subject to fee regulation in seven states: Arizona, California, Hawaii, Louisiana, Ohio, Pennsylvania and Florida, where regulations set maximum fees for cashing various types of checks. Our fees comply with applicable state regulations.

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

 

In Canada, the federal government generally does not regulate our check cashing business, nor do provincial governments generally impose any regulations specific to the check cashing industry. The exceptions are the provinces of Québec and Saskatchewan, where check cashing stores are not permitted to charge a fee to cash government checks, and Manitoba, where the province imposes a maximum fee to cash government checks.

 

In the United Kingdom, as a result of the Cheques Act of 1992, banks must refund the fraudulent or dishonest checks that they clear to the maker. For this reason, banks have invoked more stringent credit inspection and indemnity criteria for businesses such as ours. Additionally, in 2003, the Money Laundering Regulations of 1993 were enhanced, requiring check cashing, money transfer and foreign currency exchange providers to be licensed, and in 2007, they were further enhanced to require background checks of persons running such businesses as a requirement of granting a license. We believe we currently comply with these rules and regulations.

 

Regulation of Consumer Lending

 

In Canada, our consumer lending activities have historically been subject to provincial licensing in Saskatchewan, Nova Scotia, New Brunswick and Newfoundland. A federal usury ceiling had applied to loans we made to Canadian consumers. Historically, Canadian borrowers contracted to repay us in cash. If they elected to repay by check, we also collected, in addition to a permissible finance charge, our customary check-cashing fees. Effective May 3, 2007, the Canadian Parliament amended the federal usury law to transfer jurisdiction and the development of laws and regulation of our industry’s consumer loan products to the respective provinces. To date, the provinces of British Columbia, Saskatchewan, Manitoba, Ontario, Nova Scotia, Prince Edward Island and New Brunswick have all passed legislation to regulate short term consumer lenders, and each are in the process of adopting the new regulations and rates consistent with the regulations. Alberta has also added regulations to its existing consumer protection legislation to also regulate short term consumer lenders. As of July 1, 2009, we have implemented a new lending model in Ontario to conform to its new legislation. As of August 1, 2009, we have also implemented our new lending model in Nova Scotia and in Alberta on September 1, 2009, and in British Columbia on November 1, 2009. The new lending model requires consumers to pay a flat fee per each $100 borrowed. In general, the regulations proposed and implemented to date are similar to those in effect in the United States which require lenders to be licensed, set maximum limits on the charges to the consumer for a loan and regulate collection practices.

 

In the United Kingdom, consumer lending is governed by the Consumer Credit Act of 1974, or the Act, and related rules and regulations. As required by the Act, we have obtained licenses from the Office of Fair Trading, which is responsible for regulating competition, policy, and for consumer protection. The Act also contains rules regarding the presentation, form and content of loan agreements, including statutory warnings and the layout of financial information. Beginning July 31, 2009, The Money Laundering Regulations 2007 were enhanced to include consumer credit lenders and all consumer credit lenders not authorized by the FSA or the HM Revenue and Customs as a Money Service Business are now required to register with the Office of Fair Trading. We believe we have complied with these new regulations where we were not already registered by HM Revenue and Customs.

 

Our consumer lending activities are also subject to certain other state, federal and foreign regulations, including regulations governing lending practices and terms, such as the content, form and accuracy of our consumer disclosures, limitations on the cost of credit, fair debt collection practices and rules regarding advertising content.

 

Corporate Information

 

Dollar Financial Corp. is a Delaware corporation formed in 1990. National Money Mart Company is an unlimited company amalgamated under the laws of the Province of Nova Scotia, Canada, on July 1, 2006.

We operate our store networks through our direct and indirect wholly-owned foreign and domestic subsidiaries. Our principal executive offices are located at 1436 Lancaster Avenue, Berwyn, Pennsylvania 19312, and our telephone number is (610) 296-3400. Our website address is http://www.dfg.com. Our website and the information contained therein or connected thereto shall not be deemed to be incorporated into this offering circular.

 

Trademarks

 

Money Mart^®, Money Shop^®, Loan Mart^®, Money Corner^®, Money MartExpress^®, Insta-Cheques^®, Check Mart^®, The Check Cashing Store^®, Cash ’Til Payday^®, CustomCash^®, Momentum^®, Qwicash^®, Payday Express^®, Cheque In Cash Out^®, Real People. Fast Cash^®, EasyTax^®, Zap-It^®, Fast Cash Advance^®, Advance Canada^®, Creditgo^tm, Creditboost^tm, Directload^tm, CC^®, iii optima^®, mce^®, and Eurosdirect^® are our registered trademarks. All other registered trademarks and trade names referred to in this offering circular are the property of their respective owners.

 

The Transactions

 

In addition to the notes offered hereby, the Transactions include the transactions described below.

 

Amended Credit Facility

 

We have received the consent of our lenders to amend the terms of our senior secured credit facility. We expect the amendments to and extension of our senior secured credit facility, which we refer to as the amended credit facility, to provide us with greater operational flexibility and to extend the maturity of portions of our senior secured credit facility. The consummation of this offering is conditioned upon the effectiveness of our amended credit facility. The effectiveness of our amended credit facility is not conditioned upon the consummation of this offering. However, the effectiveness of our amended credit facility is conditioned on the prepayment of $100.0 million of our term loans and we anticipate utilizing a portion of the proceeds of this offering for such prepayment. We received the necessary consent of our lenders to the amendment to our senior secured credit facility on November 20, 2009 and we anticipate causing the amended credit facility to become effective on the same day as the closing of this offering. The amendment includes an extension of our revolving credit facilities and term loans to December 31, 2014 as to those lenders that agree to such extensions. As of November 30, 2009, 88.0% of the revolving lenders and 85.1% of the term loan lenders have agreed to extend the maturity. The effectiveness of the extension of the maturity of our senior secured credit facility to December 31, 2014, is conditioned upon the aggregate principal amount of Parent’s outstanding 2.875% senior convertible notes due 2027 being reduced to an amount less than or equal to $50.0 million prior to October 30, 2012, by means of (i) the repurchase or redemption thereof by Parent, (ii) defeasance thereof by Parent in accordance with the terms thereof or (iii) the exchange or conversion thereof into unsecured notes of Parent or any of its direct or indirect subsidiaries having no mandatory repayment prior to April 1, 2015, or into common stock of Parent. See “Use of Proceeds” and “Description of Other Indebtedness — Senior Secured Credit Facility.”

