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 May 31,
2010
 
  ̈
              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.
      EmployerIncorporation
      or Organization)
                  
                  Identification
      Number)
 
 183 Plains Road, Suite 2,
Milford, Connecticut 06461
 (Address
of Principal Executive Offices)
 
 (203)
877-9508
 (Registrant’s
Telephone Number, Including Area Code)
  (Former
Name, Former Address and Former Fiscal Year, if Changed
 Since
Last Report)
 
 Indicate
by check mark whether the registrant (1) has filed all reports required to be
filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934 during the
preceding 12 months (or for such shorter period that the registrant was required
to file such reports), and (2) has been subject to such filing requirements for
the past 90 days. Yes x     No
 ̈
 
 Indicate
by check mark whether the registrant has submitted electronically and posted on
its corporate Web site, if any, every Interactive Data File required to be
submitted and posted pursuant to Rule 405 of Regulation S-T (Section 232.405 of
this chapter) during the preceding 12 months (or for such shorter period that
the registrant was required to submit and post such files). Yes  ̈     No
 ̈
  Indicate
by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer, or a smaller reporting company. See
the definitions of “large accelerated filer”, “accelerated filer” and “smaller
reporting company” in Rule 12b-2 of the Exchange Act. (Check one):
 Large
      accelerated filer   ̈
                Accelerated
      filer                    ̈Non-accelerated
      filer     ̈
                  (Do
      not check if a smaller reporting company)
                Smaller
      reporting company  x
  Indicate
by check mark whether the registrant is a shell company (as defined in Rule
12b-2 of the Exchange Act). Yes  ̈     No
x
 
 Indicate
the number of shares outstanding of each of the issuer’s classes of common stock
as of the latest practicable date.  As of July 12, 2010, there were
3,512,527 shares of Common Stock, $.01 par value per share,
outstanding.
  
  UNITED
STATES BASKETBALL LEAGUE, INC.
 INDEX
 
 PAGEPART
      I.
                          FINANCIAL
      INFORMATION
                          3Item
      1.
                          UNAUDITED
      FINANCIAL STATEMENTS.
                          3Consolidated
      Balance Sheets – May 31, 2010and
      February 28, 2010
                          3Consolidated
      Statements of Operations for thethree
      months Ended May 31, 2010 and 2009
                          4Consolidated
      Statement of Stockholders’Deficiency
      for the three months ended May 31, 2010
                          5Consolidated
      Statements of Cash Flows for thethree
      months ended May 31, 2010 and 2009
                          6Notes
      to Consolidated Financial Statements
                          7Item
      2.
                          Management’s
      Discussion and Analysis of Financial Conditionand
      Results of Operations
                          12Item
      3.
                          Quantitative
      and Qualitative Disclosures About Market Risk
                          13Item
      4T.
                          Controls
      and Procedures
                          13PART
      II.
                          OTHER
      INFORMATION
                          14Item
      2.
                          Recent
      Sale of Unregistered Securities and Use of Proceeds
                          14Item
      6.
                          Exhibits
                          14
  2
  
 PART
I
 FINANCIAL
INFORMATION
 
 ITEM
1.                   CONSOLIDATED
FINANCIAL STATEMENTS
 
 UNITED STATES BASKETBALL
LEAGUE, INC. AND SUBSIDIARY
  CONSOLIDATED BALANCE
SHEETS
 
 May 31,
                              2010
                            
                            
                            February 28,
                              2010(Unaudited)ASSETSCURRENT
      ASSETS:Cash
      and cash equivalents
                            
                            $
                            5,414
                            
                            
                            $
                            661Marketable
      equity securities
                            
                            
                            189,017
                            
                            
                            
                            141,103Inventory
                            
                            
                            5,000
                            
                            
                            
                            5,000Due
      from related parties
                            
                            
                            -
                            
                            
                            
                            113,814Total
      current assets
                            
                            
                            199,431
                            
                            
                            
                            260,578PROPERTY,
      NET of accumulated depreciation of $36,296 and $34,998,
      respectively
                            
                            
                            240,704
                            
                            
                            
