UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549


                                   FORM 10-QSB

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

                For the quarterly period ended November 30, 2005


                          JACOBS FINANCIAL GROUP, INC.
                          ----------------------------
             (Exact name of Registrant as specified in its charter)

<TABLE>
<CAPTION>
<S>                                      <C>                                   <C>
======================================== ===================================== =====================================
               Delaware                                0-21210                               84-0922335
---------------------------------------- ------------------------------------- -------------------------------------
    (State or other jurisdiction of             (Commission File Number)          (IRS Employer Identification No.)
            incorporation)
======================================== ===================================== =====================================
</TABLE>


               300 Summers Street, Suite 970, Charleston, WV 25301
                       ----------------------------------
               (Address of principal executive offices) (Zip Code)


       Registrant's telephone number, including area code: (304) 343-8171
                                                           --------------

                                   NELX, INC.
                   (Former Name, if Changed Since Last Report)
                   -------------------------------------------

State the number of shares outstanding of each of the issuer's classes of common
equity, as of the latest practicable date:

                138,927,081 common shares as of January 13, 2006


<PAGE>


                         PART I-- FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

The following financial statements are included herein in response to Item 1:


                                                                           Page
                                                                           ----
        Financial Statements (Unaudited)
        --------------------------------
        Consolidated Condensed Balance Sheets                               F-1
        Consolidated Condensed Statements of Operations                     F-2
        Consolidated Condensed Statements of Cash Flows                     F-3
        Notes to Consolidated Condensed Financial Statements                F-4






















                                       1
<PAGE>
JACOBS FINANCIAL GROUP, INC.
CONSOLIDATED CONDENSED BALANCE SHEETS (UNAUDITED)
<TABLE>
<CAPTION>

                                                                                          November 30, 2005    May 31, 2005
                                                                                          -----------------    ------------
ASSETS

CURRENT ASSETS
<S>                                                                                       <C>                  <C>
    Cash and cash equivalents                                                             $         49,176     $        437
    Receivables                                                                                     34,866           28,286
    Prepaid and other                                                                                9,808            7,560
                                                                                          -----------------    ------------
      Total current assets                                                                          93,850           36,283


FURNITURE AND EQUIPMENT,
    net of accumulated depreciation of $96,375 and $93,425, respectively                             7,709           10,659

Deposits                                                                                            40,000           40,000
                                                                                          -----------------    ------------

      Total assets                                                                        $        141,559     $     86,942
                                                                                          =================    ============


LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)

CURRENT LIABILITIES
    Current maturities of notes payable                                                   $      1,439,300     $  1,419,300
    Current maturities of notes payable - related parties                                        1,809,685        1,605,715
    Accounts payable                                                                               300,275          271,295
    Accrued interest payable                                                                       168,547          121,632
    Accrued expenses                                                                               926,357          799,376
                                                                                          -----------------    ------------
      Total current liabilities                                                                  4,644,164        4,217,318

LONG-TERM LIABILITIES
    Notes payable, less current maturities                                                         116,000                -
    Notes payable, less current maturities - related parties                                       320,602           95,702
                                                                                          -----------------    ------------
      Total long-term liabilities                                                                  436,602           95,702

      Total liabilities                                                                          5,080,766        4,313,020
                                                                                          -----------------    ------------

STOCKHOLDERS' EQUITY (DEFICIT)
    Common stock, $.0001 par value par value; 500 million shares
      authorized: 122,663,860 shares issued and outstanding                                         12,266           12,266
    Additional paid-in capital                                                                   1,115,138        1,115,138
    Accumulated deficit                                                                         (6,066,611)      (5,353,482)
                                                                                          -----------------    ------------
      Total stockholders' equity (deficit)                                                      (4,939,207)      (4,226,078)
                                                                                          -----------------    ------------

      Total liabilities and stockholders' equity (deficit)                                $        141,559     $     86,942
                                                                                          =================    ============

</TABLE>

                            See accompanying notes.

