SECURITIES AND EXCHANGE COMMISSION
                             450 FIFTH STREET, N.W.
                             WASHINGTON, D.C. 20549

                                   Form 10-KSB

[X] ANNUAL REPORT UNDER SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF
    1934

                                     For the fiscal year ended February 28, 2006

                                       or

[ ] TRANSITIONAL REPORT UNDER SECTION 13 OR 15(D) OF THE SECURITIES
    EXCHANGE ACT OF 1934

                           For the transition period from _________ to _________

                                                Commission File Number 001-15913

                      UNITED STATES BASKETBALL LEAGUE, INC.
                 (Name of small business issuer in its charter)

                 Delaware                               06-1120072
        (State or other jurisdiction of              (I.R.S.  Employer
        incorporation or organization)               Identification No.)

     46 Quirk Road, Milford, Connecticut                   06460
   (Address of principal executive offices)              (Zip Code)

Issuer's telephone number (203) 877-9508

Securities registered pursuant to Section 12(b) of the Act:

Securities registered pursuant to Section 12(g) of the Act:

                          Common Stock - $.01 par value


     Check  whether  the issuer (1) filed all  reports  required  to be filed by
Section 13 or 15(d) of the  Securities  Exchange  Act of 1934 during the past 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 [ ]

     Check if there is no disclosure of delinquent  filers  pursuant to Item 405
of  Regulation  S-B is  contained  in  this  form,  and no  disclosure  will  be
contained,  to the  best of  registrant's  knowledge,  in  definitive  proxy  or
information statements incorporated by reference in Part III of this Form 10-KSB
or any amendments to this Form 10-KSB.                                       [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]

     State issuer's revenues for its most recent fiscal year: $366,556

     As of May 15, 2006, the aggregate market value of the voting and non-voting
common equity held by non-affiliates was approximately $496,000.

     Indicate  the  number of  shares  outstanding  of each of the  registrant's
classes of common stock, as of the latest practicable date.

     The number of shares of the registrant's common stock outstanding as of May
15,  2006 was  3,482,527  shares.  The  number  of  shares  of the  registrant's
preferred stock outstanding as of May 15, 2006 was 1,105,679 shares.


<PAGE>


Item  1.    Description of Business.

a)   History

     The United States  Basketball  League  ("USBL",  "we" or the "Company") was
incorporated  in  Delaware  in  May,  1984  as  a  wholly-owned   subsidiary  of
Meisenheimer  Capital,  Inc.  ("MCI").  MCI was and is a publicly  owned company
having made a  registered  public  offering of its common  stock in 1984.  Since
1984, MCI has been under the control of the  Meisenheimer  family  consisting of
Daniel T. Meisenheimer III, his brother, Richard Meisenheimer,  and their father
and  mother,  Daniel  Meisenheimer,  Jr.  and Mary  Ellen  Meisenheimer.  Daniel
Meisenheimer,  Jr. died in September,  1999. Members of the Meisenheimer  family
also have a controlling interest in Spectrum Associates,  Inc.  ("Spectrum"),  a
company  engaged in the  manufacture  of  helicopter  parts.  From time to time,
Spectrum  has loaned  money to us and has  engaged in other  revenue  generating
transactions with us.

b)   Operations

     We were  incorporated  by MCI for the purpose of developing  and managing a
professional  basketball  league,  the  United  States  Basketball  League  (the
"League").  The League was originally conceived to provide a vehicle for college
graduates  interested in going professional with an opportunity to improve their
skills and to showcase their skills in a professional environment. This approach
affords  the players an  opportunity  to perhaps be selected by one of the teams
comprising the National Basketball Association ("NBA") and to attend summer camp
sponsored by that team.  Today,  our players also consist of free agents seeking
to join an NBA  team.  USBL's  season  (April  through  June of each  year)  was
specifically  designed to afford our League players the chance to participate in
the  various  summer  camps  run by the  teams in the NBA,  which  summer  camps
normally start in August each year.  Since 1984 and up to the present time there
have been  approximately 150 players from our League who also have been selected
to play for teams in the NBA. A sizable  number of our players  were  eventually
selected to play in NBA all star games.  Additionally,  a total of approximately
75  players  were  previously  selected  each  year to  play in the  Continental
Basketball  Association ("CBA") and the National  Basketball  Development League
(the "NBDL"), the official developmental league of the NBA.

     Since the  inception  of our  League,  we have been  primarily  engaged  in
selling  franchises  and  managing  the League.  From 1985 and up to the present
time, we have sold a total of approximately  forty active franchises  (teams), a
vast  majority of which were  terminated  for non-payment  of  their  respective
franchise  obligations.  For the 1999  season  (ending in  August,  1999) we had
thirteen active franchises and two inactive  franchises.  After the 1999 season,
two franchises  were canceled for their failure to meet  franchise  obligations.
For our 2000 season,  which began in May, 2000, we had eleven active franchises.
For the 2001 season, which began on May 30 and ended on July 1, 2001, we had ten
active  franchises.  One franchise  active during the 2001 season was terminated
for failure to pay its annual  franchise  fees. For the 2002 season,  we had ten
active  franchises.  For the 2003 season we had nine active  franchises  and two
inactive franchises which were current in paying their franchise fees. These two
inactive franchises were activated for the 2004 season which began in April 2004
for a total of eleven teams for that

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<PAGE>


season. We now have eight active franchises and one franchise (Brevard Blue
Ducks) dormant for the 2006 season.

     As the  League is  presently  constituted,  each  team  within  the  League
maintains  an active  roster of eleven  players  during the season and each team
plays thirty games per season. We have playoffs at the conclusion of the regular
season. Under the terms of our Franchise  Agreements,  each franchise is limited
to a $47,500  salary cap for all players for each season.  No player can receive
more than $1,000 a week as salary.

     Since the inception of the League to the present time, the number of active
franchises has fluctuated from a low of seven to a high in the 1999 season of 13
franchises. The current active franchises,  divided into the Eastern and Midwest
Divisions,  are located in Dodge City,  Kansas  (the Dodge City  Legend);  Enid,
Oklahoma (the  Oklahoma  Storm);  Salina,  Kansas (the Kansas  Cagerz);  Lehigh,
Pennsylvania (the Pennsylvania Valley Dawgs);  Brooklyn,  New York (the Brooklyn
Kings); Long Island, New York (Long Island Primetime) and Kearney, Nebraska (the
Nebraska  Cranes).  The Melbourne,  Florida team (Brevard Blue Ducks) is dormant
for the 2006 season.  In addition,  MCI owns two inactive  franchises  which pay
annual  royalty  fees,  and Spectrum  Associates  owns one,  which also pays its
royalty fees.

     At the present  time we are  offering  franchises  for  $200,000.  Our most
recent sale was in 2006 at a price of  $150,000,  $50,000 as a down  payment and
the  balance  was to be paid over four  years  pursuant  to a payment  schedule.
However,  the  franchisee  failed to pay the down payment and the  franchise was
subsequently terminated.  We have been unable to receive more than $50,000 for a
down  payment  on  expansion  teams  and we  require  dues be paid  prior to the
year-end.  This does not always allow us to receive all of the  installments due
on time.  We  therefore  work with our  franchisees  to allow them to meet their
local market  obligations and carry their balance with the League until they can
make  payments.  This is in the best  interest  of the USBL and its  teams.  The
stronger the teams are in their markets and  financially the stronger the League
becomes.

     Since 1984,  we have sold  franchises  at various  prices  ranging  from as
little as $25,000 to $300,000. The price for the franchises has varied depending
on the location of the franchise, the prior history, if any, and the location of
existing  franchises.  Because  historically  most of the  franchises  have  not
operated  profitably,  the asking price has been  negotiated  and in addition we
have extended highly favorable  installment plans.  Nearly all of the franchises
sold by us since the  beginning of our  operations in 1984 and up to the present
time have been sold on an  installment  basis and at times the purchasers of the
franchises have not been able to meet the installment  terms and as a result the
franchises were  terminated.  Based on the  uncertainty of collecting  franchise
fees, we record those  revenues upon receipt of cash  consideration  paid or the
performance of related services by the franchisee.  We believe that today we are
in a stronger  position and have a greater name  recognition than at any time in
our history.  As a result,  we are in a better  position to demand and receive a
large down payment and installments on a more regular basis. Discussions are now
being held for new  expansion  teams for 2007,  with a limit of 12 teams for the
2007 season.

