FORM 10-Q
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM 10-Q

(Mark One)
x
  
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
   
For the quarterly period ended July 31, 2006
or
o
  
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
   
For the transition period from __________ to __________
 

Commission File Number: 000-28221

M.B.A. HOLDINGS, INC.
(Exact name of business issuer as specified in its charter)
 
Nevada
 
87-0522680
(State or other jurisdiction of
 
(I.R.S. Employer Identification No.)
incorporation or organization)
 
 
     
 9419 E. San Salvador, Suite 105
    
Scottsdale, AZ
  
85258-5510 
 (Address of principal executive offices)
  
(Zip Code) 

Registrant’s telephone number, including area code:  (480)-860-2288

Former name, former address and former fiscal year, if changed since last report:  None

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

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer.  See definition of  “accelerated filer and large accelerated filer” in Rule 12b-2 of the Exchange Act.  (Check one)
     
Large accelerated filer    o Accelerated filer    o  Non-accelerated filer    ý
     
Indicate by check mark if the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).     Yes  o No ý

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.
 
Number of Common Stock shares (no par value, $0.0001 stated value) outstanding at July 31, 2006:  217,005,313 shares.

M.B.A. HOLDINGS, INC. AND SUBSIDIARIES
 
 
PART I - FINANCIAL INFORMATION
  
   
 Page
Item 1. Consolidated Financial Statements  
     
 
3
 
5
 
6
 
7
 
8
     
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
13
Item 3. Quantitative and Qualitative Disclosures About Market Risk
17
Item 4. Controls and Procedures
17
     
     
 
PART II - OTHER INFORMATION
  
     
Item 1. Legal Proceedings
18
Item 1A. Risk Factors 
18
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
19
Item 3. Defaults Upon Senior Securities
19
Item 4. Submissions of Matters to a Vote of Security Holders
19
Item 5. Other Information
19
Item 6. Exhibits
19
     
Signatures
20
     
 
2
 
PART I - FINANCIAL INFORMATION
 
ITEM 1.
CONSOLIDATED FINANCIAL STATEMENTS
 
 
   
CONDENSED CONSOLIDATED BALANCE SHEETS
 
JULY 31, 2006 AND OCTOBER 31, 2005
  
           
ASSETS
  
July 31,
 
October 31,
  
   
2006
  
2005
  
   
(Unaudited)
     
CURRENT ASSETS:
    
   
 
Cash and cash equivalents
  
$
59,020
  
$
545,184
  
Restricted cash
    
120,341
   
25,653
 
Accounts receivable
    
351,562
   
284,502
 
Prepaid expenses and other assets
    
67,332
   
31,481
 
Deferred direct costs
    
2,141,205
   
2,496,606
 
Total current assets
    
2,739,460
   
3,383,426
 
               
PROPERTY AND EQUIPMENT:
    
   
 
Computer equipment
    
347,531
   
332,523
 
Office equipment and furniture
    
161,038
   
208,523
 
Vehicles
    
25,000
   
410,318
 
Leasehold improvements
    
80,182
   
80,182
 
Total property and equipment
    
613,751
   
1,031,546
 
Accumulated depreciation and amortization
   
(507,341
)
  
(498,274
)
Property and equipment - net
    
106,410
   
533,272
 
 
    
   
 
OTHER ASSETS
    
   
 
Deposits
    
4,217
   
–
  
Deferred direct costs
    
2,108,225
   
2,925,256
 
 
    
2,112,442
   
2,925,256
 
 
    
   
 
TOTAL ASSETS
  
$
4,958,312
  
$
6,841,954
  
               
See notes to condensed consolidated financial statements.
              
 
3
 
M.B.A. HOLDINGS, INC. AND SUBSIDIARIES
  
   
CONDENSED CONSOLIDATED BALANCE SHEETS (Continued)
  
JULY 31, 2006 AND OCTOBER 31, 2005
  
           
LIABILITIES AND STOCKHOLDERS’ DEFICIT
  
July 31,
 
October 31,
  
   
2006
  
2005
  
   
(Unaudited)
     
CURRENT LIABILITIES:
    
   
 
Net premiums payable to insurance companies
  
$
357,670
  
$
349,000
  
Notes payable - short term
    
233,473
   
458,695
 
Notes payable - officer
    
487,375
   
147,500
 
Accounts payable and accrued expenses
    
628,191
   
721,884
 
Accounts payable - officer
    
356,584
   
175,006
 
Capital lease obligations
   
10,686
   
9,828
 
Deferred revenues
    
2,466,676
   
2,871,093
 
Total current liabilities
   
4,540,655
   
4,733,006
 
 
    
   
 
Capital lease obligations - net of current portion
    
18,519
   
14,067
 
Notes payable less current portion
    
47,862
   
477,624
 
Deferred income tax liability
    
12,802
   
12,802
 
Deferred revenues
    
2,448,802
   
3,356,602
 
Total liabilities
    
7,068,640
   
8,594,101
 
               
COMMITMENTS AND CONTINGENCIES
   
–
   
–
 
Minority interest in consolidated subsidiary
    
–
   
–
 
               
STOCKHOLDERS’ DEFICIT:
    
   
 
Preferred stock, no par value; $.0001 stated value 100,000,000 shares authorized in 2006 and 2005; 2,000,000 Class B non-convertible preferred issued and outstanding in 2006 and 2005
    
200
   
200
 
Common stock, no par value, $.0001 stated value, 350,000,000 shares authorized (post split), 218,005,313 shares issued (post split) in 2006 and 209,871,980 (post split) in 2005, 217,689,313 shares (post split) outstanding in 2006 and 209,555,980 (post split) in 2005
    
21,769
   
20,987
 
Additional paid-in capital
   
9,962,318
   
9,805,836
 
Accumulated deficit
   
(12,039,115
)
  
(11,523,670
)
Less: 316,000 (post split) shares in 2006 and 2005 of common stock in treasury, at cost
   
(55,500
)
  
(55,500
)
Total stockholders’ deficit
    
(2,110,328
)
  
(1,752,147
)
 
    
   
 
TOTAL LIABILITIES AND STOCKHOLDERS’ DEFICIT
  
$
4,958,312
  
$
6,841,954
  
               
See notes to condensed consolidated financial statements.
              
