UNITED STATES BASKETBALL LEAGUE INC - FORM 10-Q

Attached files

file	filename
EX-32 - UNITED STATES BASKETBALL LEAGUE INC	v208111_ex32.htm
EX-31.2 - UNITED STATES BASKETBALL LEAGUE INC	v208111_ex31-2.htm
EX-31.1 - UNITED STATES BASKETBALL LEAGUE INC	v208111_ex31-1.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington D.C. 20549

FORM 10-Q

(Mark One)

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

For the quarterly period ended November 30, 2010

¨	TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT

For the transition period from to

Commission File Number 1-15913

UNITED STATES BASKETBALL LEAGUE, INC.

(Exact Name of Registrant as Specified in Its Charter)

Delaware	06-1120072
(State or Other Jurisdiction of	(I.R.S. Employer
Incorporation or Organization)	Identification Number)

183 Plains Road, Suite 2 Milford, Connecticut 06461

(Address of Principal Executive Offices)

(203) 877-9508

(Registrant’s Telephone Number, Including Area Code)

___________________________________________

(Former Name, Former Address and Former Fiscal Year, if Changed

Since Last Report)

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

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (Section 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ¨ No ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer”, “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer ¨	Accelerated filer ¨
Non-accelerated filer ¨ (Do not check if a smaller reporting company)	Smaller reporting company x

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ¨ No x

Indicate the number of shares outstanding of each of the issuer’s classes of common stock as of the latest practicable date. As of January 12, 2011, there were 3,512,527 shares of Common Stock, $.01 par value per share, outstanding.

UNITED STATES BASKETBALL LEAGUE, INC.

INDEX

		PAGE

PART I.	FINANCIAL INFORMATION	3

Item 1.	UNAUDITED FINANCIAL STATEMENTS.

	Consolidated Balance Sheets – November 30, 2010and February 28, 2010	3

	Consolidated Statements of Operations for the three and nine months ended November 30, 2010 and 2009	4

	Consolidated Statement of Stockholders’ Deficiency	5

	Consolidated Statements of Cash Flows for the nine months ended November 30, 2010 and 2009	6

	Notes to Consolidated Financial Statements	7

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	12

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	13

Item 4.	Controls and Procedures	13

PART II.	OTHER INFORMATION	14

Item 1.	Legal Proceedings	14

Item 6.	Exhibits	14

PART I

FINANCIAL INFORMATION

ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS.

UNITED STATES BASKETBALL LEAGUE, INC. AND SUBSIDIARY

CONSOLIDATED BALANCE SHEETS

	November 30, 2010			February 28, 2010
	(Unaudited)
ASSETS

CURRENT ASSETS:
Cash and cash equivalents	$	1,873		$	661
Marketable equity securities		252,281			141,103
Inventory		5,000			5,000
Due from related parties		10,500			113,814
Total current assets		269,654			260,578

PROPERTY, NET		238,108			242,002
Total assets	$	507,762		$	502,580

LIABILITIES AND STOCKHOLDERS’ DEFICIENCY

CURRENT LIABILITIES:
Accounts payable and accrued expenses	$	140,377		$	114,816
Due in connection with South Korea venture		-			20,000
Credit card obligations		95,667			96,711
Due to related parties		1,777,257			1,655,840

Total current liabilities		2,013,301			1,887,367
Due to related parties, net of current portion		50,000			50,000
Total Liabilities		2,063,301			1,937,367
STOCKHOLDERS’ DEFICIENCY
Common stock, $0.01 par value; 30,000,000 shares authorized; issued 3,522,502 and 3,522,502 shares, respectively		35,525			35,225
Preferred stock, $0.01 par value; 2,000,000 shares authorized; 1,105,679 shares issued and outstanding		11,057			11,057
Additional paid-in-capital		2,679,855			2,668,155
Deficit		(4,239,522	)		(4,106,770	)
Treasury stock, at cost; 39,975 shares of common stock		(42,454	)		(42,454	)
Total stockholders’ deficiency		(1,555,539	)		(1,434,787	)

Total liabilities and stockholders’ deficiency	$	507,762		$	502,580

See notes to consolidated financial statements.