     We utilize a standard  franchise  agreement which is on file in the various
states where we


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offer our franchises.  Under this standard franchise agreement,  the term of the
franchise is for ten (10) years with a right to renew for a similar  period.  In
addition  to the  initial  purchase  price of the  franchises,  franchisees  are
required to pay an annual  royalty fee ranging from $20,000 to $25,000 per year.
Currently  three of the eight active  franchises are current in their payment of
annual  royalty fees.  One franchise was terminated for failure to pay franchise
fees and the remaining  franchises all owe approximately  $10,000. The franchise
agreement  affords us the right to terminate these franchises for failure to pay
the annual  royalty  fee,  but in an effort to maintain  the  continuity  of the
League we have  elected  not to do so in  certain  instances.  In  addition  and
because of our desire to have the League expand, historically, we have from time
to time adjusted annual royalty fees in certain  situations where the individual
franchise  has not been  operating  profitably.  Currently  there  have  been no
adjustments  for the annual  royalty fees due us. Our franchise  agreement  also
entitles us to receive television  revenues on a sharing basis with the teams in
connection with the  broadcasting  of regional or national  games.  While in the
past  we  have  broadcasted  on a  regional  basis,  we have  not  received  any
significant revenues. We are also entitled to receive a percentage from the sale
of team and league  merchandise which is directly sold by us, primarily over the
Internet.  Revenues earned by us from  merchandise has also been  insignificant.
Revenues  from the sale by a team of its own  merchandise  are  retained  by the
selling team. These sales have contributed to the individual team's revenues.

     Our franchise  agreements also require us to use our best efforts to obtain
sponsorships for each team and the League.  Such sponsorships are generally from
local or national  corporations.  The sponsorships  which for the last few years
have been  negligible  generally  take the form of free  basketballs,  uniforms,
airline tickets and discount  accommodations for teams when they travel.  During
the 2003  season  we did  receive  discounted  air fares  for team  travel  from
American  Airlines in exchange for  advertising  in team programs and signage at
the arenas as well as advertising on our web site. The sponsorships generated by
us are shared by all of the teams in the League. The individual teams comprising
the league are also free to seek sponsorship for their own individual franchise.
Some of the teams have been successful in attracting  local  sponsorships in the
form of  merchandise  and cash and it is these  sponsorships  that  have  helped
support the ongoing  operations of the  individual  teams.  Other teams have not
been successful. The success of obtaining sponsorship is generally a function of
good attendance and good media exposure. In some instances particular franchises
cannot generate any meaningful  attendance  because of a lack of media exposure.
The Franchise  Agreement also requires us to provide scheduling of all games and
officiating  for all games. We also print a full roster book as well as a weekly
newsletter which provides information regarding the League as well as individual
players and their  personal  statistics.  The USBL website  (usbl.com) is also a
resource for the teams,  the media and the fans,  with 1,000,000 hits per month.
The website is updated daily with statistical information and articles.

     As previously stated, very few of our franchises have operated  profitably.
This is primarily due to the fact that  attendance and  sponsorship has not been
sufficient  to sustain a team's  expenses.  We estimate that at the current time
annual  expenses for each team average  approximately  $250,000.  At the present
time only two franchises are operating profitably. The general lack of marketing
by the League and the teams is primarily due to insufficient capital to properly
promote  and market the League,  which has  resulted  in our  inability  and the
individual team's inability to attract any meaningful sponsorships. As a result,
the sale of additional


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<PAGE>

franchises  either to maintain a constant  number of franchises or to expand the
League has historically proven difficult for us.

     From the inception of the League,  USBL has  generally  operated at a loss.
This has been due to the poor sale of  franchises  and the  inability of most of
the franchises to generate  sufficient  revenues to pay their respective  annual
royalty fees.  Because of the poor historical  record, we have been dependent on
loans from the principals and their  affiliated  companies to defray the cost of
operations.  See "Item 12 - Certain  Relationships  and  Related  Transactions."
Additionally  and  because  of our poor  performance  for at least the last four
years, our auditors have rendered  qualified opinions based on their concerns as
to our ability to continue as a going  concern.  We do believe  that the current
mix of franchises is beginning to reflect a greater spectator interest resulting
in an increase in attendance for a few teams. For Fiscal 1999 (the 1998 season),
gross attendance for the entire League was 153,115 attendees,  which represented
an average of 981 attendees per game. The gross  attendance for Fiscal 2000 (the
1999  season)  was   162,962-1,044   attendees  per  game,   which   represented
approximately  a 6 1/2%  increase  over the previous  year.  For the fiscal year
which ended  February  28,  2001 (the 2000  season),  attendance  for our entire
season was 248,222 gross attendees - 1,513 attendees per game. This  represented
a 52%  increase  over Fiscal  2000.  For our 2001  season,  attendance  was only
225,791-1,446  attendees per game, a decline from the prior season. For the 2002
season our attendance was  251,853-1,679  attendees per game. This represented a
10% increase over the prior year.  For the 2003 season,  attendance was 173,351-
1,536  attendees per game.  For the 2004 season,  attendance was 171,386 - 1,038
attendees  per game, a decline from the prior season due to less  marketing  and
the  league  mid-season  took  over a team  and ran it with  no  advertising  or
promotions. For the 2005 season the attendance was 165,000 - 1,024 attendees per
game. We believe that the decrease in attendance will have very little effect on
the future growth of the League.

c)   Employees

     We currently  have a staff in excess of 50 people.  We have four  full-time
employees   consisting   of  the  chairman  and  League   commissioner,   Daniel
Meisenheimer III, a director of  administration,  a director of public relations
and a  director  of  operations.  The  balance of such  people  are  independent
contractors and consist of referees who are paid on a per game basis.  From time
to time we have also used independent contractors for consulting work.

d)   Future Plans

     We have,  as an ultimate  goal,  the  establishment  of at least forty (40)
franchises  throughout the United  States,  consisting of ten (10) teams in four
regional  divisions.  This would  result in regional  play-off  games and then a
final  championship  series.  We  have  been  attempting  to  develop  a  formal
association  with the National  Basketball  Association  ("NBA").  During fiscal
1998, the NBA selected us to handle a pre-draft  camp for the Korean  Basketball
League for which we received a nominal fee. We believe that a formal association
with  the NBA  would  enhance  the  value of our  franchises  and  attract  more
significant gate attendance, but there can be no assurances that we will ever be
able to  develop  a  formal  working  relationship.  Currently,  the NBA has its
development league, the NBDL. The NBDL competes against the reformed


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Continental Basketball  Association.  Neither of these leagues competes with the
USBL's season.  Notwithstanding  the lack of a formal  relationship,  the NBA is
well aware that USBL represents a potential pool of qualified  players.  We will
continue to pursue a more formal relationship with the NBA.

                                  RISK FACTORS

     Prospective  investors  as well as  shareholders  should  be aware  that an
investment in USBL involves a high degree of risk. Accordingly, you are urged to
carefully  consider  the  following  Risk  Factors  as well as all of the  other
information contained in this Annual Report and the information contained in the
Financial Statements and the notes thereto.

Forward Looking Statements

     When used in this report, the words "may", "will", "expect",  "anticipate",
"estimate" and "intend" and similar expressions are intended to identify forward
looking  statement within the meaning of Section 21E of the Securities  Exchange
Act of 1934 regarding events,  conditions,  and financial trends that may affect
our  future  plan  of  operations,  business  strategy,  operating  results  and
financial position.  Prospective investors are forewarned and cautioned that any
forward  looking  statements  are not guarantees of future  performance  and are
subject to risks and uncertainties and that actual results may differ materially
from those included within any such forward looking statements.

