UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington D.C. 20549



FORM 10-Q



(Mark One)



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



For the quarterly period ended August
31, 2012



| |  ̈ | TRANSITION REPORT UNDER
SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
| | - | --------------------------------------------------------------------------



For the transition period from __________
to________



Commission File Number 1-15913



UNITED STATES BASKETBALL LEAGUE, INC.

(Exact Name of Registrant as Specified in
Its Charter)



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



183 Plains Road, Suite 2, Milford, Connecticut
06461

(Address of Principal Executive Offices)



(203) 877-9508

(Registrant’s Telephone Number, Including
Area Code)



___________________________________________

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

Since Last Report)



Indicate by
check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15 (d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports),
and (2) has been subject to such filing requirements for the past 90 days. YesxNo ̈



Indicate by
check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive
Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (Section 232.405 of this chapter) during the
preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). YesxNo ̈



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

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



Indicate by check mark whether the registrant
is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes ̈Nox



Indicate the number of shares outstanding
of each of the issuer’s classes of common stock as of the latest practicable date. As of October 11, 2012, there were 3,512,527
shares of Common Stock, $.01 par value per share, outstanding.











UNITED STATES BASKETBALL LEAGUE, INC.

INDEX



|         |                                                                                                   | PAGE
|-------- | ------------------------------------------------------------------------------------------------- | ----
|         |                                                                                                   |     
|PART I.  | FINANCIAL INFORMATION                                                                             | 4   
|         |                                                                                                   |     
|Item 1.  | Unaudited Financial Statements                                                                    |     
|         |                                                                                                   |     
|         | Consolidated Balance Sheets – August 31, 2012 and February 29, 2012                               | 4   
|         |                                                                                                   |     
|         | Consolidated Statements of Operations for the three and six months ended August 31, 2012 and 2011 | 5   
|         |                                                                                                   |     
|         | Consolidated Statement of Stockholders’ Deficiency for the six months ended August 31, 2012       | 6   
|         |                                                                                                   |     
|         | Consolidated Statements of Cash Flows for the  six months ended August 31, 2012 and 2011          | 7   
|         |                                                                                                   |     
|         | Notes to Consolidated Financial Statements                                                        | 8   
|         |                                                                                                   |     
|Item 2.  | Management’s Discussion and Analysis of Financial Condition and Results of Operation              | 13  
|         |                                                                                                   |     
|Item 3.  | Quantitative and Qualitative Disclosures About Market Risk                                        | 15  
|         |                                                                                                   |     
|Item 4.  | Controls and Procedures                                                                           | 15  
|         |                                                                                                   |     
|PART II. | OTHER INFORMATION                                                                                 | 15  
|         |                                                                                                   |     
|Item 6.  | Exhibits                                                                                          | 17  



2







PART I

FINANCIAL INFORMATION





|Item 1. | Consolidated Financial Statements. | 
|------- | ---------------------------------- | 