 

The DFS Acquisition

 

On October 28, 2009, DFG entered into a purchase agreement to acquire MFS. We expect to use approximately $117.8 million (subject to adjustment for the working capital of MFS and its subsidiaries as of the closing date, which we currently estimate will result in an additional $1.2 million payment to the sellers) of the net proceeds from this offering to pay the purchase price for the DFS acquisition. The consummation of the DFS acquisition is subject to the consent of our lenders under our senior secured credit facility, which we received on November 20, 2009. In addition, the consummation of the DFS acquisition is subject to the procurement by us and our subsidiaries of sufficient financing and the satisfaction of other customary closing conditions. We expect to complete the DFS acquisition simultaneously with the closing of this offering. However, there is no assurance that the acquisition will be consummated at that time or thereafter. The purchase agreement may be terminated by DFG or the sellers at any time after December 31, 2009 due to a failure to satisfy any of the closing conditions.

Investment of Proceeds by Issuer

 

The Issuer expects to utilize a portion of the proceeds of this offering to purchase from a subsidiary of Parent a portion of the equity interest that such subsidiary owns in Dollar Financial U.K. Such sale proceeds will then be utilized by Parent to pay the purchase price for the DFS acquisition and certain related costs and expenses. The Issuer also expects to purchase newly issued shares of Dollar Financial U.K. and Dollar Financial U.K. expects to then utilize such sale proceeds to prepay a portion of our U.K. term loan.

 

Ownership Structure

 

The chart below illustrates a summary of our current ownership and corporate structure after giving effect to the Transactions. The chart is a summary only and does not reflect all subsidiaries of Dollar Financial Group, Inc., DFG International, Inc., DFG World, Inc. or Dollar Financial U.K. The notes will be guaranteed by Parent and substantially all of our U.S. and Canadian subsidiaries.

 

 

SUMMARY HISTORICAL AND PRO FORMA CONSOLIDATED FINANCIAL DATA

 

The following table sets forth a summary of our selected consolidated historical financial data as of and for the periods presented. The summary historical financial information as of and for each of the fiscal years ended June 30, 2007, 2008 and 2009 have been derived from our audited consolidated financial statements incorporated by reference in this offering circular. The summary historical financial information as of and for each of the three-month periods ended September 30, 2008 and 2009 have been derived from our unaudited interim consolidated financial statements incorporated by reference in this offering circular. In the opinion of management, the unaudited interim financial data includes all adjustments, consisting of only normal non-recurring adjustments, considered necessary for a fair presentation of this information. The results of operations for interim periods are not necessarily indicative of the results that may be expected for the entire year.

 

We derived our summary pro forma financial data from our pro forma financial statements set forth in “Unaudited Pro Forma Condensed Consolidating Financial Statements.” The following unaudited pro forma condensed consolidating financial statements are based on our historical financial statements and those of MFS incorporated by reference in this offering circular after giving effect to the Transactions. These pro forma financial statements have been prepared applying the assumptions and adjustments described in the accompanying notes.

 

The unaudited pro forma condensed consolidating statements of operations data for the periods presented give effect to the Transactions as if they had been consummated on July 1, 2008. DFS’ fiscal year ends on December 31. DFS’ historical statement of operations for the twelve months ended June 30, 2009 represents a compilation of their quarterly periods during the twelve month period ended June 30, 2009. As a result, such statement of operations includes estimates inherent in preparing interim financial statements, which estimates were based on DFS’ actual fiscal years. The unaudited pro forma condensed consolidating balance sheet data give effect to the Transactions as if they had occurred on September 30, 2009. We describe the assumptions underlying the pro forma adjustments in the accompanying notes, which should also be read in conjunction with these unaudited pro forma condensed consolidating financial statements. You should also read this information in conjunction with the:

 

 

The pro forma adjustments related to the purchase price allocation and financing of the DFS acquisition are preliminary and based on information obtained to date by management, and are subject to revision as additional information becomes available as to, among other things, the fair value of acquired assets and liabilities as well as any pre-acquisition contingencies and finalization of acquisition-related costs. The actual adjustments described in the accompanying notes will be made as of the closing date of the DFS acquisition and may differ from those reflected in these unaudited pro forma condensed financial statements. Revisions to the preliminary purchase price allocation and financing of the DFS acquisition may have a significant impact on the pro forma amounts of total assets, total liabilities and stockholders’ equity, operating expense and costs, depreciation and amortization and interest expense.

 

The unaudited pro forma condensed consolidating financial statements should not be considered indicative of actual results that would have been achieved had the Transactions been consummated on the date or for the periods indicated, and do not purport to indicate consolidated balance sheet data or results of operations as of any future date or any future period.

 

The summary historical consolidated financial data and unaudited pro forma condensed consolidated statements of operations should be read in conjunction with “Unaudited Pro Forma Condensed Consolidating Financial Statements,” “Selected Financial Data,” and our audited and unaudited consolidated financial

statements filed on our most recent Form 10-Q, and our audited consolidated financial statements, filed on our most recent Form 10-K, as amended in our current report on Form 8-K filed with the SEC on November 20, 2009, all included in this offering circular or incorporated by reference herein.

 

 

 

 

 

The table below reconciles net (loss) income to EBITDA and Adjusted EBITDA:

 

 

 

 

RISK FACTORS

Risks Related to Our Business and Industry

 

If we do not generate a sufficient amount of cash, which depends on many factors beyond our control, our liquidity and our ability to service our indebtedness and fund our operations would be harmed.

 

We believe that our cash flow from operations, available cash and available borrowings under our senior secured credit facility, as amended in connection with the Transactions, will be adequate to meet our future liquidity needs. However, we have substantial debt service obligations, working capital needs and contractual commitments. We cannot assure you that our business will generate sufficient cash flow from operations, that our anticipated revenue growth will be realized or that future borrowings will be available to us under credit facilities in amounts sufficient to enable us to pay our existing indebtedness, fund our expansion efforts or fund our other liquidity needs. In addition, adverse changes in any of the measures above may impact the value of the goodwill or other intangible assets on our balance sheet by causing us to write-down or write-off the balance completely.

 

Changes in applicable laws and regulations governing consumer protection and lending practices, both domestically and abroad, may have a significant negative impact on our business, results of operations and financial condition.

 

Our business is subject to numerous state and certain federal and foreign laws and regulations which are subject to change and which may impose significant costs or limitations on the way we conduct or expand our business. These regulations govern or affect:

 

 

As we develop and introduce new products and services, we may become subject to additional federal, state and foreign regulations. In addition, future legislation or regulations may restrict our ability to continue our current methods of operation or expand our operations and may have a negative effect on our business, results of operations and financial condition. In addition, local and federal governments may seek to impose new licensing requirements or interpret or enforce existing requirements in new ways. Our business is also subject to litigation and regulatory proceedings, which could generate adverse publicity or cause us to incur substantial expenditures or modify the way we conduct our business.