                            242,002Total
      assets
                            
                            $
                            440,135
                            
                            
                            $
                            502,580LIABILITIES AND STOCKHOLDERS’
      DEFICIENCYCURRENT
      LIABILITIES:Accounts
      payable and accrued expenses
                            
                            $
                            111,986
                            
                            
                            $
                            114,816Due
      in connection with South Korea venture
                            
                            
                            85,000
                            
                            
                            
                            20,000Deferred
      revenue
                            
                            
                            -
                            
                            
                            
                            -Credit
      card obligations
                            
                            
                            94,879
                            
                            
                            
                            96,711Due
      to related parties
                            
                            
                            1,583,312
                            
                            
                            
                            1,655,840Total
      current liabilities
                            
                            
                            1,875,177
                            
                            
                            
                            1,887,367Due
      to related parties, net of current portion
                            
                            
                            50,000
                            
                            
                            
                            50,000Total
      Liabilities
                            
                            
                            1,925,177
                            
                            
                            
                            1,937,367STOCKHOLDERS’
      DEFICIENCYCommon
      stock, $0.01 par value; 30,000,000 shares authorized; issued 3,552,502 and
      3,522,502 shares, respectively
                            
                            
                            35,525
                            
                            
                            
                            35,225Preferred
      stock,  $0.01 par value; 2,000,000 shares authorized; 1,105,679
      shares issued and outstanding
                            
                            
                            11,057
                            
                            
                            
                            11,057Additional
      paid-in-capital
                            
                            
                            2,679,855
                            
                            
                            
                            2,668,155Deficit
                            
                            
                            (4,169,025
                            )
                            
                            
                            (4,106,770
                            )Treasury
      stock, at cost; 39,975 shares
                            
                            
                            (42,454
                            )
                            
                            
                            (42,454
                            )Total
      stockholders’ deficiency
                            
                            
                            (1,485,042
                            )
                            
                            
                            (1,434,787
                            )Total
      liabilities and stockholders’ deficiency
                            
                            $
                            440,135
                            
                            
                            $
                            502,580
 
 See notes
to consolidated financial statements.
  3
 
 UNITED STATES BASKETBALL
LEAGUE, INC. AND SUBSIDIARY
  CONSOLIDATED STATEMENTS OF
OPERATIONS
 (Unaudited)
 
 Three Months EndedMay 31,
                        2010
                      
                      
                      May 31,
                        2009REVENUES:Consulting
      fees
                      
                      $
                      -
                      
                      
                      $
                      4,000-
                      
                      
                      
                      4,000OPERATING
      EXPENSES:Consulting
                      
                      
                      16,000
                      
                      
                      
                      2,900Salaries
                      
                      
                      13,868
                      
                      
                      
                      14,928Travel
      and promotion
                      
                      
                      7,557
                      
                      
                      
                      4,974Depreciation
                      
                      
                      1,298
                      
                      
                      
                      1,298Other
                      
                      
                      20,656
                      
                      
                      
                      16,07859,379
                      
                      
                      
                      40,178Income
      (loss) from operations
                      
                      
                      (59,379
                      )
                      
                      
                      (36,178
                      )OTHER
      INCOME (EXPENSES):Net
      gain (loss) from marketable equity securities
                      
                      
                      5,308
                      
                      
                      
                      46,753Interest
      expense
                      
                      
                      (8,209
                      )
                      
                      
                      (8,686
                      )Interest
      income
                      
                      
                      25
                      
                      
                      
                      6(2,876
                      )
                      
                      
                      38,073NET
      INCOME (LOSS)
                      
                      $
                      (62,255
                      )
                      
                      $
                      1,895Earnings
      (loss) per common share:Basic
                      
                      $
                      (0.02
                      )
                      
                      $
                      0.00Diluted
                      
                      $
                      (0.02
                      )
                      
                      $
                      0.00WEIGHTED
      AVERAGE NUMBER OFCOMMON
      SHARES OUTSTANDINGBasic
                      
                      
                      3,491,005
                      
                      
                      
                      3,482,527Diluted
                      
                      
                      3,491,005
                      
                      
                      