UNITED STATES BASKETBALL LEAGUE, INC.
AND SUBSIDIARY



CONSOLIDATED BALANCE SHEETS



|                                                                                                                                 |  | August 31, 2012 |            |   | February 29, 2012 |  
|-------------------------------------------------------------------------------------------------------------------------------- |  | --------------- | ---------- | - | ----------------- | -
|                                                                                                                                 |  | (Unaudited)     |            |   |                   |  
|ASSETS                                                                                                                           |  |                 |            |   |                   |  
|CURRENT ASSETS:                                                                                                                  |  |                 |            |   |                   |  
|Cash and cash equivalents                                                                                                        |  | $               | 85,212     |   |                   | $
|Marketable equity securities                                                                                                     |  |                 | 32,034     |   |                   |  
|Inventory                                                                                                                        |  |                 | 5,000      |   |                   |  
|Due from related parties                                                                                                         |  |                 | 31,231     |   |                   |  
|Total current assets                                                                                                             |  |                 | 153,477    |   |                   |  
|                                                                                                                                 |  |                 |            |   |                   |  
|PROPERTY, NET of accumulated depreciation of $47,978 and $45,382, respectively                                                   |  |                 | 229,022    |   |                   |  
|Total assets                                                                                                                     |  | $               | 382,499    |   |                   | $
|                                                                                                                                 |  |                 |            |   |                   |  
|LIABILITIES AND STOCKHOLDERS’ DEFICIENCY                                                                                         |  |                 |            |  
|                                                                                                                                 |  |                 |            |   |                   |  
|CURRENT LIABILITIES:                                                                                                             |  |                 |            |   |                   |  
|Accounts payable and accrued expenses                                                                                            |  | $               | 179,893    |   |                   | $
|Credit card obligations                                                                                                          |  |                 | 40,343     |   |                   |  
|Due to related parties                                                                                                           |  |                 | 2,172,379  |   |                   |  
|                                                                                                                                 |  |                 |            |   |                   |  
|Total current liabilities                                                                                                        |  |                 | 2,392,615  |   |                   |  
|Total Liabilities                                                                                                                |  |                 | 2,392,615  |   |                   |  
|                                                                                                                                 |  |                 |            |   |                   |  
|STOCKHOLDERS’ DEFICIENCY                                                                                                         |  |                 |            |   |                   |  
|Common stock, $0.01 par value; 30,000,000 shares authorized; issued and outstanding 3,552,502 and 3,552,502 shares, respectively |  |                 | 35,525     |   |                   |  
|Preferred stock,  $0.01 par value; 2,000,000 shares authorized; 1,105,679 shares issued and outstanding                          |  |                 | 11,057     |   |                   |  
|Additional paid-in-capital                                                                                                       |  |                 | 2,679,855  |   |                   |  
|Deficit                                                                                                                          |  |                 | (4,694,099 | ) |                   |  
|Treasury stock, at cost; 39,975 shares                                                                                           |  |                 | (42,454    | ) |                   |  
|Total stockholders’ deficiency                                                                                                   |  |                 | (2,010,116 | ) |                   |  
|                                                                                                                                 |  |                 |            |   |                   |  
|Total liabilities and stockholders’ deficiency                                                                                   |  | $               | 382,499    |   |                   | $



See notes to consolidated financial statements.



3







UNITED STATES BASKETBALL LEAGUE, INC.
AND SUBSIDIARY



CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)



|                                                      |  | Three Months Ended |           |   | Six Months Ended |  
|----------------------------------------------------- |  | ------------------ | --------- | - | ---------------- | -
|                                                      |  | August 31, 2012    |           |   | August 31, 2011  |  
|REVENUES:                                             |  |                    |           |   |                  |  
|Rental income                                         |  | $                  | 9,000     |   |                  | $
|                                                      |  |                    |           |   |                  |  
|OPERATING EXPENSES:                                   |  |                    |           |   |                  |  
|Consulting                                            |  |                    | 0         |   |                  |  
|Salaries                                              |  |                    | 12,514    |   |                  |  
|Travel and promotion                                  |  |                    | (1,134    | ) |                  |  
|Depreciation                                          |  |                    | 1,298     |   |                  |  
|Other                                                 |  |                    | 49,617    |   |                  |  
|Total operating expenses                              |  |                    | 62,295    |   |                  |  
|                                                      |  |                    |           |   |                  |  
|Loss from operations                                  |  |                    | (53,295   | ) |                  |  
|                                                      |  |                    |           |   |                  |  
|OTHER INCOME (EXPENSES):                              |  |                    |           |   |                  |  
|Net gain (loss) from marketable equity securities     |  |                    | 32,822    |   |                  |  
|Interest expense                                      |  |                    | (5,386    | ) |                  |  
|Interest income                                       |  |                    | 0         |   |                  |  
|                                                      |  |                    |           |   |                  |  
|Total other income (expenses)                         |  |                    | 27,436    |   |                  |  
|                                                      |  |                    |           |   |                  |  
|NET LOSS                                              |  | $                  | (25,859   | ) |                  | $
|                                                      |  |                    |           |   |                  |  
|Earnings (loss) per common share:                     |  |                    |           |   |                  |  
|Basic                                                 |  | $                  | (.01      | ) |                  | $
|Diluted                                               |  | $                  | (.01      | ) |                  | $
|                                                      |  |                    |           |   |                  |  
|WEIGHTED AVERAGE NUMBER OF  COMMON SHARES OUTSTANDING |  |                    |           |   |                  |  
|Basic                                                 |  |                    | 3,512,527 |   |                  |  
|Diluted                                               |  |                    | 3,512,527 |   |                  |  