 

Various anti-cash advance legislation has been proposed or introduced in various state legislatures and in the U.S. Congress. Congressional members continue to receive pressure from consumer advocates and other industry opposition groups to adopt such legislation. Any U.S. federal legislative or regulatory action that

severely restricts or prohibits cash advance and similar services, if enacted, could have an adverse impact on our business, prospects, results of operations and financial condition.

 

Currently our check cashing and consumer lending activities are subject to only limited substantive regulation in Canada other than usury laws. Effective May 3, 2007, the Canadian Parliament amended the federal usury law to transfer jurisdiction and the development of laws and regulations of our industry’s consumer loan products to the respective provinces. There can be no assurance that the new regulations that may be adopted would not have a detrimental effect on our consumer lending business in Canada. Historically, our Canadian consumer lending activities were subject to provincial licensing in Saskatchewan, Nova Scotia, New Brunswick and Newfoundland. A federal usury ceiling applied to loans we made to Canadian customers. Such borrowers historically contracted to repay us in cash; if they elected to repay by check, we also collected, in addition to a permissible finance charge, our customary check-cashing fees. To date, the provinces of British Columbia, Saskatchewan, Manitoba, Ontario, Nova Scotia, Prince Edward Island, Alberta and New Brunswick have all passed legislation to regulate short term consumer lenders and each are in the process of adopting the new regulations and rates consistent with the regulations. In general, the regulations proposed and implemented to date are similar to those in effect in the United States which require lenders to be licensed, set maximum limits on the charges to the consumer for a loan and regulate collection practices.

 

In the United Kingdom, our consumer lending activities must comply with the Consumer Credit Act of 1974 and related rules and regulations which, among other things, require us to obtain governmental licenses and prescribe the presentation, form and content of loan agreements. The modification of existing laws or regulations in Canada and the United Kingdom, or the adoption of new laws or regulations restricting or imposing more stringent requirements on our international check cashing and consumer lending activities, could increase our operating expenses and significantly limit our international business activities.

 

Public perception and press coverage of single-payment consumer loans as being predatory or abusive could negatively affect our revenues and results of operations.

 

Consumer advocacy groups and some legislators have recently advocated governmental action to prohibit or severely restrict certain types of short-term consumer lending. Typically the consumer groups, some legislators and press coverage focus on lenders that charge consumers interest rates and fees that are higher than those charged by credit card issuers to more creditworthy consumers. This difference in credit cost may become more significant if a consumer does not repay the loan promptly, but renews the loan for one or more additional short-term periods. These types of short-term single-payment loans are often characterized by consumer groups, some legislators and press coverage as predatory or abusive toward consumers. If consumers accept this negative characterization of certain single-payment consumer loans and believe that the loans we provide to our customers fit this characterization, demand for our loans could significantly decrease, which could negatively affect our revenues and results of operations.

 

If our estimates of loan losses are not adequate to absorb losses, our results of operations and financial condition may be adversely affected.

 

We maintain an allowance for loan losses for anticipated losses on company-funded loans and loans in default. To estimate the appropriate level of loan loss reserves, we consider known and relevant internal and external factors that affect loan collectability, including the amount of outstanding loans owed to us, historical loans charged off, current collection patterns and current economic trends. Our current allowance for loan losses is based on our charge-offs, expressed as a percentage of loan amounts originated for the last twelve months applied against the principal balance of outstanding loans. As of September 30, 2009, our allowance for loan losses on company-funded consumer loans that were not in default was $13.4 million and our allowance for losses on loans in default was $18.0 million. These reserves, however, are estimates, and if actual loan losses are materially greater than our loan loss reserves, our results of operations and financial condition could be adversely affected.

Legal proceedings may have a material adverse impact on our results of operations or cash flows in future periods.

 

We are currently subject to a number of legal proceedings. We are vigorously defending these proceedings. In addition, we are likely to be subject to further legal proceedings in the future. The resolution of any current or future legal proceeding could cause us to have to refund fees and/or interest collected, refund the principal amount of advances, pay damages or other monetary penalties and/or modify or terminate our operations in particular local and federal jurisdictions. We may also be subject to adverse publicity. Defense of any legal proceedings, even if successful, requires substantial time and attention of our senior officers and other management personnel that would otherwise be spent on other aspects of our business and requires the expenditure of significant amounts for legal fees and other related costs. Settlement of lawsuits may also result in significant payments and modifications to our operations. Any of these events could have a material adverse effect on our business, prospects, results of operations and financial condition. See “Item 3. Legal Proceedings” in our annual report on Form 10-K for fiscal year 2009.

 

For example, as previously disclosed in our public filings with the SEC, on August 19, 2003, a former customer in Ontario, Canada, Margaret Smith commenced an action against DFG and the Issuer, on behalf of a purported class of Ontario borrowers who, Smith claims, were subjected to usurious charges in payday-loan transactions, which we refer to as the Ontario Litigation. The action alleges violations of a Canadian federal law proscribing usury, seeks restitution and damages, including punitive damages, and seeks injunctive relief prohibiting further alleged usurious charges. The plaintiff’s motion for class certification was granted on January 5, 2007. The trial of the common issues commenced on April 27, 2009 but was suspended when the parties reached a settlement, which is subject to final court approval. During the fiscal quarter and fiscal year ended June 30, 2009, the Issuer recorded a charge of $57.4 million in relation to the pending Ontario settlement and for the potential settlement of certain of the similar class action proceedings pending in other Canadian provinces. There is no assurance that the Ontario settlement will receive final Court approval or that any of the other class action proceedings will be settled. Although we believe that we have meritorious defenses to the claims in the proceedings and intend to vigorously defend against such claims, the ultimate cost of resolution of such claims, either through settlements or pursuant to litigation, may substantially exceed the amount accrued as of June 30, 2009, and additional accruals may be required in the future. As of September 30, 2009, the remaining provision of approximately $53.4 million is included in our accrued expenses.

 

Competition in the financial services industry could cause us to lose market share and revenues.

 

The industry in which we operate is highly fragmented and very competitive. In addition, we believe that the market will become more competitive as the industry consolidates. In addition to other check cashing stores and consumer lending stores in the United States, Canada, the United Kingdom and Europe, we compete with banks and other financial services entities and retail businesses that cash checks, offer consumer loans, sell money orders, provide money transfer services or offer other products and services offered by us. Some of our competitors have larger and more established customer bases and substantially greater financial, marketing and other resources than we have. As a result, we could lose market share and our revenues could decline, thereby affecting our ability to generate sufficient cash flow to service our indebtedness and fund our operations.

 

Unexpected changes in foreign tax rates could negatively impact our operating results.

 

We currently conduct significant check cashing and consumer lending activities internationally. Our foreign subsidiaries accounted for 75.9% of our total revenues during the three months ended September 30, 2009, and 72.4% of our total revenues during the three months ended September 30, 2008. Our financial results may be negatively impacted to the extent tax rates in foreign countries where we operate increase and/or exceed those in the United States and as a result of the imposition of withholding requirements on foreign earnings.