 
 
 
   
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (LOSS) (UNAUDITED)
  
THREE AND NINE MONTHS ENDED JULY 31, 2006 AND 2005
  
                   
   
Three Months Ended July 31,
  
Nine Months Ended July 31,
  
   
2006
  
2005
  
2006
  
2005
  
REVENUES:
    
   
   
   
 
Vehicle service contract gross income
 
$
580,351
  
$
1,212,202
  
$
1,786,034
  
$
3,104,164
  
Net mechanical breakdown insurance income (cancellations)
   
258,153
   
30,613
   
354,096
   
52,344
 
Brokerage, association and administrative service revenue
   
17,849
   
126,155
   
63,262
   
232,476
 
Motorcycle rental and related revenues
   
97,539
   
159,677
   
399,440
   
159,677
 
Licensing and association fees
   
16,881
   
–
   
120,553
   
–
 
Total net revenues
    
970,773
   
1,528,647
   
2,723,385
   
3,548,661
 
OPERATING EXPENSES:
    
   
   
   
 
Direct acquisition costs of vehicle service contracts
    
594,187
   
1,184,071
   
1,761,271
   
2,938,592
 
Costs of motorcycle and insurance premium expense
    
7,568
   
79,886
   
35,293
   
79,886
 
Salaries and employee benefits
    
193,508
   
419,273
   
590,855
   
883,135
 
Mailings and postage
    
15,823
   
14,106
   
23,053
   
36,835
 
Rent and lease expense
    
81,444
   
84,151
   
270,288
   
236,603
 
Professional fees
    
80,485
   
316,711
   
342,774
   
707,994
 
Telephone
    
17,267
   
14,126
   
43,400
   
4,153
 
Depreciation and amortization
    
19,246
   
62,952
   
56,122
   
75,645
 
Merchant and bank charges
    
9,325
   
9,622
   
30,775
   
19,665
 
Insurance
    
8,726
   
2,240
   
49,326
   
7,730
 
Supplies
    
251
   
8,573
   
22,998
   
14,945
 
License and fees
    
915
   
1,323
   
10,999
   
5,224
 
Other operating expenses
    
43,316
   
127,449
   
193,133
   
262,367
 
Total operating expenses
    
1,072,061
   
2,324,483
   
3,430,287
   
5,272,774
 
Equity in net loss of Blue Sky Motorcycle Rentals, Inc.
    
–
    –    
–
   
(40,076
)
 
    
   
   
   
 
OPERATING LOSS
    
(101,288
)
  
(795,836
)
  
(706,902
)
  
(1,764,189
)
                           
OTHER INCOME (EXPENSE):
    
   
   
   
 
Finance and other fee income
    
7,203
   
239
   
12,538
   
4,164
 
Interest income
    
0
   
54
   
431
   
280
 
Interest expense and fees
    
(9,550
)
  
(1,018
)
  
(26,782
)
  
(12,561
)
Other income (expense)
    
82,039
   
(15,296
)
  
73,857
   
(35,937
)
Gain on sale of assets
    
131,413
   
0
   
131,413
   
0
 
Other income (expense) - net
    
211,105
   
(16,021
)
  
191,457
   
(44,054
)
INCOME (LOSS) BEFORE INCOME TAXES
    
109,817
   
(811,857
)
  
(515,445
)
  
(1,808,243
)
INCOME TAXES
    
–
   
–
   
–
   
–
 
NET INCOME (LOSS)
  
$
109,817
  
$
(811,857
)
$
(515,445
)
$
(1,808,243
)
 
    
   
   
   
 
BASIC AND DILUTED NET LOSS PER SHARE
  
$
0.00
  
$
(0.01
)
$
(0.00
)
$
(0.01
)
WEIGHTED AVERAGE NUMBER OF COMMON SHARES
OUTSTANDING – BASIC AND DILUTED (Post Split)
    
213,667,574
   
188,574,389
   
210,953,049
   
151,282,437
 
                           
See notes to condensed consolidated financial statements.
                          
5
 
M.B.A. HOLDINGS, INC. AND SUBSIDIARIES
  
   
 
YEAR ENDED OCTOBER 31, 2005 AND NINE MONTHS ENDED JULY 31, 2006
  
                                   
                               
Total
 
                   
Additional
 
Retained
     
Stockholders’
  
   
Preferred Stock
  
Common Stock
 
Paid-In
  
Earnings
 
Treasury
 
(Deficit) 
  
   
Shares
 
Amount
 
Shares
 
Amount
 
Capital
 
(Deficit)
 
Stock
 
 Equity
 
                                   
BALANCE NOVEMBER 1, 2004
    
2,000,000
 
$
200
    
121,268,264
 
$
12,126
  
$
2,433,205
  
$
(3,668,184
)
$
(55,500
)
$
(1,278,153
)
 
    
   
   
   
   
   
   
   
 
Issuance of common shares and exercise of stock options
   
   
   
42,603,716
   
4,261
   
2,777,231
   
   
   
2,781,492
 
 
    
   
   
   
   
   
   
   
 
Conversion of preferred to common shares
   
(460,000
)
  
(46
)
  
46,000,000
   
4,600
   
4,595,400
   
   
   
4,599,954
 
 
    
   
   
   
   
   
   
   
 
Retirement of Class A preferred shares
   
(1,540,000
)
  
(154
)
  
   
   
   
   
   
(154
)
 
    
   
   
   
   
   
   
   
 
Issuance of preferred shares
   
2,000,000
   
200
   
   
   
   
   
   
200
 
 
    
   
   
   
   
   
   
   
 
Net loss
    
–
   
–
   
–
   
–
   
–
   
(7,855,486
)
  
–
   
(7,855,486
)
                                                   
BALANCE OCTOBER 31, 2005
    
2,000,000
   
200
   
209,871,980
   
20,987
   
9,805,836
   
(11,523,670
)
  
(55,500
)
  
(1,752,147
)
 
    
   
   
   
   
   
   
   
 
Issuance of common shares and exercise of stock options (Unaudited)
               