see notes to consolidated financial statements.



4







UNITED STATES BASKETBALL LEAGUE, INC.
AND SUBSIDIARY

Consolidated Statement of Stockholders’
Deficiency

Six Months Ended August 31, 2012

(Unaudited)



|                           |  | Common Stock |           |  | Preferred Stock |   |        | Additional  |  |  |           |  |  |         |        |  | Total   |  
|-------------------------- |  | ------------ | --------- |  | --------------- | - | ------ | ----------- |  |  | --------- |  |  | ------- | ------ |  | ------- | -
|                           |  | Shares       |           |  |                 |   |        | Shares      |  |  |           |  |  | Paid-in |        |  |         |  
|                           |  | Outstanding  |           |  | Amount          |   |        | Outstanding |  |  | Amount    |  |  | Capital |        |  | Deficit |  
|                           |  |              |           |  |                 |   |        |             |  |  |           |  |  |         |        |  |         |  
|Balance, February 29, 2012 |  |              | 3,552,502 |  |                 | $ | 35,525 |             |  |  | 1,105,679 |  |  | $       | 11,057 |  |         | $
|                           |  |              |           |  |                 |   |        |             |  |  |           |  |  |         |        |  |         |  
|Net loss                   |  |              | -         |  |                 |   | -      |             |  |  | -         |  |  |         | -      |  |         |  
|                           |  |              |           |  |                 |   |        |             |  |  |           |  |  |         |        |  |         |  
|Balance, August 31, 2012   |  |              | 3,552,502 |  |                 | $ | 35,525 |             |  |  | 1,105,679 |  |  | $       | 11,057 |  |         | $



See notes to consolidated financial statements.



5







UNITED STATES BASKETBALL LEAGUE, INC.
AND SUBSIDIARY



CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)



|                                                                            |  | Six Months Ended |         
|--------------------------------------------------------------------------- |  | ---------------- | --------
|                                                                            |  | August 31, 2012  |         
|                                                                            |  |                  |         
|CASH FLOWS FROM OPERATING ACTIVITIES:                                       |  |                  |         
|Net loss                                                                    |  | $                | (135,582
|Adjustments to reconcile net loss to net cash used in operating activities: |  |                  |         
|Depreciation                                                                |  |                  | 2,596   
|Non-cash compensation                                                       |  |                  | -       
|Changes in operating assets and liabilities:                                |  |                  |         
|Marketable equity securities                                                |  |                  | 154,734 
|Accounts payable and accrued expenses                                       |  |                  | 7,793   
|Credit card obligations                                                     |  |                  | (46,399 
|                                                                            |  |                  |         
|Net cash used in operating activities                                       |  |                  | (16,858 
|                                                                            |  |                  |         
|CASH FLOWS FROM FINANCING ACTIVITIES:                                       |  |                  |         
|Increase in due from related parties                                        |  |                  | (6,304  
|Increase in due to related parties                                          |  |                  | 103,540 
|                                                                            |  |                  |         
|Net cash provided by financing activities                                   |  |                  | 97,236  
|                                                                            |  |                  |         
|NET INCREASE IN CASH AND CASH EQUIVALENTS                                   |  |                  | 80,378  
|                                                                            |  |                  |         
|CASH AND CASH EQUIVALENTS, beginning of period                              |  |                  | 4,834   
|                                                                            |  |                  |         
|CASH AND CASH EQUIVALENTS, end of period                                    |  | $                | 85,212  
|                                                                            |  |                  |         
|SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:                          |  |                  |         
|Interest paid                                                               |  | $                | 9,159   
|Income tax paid                                                             |  | $                | -       



See notes to consolidated financial statements.