UNITED STATES BASKETBALL LEAGUE, INC. AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

	Three Months Ended						Nine Months Ended
	November 30, 2010			November 30, 2009			November 30, 2010			November 30, 2009

REVENUES:
Initial franchise fees	$	-		$	-		$	-		$	-
Continuing franchise fees		-			-			-			-
Consulting fees		-			4,000			20,000			12,000
Sponsorship/advertising		-			-			-			-
Other		-			-			-			-
		-			4,000			20,000			12,000

OPERATING EXPENSES:
Consulting		-			500			16,575			4,200
Referee fees		-			-			-			-
Salaries		14,989			13,636			43,567			42,803
Travel and promotion		4,350			6,908			24,084			19,442
Depreciation		1,298			1,298			3,894			3,894
Other		35,265			10,628			84,476			68,926
		55,900			32,970			172,594			139,265

Income (loss) from operations		(55,900	)		(28,970	)		(152,594	)		(127,265	)

OTHER INCOME (EXPENSES):
Net gain (loss) from marketable equity securities		63,800			7,813			44,513			32,120
Interest expense		(8,251	)		(8,414	)		(24,698	)		(25,694	)
Interest and dividend income		1			2			27			9

		55,550			(599	)		19,842			6,435
NET INCOME (LOSS)	$	(350	)	$	(29,569	)	$	(132,752	)	$	(120,830	)

Earnings (loss) per common share:
Basic	$	(.00	)	$	(.01	)	$	(.04	)	$	(.03	)
Diluted	$	(.00	)	$	(.01	)	$	(.04	)	$	(.03	)
WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING
Basic		3,482,527			3,482,527			3,482,527			3,482,527
Diluted		4,588,206			4,588,206			4,588,206			4,588,206

See notes to consolidated financial statements.

UNITED STATES BASKETBALL LEAGUE, INC. AND SUBSIDIARY

Consolidated Statement of Stockholders’ Deficiency

(Unaudited)

	Common Stock				Preferred Stock				Additional										Total
	Shares				Shares				Paid-in					Treasury Stock					Stockholders’
	Outstanding		Amount		Outstanding		Amount		Capital		Deficit			Shares		Amount			Deficiency

Balance, February 28, 2010		3,522,502	$	35,225		1,105,679	$	11,057	$	2,668,155	$	(4,106,770	)		39,975	$	(42,454	)	$	(1,434,787	)

Shares issued for services		30,000		300		-		-		11,700		-			-		-			12,000

Net income (loss)		-		-		-		-		-		(132,752	)		-		-			(132,752	)

Balance, November 30, 2010		3,552,502	$	35,525		1,105,679	$	11,057	$	2,679,855	$	(4,239,522	)		39,975	$	(42,454	)	$	(1,555,539	)

See notes to consolidated financial statements

UNITED STATES BASKETBALL LEAGUE, INC. AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

	Nine Months Ended
	November 30, 2010			November 30, 2009

CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss)	$	(132,752	)	$	(120,830	)
Adjustments to reconcile net income(loss) to net cash provided by (used in) operating activities:
Depreciation		3,894			3,894
Non-cash compensation		12,000			-
Changes in operating assets and liabilities:
Marketable equity securities		(111,178	)		(70,527	)
Accounts payable and accrued expenses		25,561			28,555
Due in connection with South Korea venture		(20,000	)		(120,000	)
Deferred revenues		-			(37,000	)
Credit card obligations		(1,044	)		(9,581	)

Net cash used in operating activities		(223,519	)		(325,489	)

CASH FLOWS FROM FINANCING ACTIVITIES:
Decrease (increase) in due from related parties		(15,469	)		39,717
Increase (decrease) in due to related parties		240,200			281,063

Net cash provided by financing activities		224,731			320,780

NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS		(1,212	)		(4,709	)

CASH AND CASH EQUIVALENTS, beginning of period		661			7,233

CASH AND CASH EQUIVALENTS, end of period	$	1,873		$	2,524

SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:

Interest paid	$	12,998		$	13,994
Income tax paid	$	-		$	-

NON-CASH FINANCING ACTIVITY:
Transfer of amounts due from related parties to USBL president in partial satisfaction of amount due to USBL president	$	118,783		$	-

See notes to consolidated financial statements.