Risk and uncertainties related to political and economic conditions in foreign countries in which we operate could negatively impact our operations.

 

We currently conduct significant check cashing and consumer lending activities internationally. If political, regulatory or economic conditions deteriorate in these countries, our ability to conduct our international operations could be limited and our costs could be increased. Moreover, actions or events could occur in these countries that are beyond our control, which could restrict or eliminate our ability to operate in such jurisdictions or significantly reduce product demand and the expected profitability of such operations.

 

The international scope of our operations may contribute to increased costs and negatively impact our operations.

 

Our operations in Canada and the United Kingdom are significant to our business and present risks which may vary from those we face domestically. At September 30, 2009, assets held by our foreign subsidiaries represented 71.1% of our total assets. Since international operations increase the complexity of an organization, we may face additional administrative costs in managing our business. In addition, most countries typically impose additional burdens on non-domestic companies through the use of local regulations, tariffs and labor controls. Unexpected changes to the foregoing could negatively impact our operations.

 

Foreign currency fluctuations may adversely affect our results of operations.

 

We derive significant revenue, earnings and cash flow from our operations in Canada and the United Kingdom. Our results of operations are vulnerable to currency exchange rate fluctuations principally in the Canadian dollar and the British pound against the United States dollar. We estimate that a 10.0% change in foreign exchange rates by itself would have impacted reported pre-tax earnings from continuing operations (exclusive in the three months ended September 30, 2009 of unrealized foreign exchange losses of approximately $7.8 million and losses on store closings of approximately $0.2 million) by approximately $2.9 million for the three months ended September 30, 2009 and $3.0 million (exclusive of losses on store closings of approximately $2.3 million) for the three months ended September 30, 2008. This impact represents 12.7% of our consolidated foreign pre-tax earnings for the three months ended September 30, 2009 and 13.6% of our consolidated foreign pre-tax earnings for the three months ended September 30, 2008.

 

Demand for our products and services is sensitive to the level of transactions effected by our customers, and accordingly, our revenues could be affected negatively by a general economic slowdown.

 

A significant portion of our revenues is derived from cashing checks and consumer lending. Revenues from check cashing and consumer lending accounted for 26.7% and 55.7%, respectively, of our total revenues during the three months ended September 30, 2009 and 31.7% and 53.2%, respectively, of our total revenues during the three months ended September 30, 2008. Any changes in economic factors that adversely affect consumer transactions and employment could reduce the volume of transactions that we process and have an adverse effect on our revenues and results of operations.

 

If the national and worldwide financial crisis continues, potential disruptions in the credit markets may negatively impact the availability and cost of short-term borrowing under our senior secured credit facility, which could adversely affect our results of operations, cash flows and financial condition.

 

If internal funds are not available from our operations and after utilizing our excess cash we may be required to rely on the banking and credit markets to meet our financial commitments and short-term liquidity needs. Disruptions in the capital and credit markets, as have been experienced during 2008 and 2009, could adversely affect our ability to draw on our revolving loans. Our access to funds under that credit facility is dependent on the ability of the banks that are parties to the facility to meet their funding commitments. Those banks may not be able to meet their funding commitments to us if they experience shortages of capital and liquidity or if they experience excessive volumes of borrowing requests from us and other borrowers within a short period of time. In addition, the effects of the global recession and its effects on our operations and the

translational effects of our foreign operations, could cause us to have difficulties in complying with our credit agreements.

 

Longer term disruptions in the capital and credit markets as a result of uncertainty, changing or increased regulation, reduced alternatives, or failures of significant financial institutions could adversely affect our ability to refinance our senior secured credit facility on favorable terms, if at all. The lack of availability under, and the inability to subsequently refinance, our senior secured credit facility could require us to take measures to conserve cash until the markets stabilize or until alternative credit arrangements or other funding for our business needs can be arranged. Such measures could include deferring capital expenditures, including acquisitions, and reducing or eliminating other discretionary uses of cash.

 

Our business model for our legal document processing services business is being challenged in the courts, as well as by state legislatures, which could result in our discontinuation of these services in any one or more jurisdictions.

 

Our business model for our legal document processing services business is being challenged in various states and, at the federal level, by various United States bankruptcy trustees, as the unauthorized practice of law. A finding in any of these pending lawsuits and proceedings that our legal document processing services business model constitutes the unauthorized practice of law could result in our discontinuation of these services in any one or more jurisdictions.

 

Future legislative and regulatory activities and court orders may restrict our ability to continue our current legal document processing services business model or expand its use. For example, there have been recent efforts by various trade and state bar associations and state legislatures and regulators to define the practice of law in a manner which would prohibit the preparation of legal documents by non-attorneys or prohibit non-attorneys from offering for sale certain legal documents.

 

Changes in local rules and regulations such as local zoning ordinances could negatively impact our business, results of operations and financial condition.

 

In addition to state and federal laws and regulations, our business can be subject to various local rules and regulations such as local zoning regulations. Any actions taken in the future by local zoning boards or other local governing bodies to require special use permits for, or impose other restrictions on, our ability to provide products and services could adversely affect our ability to expand our operations or relocate existing stores.

 

A reduction in demand for our products and services and failure by us to adapt to such reduction could adversely affect our business and results of operations.

 

The demand for a particular product or service we offer may be reduced due to a variety of factors, such as regulatory restrictions that decrease customer access to particular products, the availability of competing products or changes in customers’ preferences or financial conditions. Should we fail to adapt to significant changes in our customers’ demand for, or access to, our products or services, our revenues could decrease significantly and our operations could be harmed. Even if we do make changes to existing products or services or introduce new products or services to fulfill customer demand, customers may resist or may reject such products or services. Moreover, the effect of any product change on the results of our business may not be fully ascertainable until the change has been in effect for some time and by that time it may be too late to make further modifications to such product or service without causing further harm to our business and results of operations.

 

Our business and results of operations may be adversely affected if we are unable to manage our growth effectively.

 

Our expansion strategy, which contemplates the addition of new stores, the acquisition of competitor stores and acquiring or developing new distribution channels for our products in the United States, Canada, the United Kingdom, the Republic of Ireland, Poland and other international markets, is subject to significant

risks. Our continued growth is dependent upon a number of factors, including the ability to hire, train and retain an adequate number of experienced management employees, the availability of adequate financing for our expansion activities, the ability to successfully transition acquired stores or their historical customer base to our operating platform, the ability to obtain any government permits and licenses that may be required, the ability to identify and overcome cultural and linguistic differences which may impact market practices within a given geographic region, and other factors, some of which are beyond our control. There can be no assurance that we will be able to successfully grow our business or that our current business, results of operations and financial condition will not suffer if we are unable to do so. Expansion beyond the geographic areas where the stores are presently located will increase demands on management and divert their attention. In addition, expansion into new products and services will present new challenges to our business and will require additional management time.