8,133,333
   
782
   
156,482
               
157,264
 
                                                   
Net loss (Unaudited)
    
–
   
–
   
–
   
–
   
–
   
(515,445
)
  
–
   
(515,445
)
                                                   
BALANCE JULY 31, 2006 (Unaudited)
    
2,000,000
 
$
200
    
218,005,313
 
$
21,769
  
$
9,962,318
  
$
(12,039,115
)
$
(55,500
)
$
(2,110,328
)
                                                   
See notes to condensed consolidated financial statements
 
6
 
 
   
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
  
NINE MONTHS ENDED JULY 31, 2006 AND 2005
  
       
   
July 31,
  
   
2006
  
2005
  
CASH FLOWS FROM OPERATING ACTIVITIES:
    
   
 
Net loss
  
$
(515,445
)
$
(1,808,243
)
Adjustments to reconcile net loss to net cash used in operating activities:
    
   
 
Depreciation and amortization
    
56,122
   
75,645
 
Issuance of stock for services
    
44,634
   
–
  
Write-off of Book Value of Vehicle Sold
    
8,789
   
–
  
Gain on Sale of Assets
    
(131,413
)
  
–
  
Stock based Compensation
    
–
   
213,000
 
Related party rent expense paid in excess of accrual
    
–
    
11,729
 
Equity in net loss of Blue Sky Motorcycle Rentals, Inc.
    
–
    
40,076
 
Issuance of preferred stock in return for related party rent
    
–
    
214,129
 
Changes in assets and liabilities:
    
   
 
Accounts receivable
   
(68,951
)
  
(294,580
)
Inventory
   
–
    
(5,677
)
Prepaid expenses and other assets
    
(19,723
)
  
(5,399
)
Deferred direct costs
    
1,172,433
   
1,413,082
 
Net premiums payable to insurance companies
    
8,670
   
239,253
 
Insurance deposits from members
    
–
    
16,368
 
Accounts payable - officer
    
181,578
   
–
 
Accounts payable and accrued expenses
    
(78,899
)
  
(77,957
)
Deposits
    
(4,217
)
  
–
 
Deferred revenues
    
(1,312,217
)
  
(1,555,128
)
Net cash (used in) operating activities
    
(658,639
)
  
(1,523,702
)
CASH FLOWS FROM INVESTING ACTIVITIES:
    
   
 
Investment in Blue Sky Motorcycle Rentals, Inc.
    
–
   
309,214
 
Payments from Restricted cash
    
(94,688
)
  
(61,003
)
Purchase of Property and Equipment
    
(17,635
)
  
(1,042,669
)
Proceeds of Sale of Vehicle and Equipment
    
12,000
   
–
 
Net cash provided by investing activities
    
(100,323
)
  
(794,458
)
CASH FLOWS FROM FINANCING ACTIVITIES:
    
   
 
Proceeds (repayment) of borrowing from officers and affiliates
    
339,875
   
(190,664
)
Issuance of common stock
    
67,630
   
1,918,674
 
Payments of notes payable
    
(140,016
)
  
–
 
Additions to (Payments on) capital lease obligation
    
5,309
   
15,593
 
Net cash provided by (used in) financing activities
    
272,798
   
1,743,603
 
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
    
(486,164
)
  
(574,557
)
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD
    
545,184
   
782,848
 
CASH AND CASH EQUIVALENTS, END OF PERIOD
  
$
59,020
  
$
208,291
  
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
    
   
 
Cash paid for interest
  
$
4,719
  
$
1,779
  
Non Cash Investing and Financing Activities
    
   
 
Stock issued to employees and consultants for services
 
$
89,634
  
$
–
  
               
See notes to condensed consolidated financial statements.
              
 
M.B.A. HOLDINGS, INC. AND SUBSIDIARIES
 
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
SIX MONTHS ENDED JULY 31, 2006 AND 2005

 
1.
BASIS OF PRESENTATION

In accordance with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X, the accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information. Accordingly, not all of the information and notes required by generally accepted accounting principles for complete financial statements are included. Accounting principles assume the continuation of the Company as a going concern. The Company’s auditors, in their opinion on the financial statements for the year ended October 31, 2005, expressed concern about this uncertainty. The accompanying condensed consolidated financial statements do not include any adjustment that might arise from the outcome of this assumption. The unaudited interim condensed consolidated financial statements furnished herein reflect all adjustments (which include only normal, recurring adjustments) which are, in the opinion of management, necessary for a fair statement of the results for the interim periods presented. Operating results for the three and nine months ended July 31, 2006 may not be indicative of the results of operations that may be expected for the year ending October 31, 2006. For further information, please refer to the consolidated financial statements and notes thereto included in the Company’s Form 10-K for the year ended October 31, 2005.
 
2.
NET INCOME/LOSS PER SHARE
 
Net income/loss per share is calculated in accordance with SFAS No. 128, Earnings Per Share that requires dual presentation of basic and diluted EPS on the face of the statements and requires a reconciliation of the numerator and denominator of basic and diluted EPS calculations. Basic income/ loss per common share is computed on the weighted average number of shares of common stock outstanding during each period. SFAS No. 128 requires that income per common share assuming dilution is computed on the same weighted average number of shares of common stock outstanding as basic loss per share. The additional shares representing the exercise of outstanding common stock options using the treasury stock method are not considered nor are the dilutive effect of the voting rights of the Class B preferred stock and employee stock options for the same reason. The 10-1 forward stock split, the 1 for 100 stock dividend and the 1 for 200 stock dividend are reflected retroactively for all periods presented. At July 31, 2006, the Company had 6,150,010 stock options outstanding that have been excluded from the diluted loss per share calculation because inclusion of such would be anti-dilutive.
 