6







UNITED STATES BASKETBALL LEAGUE, INC.
AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

SIX MONTHS ENDED AUGUST 31, 2012

(Unaudited)



| | 1. | Description of Business and Basis of Presentation
| | -- | -------------------------------------------------



United
States Basketball League, Inc. (“USBL”), incorporated in Delaware on May 29, 1984, has operated a professional summer
basketball league through franchises located in the United States. Its wholly owned subsidiary Meisenheimer Capital Real Estate
Holdings, Inc. (“MCREH”) owns a commercial building in Milford, Connecticut. USBL cancelled its 2008, 2009,
2010, 2011 and 2012 seasons.



At August 31, 2012, USBL and
MCREH (collectively, the “Company”) had negative working capital of $2,239,138, a stockholders’ deficiency of
$2,010,116, and accumulated losses of $4,694,099. This factor, as well as the Company’s reliance on related parties (see
Notes 7 and 9), raises substantial doubt as to the Company’s ability to continue as a going concern.



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



The accompanying unaudited consolidated
financial statements have been prepared by the Company pursuant to the rules and regulations of the Securities and Exchange Commission.
Accordingly, they may not include all of the information and footnotes required by accounting principles generally accepted in
the United States for complete financial statements. In the opinion of management, the unaudited financial statements reflect all
adjustments, which include only normal recurring adjustments, necessary for a fair presentation. Operating results for the six-month
period ended August 31, 2012 may not necessarily be indicative of the results that may be expected for the year ending February
28, 2013. The notes to the consolidated financial statements should be read in conjunction with the notes to the consolidated financial
statements contained in the Company’s Form 10-K for the year ended February 29, 2012.



| | 2. | Summary of Significant Accounting Policies
| | -- | ------------------------------------------



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



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



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



Marketable equity securities–Marketable equity securities are recorded at fair value with unrealized gains and losses included in income. The Company
has classified its investment in marketable equity securities as trading securities. The change in net unrealized holding gain
(loss) included in earnings for the three months ended August 31, 2012 and 2011 and the six months ended August 31, 2012 and 2011
was $29,253, $(86,599), $39,629, and $16,433, respectively.



7







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 (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, 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 generated advertising
revenue from fees for arena signage, tickets, and program and yearbook advertising space. Advertising revenue was recognized over
the period that the advertising space was made available to the user.



Fees charged to teams to allow
them to relocate were recognized as revenue upon collection of the fee. Souvenir sales, which were generated on the Company’s
web site, were recorded upon shipment of the order. Essentially all orders were 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 (approximately $875,000 at February 29, 2012)
attributable to the USBL net operating loss carryforward.



As of February 29, 2012, USBL
had a net operating loss carryforward of approximately $2,500,000 available to offset future taxable income. The carryforward expires
in varying amounts from 2019 to 2032. Current United States income tax laws limit the amount of loss available to offset against
future taxable income when a substantial change in ownership occurs. Therefore, the amount available to offset future taxable income
may be limited.



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



Advertising costs
- Advertising costs are expensed as incurred.



Stock-based compensation
– Stock-based compensation is accounted for at fair value in accordance with Accounting Standards Codification (“ASC”)
718, “Compensation – Stock Compensation.” No stock options were granted during 2012 and 2011 and none are outstanding
at August 31, 2012.