                      4,588,206
 
 See notes
to consolidated financial statements.
  4
  UNITED
STATES BASKETBALL LEAGUE, INC. AND SUBSIDIARY
 Consolidated
Statements of Stockholders’ Deficiency
 (Unaudited)
 
 Common Stock
                    
                    
                    Preferred Stock
                    
                    
                    Additional
                    
                    
                    
                    
                    
                    
                    
                    
                    TotalShares
                    
                    
                    
                    
                    
                    Shares
                    
                    
                    
                    
                    
                    Paid-in
                    
                    
                    
                    
                    
                    Treasury Stock
                    
                    
                    Stockholders’Outstanding
                    
                    
                    Amount
                    
                    
                    Outstanding
                    
                    
                    Amount
                    
                    
                    Capital
                    
                    
                    Deficit
                    
                    
                    Shares
                    
                    
                    Amount
                    
                    
                    DeficiencyBalance,
      February 28, 2010
                    
                    
                    3,522,502
                    
                    
                    $
                    35,225
                    
                    
                    
                    1,105,679
                    
                    
                    $
                    11,057
                    
                    
                    $
                    2,668,155
                    
                    
                    $
                    (4,106,770
                    )
                    
                    
                    39,975
                    
                    
                    $
                    (42,454
                    )
                    
                    $
                    (1,434,787
                    )Shares
      issued for services
                    
                    
                    30,000
                    
                    
                    
                    300
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    11,700
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    12,000Net
      income (loss)
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    (62,255
                    )
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    (62,255
                    )Balance,
      May 31, 2010
                    
                    
                    3,552,502
                    
                    
                    $
                    35,525
                    
                    
                    
                    1,105,679
                    
                    
                    $
                    11,057
                    
                    
                    
                    2,679,855
                    
                    
                    
                    (4,169,025
                    )
                    
                    
                    39,975
                    
                    
                    
                    (42,454
                    )
                    
                    
                    (1,485,042
                    )
  See notes
to consolidated financial statements.
  5
  UNITED STATES BASKETBALL
LEAGUE, INC. AND SUBSIDIARY
  CONSOLIDATED STATEMENTS OF
CASH FLOWS
 (Unaudited)
 
 Three Months EndedMay 31,
                              2010
                            
                            
                            May 31,
                              2009CASH
      FLOWS FROM OPERATING ACTIVITIES:Net
      income (loss)
                            
                            $
                            (62,255
                            )
                            
                            $
                            1,895Adjustments
      to reconcile net income (loss) to net cash provided by (used in) operating
      activities:Depreciation
                            
                            
                            1,298
                            
                            
                            
                            1,298Non-cash
      compensation
                            
                            
                            12,000
                            
                            
                            
                            -Change
      in operating assets and liabilities:Marketable
      equity securities
                            
                            
                            (47,914
                            )
                            
                            
                            (46,752
                            )Accounts
      payable and accrued expenses
                            
                            
                            (2,830
                            )
                            
                            
                            16,480Due
      in connection with South Korea venture
                            
                            
                            65,000
                            
                            
                            
                            (20,000
                            )Deferred
      revenue
                            
                            
                            -
                            
                            
                            
                            (29,000
                            )Credit
      card obligations
                            
                            
                            (1,832
                            )
                            
                            
                            (5,204
                            )Net
      cash (used in) provided by operating activities
                            
                            
                            (36,533
                            )
                            
                            
                            (81,283
                            )CASH
      FLOWS FROM FINANCING ACTIVITIES:Decrease
      (increase) in due from related parties
                            
                            
                            (4,969
                            )
                            
                            
                            (4,060
                            )Increase
      (decrease) in due to related parties
                            
                            
                            46,255
                            
                            
                            
                            78,441Net
      cash provided by (used in) financing activities
                            
                            
                            41,286
                            
                            
                            
                            74,381NET
      (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS
                            
                            
                            4,753
                            
                            
                            
                            (6,902
                            )CASH
      AND CASH EQUIVALENTS, beginning of period
                            
                            
                            661
                            
                            
                            