Our Operating History Does Not Reflect Profitable Operations

     Our operating history does not reflect a history of profitable  operations.
Since  our  inception  we have  been  attempting  to  develop  the  League.  Our
operations  have not been  profitable  and unless and until we can  increase the
sale of  franchises  and at the same time  attract  franchisees  who are able or
willing to incur start-up costs to develop their respective  franchises,  we may
continue  to  operate  at a  loss.  There  can be no  assurance  that we will be
successful.

We May Not Be Able to Continue as a Going Concern

     Because of our historically  poor revenues and earnings,  our auditors have
for at least the last five years  qualified  their opinions and expressed  their
concern  as  to  our  ability  to  continue  to  operate  as  a  going  concern.
Shareholders and prospective  shareholders should weigh this factor carefully in
considering the merits of our company as an investment vehicle.

We Have Not Been Able to Realize the Full Sales Value of a Franchise

     Generally speaking, we have not been able to collect what we perceive to be
true value for a franchise because of the League's overall weak performance.  As
such we have sold  franchises  for less than we believe the true value to be and
additionally have extended terms for payment as an additional  inducement to the
franchisees  to purchase the  franchise.  As a result,  our  revenues  have been
affected  and will  continue  to be  affected  until such time as we are able to
realize the full value for franchises.


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<PAGE>


Our Established  Guidelines in Connection with the Sale of Franchises May Not be
Sufficient to Ensure the Viability of a Franchise Over the Long Term

     Historically in our dealings with prospective franchisees and in our desire
to sell  franchises,  we did not  establish  adequate  guidelines to insure that
prospective  franchisees have sufficient capital to properly finance a franchise
and to be able to absorb  losses until such time as the  franchise  would become
profitable.  Starting  with  the  1999  season,  we  have  established  rigorous
standards to ensure the viability of the franchise over the long term;  however,
there is still no assurance that in view of our inability to have any meaningful
expansion  we will  be  able  to  attract  qualified  franchisees  or  that  our
established  guidelines  will ensure the viability of a franchise  over the long
term.

We Have Been  Dependent on Loans and  Revenues  from  Affiliates  to Sustain Our
Operations

     Because our revenues from third parties have been  insufficient  to sustain
our  operations,  we have been  historically  dependent on  revenues,  loans and
advances from the Meisenheimer  family as well as companies  affiliated with the
Meisenheimers  to assist in  financing.  If members of the  Meisenheimer  family
elected  not to  continue  to  advance  loans  to us,  our  operations  could be
drastically impaired.

We Are Dependent on Corporate Sponsorships Which Have Been Negligible

     The financial success of the individual  franchises is dependent to a large
degree  on  corporate  sponsorship  to help  defray  costs.  To date,  corporate
sponsorship  in some  cities has been  negligible  and as a result,  some of the
franchises  have been required to absorb  expenses,  which would  otherwise have
been  supported by corporate  sponsorship.  As a result,  profits of some of the
franchises  have been affected and many of the franchises have been operating at
a loss.  Until  such time as the  League  can  attract  meaningful  sponsorship,
earnings, if any, of the individual franchises will be impacted.

Our Basketball Season Competes with Other Professional Sporting Events

     Our  season  from  April to June is  designed  to afford  players  with the
opportunity to showcase their  professional  ability to the teams comprising the
National  Basketball   Association  ("NBA")  and  to  be  possibly  selected  to
participate in NBA team's summer camps in the latter part of July and August. As
such, our schedule competes with other sporting events such as the NBA playoffs,
baseball,  golf and  tennis.  Additionally,  our  season  comes  at a time  when
spectators might normally prefer to be outdoors rather than indoors in an arena.
These factors have had some impact on the League's overall attendance.

We Lack Sufficient Capital to Promote the League

     In order for the  League  to  become  successful,  we have to  promote  the
League.  Historically  and up to the present  time,  we have  lacked  sufficient
capital to develop a national


                                       7

<PAGE>



promotion for the League. Promotion will achieve two objectives: (i) create more
fan interest, and (ii) franchise interest.  Until such time that we can properly
promote the League we do not  anticipate any  significant  change in the overall
fan interest,  and  consequently  no significant  change in sales of franchises.
Attendance  is  still  rather  small  and is not  enough  to  support  a  team's
operations. Additionally, interest in franchises has increased, but without real
promotional   efforts,  we  do  not  anticipate  any  significant   increase  in
franchises. We do advertising in The Wall Street Journal.

The Meisenheimer Family Exercises Significant Control over Us

     The Meisenheimer family,  consisting of Daniel T. Meisenheimer III, Richard
C.  Meisenheimer  and Mary Ellen  Meisenheimer,  and companies  they control own
approximately 81% of our outstanding  common stock and as such control the daily
affairs of the business as well as significant corporate actions.  Additionally,
the Meisenheimer family controls the Board of Directors and as such shareholders
have little or no influence over the affairs of the Company.

Dependence upon Key Individual

     Our success is dependent upon the activities of Daniel T. Meisenheimer III.
The loss of Mr. Meisenheimer through death, disability or resignation would have
a material and adverse effect on our business.

We Have a Limited Public Market for Our Stock

     There are  approximately  550,000 shares held by  approximately  300 public
shareholders  and as such there is a limited  public  market  for our stock.  As
such, holders of our stock may have difficulty in selling their shares.

Penny Stock Regulation

     Broker-dealer  practices in connection with  transactions in "penny stocks"
are  regulated  by certain  penny stock rules  adopted by the SEC.  Penny stocks
generally  are equity  securities  with a price of less than $5.00  (other  than
securities  registered on certain national securities exchanges or quoted on the
NASDAQ  System).  The penny  stock  rules  require a  broker-dealer,  prior to a
transaction in a penny stock not otherwise  exempt from the rules,  to deliver a
standardized risk disclosure document that provides information  regarding penny
stocks  and the  nature  and  level of  risks in the  penny  stock  market.  The
broker-dealer  also  must  provide  the  customer  with  current  bid and  offer
quotations for the penny stock,  the compensation of the  broker-dealer  and its
salesperson  must disclose this fact and the  broker-dealer's  presumed  control
over the market, and monthly account statements showing the market value of each
penny stock held in the customer's  account.  In addition,  broker-dealers,  who
sell such securities to persons other than established  customers and accredited
investors,  must make a special written  determination that the penny stock is a
suitable  investment  for the  purchaser  and  receive the  purchaser's  written
agreement to the  transaction.  Consequently,  these  requirements  may have the
effect of reducing the level of  activity,  if any, in the market for our common
stock.


                                       8


<PAGE>


Item 2.     Description of Property.

     MCI Capital Real Estate Holdings Inc. ("MRE"), a wholly owned subsidiary of
USBL, owns the property at 46 Quirk Road,  Milford,  Connecticut.  Such property
consists of three-quarters of an acre of real property and an office building of
approximately  6,000 square feet.  USBL  maintains  its offices along with other
tenants  at the  building.  The  rental  income  from the other two  tenants  is
sufficient  to pay the monthly  mortgage  payments.  The balance on the mortgage
currently amounts to approximately $94,000.

Item  3.    Legal Proceedings.

     None.

Item  4.    Submission of Matters to a Vote Of Security Holders.

     None.

                                    Part II

Item  5.    Market for Common Equity and Related Stockholder Matters.

     The Common Stock trades on the  Over-the-Counter  Bulletin  Board under the
symbol "USBL". The following is the range of high and low closing bid prices for
the Common Stock for each quarter for the Company's  fiscal years ended February
28, 2005 and February 28, 2006.