8







Earnings
(loss) per share– ASC 260, “Earnings Per Share”, establishes standards
for computing and presenting earnings (loss) per share (EPS). ASC 260 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. The Company did not include the 1,105,679 shares of convertible preferred
stock in its calculation of diluted loss per share for the three and six months ended August 31, 2012 and 2011 as the result would
have been 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’ deficiency. Comprehensive income (loss) was equivalent to net income (loss) for all periods
presented.



| | 3. | Marketable Equity Securities
| | -- | ----------------------------



At August 31, 2012 (unaudited),
marketable equity securities consisted of:



|                                  |  |        |           |  |      |   |        | Fair      | 
|--------------------------------- |  | ------ | --------- |  | ---- | - | ------ | --------- | 
|                                  |  |        |           |  |      |   |        | Value and | 
|                                  |  |        |           |  |      |   |        | Carrying  | 
|Security                          |  | Shares |           |  | Cost |   |        | Value     | 
|Seafarer Exploration Corp. (SFRX) |  |        | 4,302,064 |  |      | $ | 57,928 |           | 
|Other                             |  |        |           |  |      |   | 21,625 |           | 
|                                  |  |        |           |  |      |   |        |           | 
|Total                             |  |        |           |  |      | $ | 79,553 |           | 



At February 29, 2012, marketable
equity securities consisted of:



|                                  |  |        |           |  |      |   |         | Fair      | 
|--------------------------------- |  | ------ | --------- |  | ---- | - | ------- | --------- | 
|                                  |  |        |           |  |      |   |         | Value and | 
|                                  |  |        |           |  |      |   |         | Carrying  | 
|Security                          |  | Shares |           |  | Cost |   |         | Value     | 
|Seafarer Exploration Corp. (SFRX) |  |        | 7,252,064 |  |      | $ | 97,642  |           | 
|Pacific Rim Mining Corp. (PMV)    |  |        | 350,000   |  |      |   | 83,458  |           | 
|Caledonia Mining Corp. (CALVF)    |  |        | 410,000   |  |      |   | 34,099  |           | 
|Other                             |  |        |           |  |      |   | 82,399  |           | 
|                                  |  |        |           |  |      |   |         |           | 
|Total                             |  |        |           |  |      | $ | 297,598 |           | 



As discussed in Note 2, the Company
has classified its investment in marketable equity securities as trading securities. All fair value measurements are based on Level
1 inputs (i.e., closing trading prices of respective marketable equity securities).



9







Gain (loss) on marketable equity
securities consisted of:



|                           |  | Six Months Ended August 31, |        
|-------------------------- |  | --------------------------- | -------
|                           |  | (Unaudited)                 |        
|                           |  | 2012                        |        
|Realized net gain (loss)   |  | $                           | (71,627
|Unrealized net gain (loss) |  |                             | 39,629 
|                           |  |                             |        
|Net gain (loss)            |  | $                           | (31,998



Commencing March 2012, the Company
began the process of selling its marketable equity securities pursuant to a plan to liquidate substantially all of such securities
as market conditions allow.



| | 4. | Due from Related Parties
| | -- | ------------------------



Due from related parties consist
of:



|                                                                                                                             |  | August 31,  |        |  | February 29, |  
|---------------------------------------------------------------------------------------------------------------------------- |  | ----------- | ------ |  | ------------ | -
|                                                                                                                             |  | 2012        |        |  | 2012         |  
|                                                                                                                             |  | (Unaudited) |        |  |              |  
|USBL receivable from Meisenheimer Capital, Inc. (“MCI”) controlling stockholder of USBL, non-interest bearing, due on demand |  | $           | 31,231 |  |              | $
|                                                                                                                             |  |             |        |  |              |  
|Total                                                                                                                        |  | $           | 31,231 |  |              | $



| | 5. | Property, Net
| | -- | -------------



Property, net, consists of:



|                              |  | August 31,  |         |   | February 29, |  
|----------------------------- |  | ----------- | ------- | - | ------------ | -
|                              |  | 2012        |         |   | 2012         |  
|                              |  | (Unaudited) |         |   |              |  
|                              |  |             |         |   |              |  
|Land                          |  | $           | 121,253 |   |              | $
|Building                      |  |             | 155,747 |   |              |  
|Total                         |  |             | 277,000 |   |              |  
|                              |  |             |         |   |              |  
|Less accumulated depreciation |  |             | (47,978 | ) |              |  
|                              |  |             |         |   |              |  
|Property, net                 |  | $           | 229,022 |   |              | $