 

Our ability to open and acquire new stores is subject to outside factors and circumstances over which we have limited control or that are beyond our control which could adversely affect our growth potential.

 

Our expansion strategy includes acquiring existing stores and opening new ones. The success of this strategy is subject to numerous outside factors, such as the availability of attractive acquisition candidates, the availability of acceptable business locations, the ability to access capital to acquire and open such stores and the ability to obtain required permits and licenses. We have limited control, and in some cases, no control, over these factors. Moreover, the start-up costs and the losses we likely would incur from initial operations attributable to each newly opened store place demands upon our liquidity and cash flow, and we cannot assure you that we will be able to satisfy these demands. The failure to execute our expansion strategy would adversely affect our ability to expand our business and could materially adversely affect our revenue, profitability and results of operations.

 

If we do not successfully integrate newly acquired businesses into our operations, our performance and results of operations could be negatively affected.

 

We have historically grown through strategic acquisitions and a key component of our growth strategy is to continue to pursue attractive acquisition opportunities, such as the DFS acquisition. The success of our acquisitions is dependent, in part, upon our effectively integrating the management, operations and technology of acquired businesses into our existing management, operations and technology platforms, of which there can be no assurance. The failure to successfully integrate acquired businesses into our organization, such as the business acquired in the DFS acquisition, could materially adversely affect our business, prospects, results of operations and financial condition.

 

Our check cashing services may further diminish because of technological advances.

 

We derive a significant component of our revenues from fees associated with cashing payroll, government and personal checks. Recently, there has been increasing penetration of electronic banking services into the check cashing and money transfer industry, including direct deposit of payroll checks and electronic transfer of government benefits. To the extent that checks received by our customer base are replaced with such electronic transfers, demand for our check cashing services could decrease.

 

Our business is seasonal in nature, which causes our revenues and earnings to fluctuate.

 

Our business is seasonal due to the impact of several tax-related services, including cashing tax refund checks, making electronic tax filings and processing applications for refund anticipation loans. Historically, we have generally experienced our highest revenues and earnings during the third fiscal quarter ending March 31 when revenues from these tax-related services peak. This seasonality requires us to manage our cash flows over the course of the year. If our revenues were to fall substantially below what we would normally expect during certain periods, our financial results would be adversely impacted and our ability to service our debt, including our ability to make interest payments on our debt, may also be adversely affected.

Because we maintain a significant supply of cash in our stores, we may be subject to cash shortages due to robbery, employee error and theft.

 

Since our business requires us to maintain a significant supply of cash in each of our stores, we are subject to the risk of cash shortages resulting from robberies, as well as employee errors and theft. Although we have implemented various programs to reduce these risks, maintain insurance coverage for theft and provide security, systems and processes for our employees and facilities, we cannot assure you that robberies, employee error and theft will not occur and lead to cash shortages that could adversely affect our results of operations.

 

If we lose key management or are unable to attract and retain the talent required for our business, our operating results could suffer.

 

Our future success depends to a significant degree upon the members of our senior management team, which have been instrumental in procuring capital to assist us in executing our growth strategies, identifying and negotiating domestic and international acquisitions and providing expertise in managing our developing international operations. The loss of the services of one or more members of senior management could harm our business and future development. Our continued growth also will depend upon our ability to attract and retain additional skilled management personnel. If we are unable to attract and retain the requisite personnel as needed in the future, our operating results and growth could suffer.

 

A catastrophic event at our corporate or international headquarters or our centralized call-center facilities in the United States, Canada and the United Kingdom could significantly disrupt our operations and adversely affect our business, results of operations and financial condition.

 

Our global business management processes are primarily provided from our corporate headquarters in Berwyn, Pennsylvania, and our operations headquarters in Victoria, British Columbia, Nottingham, England and a satellite office in Fort Lauderdale, Florida. We also maintain a centralized call-center facility in Salt Lake City, Utah that performs customer service, collection and loan-servicing functions for our consumer lending business, as well as similar facilities in Victoria, British Columbia, Nottingham, England and a satellite office in Fort Lauderdale, Florida. We have in place disaster recovery plans for each of these sites, including data redundancy and remote information back-up systems, but if any of these locations were severely damaged by a catastrophic event, such as a flood, significant power outage or act of terror, our operations could be significantly disrupted and our business, results of operations and financial condition could be adversely impacted.

 

Any disruption in the availability of our information systems could adversely affect our business operations.

 

We rely upon our information systems to manage and operate our stores and business. Each store is part of an information network that is designed to permit us to maintain adequate cash inventory, reconcile cash balances on a daily basis and report revenues and expenses to our headquarters. Our back-up systems and security measures could fail to prevent a disruption in our information systems. Any disruption in our information systems could adversely affect our business, prospects, results of operations and financial condition.

 

In the event that our cash flow from operations are not sufficient to meet our future liquidity needs, a portion of the goodwill on our balance sheet could become impaired, which could significantly impact our total shareholders’ equity.

 

In the event that our cash flow from operations are not sufficient to meet our future liquidity needs, a portion of the goodwill on our balance sheet could become impaired as the fair value of our goodwill is estimated based upon a present value technique using discounted future cash flows. The balance of our goodwill as of September 30, 2009 of $467.3 million exceeded total shareholders’ equity of $219.9 million.

As a result, a decrease to our cash flow from operations could result in a charge that significantly impacts the balance of our total shareholders’ equity.

 

Risks Related to the DFS Business

 

The DFS business relies upon exclusive contractual relationships with its service providers, and the DFS business would be harmed from the loss of any of these service providers or if alternate service providers are needed but cannot be arranged or are not available.

 

DFS is an established business that provides services to enlisted military personnel who make application for auto loans to purchase new and used vehicles that are funded and serviced under an exclusive agreement with a major third-party national bank based in the United States. DFS’s revenue comes from fees related to the loan application which are paid by the third-party national bank and fees from the sale of ancillary products such as warranty service contracts and GAP insurance coverage. DFS relies upon exclusive contractual relationships with the third-party national bank for the funding and servicing of auto loans made in connection with qualifying applications submitted for its customers through DFS’s MILES program, a third-party provider for service contracts and a third-party provider for GAP insurance contracts. If events were to occur which resulted in DFS losing any or all of these contractual relationships, or which resulted in a material reduction in the services provided, a material increase in the cost of the services provided or a material reduction in the fees earned by DFS for the services provided under these exclusive contractual relationships, DFS could be required to locate new or alternate service providers. In such event, and until DFS would be able to locate new or alternate service providers, the DFS business could be significantly disrupted. In addition, these new or alternate service providers may offer services that are more costly to DFS’s customers or that pay premiums or fees below the level that DFS currently receives. These changes could have a material adverse effect on the DFS business and negatively affect its revenues and results of operations.