                                             Fiscal 2005
                                             Closing Bid

                                       High               Low
First Quarter Ended 5/31/04           $1.90              $1.50
Second Quarter Ended 8/31/04          $1.25              $1.05
Third Quarter Ended 11/30/04          $1.30              $1.06
Fourth Quarter Ended 2/29/05          $1.60              $1.30

                                             Fiscal 2006
                                             Closing Bid

                                        High              Low
First Quarter Ended 5/31/05            $1.40             $1.25
Second Quarter Ended 8/31/05           $1.50             $1.25
Third Quarter Ended 11/30/05           $1.50             $1.00
Fourth Quarter Ended 2/28/06           $1.30              $.90

     The foregoing range of high-low  closing bid prices  represents  quotations
between dealers without adjustments for retail markups, markdowns or commissions
and may not represent actual transactions.  The information has been provided by
the National Association of Securities


                                       9


<PAGE>



Dealers Composite Feed or other qualified inter-dealer quotation medium.

     Approximately   550,000  shares  of  our  Common  Stock  are  held  by  300
shareholders.  The shares  held by members  of the public  were  issued by us in
connection  with a  private  placement  at  least  ten  years  ago  and  also in
connection  with an  offering  in 1995  under  Rule 504 of  Regulation  D of the
Securities  Act of 1933. The existing  holders of shares issued  pursuant to the
private  placement  would have available to them the exemption  provided by Rule
144 and thus would be able to sell all of their shares if they so elected.

     We have not paid any dividends and do not  anticipate  paying  dividends in
the future.

     Our Preferred  Stock is held by our officers and directors and  affiliates.
No member of the public holds any Preferred Stock.


                      EQUITY COMPENSATION PLAN INFORMATION
<TABLE>
<CAPTION>

------------------------------- ---------------------------- ---------------------------- ----------------------------
                                Number of securities to be    Weighted-average exercise      Number of securities
                                  issued upon exercise of       price of outstanding        remaining available for
                                   outstanding options,         options, warrants and        future issuance under
                                  warrants and rights (a)            rights (b)            equity compensation plans
                                                                                             (excluding securities
                                                                                           reflected in column (a))
                                                                                                      (c)
------------------------------- ---------------------------- ---------------------------- ----------------------------
<S>                             <C>                          <C>                          <C>
  Equity compensation plans
     approved by security                    0                           N/A                           0
         holders........
------------------------------- ---------------------------- ---------------------------- ----------------------------
Equity compensation plans not
approved by security holders...              0                           N/A                           0
------------------------------- ---------------------------- ---------------------------- ----------------------------

          Total............                  0                           N/A                           0

------------------------------- ---------------------------- ---------------------------- ----------------------------
</TABLE>

Item  6.    Management's Discussion and Analysis or Plan of Operation.

Overview

     It is  anticipated  that the Company will continue to operate at a loss for
the next twelve  months.  The Company is  anticipating  a decrease in attendance
based on fewer teams in 2006, but individual  teams may actually see an increase
in attendance.  One franchise is now using a coach who enjoys high visibility in
basketball--Darryl  Dawkins.  The  Company  anticipates  continued  reliance  on
financial assistance from affiliates. The Meisenheimer family is fully committed
to making the Company a profitable operation and also making the League a viable


                                       10

<PAGE>



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  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  Development
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 an NBDL player from playing in the USBL. Accordingly,
and 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  working
relationship with the NBA.

CRITICAL ACCOUNTING POLICIES

Revenue Recognition

     The Company generally uses the accrual method of accounting.  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  Company  generates  advertising  revenue  from fees for area  signage,
tickets and program  and  yearbook  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.

Fiscal Year 2006 Compared To Fiscal Year 2005

     For the year ended February 28, 2006 ("Fiscal 2006") initial franchise fees
amounted to $5,000 as compared to $50,000 for the year ended  February 28, 2005.
Continuing  franchise fees amounted to $168,750 as compared to $310,255 in 2005.
The  aggregate  decrease of $141,505  (46%) results from the fact that in fiscal
2005  USBL  recognized  $122,000   continuing   franchise  fees  in  a  non-cash
transaction  which did not recur in Fiscal  2006.  Advertising  and  sponsorship
revenue totaled  $140,000 as compared to $80,250 in 2005.  Advertising  fees are
mostly  generated  from an  affiliate,  Spectrum  Associates,  Inc.,  which  ran
advertisements in league bulletins,  programs and brochures.  Other revenues for
2006 were $52,806, which reflects rental income generated in connection with the
acquisition of MRE in May 2003.  Approximately


                                       11

<PAGE>


$283,000 and $201,000 of the 2006 and 2005 revenues,  respectively, were derived
from various related parties.

     Operating  expenses for the years ended  February 28, 2006 and February 28,
2005 approximated  $400,000 and $805,000,  respectively.  Operating expenses for
2006 and 2005,  respectively  include management fees of $90,000 and $180,000 to
MCI for management  services,  including the services provided to the Company by
Daniel  Meisenheimer III and Richard  Meisenheimer.  In addition to this $90,000
decrease,  consulting  expenses  decreased as a result of a $33,158  decrease in
stock-based  compensation.  Team and post  season  festival  expenses  decreased
$38,624  from  $60,001 in fiscal  2005 to  $21,377 in Fiscal  2006 due to USBL's
nonoperation  of any teams in 2006.  Travel  and  promotion  expenses  decreased
$189,082  from  $217,613  in fiscal  2005 to $28,531  in Fiscal  2006 due to the
nonrecurrence of a $122,000  promotion expense  recognized in 2005 in a non-cash
transaction and the  nonrecurrence of travel expenses  incurred in 2005 relating
to the operation of a team.

     Net loss for the year ended  February  28, 2006  approximated  $80,000,  as
compared to $328,000  for the year ended  February  28,  2005,  which was due in
large part to a decrease in consulting and travel and promotion expenses.

Liquidity And Capital Resources

     The Company had a working capital deficit of $870,439 at February 28, 2006.
The  Company's  statement  of cash flows  reflects  cash used in  operations  of
approximately  $185,000,  which is due primarily to the net loss of $80,000, the
$47,000 increase in marketable  equity  securities,  and the $69,000 decrease in
credit card obligations.  Net cash provided by financing activities approximated
$188,000,  which is due  primarily to the net increase in amounts due to related
parties.

     The Company's  ability to generate cash flow from franchise royalty fees is
dependent on 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 at least $300,000 of working capital to sustain operations over
a 12-month period. Assuming that all of the teams pay their annual royalty fees,
this would amount to approximately $200,000.  However, the Company believes that
given prior  experience it is more  realistic to  anticipate  lower royalty fees
because  some of  these  teams  are  simply  not  able to  generate  significant
attendance  at  games.  Accordingly,  if  the  Company  is  unable  to  generate
additional  sales of franchises  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.


                                       12

<PAGE>


Item 7.     Financial Statements.

     The Financial Statements appear commencing on page F-1 hereof.

Item 8.     Changes   In   and  Disagreements  with  Accountants  on  Accounting
            and Financial Disclosure.

     None.

Item 8A.    Controls and Procedures.

     Based on their evaluation as of February 28, 2006, our management, with the
participation of our President and Chief Financial Officer,  being our principal
executive and principal financial officer, respectively, conducted an evaluation
of the effectiveness of the design and operation of our disclosure  controls and
procedures,  as required by Exchange Act Rule  13a-15.  In the  evaluation,  our
management  considered the amendment of our financial statements as discussed in
our Forms  10-QSB for the  periods  ending  May 31,  2005,  August 31,  2005 and
November 30, 2005. Based on that  evaluation,  the President and Chief Financial
Officer have  concluded that our  disclosure  controls and  procedures  were not
effective  as of February 28, 2006.  We are  continuing  to take steps to ensure
that  information  required to be disclosed by us in the reports that we file or
submit under the Exchange Act is accurately recorded, processed,  summarized and
reported within the time periods specified by the SEC's rules and forms.

     There were no significant  changes in our internal  controls over financial
reporting  that occurred  during the quarter  ended  February 28, 2006 that have
materially affected, or are reasonably likely to materially affect, our internal
control over financial reporting.