The property is a commercial
building owned by MCREH located in Milford, Connecticut. From June 2008 to December 2010, MCREH had no tenants at the property.



10







In 2011, Spectrum Associates,
Inc. (“Spectrum”), a corporation controlled by the two officers of USBL, entered into an informal agreement to rent
available space from MCREH for the purpose of storing surplus material. Under this agreement, Spectrum paid MCREH a total of $12,000
rent for the year ended February 29, 2012.



On February 1, 2012, MCREH executed
a Lease Agreement with an unrelated entity (the “Tenant”) to rent the property (on a Net Lease basis) for a term of
11 months from February 1, 2012 to December 31, 2012 at a monthly rent of $3,000. The Tenant has an option to renew the lease for
two additional periods of one year each at monthly rates of $3,150 (for the year ended December 31, 2013), and $3,300 (for the
year ended December 31, 2014).



| | 6. | 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.



| | 7. | Due to Related Parties
| | -- | ----------------------



Due to related parties consists
of:



|                                                                                                                                                  |  | August 31, 2012 |            |   | February 29, 2012 |  
|------------------------------------------------------------------------------------------------------------------------------------------------- |  | --------------- | ---------- | - | ----------------- | -
|                                                                                                                                                  |  | (Unaudited)     |            |   |                   |  
|USBL loans payable to Spectrum Associates, Inc. (“Spectrum”), a corporation controlled by the two officers of USBL, interest at 6%, due on demand |  | $               | 1,232,289  |   |                   | $
|USBL loans payable to the two officers of USBL, interest at 6%, due on demand                                                                     |  |                 | 607,490    |   |                   |  
|USBL loan payable to Genvest, LLC (“Genvest”), an entity controlled by the two officers of USBL                                                   |  |                 | 20,000     |   |                   |  
|USBL loans payable to Daniel T. Meisenheimer, Jr. Trust, a trust controlled by the two officers of USBL, non-interest bearing, due on demand      |  |                 | 44,100     |   |                   |  
|MCREH note payable to trusts for the benefit of the two officers of USBL, interest at 6%, due December 31, 2011                                   |  |                 | 50,000     |   |                   |  
|MCREH note payable to Spectrum, interest at 7%, due on demand, secured by MCREH property                                                          |  |                 | 25,000     |   |                   |  
|                                                                                                                                                  |  |                 |            |   |                   |  
|MCREH note payable to president of USBL, interest at 7%, due on demand, secured by MCREH property                                                 |  |                 | 45,000     |   |                   |  
|MCREH note payable to the two officers of USBL, interest at 7%, due on demand, secured by MCREH property                                          |  |                 | 70,000     |   |                   |  
|                                                                                                                                                  |  |                 |            |   |                   |  
|MCREH note payable to a trust for the benefit of the two officers of USBL, interest at 4%, due October 22, 2009, secured by MCREH property        |  |                 | 70,000     |   |                   |  
|MCREH loan payable to president of Spectrum, non-interest bearing, due on demand                                                                  |  |                 | 4,500      |   |                   |  
|MCREH loan payable to president of USBL, non-interest bearing, due on demand                                                                      |  |                 | 4,000      |   |                   |  
|Total                                                                                                                                             |  |                 | 2,172,379  |   |                   |  
|Less current portion                                                                                                                              |  |                 | (2,172,379 | ) |                   |  
|                                                                                                                                                  |  |                 |            |   |                   |  
|Non current portion                                                                                                                               |  | $               | -          |   |                   | $



11







For the
six months ended August 31, 2012 and 2011, interest due under the USBL loans were waived by the respective lenders.