 

Potential disruptions in the credit markets may negatively impact the availability and cost of auto loans which could adversely affect DFS’s results of operations, cash flows and financial condition.

 

The auto loans made in connection with qualifying applications submitted for its customers through DFS’s MILES program are funded and serviced under an exclusive agreement with a major third-party national bank based in the United States. Disruptions in the capital and credit markets could adversely affect the third-party national bank’s ability to continue funding and servicing these auto loans. In addition, longer term disruptions in the capital and credit markets as a result of uncertainty, changing or increased regulation, reduced alternatives, or failures of significant financial institutions could adversely affect DFS’s ability to make arrangements with replacement or alternate lenders on favorable terms, if at all. If this third-party national bank were to provide DFS notice under its contract with DFS of its intent to terminate the contract, DFS would be required to find new or alternate service providers of credit arrangements for its customers. Increases in the costs of auto loans, reductions in the fees paid to DFS in connection with auto loans or declines in business while replacement or alternate lenders are arranged could adversely affect DFS’s results of operations, cash flows and financial condition.

 

The DFS business relies upon ongoing enlistment in the U.S. military and budget cuts that reduce enlistments or reduce the number of active duty military personnel could harm the DFS business.

 

DFS offers its services to enlisted active duty U.S. military personnel. The number of enlisted active duty military personnel and the number of recruits joining the military each year are subject to the U.S. defense budget. Cuts in the U.S. defense budget may result in reductions in recruitment targets, reductions in the number of active duty military personnel or both, any of which would reduce the overall number of potential DFS customers or potentially reduce demand for the services offered by DFS which would cause the revenue of DFS to decline and could otherwise harm its business, financial condition and results of operations.

Risks Related to the Notes and Our Indebtedness

 

We have a holding company structure and may not be able to generate sufficient cash to service all of our indebtedness, including the notes, and may be forced to take other actions to satisfy our obligations under our indebtedness, which may not be successful.

 

Parent and certain guarantors are holding companies and conduct most of their operations through subsidiaries. Certain guarantors’, including Parent’s, operating cash flows and consequently their ability to service their debt, including the guarantee obligations if the Issuer were to default on its obligations, are therefore principally dependent upon their subsidiaries’ earnings and their distributions of those earnings to them and may also be dependent upon loans, advances or other payments of funds to them by those subsidiaries. In some circumstances, the subsidiaries of these guarantors may be unable to pay them dividends or otherwise make payments to these guarantors, including as a result of insufficient cash flow, restrictive covenants in loan agreements, foreign exchange limitations or other regulatory restrictions. If the subsidiaries of these guarantors are unable to pay them dividends or otherwise make payments to these guarantors, the guarantors will not be able to make debt service payments on the guarantee obligations under the notes. In addition, any payments of dividends, distributions, loans or advances to us by our subsidiaries could be subject to legal and contractual restrictions. Our operating subsidiaries are permitted under the terms of our indebtedness, including the indenture governing the notes and our senior secured credit facility, as amended in connection with the Transactions, to incur additional indebtedness that may restrict payments from those subsidiaries to us. The agreements governing the current and future indebtedness of our operating subsidiaries may not permit those subsidiaries to provide Parent and certain other guarantors with sufficient cash to meet their guarantee obligations on the notes when due. After giving effect to the Transactions, the Issuer’s debt service obligations will substantially increase as a result of the interest expense on the notes. If our cash flows and capital resources are insufficient to fund our debt service obligations, we may be forced to reduce or delay capital expenditures, seek additional capital or seek to restructure or refinance our indebtedness, including the notes. These alternative measures may not be successful and may not permit us to meet our scheduled debt service obligations. In the absence of such operating results and resources, we could face substantial liquidity problems and might be required to sell material assets or operations to attempt to meet our debt service and other obligations. Our senior secured credit facility, as amended in connection with the Transactions, restricts our ability to use the proceeds from asset sales. We may not be able to consummate those asset sales to raise capital or sell assets at prices that we believe are fair and proceeds that we do receive may not be adequate to meet any debt service obligations then due.

 

The amendment of our senior secured credit facility and the maturity date of the notes offered hereby are subject to a springing maturity which requires us to satisfy certain conditions for the springing maturity to become effective.

 

The extension of certain maturity dates contemplated by the amendment to our senior secured credit facility will not become effective and the maturity date of the notes offered hereby will be automatically shortened to November 30, 2012, unless prior to October 30, 2012, the aggregate principal amount of Parent’s outstanding 2.875% senior convertible notes due 2027 has been reduced to an amount less than or equal to $50.0 million by means of (i) the repurchase or redemption thereof by Parent, (ii) defeasance thereof by Parent in accordance with the terms thereof or (iii) the exchange or conversion thereof into unsecured notes of Parent or any of its direct or indirect subsidiaries having no mandatory repayment prior to April 1, 2015, or into common stock of Parent. We refer to this condition as the “springing maturity.”

 

If we are unable to satisfy the springing maturity condition we will be required to repay or refinance the amounts due under our senior secured credit facility and the notes earlier than otherwise anticipated. In such case, if we are unable to repay or refinance our senior secured credit facility, which will mature before the notes, we would be in default under our senior secured credit facility. If we were to default on our credit facility, we would also be in default under the notes as a result of the cross-default provisions under the indenture governing the terms of the notes. We cannot be sure that we would have, or be able to obtain, sufficient funds to repay the amounts outstanding under our senior secured credit facility and the notes if we

are unable to satisfy the springing maturity condition or that we would be able to obtain third-party financing on terms reasonably acceptable to us or at all.

 

In addition, if we are unable to satisfy the springing maturity condition our ability to timely refinance our senior secured credit facility and the notes will depend upon the foregoing factors as well on continued and sustained improvements in financing markets. We cannot assure creditors that refinancing will be possible. If we are unable to refinance our debt on a timely basis, we might be forced to dispose of certain assets, minimize capital expenditures or take other steps that could be detrimental to our business. There is no assurance that any of these alternatives would be available to us, if at all, on satisfactory terms or on terms that would not require us to breach the terms and conditions or our existing or future debt agreements. The inability to refinance or obtain additional financing could have a material adverse effect on our financial condition and on our ability to meet our obligations to holders of the notes.

 

The notes will be subject to a change of control provision, and we may not have the ability to raise the funds necessary to fulfill our obligations under the notes following a change of control.