                            7,233CASH
      AND CASH EQUIVALENTS, end of period
                            
                            $
                            5,414
                            
                            
                            $
                            331SUPPLEMENTAL
      DISCLOSURES OF CASH FLOW INFORMATION:Interest
      paid
                            
                            $
                            4,309
                            
                            
                            $
                            4,786Income
      tax paid
                            
                            $
                            -
                            
                            
                            $
                            -NON-CASH
      FINANCING ACTIVITY:Transfer
      of amounts due from related partiesto USBL president in partial
      satisfaction of amountdue
      to USBL president
                            
                            $
                            118,783
                            
                            
                            
                            -
  6
 
 UNITED STATES BASKETBALL
LEAGUE, INC. AND SUBSIDIARY
 NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS
 THREE MONTHS ENDED MAY 31,
2010
 (Unaudited)
 
 1.
              Description
      of Business and Basis of
Presentation
 
 United
States Basketball League, Inc. (“USBL”), incorporated in Delaware on May 29,
1984, has operated a professional summer basketball league through franchises
located in the United States.  Its wholly owned subsidiary
Meisenheimer Capital Real Estate Holdings, Inc. (“MCREH”) owns a commercial
building in Milford, Connecticut.USBL cancelled its 2008,
2009, and 2010 seasons.
 
 At May
31, 2010, USBL and MCREH (collectively, the “Company”) had negative working
capital of $1,675,746, a stockholders’ deficiency of $1,485,042, and accumulated
losses of $4,169,025.  This factor, as well as the Company’s reliance
on related parties (see Notes 6 and 8), 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 three-month period ended May
31, 2010 may not necessarily be indicative of the results that may be expected
for the year ending February 28, 2011.  The notes to the consolidated
financial statements should be read in conjunction with the notes to the
consolidated financial statements contained in the Company’s Form 10-K for the
year ended February 28, 2010.
 
 2.
              Summary
      of Significant Accounting
Policies
 
 Principles of
consolidation - The accompanying consolidated financial statements
include the accounts of USBL and MCREH.  All significant intercompany
accounts and transactions have been eliminated.
 
 Fair value
disclosures –The carrying amounts of the Company’s financial
instruments, which consist of cash and cash equivalents, marketable equity
securities, due from related parties, accounts payable and accrued expenses, due
in connection with South Korea venture, credit card obligations, and due to
related parties, approximate their fair value due to their short term nature or
based upon values of comparable instruments.
 
 Cash and cash
equivalents -The Company considers all highly liquid debt instruments
purchased with a maturity of three months or less to be cash
equivalents.
  7
  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 May 31, 2010 and 2009 was $5,308 and $46,753, respectively.
  Inventory -Inventory consists of USBL trading cards, basketball uniforms, sporting
equipment and printed promotional material and is stated at the lower of cost or
market.  Certain inventory was obtained through barter transactions
whereby the USBL granted suppliers various advertising space (print) and airtime
(television) in return for the supplier’s products.  These
transactions were accounted for based upon the fair values of the assets and
services involved in the transactions.
 
 Depreciation
expense -Depreciation is computed using the straight-line method over
the building’s estimated useful life (30 years).
 
 Revenue
recognition -The Company generally uses the accrual method of accounting
in these financial statements.  However, due to the uncertainty of
collecting royalty and franchise fees from the franchisees, the USBL records
these revenues upon receipt of cash consideration paid or the performance of
related services by the franchisee.  Franchise fees earned in
nonmonetary transactions are recorded at the fair value of the franchise granted
or the service received, based on which value is more readily
determinable.  Upon the granting of the franchise, the Company has
performed essentially all material conditions related to the
sale.  The offering price of a new franchise at May 31, 2010 was
$50,000.
 
 The
Company generates advertising revenue from fees for arena 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.
 
 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 $800,000)
attributable to the USBL net operating loss carryforward.
 
 As of
February 28, 2010, USBL had a net operating loss carryforward of approximately
$2,000,000 available to offset future taxable income.  The
carryforward expires in varying amounts through year ended February 28,
2030.
 
 Estimates
– The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting
period.  Actual results could differ from those
estimates.
 
 Advertising
costs - Advertising costs are expensed as incurred.
  8
  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 2010 and 2009 and none
are outstanding at May 31, 2010.
  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 months ended May 31, 2010 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’
equity.  Comprehensive income (loss) was equivalent to net income
(loss) for all periods presented.
 