3.
LIQUIDITY AND GOING CONCERN
 
The Company has incurred losses in prior years and in two of the three quarters of 2006 and expects such losses to continue through 2006. In fiscal 2005 and earlier periods, the Company has used funds obtained from the exercise of stock options by its employees to supplement funds provided by operations. In the current fiscal quarter a related party has advanced funds on demand notes and through the deferral of rent payments (See Note 4) in order to overcome working capital deficiencies. The Company has granted the related party, Cactus Family Investments, LLC, a security interest in all of its unencumbered assets. There is no assurance that additional advances will be made if additional working capital is required. The Company’s auditors have expressed doubt about the Company’s ability to continue as a going concern in their opinion. Based upon the foregoing, the accompanying condensed consolidated financial statements have been prepared assuming the Company will continue as a going concern. The Company is attempting to reverse this downward trend of its warranty operations and motorcycle rental operations, with increased number of licensed stores and marketing contacts with other Internet vendors and further expansion into the motorcycle market through its subsidiaries, National Motorcycle Dealers Association, LLC., Rent 2 Ride Nationwide, LLC., Blue Sky Motorcycle Rentals, Inc. and the Street Eagle licensed dealerships.
 
8
 
4.
RELATED PARTY TRANSACTIONS
 
The Company leases its office space from Cactus Family Investments, LLC. The managing member of Cactus Family Investments, LLC is Gaylen Brotherson, the Chief Executive Officer. Rent expense for this office space was $47,347 and $71,376 for the three months ending July 31, 2006 and 2005 and $165,069 and $214,129 for the nine months ended July 31, 2006 and 2005.

From time to time, Gaylen Brotherson, the Chief Executive Officer, directly and through an affiliated company, has loaned the Company funds to enable it to meet its operating expenses. The loans are evidenced by a note that matures on demand and bears interest at a rate of 6%. As security for the loan, the Company has granted the affiliated company, Cactus Family Investments, LLC, a security interest in all of its unencumbered assets.
 
5.
EMPLOYEE STOCK OPTION PLAN

On April 7, 2004, the Company adopted the M.B.A. Holdings, Inc. Employee Stock Incentive Plan for the Year 2004 and on July 7, 2004, the M.B.A. Holdings. Inc. Employee Stock Incentive Plan for the Year 2004 -B. These plans have the purpose of advancing the business and development of the Company and its shareholders by affording employees of the Company the opportunity to acquire an equity interest in the Company. Under the terms of the plans, employees are granted options to purchase Company stock at specified prices. The plan is administered by the Compensation Committee of the Board of Directors and is authorized to grant options for up to 128,000,000 shares of the common stock of the Company. As of July 31, 2006, the Company has granted options for a total of 118,275,000 shares to selected employees. There were no options granted during the current quarter and no compensation expense was recorded in the three months ended July 31, 2006. As of July 31, 2006, there were 2,500,000 options outstanding under this plan.

On that same date, the Company also adopted the M.B.A. Holdings, Inc. Non-Employee Directors and Consultants Retainer Stock Plan for 2004 and the M.B.A. Holdings, Inc. Non-Employee Directors and Consultants Retainer Stock Plan for 2004-B. The Company seeks to motivate, retain and attract highly competent directors and consultants to advance the business and development of the Company and its shareholders by affording directors and consultants the opportunity to acquire an equity interest in the Company. Under the terms of the plan, directors and consultants are granted options to purchase Company stock at specified prices in return for their services to the Company. The options include a deferral option that allows the director/consultant to defer delivery of the stock retainer. The plan is administered by the Compensation Committee of the Board of Directors and is authorized to grant options for up to 22,000,000 shares of the common stock of the Company. As of July 31, 2006, the Company has granted options for a total of 19,987,000 shares to selected directors/consultants. Compensation expense of $5000 was recorded in connection with these transactions in the quarter ended April 30, 2006. As of July 31, 2006 there were 2,013,000 options outstanding under this plan.
 
6.
BUSINESS SEGMENTS
 
During the fiscal quarter ended July 31, 2006 and the fiscal year ended October 31, 2005, the Company operated in two business segments: Extended Warranty Sales and Servicing and Motorcycles. The Company’s reportable segments are strategic business units that offer different products and services. They are managed separately based on the fundamental differences in their operations. The Motorcycle segment became a reportable segment during 2005.

The Extended Warranty Sales and Servicing segment consists of Mechanical Breakdown Administrators, Inc. that markets and administers vehicular mechanical breakdown insurance (“MBI”) policies and sells contracts for repair services to vehicles (“VSCs”). The MBI policies and VSC contracts are for the repair of automobiles, light trucks, recreational vehicles, motorcycles, boats and certain automotive components, that are sold though Credit Unions, Auto, Recreational Vehicle, and Motorcycle Dealers, and via Direct Mail and Inbound Telemarketing with call centers in several cities, including Scottsdale, Az., St. Louis, Mo., Watertown, SD. and the Atlanta, GA.

The Motorcycle segment offers motorcycles and off road vehicles for rent at licensed locations under the name Street Eagle Motorcycle Rentals, Rent 2 Ride and Blue Sky Motorcycle Rentals. The company sold the company operated rental locations during 2006. The segment also provides assistance to Motorcycle Dealer Members in being professional, successful, and profitable businesses through special services, products and programs through the National Motorcycle Dealers Association.
 


Information by industry segment is set forth below for the quarter ended July 31, 2006 and 2005, and as of July 31, 2006 and October 31, 2005:
 
   
 July 31, 2006
  
 July 31, 2005
  
Net revenues:
          
Extended Warranty Sales and Servicing
  
$
856,353
  
$
1,319,847
  
Motorcycles
    
114,420
    
208,800
  
     
970,773
    
1,528,647
  
Income (Loss) from operations:
              
Extended Warranty Sales and Servicing
    
343,812
    
(660,271
 ) 
Motorcycles
    
(233,995
 )  
(151,586
 ) 
     
109,817
    
(811,857
 ) 
               
     
July 31, 2006
    
October 31, 2005
  
Identifiable assets:
              
Extended Warranty Sales and Servicing
    
680,995
    
1,042,301
  
Motorcycles
     27,887    
377,791
  
     
708,882
    
1,420,092
  
Deferred policy acquisition costs:
              
Extended Warranty Sales and Servicing
    
4,249,430
    
5,421,862
  
Motorcycles
    
None
   
None
 
 
See Note 10. The Company disposed of certain retail outlets within its motorcycle segment. The Company continues to rent motorcycles and intends to pursue other retail outlets for these rentals and does not intend on exiting this business segment.
 