At August
31, 2012 and February 29, 2012, accounts payable and accrued expenses included accrued interest payable on MCREH notes payable
to related parties totaling $65,887 and $61,987, respectively.



| | 8. | 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.



| | 9. | Related
Party Transactions
| | -- | --------------------------



In the
three months ended August 31, 2012 and 2011 and the six months ended August 31, 2012 and 2011, USBL included in other operating
expenses, rent to Genvest, LLC of $3,000, $3,000, $6,000, and $6,000, respectively.



| | 10. | Commitments and Contingencies
| | --- | -----------------------------



Occupancy Agreement



In September 2007, the Company moved
its office from the MCREH building to a building owned by Genvest LLC, an organization controlled by the two officers of USBL.
Improvements to the Company’s space there were completed in February 2008. Pursuant to a verbal agreement, the Company is
to pay Genvest monthly rentals of $1,000 commencing March 2008. At August 31, 2012 and February 29, 2012, accounts payable and
accrued expenses included accrued rent payable to Genvest totaling $54,000 and $48,000, respectively.



Cancellation of 2008, 2009, 2010,
2011 and 2012 Seasons



USBL cancelled its 2008, 2009, 2010.
2011 and 2012 seasons. These cancellations may result in claims and legal actions from franchisees.



Litigation



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



12







| | Item2. | Management’s
Discussion and Analysis of financial condition and results of operations.
| | ------ | --------------------------------------------------------------------------------------



OVERVIEW



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



THREE MONTHS ENDED AUGUST 31, 2012 AS COMPARED
TO AUGUST 31, 2011



For the three months
ended August 31, 2012 and 2011, the Company had no franchise fees or advertising revenues as a result of the cancellation of the
2008, 2009, 2010, 2011 and 2012 seasons.



Operating expenses
increased $18,606 from $43,689 for the three months ended August 31, 2011 to $62,296 for the three months ended August 31, 2012.
The increase in operating expenses was primarily due to increased accounting and legal fees related to quarterly filings.



Net gain from marketable
equity securities increased $112,520 in 2012, from $(79,698) in 2011 to $32,822 in 2012. The change was due primarily to a decrease
in the per share price of the company’s holdings in Seafarer Exploration Corporation (SFRX) in the second quarter of 2011.



Interest expense decreased
to $5,386 in 2012, as compared to $8,161 in 2011.



Net loss for the three
months ended August 31, 2012 was $25,859 as compared to the net loss of $131,547 for the three months ended August 31, 2011. The
increase is due mainly to the $112,520 increase in net gain (loss) from marketable securities (from $(79,698) in 2011 to $32,822
in 2012) offset partially by the $18,606 decrease in operating expenses described above.



SIX MONTHS ENDED AUGUST 31, 2012 AS COMPARED
TO AUGUST 31, 2011



For the six months
ended August 31, 2012 and 2011, the Company had no franchise fees or advertising revenues as a result of the cancellation of the
2008, 2009, 2010, 2011 and 2012 seasons.



Operating expenses
increased $12,436 from $96,189 for the six months ended August 31, 2011 to $108,625 for the six months ended August 31, 2012. The
increase in operating expenses was primarily due to increase professional fees offset by decreased travel costs.



Net gain (loss) from
marketable equity securities decreased $54,038 from $22,040 in 2011 to $(31,998) in 2012. The decrease was due primarily to realized
losses related to the sale of the company’s holdings in Seafarer Exploration Corp. (SFRX) and Pacific Rim Mining Corporation
(PMV).



Interest expense decreased
to $12,959 in 2012, as compared to $16,220 in 2011.