 Referee
fees – The Company’s principal obligation under the franchise agreements
is to provide referees for the league.
 
 3.
              Due from related
      parties
 
 Due from
related parties consist of:
 
 May 31,
                    
                    
                    February 28,2010
                    
                    
                    2010(Unaudited)USBL
      receivable from Meisenheimer Capital, Inc. (“MCI”) controlling stockholder
      of USBL, non-interest bearing, due on demand
                    
                    $
                    -
                    
                    
                    $
                    111,814USBL
      receivable from Synercom, Inc. (“Synercom”), a corporation controlled by
      the two officers of USBL, non-interest bearing, due on
    demand
                    
                    
                    -
                    
                    
                    
                    2,000Total
                    
                    $
                    -
                    
                    
                    $
                    113,814
 
 Effective
May 31, 2010, the president of USBL was transferred the then $118,783 balance
due from related parties in satisfaction of $118,783 loans payable due to him
from the Company.
  9
  4.
              Property,
      Net
 
 Property,
net, consists of:
 
 May 31,
                        
                        
                        February 28,2010
                        
                        
                        2010(Unaudited)Land
                        
                        $
                        121,253
                        
                        
                        $
                        121,253Building
                        
                        
                        155,747
                        
                        
                        
                        155,747Total
                        
                        
                        277,000
                        
                        
                        
                        277,000Less
      accumulated depreciation
                        
                        
                        (36,296
                        )
                        
                        
                        (34,998
                        )Property,
      net
                        
                        $
                        240,704
                        
                        
                        $
                        242,002
 
 Since
June 2008, MCREH has had no tenants at the property.
 
 5.
              Credit Card
      Obligations
 
 USBL uses
credit cards of related parties to pay for certain travel and promotion
expenses.  USBL has agreed to pay the credit card balances, including
related interest.  The credit card obligations bear interest at rates
ranging up to 30% and are due in monthly installments of principal and
interest.
 
 6.
              Due to Related
      Parties
 
 Due to
related parties consists of:
 
 May
      31,
                            2010
                          
                          
                          February
      28,
                            2010(Unaudited)USBL
      loans payable to Spectrum Associates, Inc. (“Spectrum”), a corporation
      controlled by the two officers of USBL, interest at 6%, due on
      demand
                          
                          $
                          973,957
                          
                          
                          $
                          911,957USBL
      loans payable to the two officers of USBL, interest at 6%, due on
      demand
                          
                          
                          331,255
                          
                          
                          
                          465,783USBL
      loan payable to Genvest, LLC (“Genvest”), an organization controlled by
      the two officers of USBL
                          
                          
                          20,000
                          
                          
                          
                          20,000USBL
      loans to Daniel T. Meisenheimer, Jr. Trust, a trust controlled by the two
      officers of USBL, non-interest bearing, due on demand
                          
                          
                          44,100
                          
                          
                          
                          44,100MCREH
      note payable to the two officers of USBL, interest at 6%, due December 31,
      2011
                          
                          
                          50,000
                          
                          
                          
                          50,000MCREH
      note payable to Spectrum, interest at 7%, due on demand, secured by MCREH
      property
                          
                          
                          25,000
                          
                          
                          
                          25,000MCREH
      note payable to president of USBL, interest at 7%, due on demand, secured
      by MCREH property
                          
                          
                          45,000
                          
                          
                          
                          45,000MCREH
      note payable to the two officers of USBL, interest at 7%, due on demand,
      secured by MCREH property
                          
                          
                          70,000
                          
                          
                          
                          70,000MCREH
      note payable to the two officers of USBL, interest at 4%, due October 22,
      2009, secured by MCREH property
                          
                          
                          70,000
                          
                          
                          
                          70,000MCREH
      loan payable to president of USBL, non-interest bearing, due on
      demand
                          
                          
                          4,000
                          
                          
                          
                          4,000Total
                          
                          
                          1,633,312
                          
                          
                          
                          1,705,840Less
      current portion
                          
                          
                          (1,583,312
                          )
                          
                          
                          (1,655,840
                          )Non
      current portion
                          
                          $
                          50,000
                          
                          
                          $
                          50,000
  10
  For the
three months ended May 31, 2010 and 2009, interest due under the USBL loans were
waived by the respective lenders.
 