UNITED STATES BASKETBALL LEAGUE, INC. AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NINE MONTHS ENDED NOVEMBER 30, 2009

(Unaudited)

1. Description of Business and Basis of Presentation:

United States Basketball League, Inc. (“USBL”), incorporated in Delaware on May 29, 1984, has operated a professional summer basketball league through franchises located in the United States. Its wholly owned subsidiary Meisenheimer Capital Real Estate Holdings, Inc. (“MCREH”) owns a commercial building in Milford, Connecticut. USBL cancelled its 2008, 2009, and 2010 seasons.

At November 30, 2010, USBL and MCREH (collectively, the “Company”) had negative working capital of $1,743,647, a stockholders’ deficiency of $1,555,539 and accumulated losses of $4,239,522. These factors, as well as the Company’s reliance on related parties (see Notes 6 and 8), raise substantial doubt as to the Company’s ability to continue as a going concern.

The Company is making efforts to raise equity capital, revitalize the league and market new franchises. However, there can be no assurance that the Company will be successful in accomplishing its objectives. The consolidated financial statements do not include any adjustments that might be necessary should the USBL be unable to continue as a going concern.

The accompanying unaudited consolidated financial statements have been prepared by the Company pursuant to the rules and regulations of the Securities and Exchange Commission. Accordingly, they may not include all of the information and footnotes required by accounting principles generally accepted in the United States for complete financial statements. In the opinion of management, the unaudited financial statements reflect all adjustments, which include only normal recurring adjustments, necessary for a fair presentation. Operating results for the nine-month period ended November 30, 2010 may not necessarily be indicative of the results that may be expected for the year ending February 28, 2011. The notes to the consolidated financial statements should be read in conjunction with the notes to the consolidated financial statements contained in the Company’s Form 10-K for the year ended February 28, 2010.

2. Summary of Significant Accounting Policies:

Principles of consolidation - The accompanying consolidated financial statements include the accounts of USBL and MCREH. All significant intercompany accounts and transactions have been eliminated.

Fair value disclosures – The carrying amounts of the Company’s financial instruments, which consist of cash and cash equivalents, marketable equity securities, due from related parties, accounts payable and accrued expenses, due in connection with South Korea venture, credit card obligations, and due to related parties, approximate their fair value due to their short term nature or based upon values of comparable instruments.

Cash and cash equivalents - The Company considers all highly liquid debt instruments purchased with a maturity of three months or less to be cash equivalents.

Marketable equity securities – Marketable equity securities are recorded at fair value with unrealized gains and losses included in income. The Company has classified its investment in marketable equity securities as trading securities. The change in net unrealized holding gain (loss) included in earnings for the three months ended November 30, 2010 and 2009 and for the nine months ended November 30, 2010 and 2009 was $61,463, $(31,205), $60,455, and $(22,576), respectively.

Inventory - Inventory consists of USBL trading cards, basketball uniforms, sporting equipment and printed promotional material and is stated at the lower of cost or market. Certain inventory was obtained through barter transactions whereby the USBL granted suppliers various advertising space (print) and airtime (television) in return for the supplier’s products. These transactions were accounted for based upon the fair values of the assets and services involved in the transactions.

Depreciation expense - Depreciation is computed using the straight-line method over the building’s estimated useful life (approximately 30 years).

Revenue recognition - The Company generally uses the accrual method of accounting in these financial statements. However, due to the uncertainty of collecting royalty and franchise fees from the franchisees, the USBL records these revenues upon receipt of cash consideration paid or the performance of related services by the franchisee. Franchise fees earned in nonmonetary transactions are recorded at the fair value of the franchise granted or the service received, based on which value is more readily determinable. Upon the granting of the franchise, the Company has performed essentially all material conditions related to the sale. The offering price of a new franchise at November 30, 2010 was $50,000.

The Company generates advertising revenue from fees for arena signage, tickets, and program and year book advertising space. Advertising revenue is recognized over the period that the advertising space is made available to the user.

Fees charged to teams to allow them to relocate are recognized as revenue upon collection of the fee. Souvenir sales, which are generated on the Company’s web site, are recorded upon shipment of the order. Essentially all orders are paid by credit card.

Income taxes - Deferred tax assets and liabilities are determined based on differences between financial reporting and tax bases of assets and liabilities, and are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse. A valuation allowance has been fully provided for the deferred tax asset (approximating $800,000) resulting from the net operating loss carryforward.