7.
COMMITMENTS AND CONTINGENCIES

The Company is subject to claims and lawsuits that arise in the ordinary course of business, consisting principally of alleged errors and omissions in connection with the sale of insurance and personnel matters and of disputes over outstanding accounts.

The Company has been named as a party to a lawsuit involving the plaintiff and the former owner of Blue Sky Motorcycle Rentals, Inc. (“BSMR”). The complaint alleges that the Company and the former owner of BSMR improperly utilized certain assets of the plaintiff as security for its borrowings. The Company has responded to the complaint by denying the allegations and intends to vigorously pursue all defenses available.

The Company has received a letter from an attorney representing the former owner of BSMR that alleges wrong doing, including securities violations, on the part of the Company and contends that certain of the representations and warranties made at the time of the purchase of BSMR were incorrect. The Company denies the allegations and contends that the former owner of BSMR misrepresented the ownership and location of BSMR’s assets and misled the Company concerning the amount of BSMR’s liabilities. The former owner has refused to transfer ownership of all BSMR’s assets to the Company. The Company has unilaterally terminated its consulting contract with the former owner of BSMR and believes it has no further obligations thereunder. At the direction of the Board of Directors of the Company, a subcommittee has been formed to vigorously pursue the location and title to the BSMR assets and to use all defenses available to answer any formal complaint received. To this end, the subcommittee has retained a legal firm to represent it in this matter and to pursue all possible claims against the former owner. MBA Holdings, Inc and MBA, Inc. has filed a complaint in the Superior Court of the State of Arizona, Case Number CV2006-004615, and were most recently awarded a Partial Judgment in the amount of $622,000.00, and eleven (11) Domain Names and eleven (11) Websites including www.blueskymotorcyclerentals.com. The monetary award far exceeds the amount of a Note Payable to the former owner on the books of MBA, Inc. in the amount of $83,000. At the time of filing of this document, no formal summons has been received relating alleged company wrong doing, however a formal complaint has been filed against the former owner of BSMR which resulted in a formal judgment against the former owner.
 
The Company maintains a reserve for claims arising in the ordinary course of business and believes that this reserve is sufficient to cover the costs of such claims. On the basis of information presently available, management does not believe the settlement of any such claims or lawsuits will have a material adverse effect on the financial position, results of operations or cash flows of the Company.

As the 50% owner of iDigital, LLC, the Company is obligated to award 200,000 common shares of M.B.A. Holdings, Inc. as additional compensation for each year of service that they complete with the Company.
 
8.
NEW ACCOUNTING PRONOUNCEMENTS

In January 2003, the FASB issued FIN No. 46, Consolidation of Variable Interest Entities (“FIN 46”) that is an interpretation of Accounting Research Bulletin No. 51, Consolidated Financial Statements. FIN 46 requires a variable interest entity (“VIE”) to be consolidated by a company that is considered to be the primary beneficiary of that VIE. In December 2003, the FASB issued FIN No. 46 (revised December 2003), Consolidation of Variable Interest Entities (“FIN 46-R”) to address certain FIN 46 implementation issues. The Company has determined that FIN 46 does not require the consolidation of Cactus Family Investments, LLC, an entity owned by the majority shareholders of the Company.

In December 2004, the FASB published FASB Statement No. 123 (R), Share-Based Payment, (“FAS 123 (R)”) which will provide investors and other users of financial statements with more complete and neutral financial information by requiring that the compensation cost relating to share-based payment transactions be recognized in financial statements. That cost will be measured based on the fair value of the equity or liability instruments issued. The Company is required to and will apply FAS 123 (R) at October 31, 2006. Since the options that are currently outstanding are exercisable at prices that are at or above current market values, the Company does not expect that implementation will have a material effect on its reported results of operations.

In December 2004, the FASB issued Statement No. 153, Exchanges of Non-monetary Assets, an amendment of APB Opinion No. 29, Accounting for Non-monetary Transactions (“FAS 153”). The amendments made by FAS 153 are based on the principle that exchanges of non-monetary assets should be measured based on the fair value of the assets exchanged. The Company has adopted FAS 153 in these statements.

In May 2005, the FASB issued FAS 154, Accounting Changes and Error Corrections—a replacement of APB Opinion No. 20 and FASB Statement No. 3. This Statement requires retrospective application to prior periods’ financial statements of changes in accounting principle, unless it is impracticable to determine either the period-specific effects or the cumulative effect of the change. It shall be effective for accounting changes and corrections of errors made in fiscal years beginning after December 15, 2005. The Company will adopt this Statement in fiscal 2006. The Company does not expect that implementation will have a material effect on its reported results of operations.
 
9.
RECLASSIFICATIONS

Certain prior period amounts have been reclassified to conform to the current period presentation.

10.
DISPOSAL OF MOTORCYCLE OPERATIONS

On June 30, 2006 the company sold two of its motorcycle rental operations, World Wide Rentals and Escape Eagles, back to the original owners of each company. They were sold for assumption of all assets and liabilities of the operations, plus World Wide Rentals paid a sum of $10. Assets and liabilities were recorded as sold at book value, a summary of which follows:
 
   
World Wide Rentals
  
  Escape Eagles
  
Total
  
 
                    
Vehicles, Property & Equipment, net of accumulated depreciation
  
$
(183,026
)
$
(184,435
)
$
(367,461
)
Prepaid Expenses and Other Assets
    
(2,592
)
  
(28,296
)
  
( 30,888
)
Accounts Payable
     7,262    
7,532
    
14,794
  
Notes Payable
     189,965    
325,003
    
514,968
  
Gain (Loss) on Sale of Assets
  
$
11,609
  
$
119,804
  
$
131,413
  

11.
ADDITIONAL SHARES ISSUED
 
On June 14, the company issued 5,000,000 shares to Crescent Fund, LLC in exchange for six months of consulting to raise long term and short term financing and to provide possible mergers and acquisitions. The value of these shares at $45,000 was capitalized as a prepaid expense. The Company is accounting for this transaction in accordance with EITF 96-18. The measurement date will occur as the counterparty performs under the contract and the prepaid expense will be amortized and revalued as those services are performed.
 