 At May
31, 2010, accounts payable and accrued expenses included accrued interest
payable on MCREH notes payable to related parties totaling
$39,887.
 
 7.
              Stockholders’
      Equity
 
 Each
share of common stock has one vote.  Each share of preferred stock has
five votes, is entitled to a 2% non-cumulative annual dividend, and is
convertible at any time into one share of common stock.
 
 On May 6,
2010, the Company issued 30,000 restricted shares of Company common stock
(valued at $12,000) to a consultant for services rendered.
 
 8.
              Related
      Party Transactions
 
 In the
three months ended May 31, 2010 and 2009, USBL included in other operating
expenses, rent to Genvest, LLC of $3,000 and $3,000, respectively.
 
 9.
              Commitments and
      Contingencies
 
 Occupancy
Agreement
 
 In
September 2007, the Company moved its office from the MCREH building to a
building owned by Genvest LLC, an organization controlled by the two officers of
USBL.  Improvements to the Company’s space 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 May 31, 2010,
accounts payable and accrued expenses included accrued rent payable to Genvest
totaling $27,000.
  Cancellation of 2008, 2009,
and 2010 Seasons
 
 USBL
cancelled its 2008, 2009, and 2010 seasons.  These cancellations may
result in claims and legal actions from franchisees.
 
 Litigation
 
 On June
30, 2008, a legal action was commenced by Albany Patroons, Inc., a franchisee of
USBL, against the Company in the United States District Court for the Northern
District of New York.  The complaint alleges breach of contract by
USBL due to the suspension of the 2008 season and seeks total damages of
$285,000.  On September 5, 2008, the Company answered the complaint
and asserted a counter-claim against plaintiff for breach of franchise agreement
and/or memorandum of agreement.  This action was discontinued and the
parties agreed to proceed with binding arbitration.  The Company
believes that it has a meritorious defense to the action and does not expect the
ultimate resolution of this matter to have a material adverse effect on its
consolidated financial condition or results of operations.
  11
  South Korea
Venture
 
 In August
2008, the Company received $170,667 from a third party to investigate business
opportunities with the South Korean Basketball League and with prospective South
Korea sponsors.  Pursuant to the related verbal agreement, USBL paid a
total of $160,000 to a consulting firm approved by the third party and
recognized the remaining $10,667 as consulting fees revenue in the three months
ended February 28, 2009.
 
 In
January 2009, the Company received an additional $256,000 from the third
party.  Under the related verbal agreement, USBL paid a total of
$240,000 ($220,000 in fiscal 2010, $20,000 in fiscal 2011) to the consulting
firm approved by the third party and recognized the remaining $16,000 as
consulting fees revenue in the year ended February 28, 2010.
 
 In April
and May 2010, the Company received an additional $157,667 relating to the South
Korea venture and paid a total of $96,667 to the consulting firm approved by the
third party.
 
 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 MAY 31, 2010 AS COMPARED TO MAY 31, 2009
 
 Revenues decreased to $0 for the first
quarter of 2010 from $4,000 in the first quarter of 2009.  $0 of the
2010 and 2009 first quarter revenues, were derived from related
parties.
 
 Operating expenses increased from
$40,178 for the three months ended May 31, 2009 to $59,379 for the three months
ended May 31, 2010.  The increase in operating expenses was primarily
due to the issuance in May 2010 of 30,000 shares of company common stock (valued
at $12,000) to a consultant for services rendered.
 
 Interest
expense decreased to $8,209 in 2010, as compared to $8,686 in 2009.
  12
  Net loss for the three months ended May
31, 2010 was $62,255 as compared to net income of $1,895 for the three months
ended May 31, 2009.  This decrease is due mainly to the $41,445
decrease in net gain from marketable securities (from $46,753 in 2009 to $5,308
in 2010) and the $19,201 increase in operating expenses described
above.
 