As of February 28, 2010, the Company had a net operating loss carryforward of approximately $2,000,000 available to offset future taxable income. The carryforward expires in varying amounts through year ended February 28, 2030.

Estimates – The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Advertising costs - Advertising costs are expensed as incurred.

Stock-based compensation - Stock compensation is accounted for at fair value in accordance with Accounting Standards Codification (“ASC”) 718, “Compensation – Stock Compensation.” No stock options were granted during 2010 and 2009 and none are outstanding at November 30, 2010.

Comprehensive income – Other comprehensive income (loss) refers to revenues, expenses, gains and losses that under generally accepted accounting principles are included in comprehensive income but are excluded from net income (loss) as these amounts are recorded directly as an adjustment to stockholders’ equity. Comprehensive income (loss) was equivalent to net income (loss) for all periods presented.

Referee fees – The Company’s principal obligation under the franchise agreements is to provide referees for the league.

3. Due From Related Parties

Due from related parties consist of:

	November 30,		February 28,
	2010		2010
	(Unaudited)

USBL receivable from Meisenheimer Capital, Inc. (“MCI”), controlling stockholder of USBL, non-interest bearing, due on demand	$	10,500	$	111,814

USBL receivable from Synercom (“Synercom”), a corporation controlled by the two officers of USBL, non-interest bearing, due on demand		-		2,000

Total	$	10,500	$	113,814

Effective May 31, 2010, the president of USBL was transferred the then $118,783 balance due from related parties in satisfaction of $118,783 loans payable due to him from the Company.

4. Property, Net

Property, net consists of:

	November 30,			February 28,
	2010			2010
	(Unaudited)

Land	$	121,253		$	121,253
Building		155,747			155,747
Total		277,000			277,000

Accumulated depreciation		(38,892	)		(34,998	)

Property, net	$	238,108		$	242,002

Since June 2008, MCREH has had no tenants at the property.

5. Credit Card Obligations

USBL uses credit cards of related parties to pay for certain travel and promotion expenses. USBL has agreed to pay the credit card balances, including related interest. The credit card obligations bear interest at rates ranging up to 30% and are due in monthly installments of principal and interest.

6.	Due to Related Parties

Due to related parties consist of:

	November 30, 2010			February 28, 2010
	(Unaudited)
USBL loans payable to Spectrum Associates, Inc. (“Spectrum”), a corporation controlled by the two officers of USBL, interest at 6%, due on demand	$	1,106,957		$	911,957
USBL loans payable to the two officers of USBL, interest at 6%, due on demand		387,700			465,783
USBL loan payable to Genvest, LLC (“Genvest”), an organization controlled by the two officers of USBL, non-interest bearing, due on demand		20,000			20,000
USBL loans to Daniel T. Meisenheimer, Jr. Trust, a trust controlled by the two officers of USBL, non-interest bearing, due on demand		44,100			44,100
MCREH note payable to the two officers of USBL, interest at 6%, due December 31, 2011		50,000			50,000
MCREH note payable to Spectrum, interest at 7%, due on demand, secured by MCREH property		25,000			25,000
MCREH note payable to president of USBL, interest at 7%, due on demand, secured by MCREH property		45,000			45,000
MCREH note payable to the two officers of USBL, interest at 7%, due on demand, secured by MCREH property		70,000			70,000
MCREH note payable to the two officers of USBL, interest at 4%, due October 22, 2009, secured by MCREH property		70,000			70,000
MCREH loan payable to Spectrum, non-interest bearing, due on demand		4,500			-
MCREH loan payable to president of USBL, non-interest bearing, due on demand		4,000			4,000
Total		1,827,257			1,705,840
Less current portion		(1,777,257	)		(1,655,840	)

Non current portion	$	50,000		$	50,000

For the nine months ended November 30, 2010 and 2009, interest due under the USBL loans were waived byy the respective lenders.

At November 30, 2010 and February 28, 2010, accounts payable and accrued expenses included accrued interest payable on MCREH notes payable to related parties totaling $47,687 and $35,987, respectively.

7.	Stockholders’ Equity

Each share of common stock has one vote. Each share of preferred stock has five votes, is entitled to a 2% non-cumulative annual dividend, and is convertible at any time into one share of common stock.

On May 6, 2010, the Company issued 30,000 restricted shares of Company common stock (valued at $12,000) to a consultant for services rendered.