 

We may not have the ability to raise the funds necessary to fulfill our obligations under the notes following a “change of control” as defined in the indenture governing the notes. Under the indenture governing the notes, upon the occurrence of a defined change of control, we will be required to offer to repurchase all outstanding notes at 101% of the principal amount thereof plus, without duplication, accrued and unpaid interest and special interest, if any, to the date of repurchase. However, we may not have sufficient funds at the time of the change of control to make the required repurchase of the notes. Our failure to make or complete a change of control offer would place us in default under the indenture governing the notes. In addition, we are not permitted to make a change in control payment for the notes under our senior secured credit facility.

 

Your right to receive payments on the notes could be adversely affected if any of our non-guarantor subsidiaries declares bankruptcy, liquidate or reorganize.

 

Parent and some, but not all, of its direct and indirect U.S. and Canadian subsidiaries guarantee the notes. As a result, you are creditors of only the Issuer and Parent and certain of its U.S. and Canadian subsidiaries that guarantee the notes. In the case of subsidiaries that are not guarantors and those U.S., Canadian and U.K. subsidiaries of Parent which are borrowers or guarantors under our senior secured credit facility, all the existing and future liabilities of those subsidiaries, including any claims of trade creditors, debtholders and preferred stockholders, are effectively senior to the notes and related guarantees. Subject to limitations in our senior secured credit facility, as amended in connection with the Transactions, and the indenture governing the notes, non-guarantor subsidiaries may incur additional indebtedness in the future (and may incur other liabilities without limitation). In the event of a bankruptcy, liquidation or reorganization of any of our non-guarantor subsidiaries, their creditors will generally be entitled to payment of their claims from the assets of those subsidiaries before any assets are made available for distribution to us. For fiscal year 2009 and the three months ended September 30, 2009, on a pro forma basis after giving effect to the Transactions, our subsidiaries that will not be guarantors of the notes had total revenue of $138.7 million and $44.7 million respectively, and as of September 30, 2009, those subsidiaries had assets of $220.8 million and debt and other liabilities of $180.7 million (including inter-company balances).

 

We are subject to restrictive covenants imposed by our senior secured credit facility and by the indenture governing the notes.

 

Our senior secured credit facility, as amended in connection with the Transactions, and the indenture governing the notes contain numerous financial and operating covenants. These covenants restrict, among other things, our ability to:

 

 

Our senior secured credit facility also requires us to maintain minimum financial ratios. Such financial ratios are a maximum ratio of debt to EBITDA, a maximum ratio of secured debt to EBITDA and a minimum ratio of EBITDA to fixed charges. The restrictions in our senior secured credit facility and restrictions in the indenture governing the notes limit our financial and strategic flexibility, and may prohibit or limit any contemplated strategic initiatives and limit our ability to grow and increase our revenues or respond to competitive changes. The failure to comply with the covenants would result in a default and permit the lenders under our senior secured credit facility to accelerate the maturity of the indebtedness issued thereunder, and we could be prohibited from making any principal payments on the notes.

 

Agreements governing future indebtedness could also contain significant financial and operating restrictions. A failure to comply with the obligations contained in the indenture governing the notes could result in an event of default under the indenture, which could permit acceleration of the notes and acceleration of debt under other instruments that may contain cross-acceleration or cross-default provisions. We are not certain whether we would have, or be able to obtain, sufficient funds to make these accelerated payments. If not, the notes would likely lose much or all of their value.

 

If we default on our obligations to pay our other indebtedness, we may not be able to make payments on the notes.

 

Any default under the agreements governing our indebtedness, including a default under our senior secured credit facility, that is not waived by the required lenders or holders of such indebtedness, and the remedies sought by the holders of such indebtedness could prevent us from paying principal, premium, if any, and interest on the notes and substantially decrease the market value of the notes. If we are unable to generate sufficient cash flow or are otherwise unable to obtain funds necessary to meet required payments of principal, premium, if any, and interest on our indebtedness, or if we otherwise fail to comply with the various covenants in the agreements governing our indebtedness, including the covenants contained in our senior secured credit facility, we would be in default under the terms of the agreements governing such indebtedness. In the event of such a default under our senior secured credit facility, including as it will be amended in connection with the Transactions, including a failure to satisfy the minimum financial ratios:

 

As a result of such default and any actions the lenders may take in response thereto, we could be forced into bankruptcy or liquidation.

 

Despite the level of our indebtedness, we may still incur significantly more indebtedness. This could further increase the risks associated with our indebtedness.

 

Despite our current level of indebtedness, we may be able to incur significant additional indebtedness, including secured indebtedness, in the future. Although our senior secured credit facility, as amended in connection with the Transactions, and the indenture governing the notes contain restrictions on our ability to incur additional indebtedness, these restrictions are subject to a number of qualifications and exceptions, and, under certain circumstances, the indebtedness incurred in compliance with such restrictions could be substantial. If new indebtedness is added to our current debt levels, the related risks that we face would be increased, and we may not be able to meet all our debt obligations, including repayment of the notes, in whole or in part.

 

The notes are senior unsecured obligations of National Money Mart Company guaranteed by Parent and certain of its subsidiaries, and as unsecured indebtedness will be effectively junior to any secured indebtedness to the extent of the security for such secured indebtedness.

 

The notes will be general unsecured obligations that rank junior in right of payment to all of our existing and future secured indebtedness. Our senior secured credit facility is secured by substantially all of our assets. Our senior secured credit facility will mature prior to the maturity of the notes. If we become insolvent or are liquidated, or if payment of any secured indebtedness is accelerated, the holders of the secured indebtedness will be entitled to exercise the remedies available to secured lenders under applicable law, including the ability to foreclose on and sell the assets securing such indebtedness in order to satisfy such indebtedness. In any case, any remaining assets may be insufficient to repay the notes. As of September 30, 2009, we had approximately $369.6 million aggregate principal amount of senior secured indebtedness outstanding, and an additional $95.6 million that we were able to borrow under our senior secured credit facility, to which the notes would have been effectively subordinated to the extent of the value of the collateral. As part of the Transactions, and upon the closing of this offering, we expect to prepay a portion of our term loans in an aggregate principal amount of $100.0 million.

 

There is no established trading market for the notes.

 

The notes are a new issue of securities for which there is no established trading market. We do not intend to apply for listing of the notes on any securities exchange. In addition, although the initial purchasers intend to make a market for the notes, they are not obligated to do so and may discontinue market making activities at any time, in their sole discretion. As a result, an active trading market for the notes may not develop. If an active trading market does not develop or is not maintained, the market price and liquidity of the notes may be adversely affected. In that case, holders of the notes may not be able to sell their notes at a particular time or you may not be able to sell your notes at a favorable price. Future trading prices of the notes will depend on many factors, including:

 

 

United States holders may be required to pay United States federal income tax on accrual of OID on the notes, which means that United States holders may have to include such OID in income as it accrues in advance of the receipt of cash attributable to such income.