 LIQUIDITY
AND CAPITAL RESOURCES
 
 The Company had cash of $5,414 and a
working capital deficit of $1,675,746 at May 31, 2010.  The Company's
statement of cash flows reflects cash used in operating activities of $36,533,
which results primarily from the net loss of $62,255, and an increase in
marketable securities of $47,913 offset by the $65,000 increase in the amount
due in connection with the South Korea venture. Net cash provided by financing
activities was $41,286 in 2010 compared to $74,381 in 2009.
 
 The Company's ability to generate cash
flow from franchise royalty fees is dependent on scheduling of a 2011 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 2011 season within the next 12 months it will
again have to rely on affiliates for loans and revenues to assist it in meeting
its current obligations.  With respect to long term needs, the Company
recognizes that in order for the League and USBL to be successful, USBL has to
develop a meaningful sales and promotional program. This will require an
investment of additional capital.  Given the Company's current
financial condition, the ability of the Company to raise additional capital
other than from affiliates is questionable.  At the current time the
Company has no definitive plan as to how to raise additional
capital.
 
 ITEM 3.
              QUANTITATIVE AND QUALITATIVE
      DISCLOSURES ABOUT MARKET
RISK.
 
 Not
      applicable.
  ITEM
      4T.
                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 May
31, 2010 and, based on such evaluation, our principal executive and financial
officers have concluded that these controls and procedures are
effective.  There were no significant changes in our internal control
over financial reporting that occurred during the quarter ended May 31, 2010
that has materially affected, or is reasonably likely to materially affect, our
internal control over financial reporting.
 
 Disclosure controls and procedures are
our controls and other procedures that are designed to ensure that information
required to be disclosed by us in the reports that we file or submit under the
Exchange Act is recorded, processed, summarized and reported, within the time
periods specified in the Securities and Exchange Commission’s rules and
forms.  Disclosure controls and procedures include, without
limitation, controls and procedures designed to ensure that information required
to be disclosed by us in the reports that we file under the Exchange Act is
accumulated and communicated to our management, including our principal
executive and financial officers, as appropriate to allow timely decisions
regarding required disclosures.
  13
  PART
II
 OTHER
INFORMATION
 
 Item
2.                     Unregistered
Sales of Equity Securities and Use of Proceeds.
 
 On May 6, 2010 the Company issued
30,000 restricted shares of Company common stock (valued at $12,000) to a
consultant for services rendered in reliance on Section 4(2) of the Securities
Act of 1933.
 
 Item
6.                     Exhibits.
 
 Exhibit No.:
                    
                    Description:31.1
                    
                    Certification
      of principal executive officer31.2
                    
                    Certification
      of principal financial officer32
                    
                    Certification
      pursuant to 18 U.S.C. Section 1350 adopted pursuant to Section 906 of the
      Sarbanes-Oxley Act of
2002
  14
  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 20th day of
July, 2010.
 
 UNITED
      STATES BASKETBALL LEAGUE,INC.By:
                  /s/ Daniel T. Meisenheimer
    IIIDaniel
      T. Meisenheimer IIIChairman
      and PresidentBy:
                  /s/ Richard C.
  MeisenheimerRichard
      C. MeisenheimerChief Financial Officer andDirector
 
 Pursuant
to the requirement of the Securities Exchange Act of 1934, this report has been
signed below by the following persons on behalf of the registrant and in the
capacities and on the dates indicated.
 
 Name
                          
                          Capacity
                          
                          Date/s/ Daniel T. Meisenheimer
    IIIDaniel
      T. Meisenheimer III
                          
                          Director
      and President
                            (principal
      executive officer)
                          
                          July
      20, 2010/s/ Richard C. MeisenheimerRichard
      C. Meisenheimer
                          
                          Director
      and Chief Financial
                            Officer  (principal
      financial and
                            accounting
      officer)
                          
                          July
      20,
2010
  15
  EXHIBIT
INDEX
 
 Exhibit No.:
                  
                  Description:31.1
                  
                  Certification
      of principal executive officer31.2
                  
                  Certification
      of principal financial officer32
                  
                  Certification
      pursuant to 18 U.S.C. Section 1350 adopted pursuant to Section 906 of the
      Sarbanes-Oxley Act of
2002
  16