8.	Related Party Transactions

In the three months ended November 30, 2010 and 2009 and the nine months ended November 30, 2010 and 2009, USBL included in other operating expenses, rent payable to Genvest, LLC of $3,000, $3,000, $9,000 and $9,000, respectively.

9.	Commitments and Contingencies

Occupancy Agreement

In September 2007, the Company moved its office from the MCREH building to a building owned by Genvest, LLC, an organization controlled by the two officers of USBL. Improvements to the Company’s space were completed in February 2008. Pursuant to a verbal agreement, the Company is to pay Genvest monthly rentals of $1,000 commencing March 2008. At November 30, 2010 and February 28, 2010 accounts payable and accrued expenses included accrued rent payable to Genvest totaling $33,000 and $24,000, respectively.

Cancellation of 2008, 2009, and 2010 Seasons

USBL cancelled its 2008, 2009, and 2010 seasons. These cancellations may result in claims and legal actions from franchisees.

Litigation

On June 30, 2008, a legal action was commenced by Albany Patroons, Inc., a franchisee of USBL, against the Company in the United States District Court for the Northern District of New York. The complaint alleges breach of contract by USBL due to the suspension of the 2008 season and seeks total damages of $285,000. On September 5, 2008, the Company answered the complaint and asserted a counter-claim against plaintiff for breach of franchise agreement and/or memorandum of agreement. This action was discontinued and the parties agreed to proceed with binding arbitration. The Company believes that it has a meritorious defense to the action and does not expect the ultimate resolution of this matter to have a material adverse effect on its consolidated financial condition or results of operations.

South Korea Venture

In August 2008, the Company received $170,667 from a third party to investigate business opportunities with the South Korea Basketball League and prospective South Korean sponsors. Pursuant to the related verbal agreement, USBL paid a total of $160,000 to a consulting firm approved by the third party and recognized the remaining $10,667 as consulting fees revenue in the three months ended February 28, 2009.

In January 2009, the Company received an additional $256,000 from the third party. Under the related verbal agreement, USBL paid a total of $240,000 ($220,000 in fiscal 2010, $20,000 in fiscal 2011) to the consulting firm approved by the third party and recognized the remaining $16,000 as consulting fees revenue in the year ended February 28, 2010.

In April and May 2010, the Company received an additional $157,667 relating to the South Korea venture. In the six months ended August 31, 2010, USBL paid a total of $137,667 to the consulting firm approved by the third party and recognized the remaining $20,000 as consulting fees revenue in the three months ended August, 31, 2010.

ITEM 2.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATION.

OVERVIEW

It is anticipated that the Company will continue to rely on financial assistance from affiliates. The Meisenheimer family is fully committed to making the Company a profitable operation and also making the United States Basketball League a viable one. Given the current lack of capital, the Company has not been able to develop any new programs to revitalize the League, nor has it been able to hire additional sales and promotional personnel. As a result, the Company is currently dependent on the efforts of Daniel T. Meisenheimer, III and two other employees for all marketing efforts. Their efforts have not resulted in any substantial increase in the number of franchises. The NBA has established a developmental basketball league known as the National Basketball Developmental League (“NBDL”). The Company believes that the establishment of this league, consisting of eight teams, will have no effect on the Company’s season, since the NBDL season as presently constituted runs from November through March. Further, nothing prohibits a NBDL player from playing in the USBL. Accordingly, as of the present time, the Company does not perceive the NBDL as a competitor. However, with the establishment of the NBDL, it is unlikely that, at least for the present time, the Company can develop any meaningful relationship with the NBA.

THREE MONTHS ENDED NOVEMBER 30, 2010 AS COMPARED TO NOVEMBER 30, 2009

Revenues decreased $4,000 from $4,000 in 2009 to $0 in 2010. This decrease was due to no consulting fees revenues earned in 2010 in connection with the South Korea venture (the venture was discontinued in August 2010).

Operating expenses increased $22,930 from $32,970 in 2009 to $55,900 in 2010 primarily due to an increase in other expenses.

Net loss decreased $29,219 from $29,569 in 2009 to $350 in 2010, primarily due to a $55,987 improvement in investment performance in 2010.