12
 
ITEM 2.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion should be read in conjunction with the condensed consolidated financial statements and footnotes that appear elsewhere in this report.
 
FORWARD-LOOKING STATEMENTS:

This report on Form 10-Q contains forward-looking statements. Additional written or oral forward-looking statements may be made by us from time to time in filings with the Securities and Exchange Commission or otherwise. The words “believe,” “expect,” “anticipate,” and “project,” and similar expressions identify forward-looking statements, which speak only as of the date the statement was made. Such forward-looking statements are within the meaning of that term in section 27A of the Securities and Exchange Act of 1934, as amended. Such statements may include, but not be limited to, projections of revenues, income or loss, capital expenditures, plans for future operations, financing needs or plans, the impact of inflation, and plans relating to our products or services, as well as assumptions relating to the foregoing. We undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise.
 
Forward-looking statements are inherently subject to risks and uncertainties, some of which cannot be predicted or quantified. Future events and actual results could differ materially from those set forth in, contemplated by, or underlying the forward-looking statements. Statements in this Report, including the Notes to Condensed Consolidated Financial Statements (Unaudited) and “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” describe factors, among others, that could contribute to or cause such differences.
 
CRITICAL ACCOUNTING POLICIES

The Company has prepared the accompanying unaudited condensed consolidated financial statements in conformity with accounting principles generally accepted in the United States for interim financial information. The preparation of the financial statements requires the use of judgement and estimates that affect the reported amounts of revenues, expenses, assets and liabilities. The Company has adopted accounting policies and practices that are generally accepted in the industry in which it operates. The Company believes the following are its most critical accounting policies that affect significant areas and involve management’s judgement and estimates. If these estimates differ significantly from actual results, the impact to the condensed consolidated financial statements may be material.
 
Revenue Recognition

The Company receives a single commission for the sale of each mechanical breakdown insurance policy (“MBI”) that compensates it both for the effort in selling the policy, and for providing administrative claims services as required. The Company has no direct liability for claims losses on MBI. It acts as the issuing insurance company’s agent in these transactions. The Company apportions the commissions received in a manner that it believes is proportionate to the values of the services provided. The revenues relating to policy sales are recorded in income when the policy information is received and approved by the Company. The revenues related to providing administrative claims services are deferred and recognized in income on a straight-line basis over the actual life of the policy.
 
A vehicle service contract (“VSC”) is a contract for certain defined services between the Company and the purchaser. The Company reinsures its obligations by obtaining an insurance policy that guarantees its obligations under the contract. In accordance with Financial Accounting Standards Board Technical Bulletin 90-1, “ Accounting for Separately Priced Extended Warranty and Product Maintenance Contracts”, revenues and costs associated with the sales of these contracts are deferred and recognized in income on a straight-line basis over the actual life of the contracts.
 
 
SIGNIFICANT EVENTS

In December 2004, the Company acquired a 50% interest in Blue Sky Motorcycle Rentals, Inc. (BSMR) for the sum of $350,000 in cash. BSMR is a Colorado corporation that serves the motorcycle rental industry through the rental of its motorcycles out of Denver and through its internet web sites that offer a reservation system to those desiring to rent motorcycles throughout the United States. BSMR has licensed its name and business plan to motorcycle rental stores located within the southwestern United States. The former owner of BSMR entered into a consulting contract with the Company to provide a continuity of services. The Company purchased the remaining 50% equity interest in April 2005 by forgiving $75,000 of indebtedness owed to it by the former owner of BSMR and by issuing a note in the amount of $200,000 payable in installments over the next twelve months, but MBA has since found out that 48% percent of the stock in Blue Sky was encumbered by a large loan which was not disclosed to MBA. The Company amended and extended the consulting contract with the former owner of BSMR to acquire his services for a period of eight (8) years. The Company unilaterally terminated this consulting contract during the year ended October 31, 2005. Blue Sky - Denver rental store was closed by the former owner in December 2005. MBA Holdings, Inc and MBA, Inc. has filed a complaint in the Superior Court of the State of Arizona, Case Number CV2006-004615, and were most recently awarded a Partial Judgment in the amount of $622,000.00, and eleven (11) Domain Names and eleven (11) Websites including www.blueskymotorcyclerentals.com. The monetary award far exceeds the balance due on the Note Payable to the former owner in the amount of $83,000.
 
MBA has returned to it’s root business plan by restarting it’s Direct Mail and Inbound Telemarketing with call centers in several cities, including Scottsdale, Az., St. Louis, Mo, Watertown, SD., and Atlanta, GA. These call centers produced additional gross sales of $272,000.00 in recent months.
 
MBA, and other marketers of third party VSC and MBI contracts, may find it difficult to maintain their sales and profit margins should the major automakers resume 0% financing. This is because MBA acquires most of its business through alternative financing sources such as credit unions.
 
In July 2005, the company purchased the assets of Street Eagle, Inc., Rent2Ride Nationwide, Inc. and Rent2Ride Arizona, Inc. (“R2R”) for the sum of $200,000 payable in monthly installments over an eleven (11) month period. The R2R companies are engaged in the motorcycle rental business in Hawaii and are the owners of computer software that is specifically designed to be used in a motorcycle rental location. The R2R purchase gave the Company access to this series of specialty programs that it intends to incorporate into its own and its licensed locations. The company has opened a Rent 2 Ride store Murphysboro, Tenn. We have opened Street Eagle Rental stores in Spring of 2006 in Mountain View, California, San Antonio, Texas and Maui, Hawaii, Street Eagle has additional licensed stores opening in Key Largo, Florida, Monterey, California, and Peoria, Arizona.
 
On June 30, 2006 the company sold Liberty Motorcycle Rentals back to the previous owner for a payment to MBA Holdings, Inc. of $10.00 and assumption of any and all loans, liabilities and the company cancelled the employment and consulting contract with the previous owners.
 
On June 30, 2006 the company transferred back the operations, assets and liabilities of Escape Eagles to the former owner, as covered in the original contract of sale.