     We believe that a control system, no matter how well designed and operated,
cannot provide absolute  assurance that the objectives of the control system are
met, and no  evaluation  of controls  can provide  absolute  assurance  that all
control  issues  and  instances  of fraud,  if any,  within a company  have been
detected.

Item 8B.    Other Information.

     None.

Item  9.    Directors,  Executive Officers,  Promoters   and   Control  Persons;
            Compliance with Section 16(a) of the Exchange Act.

     The following  persons  served as our directors and executive  officers for
the fiscal year ended  February 28, 2006.  Each director  holds office until the
next annual  meeting of the  stockholders  or until his  successor has been duly
elected and qualified.  Each  executive  officer serves at the discretion of the
Board of Directors of the Company.


                                       13

<PAGE>


Name                               Age      Position
----                               ---      --------

Daniel T. Meisenheimer III          55      Chairman of the Board and President

Richard C. Meisenheimer             52      Chief Financial Officer and Director

Background of Executive Officers and Directors

     Daniel T.  Meisenheimer III ("Mr.  Meisenheimer  III") has been Chairman of
the  Board  and  President  of the  Company  since its  inception  in 1984.  Mr.
Meisenheimer  III has also been the Chairman of the Board and  President of MCI,
USBL's  parent,  since 1983 and occupies the same  positions in Cadcom,  Inc., a
former  subsidiary of MCI, and Meisenheimer  Capital Real Estate Holdings,  Inc.
("MCR").  Mr.  Meisenheimer  III is also a shareholder and director of Synercom,
Inc.  ("Synercom"),  a  Meisenheimer  family-owned  holding  company  which owns
Spectrum  Associates,  Inc., a shareholder  of USBL and which company has loaned
USBL funds.

     Richard C. Meisenheimer ("R.  Meisenheimer"),  brother of Mr.  Meisenheimer
III,  has acted as Chief  Financial  Officer  and a  Director  of USBL since the
inception of the business in 1983. R. Meisenheimer has also been associated with
Spectrum  Associates,  Inc. since 1976 and is now the President of that Company.
Spectrum  owns  34.1% of USBL  Preferred  Stock and 6.7% of USBL  Common  Stock.
Spectrum was the main customer of Cadcom, MCI's other subsidiary until December,
2000 when Cadcom was sold to Synercom,  another  company owned and controlled by
the Meisenheimer family.

     The  Company  does  not  have a  separate  audit  committee.  The  Board of
Directors functions as the audit committee. Richard Meisenheimer qualifies as an
audit committee financial expert.

Section 16(a) Beneficial Ownership Reporting Compliance

     Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
executive  officers,  directors  and  persons who own more than ten percent of a
registered  class of its equity  securities  to file  reports of  ownership  and
changes  in  ownership  on  Forms 3, 4 and 5 with the  Securities  and  Exchange
Commission.  These persons are required by SEC regulation to furnish the Company
with  copies of all Forms 3, 4 and 5 they file with the SEC.  Based  solely upon
our review of the copies of the forms the Company has received,  we believe that
all such  persons  complied  on a timely  basis  with  all  filing  requirements
applicable to them with respect to transactions during fiscal 2006.


Code of Ethics

     The Company has not adopted a Code of Ethics  applicable  to its  principal
executive officer,  principal financial officer, principal accounting officer or
controller.  As a small public  company with limited funds and other  resources,
the Company elected not to incur the time and expense of adopting such a code.


                                       14


<PAGE>


Item  10.   Executive Compensation.

     For  many  years  our  only  two  officers,  D.  Meisenheimer  III  and  R.
Meisenheimer,  have not received or taken any salaries  from USBL.  There are no
formal employment agreements between D. Meisenheimer III and R. Meisenheimer and
they have not been paid any salary for the last four  years.  MCI, of which both
D.   Meisenheimer  III  and  R.   Meisenheimer  are  also  senior  officers  and
shareholders,  charged us management  fees of $90,000 and $180,000 for the years
ended February 28, 2006 and February 28, 2005,  respectively,  as  consideration
for the services provided by D. Meisenheimer and R. Meisenheimer.

Item  11.   Security Ownership of Certain Beneficial Owners  and  Management and
            Related Stockholder Matters.

     We have  30,000,000  shares of authorized  Common Stock, of which 3,482,527
shares are currently issued and outstanding.  We also have 2,000,000  authorized
shares of Convertible  Preferred  Stock, of which 1,105,679 shares are currently
issued and outstanding.

     The following table sets forth certain  information as of May 15, 2006 with
respect  to  the  beneficial  ownership  of  both  our  outstanding  Convertible
Preferred  Stock (the  "Preferred  Stock") and Common Stock by (i) any holder of
more than five (5%) percent thereof; (ii) each of our officers and directors and
(iii) directors and officers of the Company as a group.

<TABLE>
<CAPTION>

                                                Amount and Nature of         Approximate
Name and Address of Beneficial Owner            Beneficial Ownership       Percent of Class

<S>                                            <C>                              <C>
Daniel T. Meisenheimer III (1)                 143,998 Preferred Stock (1)      13.0%
c/o The United States Basketball League        437,400 Common Stock             12.6%
46 Quirk Road
Milford, CT 06460

Estate of Daniel T. Meisenheimer, Jr.(2)       182,723 Preferred Stock          16.5%
c/o Spectrum Associates                        12,000 Common Stock                  *
440 New Haven Avenue
Milford, CT 06460

Richard C. Meisenheimer(3)                     142,285 Preferred Stock          12.9%
884 Robert Treat Ext.                          5,000 Common Stock                   *
Orange, CT 06477

Meisenheimer Capital Corp.                     140,000 Preferred Stock          12.7%
46 Quirk Road                                  2,095,000 Common Stock           60.2%
Milford, CT 06460

Spectrum Associates, Inc. (4)                  376,673 Preferred Stock          34.1%
440 New Haven Avenue                           231,857 Common Stock              6.7%
Milford, CT 06460

All Officers and Directors as a Group          286,283 Preferred Stock          25.9%
                                               442,400 Common Stock             12.7%

</TABLE>
-------------------------


                                       15

<PAGE>



* less than 1%

(1) Includes 20,000 shares of Preferred Stock held by Mr.  Meisenheimer  III for
the benefit of his two minor children.

(2) Mr. Meisenheimer Jr., who died in September,  1999,  bequeathed his stock to
his wife, Mary Ellen Meisenheimer.

(3) Richard Meisenheimer, an officer and director of USBL, is also the President
of Spectrum Associates,  Inc., which owns both Preferred and Common Stock as set
forth herein.

(4) Between the various  members of the  Meisenheimer  family and an  affiliated
company, Spectrum Associates, Inc., the Meisenheimers effectively control 77% of
the  outstanding  Preferred  Stock  and  20% of the  outstanding  Common  Stock.
Including  the ownership of MCI by the  Meisenheimer  family,  they  effectively
control 81% of the outstanding Common Stock of USBL. No public  shareholders own
any Preferred Stock of USBL.

Item  12.   Certain Relationships and Related Transactions.

a)   Loans

     For at least the last ten years, the principals of MCI consisting of Daniel
Meisenheimer III, Richard  Meisenheimer and Daniel  Meisenheimer,  Jr. and their
affiliated  companies  have made loans to us. As of February 28, 2006,  USBL was
indebted to the principals or their affiliated companies in the principal sum of
approximately $759,000.  $709,000 of the outstanding debt is payable upon demand
and $50,000 is due on December 31, 2006.  Of the foregoing  amount,  Spectrum is
owed the sum of $417,000 and MCI is owed the sum of $36,000.  The principals (D.
Meisenheimer III, R. Meisenheimer and the Estate of Daniel T. Meisenheimer, Jr.)
are owed $256,000 and the mother of D.  Meisenheimer and R. Meisenheimer is owed
$50,000.

b)   Dependency on Affiliates

     Over the  years  we have  received  a  material  amount  of  revenues  from
affiliated  persons or  entities.  During the years ended  February 28, 2006 and
February 28, 2005,  continuing  franchise fees from companies  controlled by the
Meisenheimer  family,  including  Meisenheimer  Capital and Spectrum Associates,
approximated $95,000 and $75,000 respectively.