13







Net loss for the six
months ended August 31, 2012 was $135,582 as compared to net loss of $90,368 for the six months ended August 31, 2011. The decrease
is due mainly to the $54,038 decrease in net gain (loss) from marketable securities (from $22,040 in 2011 to $(31,998 in 2012)
and the $12,436 increase in operating expenses described above partially offset by a $15,000 increase in revenues.



LIQUIDITY AND CAPITAL RESOURCES



The Company had cash
of $85,212 and a working capital deficit of $2,239,138 at August 31, 2012. The Company's statement of cash flows for the six months
ended August 31, 2012 reflects cash used in operating activities of $16,858, which results primarily from the $135,582 net loss
as well as the pay down of credit card obligations offset by the sale of marketable equity securities. Net cash provided by financing
activities was $97,236 in 2012 compared to $86,300 in 2011.



The Company's ability
to generate cash flow from franchise royalty fees is dependent on scheduling of a 2013 season and the financial stability of the
individual franchises constituting the League. Each franchise is confronted with meeting its own fixed costs and expenses, which
are primarily paid from revenues generated from attendance. Experience has shown that USBL is generally the last creditor to be
paid by the franchise. If attendance has been poor, USBL has from time to time only received partial payment and, in some cases,
no payments at all. The Company estimates that it requires approximately $300,000 of working capital to sustain operations over
a 12-month period. Accordingly, if the Company is unable to generate additional sales of franchises and schedule a 2013 season
within the next three 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 and schedule a 2012 season.



| | ITEM 3. | QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET
RISK.
| | ------- | -----------------------------------------------------------



| |  | Not applicable.
| |  | ---------------



Item
4.	Controls and Procedures.



Under the supervision
and with the participation of our management, including our principal executive and financial officers, we have evaluated the effectiveness
of the design and operation of our disclosure controls and procedures as of August 31, 2012 and, based on such evaluation, our
principal executive and financial officers have concluded that these controls and procedures are effective. There were no changes
in our internal control over financial reporting that occurred during the quarter ended August 31, 2012 that has materially affected,
or is reasonably likely to materially affect, our internal control over financial reporting.



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



14







PART II

OTHER INFORMATION



| | Item 6. | Exhibits.
| | ------- | ---------



|31.1 | Certification of principal executive officer                                                                         
|---- | ---------------------------------------------------------------------------------------------------------------------
|     |                                                                                                                      
|31.2 | Certification of 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



|101.INS | XBRL Instance Document*                        
|------- | -----------------------------------------------
|101.SCH | XBRL Taxonomy Extension Schema Document*       
|101.CAL | XBRL Taxonomy Extension Calculation Document*  
|101.DEF | XBRL Taxonomy Extension Definitions Document*  
|101.LAB | XBRL Taxonomy Extension Labels Document*       
|101.PRE | XBRL Taxonomy Extension Presentations Document*
|*       | To be filed by amendment.                      



15







SIGNATURES



Pursuant to the requirements
of Section 13 or 15 (d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its
behalf by the undersigned thereunto duly authorized on the 22nd day of October, 2012.



| | UNITED STATES BASKETBALL LEAGUE, INC.
| | -------------------------------------
| |                                      
| | By:                                  
| |                                      
| |                                      
| |                                      
| |                                      
| | By:                                  
| |                                      
| |                                      
| |                                      
| |                                      



16







EXHIBIT INDEX



|31.1 | Certification of principal executive officer                                                                         
|---- | ---------------------------------------------------------------------------------------------------------------------
|     |                                                                                                                      
|31.2 | Certification of 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



|101.INS | XBRL Instance Document*                        
|------- | -----------------------------------------------
|101.SCH | XBRL Taxonomy Extension Schema Document*       
|101.CAL | XBRL Taxonomy Extension Calculation Document*  
|101.DEF | XBRL Taxonomy Extension Definitions Document*  
|101.LAB | XBRL Taxonomy Extension Labels Document*       
|101.PRE | XBRL Taxonomy Extension Presentations Document*
|*       | To be filed by amendment.                      



17