On July 14, 2006 the company entered into a consulting agreement with the Crescent Fund, LLC., a Delaware Limited Liability Company, 40 Wall Street, New York, NY. In exchange for 5,000,000 shares of stock, Crescent Fund will provide management consulting services to the company for six months. The focus of the consulting is to arrange long term financing for MBA Holdings, Inc. and short-term financing for our extended warranty sales. They have arranged small amounts of financing over the last few months and are facilitating proposals for mergers and acquisitions.
 

RESULTS OF OPERATIONS

COMPARISON OF THE THREE MONTHS ENDED JULY 31, 2006 AND 2005

NET REVENUES

Net revenues for the fiscal quarter ended July 31, 2006 totaled $970,773, down $557,874 from the $1,528,647 recognized in the quarter ended July 31, 2005. The decline is the result of continuing competitive pressures being experienced by the Company from vehicle manufacturers and other competitors as well as legislative changes in certain states that limited the companies that were allowed to underwrite policies in those states. In addition, the Company has not been able to generate significant revenues from its motorcycle rental operations.

OPERATING EXPENSES

Operating Expenses decreased to $1,072,061 in the quarter ending July 31, 2006. This was a decrease of $1,252,422 from the $2,324,483 reported for the quarter ended July 31, 2005. The closure of the Blue Sky Motorcycle Rentals, Inc. in Denver, CO this past November was beneficial to the operating costs in the motorcycle segment, while the balance of the decrease is attributable to the Company’s continued efforts at cost containment. The decline in operating costs was moderated some by the appearance of price inflation in the economy this year owing to higher energy costs.

OTHER INCOME (EXPENSE)

Total other income/expense for the quarter ended July 31, 2006 was income of $211,105. This was an improvement of $227,126 over the $16,021 expense reported in the corresponding quarter of 2005, mainly due to the sales of the motorcycle operations.


COMPARISON OF THE NINE MONTHS ENDED JULY 31, 2006 AND 2005

NET REVENUES

The downward trend in revenues that has been noted in prior periods continued in the nine months ended July 31, 2006 with net revenues down $825,276 from the comparable nine months in 2005. The decline is the result of continuing competitive pressures being experienced by the Company from vehicle manufacturers and other competitors as well as legislative changes in certain states that limited the companies that were allowed to underwrite policies in those states. There was also a decline in the motorcycle revenues since the operations were sold during this period.

OPERATING EXPENSES

Operating Expenses decreased to $3,430,287 in the nine months ending July 31, 2006. This was a decrease of $1,842,487 from the $5,272,774 reported for the nine months ended July 31, 2005. The closure of the Blue Sky Motorcycle Rentals, Inc. in Denver, CO this past November and the subsequent sales of Escape Eagles and World Wide Rentals was beneficial to the operating costs in the motorcycle segment, while the balance of the decrease is attributable to the Company’s continued efforts at cost containment. The decline in operating costs was moderated some by the appearance of price inflation in the economy this year owing to higher energy costs.

OTHER INCOME (EXPENSE)

Total other income/expense for the nine months ended July 31, 2006 was income of $191,457. This was an increase of $235,511 over the $44,054 expense reported in the corresponding period of 2005, mostly due to the sales of the motorcycle operations.
 
LIQUIDITY AND CAPITAL RESOURCES

The Company has incurred losses in prior years and in two of the three quarters of 2006 and expects such losses to continue through 2006. In fiscal 2005 and earlier periods, the Company has used funds obtained from the exercise of stock options by its employees to supplement funds provided by operations. In the previous fiscal quarter a related party has advanced funds on demand notes and through the deferral of rent payments in order to overcome working capital deficiencies. The Company has granted the related party, Cactus Family Investments, LLC, a security interest in all of its unencumbered assets. There is no assurance that additional advances will be made if additional working capital is required. The Company’s auditors have expressed a doubt about the Company’s ability to continue as a going concern in their opinion. The Company is attempting to reverse this downward trend with its motorcycle rental operations, with increased marketing contacts with other Internet vendors and further expansion into the motorcycle market through its subsidiary, National Motorcycle Dealers Association, LLC, Rent 2 Ride, Blue Sky Motorcycle Rentals and its Street Eagle licensed dealerships. The Company is seeking to grow its warranty business by means of a direct mail marketing program of a product warranty facilitated by inbound telemarketing with call centers in several cities, including Scottsdale, Az., Baton Rouge, La., and Atlanta, GA. These call centers produced additional gross sales of $272,000.00 from inception of the program in April, 2006 through July, 2006.
 
The Company anticipates new warranty products for autos, Recreational Vehicles, and motorcycles. These new products will be marketed by MBA and member dealers of NMDA, Street Eagle, Rent2Ride, and Blue Sky. This growth will require additional capital through either borrowings or infusions of equity.

SEASONALITY

The motorcycle rental business is seasonal in nature in that sales increase as weather becomes favorable and decline as weather worsens. To mitigate this affect on sales, the Company expects to relocate its rental assets with seasonal changes to its owned and/or licensed locations having the most favorable expected weather for motorcycle riding.

COMPARISON OF JULY 31, 2006 AND OCTOBER 31, 2005

Working capital at July 31, 2006 consisted of current assets of $2,739,000 and current liabilities of $4,540,000, for a current ratio of 0.60 : 1. At October 31, 2005 the working capital ratio was 0.71 : 1 with current assets of $3,383,000 and current liabilities of $4,733,000. The negative trend continues as the Company has absorbed additional operating losses. Loans from the Company’s principal shareholder have funded continuing operations.

Deferred Revenues decreased $1,312,000 while Deferred Direct Costs decreased $1,172,000 from balances at October 31, 2005. Deferred revenues consist of unearned VSC gross sales and estimated administrative service fees related to MBI policies. Deferred direct costs are costs that are directly related to the sale of VSCs. The change is due to the overall decline in new policy sales that has been experienced over the last several years and changes in the contract terms of contracts in the deferral pool.

The Company collects funds throughout the year and remits a portion of the funds to the insurance companies. As of July 31, 2006, the amount owed to insurance companies, $357,000, is little changed from the $349,000 owed at October 31, 2005.

 
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
 
Since the Company does not underwrite its own policies, a change in the current rates of inflation is not expected to have a material effect on the Company. Nevertheless, the precise effect of inflation on operations cannot be determined.