     In addition,  Spectrum  has  purchased  advertising  from us in the form of
arena signage,  TV commercials,  tickets,  and program and year book advertising
space.  For the years ended  February 28, 2006 and February 28, 2005,  we earned
advertising fees of $140,000 and $80,000, respectively, from Spectrum.

c)   Acquisition of Meisenheimer Capital Real Estate Holdings, Inc.

     On May 31, 2003, Meisenheimer Capital, Inc. ("MCI") and the Company entered
into an


                                       16


<PAGE>

agreement  whereby MCI agreed to assign to the  Company  all of the  outstanding
stock of Meisenheimer  Capital Real Estate  Holdings,  Inc.  ("MCRE"),  a wholly
owned subsidiary of MCI, in satisfaction of certain payables due from MCI to the
Company.  The  consummation of the transaction was subject to MCI's obtaining an
appraisal of the property  from an  independent  appraiser.  Such  appraisal was
received on July 7, 2003 and the shares of MCRE were  transferred to the Company
in satisfaction of the debt owing from MCI to the Company.

Item  13.   Exhibits.

a)       Exhibits

*3(i)    Certificate of Incorporation (May 29, 1984)

*3(i)a   Amended Certificate of Incorporation (Sept. 4, 1984)

*3(i)b   Amended Certificate of Incorporation (March 5, 1986)

*3(i)c   Amended Certificate of Incorporation (Feb. 19, 1987)

*3(i)d   Amended Certificate of Incorporation (June 30, 1995)

*3(i)e   Amended Certificate of Incorporation (January 12, 1996)

*3(i)f   Certificate of Renewal (June 23, 1995)

*3(i)g   Certificate of Renewal (May 22, 2000)

*3.9     By-Laws of USBL

*3.10    Amended By-Laws

+10.2    Standard Franchise Agreement of USBL

21       Subsidiaries--Meisenheimer Capital Real Estate Holdings, Inc.

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 as adopted pursuant to
         Section 906 of the Sarbanes-Oxley Act of 2002
-------------------
*Incorporated by reference to the Company's Registration Statement on Form
10-SB, and amendments thereto, filed with the SEC on May 30, 2000.

+Incorporated by reference to the Company's Annual Report on Form 10-KSB for the
fiscal year


                                       17


<PAGE>


ended February 28, 2001.


Item  14.   Principal Accountant Fees and Services.

Audit Fees

     We were billed  $16,000 by Michael T. Studer CPA P.C.  ("Mike  Studer") and
$45,686 by Holtz  Rubenstein  Reminick,  LLP ("Holtz  Rubenstein") for the years
ended  February  28,  2006 and 2005,  respectively,  for  professional  services
rendered  for the audits of our annual  financial  statements  and review of our
financial statements included in our Forms 10-QSB.

Tax Fees

     We have not  incurred  expenses  or been  billed  by Mike  Studer  or Holtz
Rubenstein  for the year ended  February  28, 2006 or February 28, 2005 for fees
for tax compliance, tax advice or tax planning services.

All Other Fees

     There were no other fees  billed to us by Mike  Studer or Holtz  Rubenstein
for the years ended February 28, 2006 or February 28, 2005.

Pre-Approval Policies

     Our Board of Directors has not adopted any blanket  pre-approval  policies.
Instead, the Board will specifically  pre-approve the provision for all audit or
non-audit services.

     Our Board of Directors approved all of the services provided by Mike Studer
and Holtz Rubenstein described in the preceding paragraphs.


                                       18


<PAGE>

UNITED STATES BASKETBALL LEAGUE, INC. AND SUBSIDIARY


CONTENTS

--------------------------------------------------------------------------------
Years Ended February 28, 2006 and February 28, 2005              Pages
--------------------------------------------------------------------------------

Financial Statements

  Reports of Independent Registered Public Accounting Firms       F-2

  Consolidated Balance Sheet                                      F-4

  Consolidated Statements of Operations                           F-5

  Consolidated Statement of Stockholders' Deficiency              F-6

  Consolidated Statements of Cash Flows                           F-7

  Notes to Consolidated Financial Statements                      F-8




                                      F-1


<PAGE>


REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Stockholders of
United States Basketball League, Inc.

I have audited the  accompanying  consolidated  balance  sheet of United  States
Basketball League,  Inc. and subsidiary (the "Company") as of February 28, 2006,
and the related consolidated statements of operations, stockholders' deficiency,
and cash  flows for the year then  ended.  These  financial  statements  are the
responsibility of the Company's  management.  My responsibility is to express an
opinion on these financial statements based on my audit.

I conducted my audit in  accordance  with the  standards  of the Public  Company
Accounting Oversight Board (United States).  Those standards require that I plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement.  An audit includes examining, on a
test basis,  evidence  supporting  the amounts and  disclosures in the financial
statements.  An audit also includes assessing the accounting principles used and
significant  estimates  made by  management,  as well as evaluating  the overall
financial statement presentation.  I believe that my audit provides a reasonable
basis for my opinion.

In my opinion,  the consolidated  financial statements referred to above present
fairly, in all material  respects,  the financial  position of the Company as of
February 28, 2006, and the results of its operations and cash flows for the year
then ended in conformity with accounting  principles  generally  accepted in the
United States.

The  accompanying  financial  statements  have been  prepared  assuming that the
Company  will  continue  as a  going  concern.  As  discussed  in  Note 1 to the
consolidated  financial  statements,  the Company's present financial  situation
raises  substantial  doubt about its  ability to  continue  as a going  concern.
Management's  plans in regard to this matter are also  described  in Note 1. The
financial  statements do not include any adjustments  that might result from the
outcome of this uncertainty.


/s/ Michael T. Studer CPA P.C.
Michael T. Studer CPA P.C.
Freeport, New York
June 22, 2006



                                      F-2

<PAGE>


             Report of Independent Registered Public Accounting Firm


Board of Directors
United States Basketball League, Inc.
Milford, Connecticut

We  have  audited  the  consolidated  statements  of  operations,  stockholders'
deficiency  and cash flows for the year ended  February  28,  2005 of the United
States Basketball League, Inc. These consolidated  financial  statements are the
responsibility of the Company's management.  Our responsibility is to express an
opinion on these consolidated financial statements based on our audits.

We conducted  our audit in accordance  with the standards of the Public  Company
Accounting Oversight Board (United States). Those standards require that we plan
and  perform  the  audit  to  obtain  reasonable  assurance  about  whether  the
consolidated  financial statements are free of material  misstatement.  An audit
includes  examining,  on a test  basis,  evidence  supporting  the  amounts  and
disclosures in the  consolidated  financial  statements.  An audit also includes
assessing the  accounting  principles  used and  significant  estimates  made by
management,  as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.

In our opinion, the consolidated  financial statements referred to above present
fairly,  in all material  respects,  the results of operations and cash flows of
the United States Basketball  League,  Inc. for the year ended February 28, 2005
in conformity with accounting principles generally accepted in the United States
of America.

The accompanying  consolidated  financial statements have been prepared assuming
that the Company will continue as a going concern. As discussed in Note 1 to the
consolidated   financial   statements,   the  Company's   recurring   cash  flow
deficiencies from operations, its inability to collect annual franchise fees and
its reliance on related party revenue transactions raise substantial doubt about
its  ability to  continue as a going  concern.  Management's  plans in regard to
these  matters  are  also  described  in  Note  1.  The  consolidated  financial
statements do not include any adjustments  that might result from the outcome of
this uncertainty.