NINE MONTHS ENDED NOVEMBER 30, 2010 AS COMPARED TO NOVEMBER 30, 2009

Revenues increased to $20,000 for the first nine months of 2010 from $12,000 for the first nine months of 2009. This increase was due to higher fees recognized from the South Korea venture in 2010.

Operating expenses increased $33,329 from $139,265 for the nine months ended November 30, 2009 to $172,594 for the nine months ended November 30, 2010, primarily as a result of the $12,000 stock-based compensation issued to a consultant in 2010 and higher other expenses.

Net loss increased $11,922 from $120,830 in 2009 to $132,752 in 2010. The increase was due mainly to the $33,329 increase in operating expenses, offset partially by the $12,393 improvement in investment performance and the $8,000 increase in operating revenues.

LIQUIDITY AND CAPITAL RESOURCES

The Company had cash of $1,873 and a working capital deficit of $1,743,647 at November 30, 2010. The Company's statement of cash flows reflects cash used in operations of $223,519 in 2010, which results primarily from the $132,752 net loss and the $111,178 increase in marketable equity securities. Net cash provided by financing activities was $224,731 in 2010, primarily due to loans from related parties.

The Company’s ability to generate cash flow from franchise royalty fees is dependent on scheduling of a season and the financial stability of the individual franchises constituting the League. Each franchise is confronted with meeting its own fixed costs and expenses, which are primarily paid from revenues generated from attendance. Experience has shown that USBL is generally the last creditor to be paid by the franchise. If attendance has been poor, USBL has from time to time only received partial payment and, in some cases, no payments at all. The Company estimates that it requires approximately $250,000 of working capital to sustain operations over a 12-month period. Accordingly, if the Company is unable to generate additional sales of franchises and schedule a season within the next 12 months, it will again have to rely on affiliates for loans and revenues to assist it in meeting its current obligations. With respect to long term needs, the Company recognizes that in order for the League and USBL to be successful, USBL has to develop a meaningful sales and promotional program. This will require an investment of additional capital. Given the Company’s current financial condition, the ability of the Company to raise additional capital other than from affiliates is questionable. At the current time the Company has no definitive plan as to how to raise additional capital.

ITEM 3.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

Not applicable

ITEM 4.

CONTROLS AND PROCEDURES.

Under the supervision and with the participation of our management, including our principal executive and financial officers, we have evaluated the effectiveness of the design and operation of our disclosure controls and procedures as of November 30, 2010 and, based on such evaluation, our principal executive and financial officers have concluded that these controls and procedures are effective. There were no significant changes in our internal control over financial reporting that occurred during the quarter ended November 30, 2010 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

Disclosure controls and procedures are our controls and other procedures that are designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the Securities and Exchange Commission’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by us in the reports that we file under the Exchange Act is accumulated and communicated to our management, including our principal executive and financial officers, as appropriate to allow timely decisions regarding required disclosures.

PART II

OTHER INFORMATION

ITEM 1.

LEGAL PROCEEDINGS.

ITEM 6.

EXHIBITS.

Exhibit No.:		Description:

31.1		Certification of President (principal executive officer)

31.2		Certification of Chief Financial Officer (principal financial officer)

32		Certification pursuant to 18 U.S.C. Section 1350 adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

SIGNATURES

Pursuant to the requirements of Section 13 or 15 (d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized on the 13th day of January, 2011.

UNITED STATES BASKETBALL LEAGUE,
INC.

By:	/s/ Daniel T. Meisenheimer III
	Daniel T. Meisenheimer III
	Chairman and President

By:	/s/ Richard C. Meisenheimer
	Richard C. Meisenheimer
	Chief Financial Officer and
	Director

Pursuant to the requirement of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

Name	Capacity	Date

/s/ Daniel T. Meisenheimer III
Daniel T. Meisenheimer III	Director and President	January 13, 2011
	(principal executive officer)

/s/ Richard C. Meisenheimer
Richard C. Meisenheimer	Director and Chief Financial	January 13, 2011
	Officer (principal financial and
	accounting officer)

EXHIBIT INDEX

Exhibit No.:		Description:

31.1		Certification of President (principal executive officer)

31.2		Certification of Chief Financial Officer (principal financial officer)

32		Certification pursuant to 18 U.S.C. Section 1350 adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

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UNITED STATES BASKETBALL LEAGUE INC Reports