Under the terms of the Company’s VSC contracts that are reinsured with insurance companies such as Old Republic Insurance Company and Capital Assurance Risk Retention Group, Inc., the Company is primarily responsible for liability under these contracts. In the unlikely event that the third party reinsuring companies were unable to meet their contractual commitments to the Company, the Company itself would be required to perform under the contracts. Such an event could have a material adverse effect on the Company’s operations.

The Company does not have any variable interest rate outstanding debt or long-term receivables. Therefore, it is not subject to significant interest rate risk.
 
CONTROLS AND PROCEDURES
 
We have evaluated, with the participation of our Chief Executive Officer/ Chief Financial Officer, the effectiveness of our disclosure controls and procedures as of the end of the period covered by this report. Based on that evaluation, the Chief Executive Officer/Chief Financial Officer has concluded that our disclosure controls and procedures were not effective as of the end of the last reporting period and have moved to improve the controls covered by this report and appointed a new Audit company Epstein, Weber and Conover of Scottsdale, Arizona.

It has been noted that a material weakness exists in the internal controls over the newly acquired assets namely BSMR. It was noted that the recent experiences with the acquisition of BSMR clearly indicated that these controls needed to be reinforced in order to create an acceptable level of control over those assets. Further, in December, 2005, the Company’s Chief financial officer resigned and the CEO has been acting as replacement. As such, the Company identified a material weakness due to a lack of a chief financial officer with appropriate knowledge of US GAAP and SEC reporting requirements. The Company has recognized these weaknesses and has established a group to evaluate those controls and to recommend changes to those internal controls to the Board of Directors.

It should be noted that any system of controls, however well designed and operated, can provide only reasonable, not absolute, assurance that the objectives of the system are met. In addition, the design of any control system is based in part upon certain assumptions about the likelihood of future events. Because of these and other inherent limitations of control systems, there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions, regardless of how remote.
 
PART II - OTHER INFORMATION

ITEM 1.
LEGAL PROCEEDINGS

The Company is subject to claims and lawsuits that arise in the ordinary course of business, consisting principally of alleged errors and omissions in connection with the sale of insurance and personnel matters and of disputes over outstanding accounts.

The Company has been named as a party to a lawsuit involving the plaintiff and the former owner of Blue Sky Motorcycle Rentals, Inc. (“BSMR”). The complaint alleges that the Company and the former owner of BSMR improperly utilized certain assets of the plaintiff as security for its borrowings. The Company has responded to the complaint by denying the allegations and intends to vigorously pursue all defenses available.

The Company has received a letter from an attorney representing the former owner of BSMR that alleges wrong doing, including securities violations, on the part of the Company and contends that certain of the representations and warranties made at the time of the purchase of BSMR were incorrect. The Company denies the allegations and contends that the former owner of BSMR misrepresented the ownership and location of BSMR’s assets and misled the Company concerning the amount of BSMR’s liabilities. The former owner has refused to transfer ownership of all of BSMR’s assets to the Company. The Company has unilaterally terminated its consulting contract with the former owner of BSMR and believes it has no further obligations thereunder. At the direction of the Board of Directors of the Company, a subcommittee has been formed to vigorously pursue the location and title to the BSMR assets and to use all defenses available to answer any formal complaint received. To this end, the subcommittee has retained a legal firm to represent it in this matter and to pursue all possible claims against the former owner. MBA Holdings, Inc and MBA, Inc. has filed a complaint in the Superior Court of the State of Arizona, Case Number CV2006-004615, and were most recently awarded a Partial Judgment in the amount of $622,000.00 total, and eleven (11) Domain Names and eleven (11) Websites including www.blueskymotorcyclerentals.com. The monetary award far exceeds the amount of a Note Payable balance of $83,000 to the former owner on the books of MBA, Inc. At the time of filing of this document, no formal summons has been received relating alleged company wrong doing, however a formal complaint has been filed against the former owner of BSMR which resulted in a formal judgment against the former owner.

The Company maintains a reserve for claims arising in the ordinary course of business and believes that this reserve is sufficient to cover the costs of such claims. On the basis of information presently available, management does not believe the settlement of any such claims or lawsuits will have a material adverse effect on the financial position, results of operations or cash flows of the Company.
 
ITEM 1A.
RISK FACTORS

In addition to the risk factors enumerated in Form 10K under Item 1A, it should be noted that during the current fiscal quarter a related party has advanced funds on demand notes and through the deferral of rent payments (See Note 4) in order to overcome working capital deficiencies. In prior years, the Company has granted the related party, Cactus Family Investments, LLC, a security interest in all of its unencumbered assets. There is no assurance that additional advances will be made if additional working capital is required. Based upon the foregoing, the accompanying condensed consolidated financial statements have been prepared assuming the Company will continue as a going concern.

The Company continues to incur operating losses and expects such losses to continue thru 2006. The Company is attempting to reverse this downward trend with its Direct Mail Warranty sales and inbound telemarketing call center and has had gross sales of $272,000.00 from the new Direct Mail Call Center activities and expects this trend to continue. The company is also working with increased marketing contacts with other Internet vendors and with further expansion into the motorcycle market through its subsidiary, National Motorcycle Dealers Association, LLC and its Street Eagle licensed rental agencies. There is no assurance that these efforts will be successful in reversing the trend of operating losses.
 
ITEM 2.
UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
 
None

ITEM 3.
DEFAULTS UPON SENIOR SECURITIES
 
None
 
ITEM 4.
SUBMISSIONS OF MATTERS TO A VOTE OF SECURITY HOLDERS

None
 
ITEM 5.
OTHER INFORMATION

None
 
ITEM 6.
EXHIBITS

Exhibit 31
Certification of Chief Executive Officer and Acting Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

Exhibit 32
Certification of Chief Executive Officer and Acting Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, as 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 thereto duly authorized.
     
  M.B.A. HOLDINGS, INC.
 
 		  
 		  
 
Dated:  October 19, 2006 By:   /s/ Gaylen M. Brotherson
 
 
Gaylen M. Brotherson
Chairman of the Board, Chief Executive Officer and
Chief Financial Officer
 
 
20