/s/Holtz Rubenstein Reminick LLP
Holtz Rubenstein Reminick LLP
Melville, New York
June 16, 2005


                                      F-3


<PAGE>

             UNITED STATES BASKETBALL LEAGUE, INC. AND SUBSIDIARY

                           Consolidated Balance Sheet

                               February 28, 2006

Assets

Current Assets:
Cash and cash equivalents                                       $    5,517
Marketable equity securities                                        47,404
Inventory                                                            8,573
Prepaid expenses and other current assets                              600
                                                                ----------
Total Current Assets                                                62,094
Property, net of accumulated depreciation of $14,230               262,770
                                                                ----------
Total Assets                                                    $  324,864
                                                                ==========

Liabilities and Stockholders' Deficiency

Current Liabilities:
Accounts payable and accrued expenses                           $   74,953
Credit card obligations                                             88,967
Due to related parties                                             758,644
Current portion of mortgage payable                                  9,969
                                                                ----------
Total Current Liabilities                                          932,533

Mortgage Payable                                                    84,754
                                                                ----------

Total Liabilities                                                1,017,287
                                                                ----------

Stockholders' Deficiency:
Common stock, $0.01 par value, 30,000,0000 shares
authorized; 3,527,602 shares issued                                 35,276
Preferred stock, $0.01 par value, 2,000,000 shares
authorized; 1,105,679 shares issued and outstanding                 11,057
Additional paid-in capital                                       2,671,929
Deficit                                                         (3,368,231)
Treasury stock, at cost; 39,975 shares of common stock             (42,454)
                                                                ----------
Total Stockholders' Deficiency                                    (692,423)
                                                                ----------
Total Liabilities and Stockholders' Deficiency                  $  324,864
                                                                ==========

                See notes to consolidated financial statements.


                                      F-4


<PAGE>


              UNITED STATES BASKETBALL LEAGUE, INC. AND SUBSIDIARY

                     Consolidated Statements of Operations

Years Ended February 28, 2006 and February 28, 2005        2006           2005
                                                           ----           ----

Revenues:
Initial franchise fees                                  $  5,000      $  50,000
Continuing franchise fees                                168,750        310,255
Advertising                                              140,000         80,250
Other                                                     52,806         52,878
                                                        --------      ---------
                                                         366,556        493,383
                                                        --------      ---------
Operating Expenses:
Consulting                                               118,600        256,658
Team and post season festival expenses                    21,377         60,001
Referee fees                                              48,114         63,920
Salaries                                                  58,800         48,667
Travel and promotion                                      28,531        217,613
Depreciation                                               5,192          5,192
Other                                                    119,017        152,504
                                                       ---------      ---------
                                                         399,631        804,555
                                                       ---------      ---------
Loss from Operations                                     (33,075)      (311,172)
                                                       ---------      ---------

Other Income (Expenses):
Interest expense                                         (30,048)       (17,215)
Gain (loss) on marketable equity securities              (17,169)             -
Interest income                                               45             54
                                                       ---------      ---------
                                                         (47,172)       (17,161)
                                                       ---------      ---------
Net Loss                                               $ (80,247)     $(328,333)
                                                       =========      =========
Net Loss Per Common Share - basic and diluted          $   (0.02)     $   (0.09)
                                                       =========      =========
Weighted Average Number of Common Shares Outstanding   3,484,627      3,457,952
                                                       =========      =========

                 See notes to consolidated financial statements.


                                      F-5

<PAGE>

<TABLE>
<CAPTION>

UNITED STATES BASKETBALL LEAGUE, INC. AND SUBSIDIARY


               Consolidated Statement of Stockholders' Deficiency

              Years Ended February 28, 2006 and February 28, 2005


                                 Common Stock        Preferred Stock
                            --------------------- --------------------

                                                                        Additional               Treasury Stock        Total
                              Shares                Shares               Paid-in               ------------------  Stockholders'
                            Outstanding   Amount  Outstanding  Amount    Capital     Deficit    Shares   Amount     Deficiency
                            ----------- --------- ----------- -------- ----------- ----------- ------- ----------  ------------
<S>                          <C>        <C>       <C>         <C>      <C>         <C>         <C>     <C>          <C>
Balance, February 28, 2004    3,485,502 $  34,855  1,105,679  $ 11,057 $ 2,627,192 $(2,959,651) 39,975 $  (42,454)  $ (329,001)
Net Loss                              -         -          -         -           -    (328,333)      -          -     (328,333)
Non-cash compensation            34,100       341          -         -      38,817           -       -          -       39,158
                            ----------- --------- ----------- -------- ----------- -----------  ------ ----------   ----------
Balance, February 28, 2005    3,519,602    35,196  1,105,679    11,057   2,666,009  (3,287,984) 39,975    (42,454)    (618,176)
Non-cash compensation             8,000        80          -         -       5,920           -       -          -        6,000
Net Loss                              -         -          -         -           -    (80,247)       -          -      (80,247)
                            ----------- --------- ----------- -------- ----------- -----------  ------ ----------   ----------

Balance, February 28, 2006    3,527,602 $  35,276  1,105,679  $ 11,057 $ 2,671,929 $(3,368,231) 39,975 $  (42,454)  $ (692,423)
                            =========== ========= ========== ========= =========== ===========  ====== ==========   ==========
</TABLE>


                 See notes to consolidated financial statements

                                      F-6

<PAGE>


              UNITED STATES BASKETBALL LEAGUE, INC. AND SUBSIDIARY

                     Consolidated Statements of Cash Flows

Years Ended February 28, 2006 and February 29, 2005         2006         2005
                                                            ----         ----

Cash Flows from Operating Activities:

Net loss                                                $ (80,247)    $(328,333)
                                                        ---------     ---------
Adjustments to reconcile net loss to net cash
used in operating activities:
Depreciation                                                5,192         5,192
Non-cash compensation                                       6,000        39,158
(Increase) decrease in assets:
Inventory                                                       -         8,574
Marketable equity securities                              (47,404)            -
Increase (decrease) in liabilities:
Accounts payable and accrued expenses                          52        86,438
Credit card obligations                                   (68,880)            -
                                                        ---------     ---------
Total adjustments                                        (105,040)      139,362
                                                        ---------     ---------
Net Cash Used In Operating Activities                    (185,287)     (188,971)
                                                        ---------     ---------

Cash Flows from Financing Activities:

Decrease in due from related parties                       33,071       205,813
Increase in due to related parties                        163,336       (21,625)
Payments on mortgage                                       (8,373)       (8,545)
                                                        ---------     ---------
Net Cash Provided by Financing Activities                 188,034       175,643
                                                        ---------     ---------

Net Increase (Decrease) in Cash                             2,747       (13,328)
Cash and Cash Equivalents, beginning of year                2,770        16,098
                                                        ---------     ---------
Cash and Cash Equivalents, end of year                  $   5,517     $   2,770
                                                        =========     =========

Supplemental disclosures of cash flow information:
   Interest paid                                        $  30,048     $  17,169
                                                        ---------     ---------
   Income tax paid                                      $       -     $       -
                                                        ---------     ---------

See notes to consolidated financial statements.


                                      F-7

<PAGE>


              UNITED STATES BASKETBALL LEAGUE, INC. AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

     1.   Description of Business and Basis of Presentation

          United  States  Basketball  League,  Inc.  ("USBL"),  incorporated  in
          Delaware on May 29, 1984,  operates a professional  summer  basketball
          league through  franchises located in the eastern and midwestern parts
          of the United States. Its wholly owned subsidiary Meisenheimer Capital
          Real Estate  Holdings,  Inc.  ("MCREH") owns a commercial  building in
          Milford, Connecticut.

          At February 28, 2006, USBL and MCREH (collectively, the "Company") had
          negative  working capital of $870,439,  a stockholders'  deficiency of
          $692,423,  and accumulated losses of $3,368,231.  This factor, as well
          as the Company's  reliance on both substantial  non-cash  transactions
          and related  parties  (Notes 8 and 9) create an  uncertainty 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.  There can be no assurance that the
          Company will be successful in accomplishing its objectives. Because of
          the  uncertainties  surrounding the ability of the Company to continue
          its operations, there is substantial doubt about the Company's ability
          to continue as a going concern. The consolidated  financial statements
          do not  include any  adjustments  that might be  necessary  should the
          Company be unable to continue as a going concern.