 

Because there is a possibility that the principal amount of the notes may exceed their “issue price” by more than the statutory de minimis threshold, the notes may be treated as being issued with OID for United States federal

income tax purposes. A United States holder (as defined in “Certain Material United States Federal Income Tax Considerations — United States Holders”) of a note with OID will be required to include such OID in gross income as it accrues, in advance of the receipt of cash attributable to that income and regardless of the United States holder’s regular method of accounting for United States federal income tax purposes. See “Certain Material United States Federal Income Tax Considerations — United States Holders” for more detail.

 

The notes are subject to restrictions on transfer.

 

The notes are being offered and sold pursuant to an exemption from registration under United States and applicable state securities laws. Therefore, you may transfer or resell the notes in the United States only in a transaction registered under or exempt from the registration requirements of the United States and applicable state securities laws, and you may be required to bear the risk of your investment for an indefinite period of time. By purchasing the notes, you will be deemed to have made certain acknowledgements, representations and agreements as set forth under “Transfer Restrictions.” Under the registration rights agreement, we are obligated to use our reasonable best efforts to file a registration statement, enabling the notes to be exchanged for equivalent notes registered under U.S. securities laws, within 90 days of the issuance of the notes and to cause such registration statement to become effective within 180 days of the issuance of the notes, or, in certain circumstances, register the reoffer and resale of the notes under United States securities laws. However, any such registration statement may not become or remain effective. See “Description of the Notes— Registered Exchange Offer; Registration Rights.”

 

Dollar Financial Corp. and certain of its direct and indirect wholly-owned U.S. and Canadian subsidiaries will guarantee the notes on a senior unsecured basis. Federal and state statutes allow courts, under specific circumstances, to void guarantees and require note holders to return payments received from guarantors.

 

Under the terms of the indenture governing the notes, the notes will be guaranteed on a senior unsecured basis by Parent and some, but not all, of its direct and indirect wholly-owned U.S. and Canadian subsidiaries. If Parent or one of the subsidiaries that is a guarantor of the notes becomes the subject of a bankruptcy case or a lawsuit filed by unpaid creditors of any such guarantor, the guarantees entered into by these guarantors may be reviewed under the federal bankruptcy law and comparable provisions of state fraudulent transfer laws. Under these laws, a guarantee could be voided, or claims in respect of a guarantee could be subordinated to other obligations of a guarantor, if, among other things, the guarantor, at the time it incurred the indebtedness evidenced by its guarantee:

 

 

 

 

In such event, any payment by a guarantor pursuant to its guarantee could be voided and required to be returned to the guarantor, or to a fund for the benefit of the guarantor’s creditors, under those circumstances.

 

If a guarantee of a guarantor were voided as a fraudulent conveyance or held unenforceable for any other reason, in all likelihood holders of the notes would be creditors solely of National Money Mart Company and those guarantors whose guarantees had not been voided. The notes then would in effect be structurally subordinated to all liabilities of the guarantor whose guarantee was voided.

 

The measures of insolvency for purposes of these fraudulent transfer laws will vary depending upon the law applied in any proceeding to determine whether a fraudulent transfer has occurred. Generally, however, a guarantor would be considered insolvent if:

 

 

We cannot assure you as to what standard a court would use to determine whether or not a guarantor would be solvent at the relevant time, or regardless of the standard used, that the guarantee would not be subordinated to any guarantor’s other debt.

 

If a court held that the guarantees should be voided as fraudulent conveyances, the court could void, or hold unenforceable, the guarantees, which could mean that you may not receive any payments under the guarantees, and the court may direct you to return any amounts that you have already received from any guarantor. Furthermore, the holders of the notes would cease to have any direct claim against the applicable guarantor. Consequently, any former guarantor’s assets would be applied first to satisfy its other liabilities, before any portion of its assets could be applied to the payment of the notes.

 

Each guarantee contains a provision intended to limit the guarantor’s liability to the maximum amount that it could incur without causing the incurrence of obligations under its guarantee to be a fraudulent transfer. This provision may not be effective to protect the guarantees from being voided under fraudulent transfer law, or may reduce or eliminate the guarantor’s obligation to an amount that effectively makes the guarantee worthless.

UNAUDITED PRO FORMA CONDENSED CONSOLIDATING FINANCIAL STATEMENTS

 

On October 28, 2009, Parent entered into a purchase agreement with all of the members of MFS pursuant to which DFG will purchase all of the outstanding membership interests of MFS, and, as a result of such purchase, MFS will become a wholly owned subsidiary of DFG. We refer to this business combination as the DFS acquisition. The consummation of the DFS acquisition is contingent on Parent obtaining acceptable financing for the acquisition, which in addition to the completion of this offering, requires an amendment to certain aspects of our senior secured credit facility, for which we received the necessary consents on November 20, 2009. We refer to the following events as the Transactions:

 

 

The following unaudited pro forma condensed consolidating financial statements are based on our historical financial statements and those of MFS incorporated by reference in this offering circular after giving effect to the Transactions. These pro forma financial statements have been prepared applying the assumptions and adjustments described in the accompanying notes.

 

The unaudited pro forma condensed consolidating statements of operations data for the periods presented give effect to the Transactions as if they had been consummated on July 1, 2008. The unaudited pro forma condensed consolidating balance sheet data give effect to the Transactions as if they had occurred on September 30, 2009. We describe the assumptions underlying the pro forma adjustments in the accompanying notes, which should also be read in conjunction with these unaudited pro forma condensed consolidating financial statements. You should also read this information in conjunction with the:

 

The pro forma adjustments related to the purchase price allocation and financing of the DFS acquisition are preliminary and based on information obtained to date by management, and are subject to revision as additional information becomes available as to, among other things, the fair value of acquired assets and liabilities as well as any pre-acquisition contingencies and finalization of acquisition-related costs. The actual adjustments described in the accompanying notes will be made as of the closing date of the DFS acquisition and may differ from those reflected in these unaudited pro forma condensed consolidating financial statements. Revisions to the preliminary purchase price allocation and financing of the DFS acquisition may have a significant impact on the pro forma amounts of total assets, total liabilities and stockholders’ equity, operating expense and costs, depreciation and amortization and interest expense.

 

The unaudited pro forma condensed consolidating financial statements should not be considered indicative of actual results that would have been achieved had the Transactions been consummated on the date or for the periods indicated, and do not purport to indicate consolidated balance sheet data or results of operations as of any future date or any future period.

Dollar Financial Corp.

 

Unaudited Pro Forma Condensed Consolidating Balance Sheet

September 30, 2009

 

Dollar Financial Corp.

 

Unaudited Pro Forma Condensed Consolidating Statement of Operations

For the Year Ended June 30, 2009

 

Dollar Financial Corp.

 

Unaudited Pro Forma Condensed Consolidating Statement of Operations

For the Three Months Ended September 30, 2009