     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  in
          consolidation.

          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.

          Fair  value  disclosures  - The  carrying  amounts  of  the  Company's
          financial  instruments,  which  consist of cash and cash  equivalents,
          marketable equity  securities,  accounts payable and accrued expenses,
          credit card obligations, due to related parties, and mortgage payable,
          approximate  their fair value due to their  short term nature or based
          upon values of comparable instruments.

          Marketable  equity  securities  -  Marketable  equity  securities  are
          recorded at fair value with  unrealized  gains and losses  included in
          income.  Effective March 1, 2005,  marketable equity securities with a
          fair  value  of  $68,674  were  transferred  to the  Company  from its
          affiliate Meisenheimer Capital, Inc. ("MCI") in exchange for a $33,071
          decrease  in the  amount  due from MCI and a $35,603  increase  in the
          amount due to MCI.  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 year ended
          February 28, 2006 was $(26,229).

          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


                                      F-8


<PAGE>


              UNITED STATES BASKETBALL LEAGUE, INC. AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

          sale.  The offering  price of a new franchise at February 28, 2006 was
          $200,000.

          The Company generates  advertising revenue from fees for area 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  $840,000)  resulting from the USBL
          net operating loss carryforward.

          As of February 28, 2006, USBL had a net operating loss carryforward of
          approximately  $2,100,000  available to offset future taxable  income.
          The  carryforward  expires  in  varying  amounts  through  year  ended
          February 28, 2026.

          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 and
          were  $2,005 and $79,112  for the years  ended  February  28, 2006 and
          February 28, 2005,  respectively.  Advertising costs include the value
          of radio air time received as  consideration  for franchise  fees. The
          value of this  advertising is based upon the standard  market price of
          air time available to third party entities.

          Stock-based compensation - Stock compensation is accounted for at fair
          value in  accordance  with SFAS No.  123 and  123(R)  "Accounting  for
          Stock-Based  Compensation".  No stock  options were issued during 2005
          and 2006, nor were any outstanding.

          Earnings  (loss)  per  share - SFAS  No.  128,  "Earnings  Per  Share"
          establishes standards for computing and presenting earnings (loss) per
          share (EPS).  SFAS No. 128  requires  dual  presentation  of basic and
          diluted EPS.  Basic EPS excludes  dilution and is computed by dividing
          net income  available to common  stockholders by the weighted  average
          number  of common  shares  outstanding  for the  period.  Diluted  EPS
          reflects the  potential  dilution that could occur if stock options or
          convertible  securities were exercised or converted into common stock.
          Basic and dilutive EPS were  equivalent  for all periods  presented as
          the  effect  of  common  stock  equivalents  (such as the  convertible
          preferred stock) was antidilutive.

          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  loss was
          equivalent to net loss for all periods presented.

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


                                      F-9


<PAGE>


              UNITED STATES BASKETBALL LEAGUE, INC. AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

     3.   Property

          At February 28, 2006, property consists of:

          Land                                $  121,253
          Building                               155,747
                                              ----------

          Total                                  277,000
          Less accumulated depreciation          (14,230)
                                              ----------
          Property, net                       $  262,770
                                              ==========


          MCREH  leases  the  property  to  USBL  and  to  other  tenants  on  a
          month-to-month  basis.  Rental income from the other tenants (which is
          included  in  other  revenues  in  the   consolidated   statements  of
          operations) for the years ended February 28, 2006 and 2005 was $51,800
          and $49,600, respectively.

     4.   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.

     5.   Due to Related Parties

          At February 28, 2006, due to related parties consists of:

          Loans payable to Spectrum Associates, Inc. ("Spectrum"),
               a corporation controlled by the two officers of USBL,
               interest at 6%, due on demand                            $416,519
          Loans payable to the two officers of USBL and their mother,
               interest at 6%, due on demand                             256,076
          Note payable to mother of the two officers of USBL,
               interest at 6%, due December 31, 2006                      50,000
          Due to MCI, due on demand                                       36,049
                                                                        --------
          Total                                                         $758,644
                                                                        ========

          For the years ended February 28, 2006 and 2005,  certain  interest due
          under these loans were waived by the respective lenders.

     6.   Mortgage Payable

          The mortgage bears interest at 7.06% per annum,  is payable in monthly
          installments  of principal  and interest of $1,362  through July 2008,
          and provides for a balloon payment of $69,373 in August 2008.

          The  mortgage  is  guaranteed  by  the  Company's   officers.   Future
          maturities of the mortgage are as follows:


                                      F-10


<PAGE>



              UNITED STATES BASKETBALL LEAGUE, INC. AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

   Year Ending February 28,
   ------------------------

     2007                              $ 9,969
     2008                               10,697
     2009                               74,057
                                       -------
     Total                             $94,723
                                       =======

     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.

     8.   Related Party Transactions


          In the years  ended  February  28,  2006 and 2005,  USBL  included  in
          continuing  franchise  fees  revenues from MCI of $75,000 and $75,000,
          respectively, and from Spectrum of $20,000 and $0, respectively.

          In  the  years  ended  February  28,  2006  and  2005,  USBL  received
          advertising  revenues  from  Spectrum  totaling  $140,000 and $80,000,
          respectively.

          In the years ended February 28, 2006 and 2005,  MCREH received  rental
          income from Cadcom, Inc., a corporation controlled by the two officers
          of USBL, totaling $48,000 and $46,000, respectively.

          In the years  ended  February  28,  2006 and 2005,  USBL  included  in
          consulting fees expenses to MCI of $90,000 and $180,000, respectively.


     9.   Non-Cash Transactions

          In the year  ended  February  28,  2005,  USBL  received  $122,000  of
          consulting fees,  promotional services,  and expense reimbursements in
          lieu of cash, as consideration for franchise fees and advertising.


                                      F-11

<PAGE>


30

                                   SIGNATURES

         In accordance with Section 13 or 15(d) of the Exchange Act, the
Registrant caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.

                                      UNITED STATES BASKETBALL LEAGUE, INC.


                                      /s/Daniel T. Meisenheimer, III
                                      -------------------------------------
                                      Daniel T. Meisenheimer, III
                                      President

         In accordance with the Exchange Act, 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   Director and President            July 10, 2006
------------------------------   (principal executive officer)
Daniel T. Meisenheimer, III


/s/Richard C. Meisenheimer       Director and Chief Financial      July 10, 2006
------------------------------   Officer (principal financial
Richard C. Meisenheimer          and accounting officer)




                                       29

<PAGE>


                                  EXHIBIT INDEX


*3(i)    Certificate of Incorporation (May 29, 1984)

*3(i)a   Amended Certificate of Incorporation (Sept. 4, 1984)

*3(i)b   Amended Certificate of Incorporation (March 5, 1986)

*3(i)c   Amended Certificate of Incorporation (Feb. 19, 1987)

*3(i)d   Amended Certificate of Incorporation (June 30, 1995)

*3(i)e   Amended Certificate of Incorporation (January 12, 1996)

*3(i)f   Certificate of Renewal (June 23, 1995)

*3(i)g   Certificate of Renewal (May 22, 2000)

*3.9     By-Laws of USBL

*3.10    Amended By-Laws

+10.2    Standard Franchise Agreement of USBL

21       Subsidiaries--Meisenheimer Capital Real Estate Holdings, Inc.

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 as adopted pursuant to
         Section 906 of the Sarbanes-Oxley Act of 2002


----------------------
*Incorporated by reference to the Company's Registration Statement on Form
10-SB, and amendments thereto, filed with the SEC on May 30, 2000.

+Incorporated by reference to the Company's Annual Report on Form 10-KSB for the
fiscal year ended February 28, 2001.


                                       30