                                      F-1
<PAGE>
JACOBS FINANCIAL GROUP, INC.
CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS (UNAUDITED)
<TABLE>
<CAPTION>
                                                        Three Months Ended November 30,     Six Months Ended November 30,
                                                      ----------------------------------------------------------------------
                                                           2005              2004              2005              2004
                                                      ----------------  ---------------   ---------------   ----------------

<S>                                                   <C>               <C>               <C>               <C>
REVENUE                                               $        53,872    $      71,336     $     113,499     $      145,628
                                                      ----------------  ---------------   ---------------   ----------------

EXPENSES
    General and administrative                                305,192          220,279           539,548            394,774
    Mutual fund costs                                          43,186           36,146            79,633             76,432
    Interest                                                  119,874           70,087           204,497            164,025
    Depreciation and amortization                               1,475            1,387             2,950              2,774
                                                      ----------------  ---------------   ---------------   ----------------

      Total expenses                                          469,727          327,899           826,628            638,005
                                                      ----------------  ---------------   ---------------   ----------------

OTHER INCOME                                                                     5,686                                9,904
                                                                        ---------------                     ----------------

NET INCOME (LOSS)                                     $      (415,855)  $     (250,877)   $     (713,129)   $      (482,473)
                                                      ================  ===============   ===============   ================


BASIC AND DILUTIVE NET INCOME (LOSS) PER SHARE:

    NET INCOME (LOSS) PER SHARE                       $            -    $            -     $       (0.01)   $             -
                                                      ================  ===============   ===============   ================


    WEIGHTED AVERAGE SHARES OUTSTANDING                  122,663,860       121,785,360       122,663,860        121,785,360
                                                      ================  ===============   ===============   ================

</TABLE>








                            See accompanying notes.

                                      F-2
<PAGE>

JACOBS FINANCIAL GROUP, INC.
CONSOLIDATED CONDENSED STATEMENT OF CASH FLOWS (UNAUDITED)
<TABLE>
<CAPTION>
                                                        Three Months Ended November 30,     Six Months Ended November 30,
                                                      ----------------------------------------------------------------------
                                                           2005              2004              2005              2004
                                                      ----------------  ---------------   ---------------   ----------------

CASH FLOWS FROM OPERATING ACTIVITIES
<S>                                                   <C>               <C>               <C>               <C>
    Net income (loss)                                 $      (415,855)  $     (250,877)   $     (713,129)   $      (482,473)
    Adjustments to reconcile net income (loss) to
      net cash provided by operating activities
        Depreciation and amortization                           1,475            1,387             2,950              2,774
        Stock issued as additional consideration for
          issuance of debt                                          -           26,896                 -             26,896
        Changes in operating assets and liabilities:
          Receivables                                            (564)          (1,328)           (6,580)             1,188
          Prepaid and other current assets                        965              368            (2,248)             2,475
          Accounts payable                                    (48,569)           6,610            28,980             58,037
          Accrued expenses                                    111,810           72,114           194,636            165,304
                                                      ----------------  ---------------   ---------------   ----------------
      Net cash flows from (used in ) operating activities    (350,738)        (144,830)         (495,391)          (225,799)
                                                      ----------------  ---------------   ---------------   ----------------

CASH FLOWS FROM INVESTING ACTIVITIES
    Purchase furniture and equipment                                -           (3,049)                -             (3,049)
    Deposit                                                         -          (10,000)                -            (10,000)
                                                      ----------------  ---------------   ---------------   ----------------
      Net cash flows (used in ) investing activities                -          (10,000)                -            (13,049)
                                                      ----------------  ---------------   ---------------   ----------------

CASH FLOWS FROM FINANCING ACTIVITIES
    Proceeds from related party debt                          515,450          197,138           838,020            305,734
    Repayment of related party debt                          (277,783)        (183,788)         (429,890)          (340,804)
    Proceeds from debt obligations                            273,500          183,850           338,500            327,950
    Repayment of debt obligations                            (112,500)         (39,250)         (202,500)           (54,350)
                                                      ----------------  ---------------   ---------------   ----------------

      Net cash flows from (used in ) financing activities     398,667          157,950           544,130            238,530
                                                      ----------------  ---------------   ---------------   ----------------

NET INCREASE (DECREASE) IN CASH                                47,929          250,948            48,739            479,381

CASH AND EQUIVALENTS, BEGINNING OF PERIOD                       1,247              232               437                621
                                                      ----------------  ---------------   ---------------   ----------------

CASH AND EQUIVALENTS, END OF PERIOD                   $        49,176   $      251,180    $       49,176    $       480,002
                                                      ================  ===============   ===============   ================


SUPPLEMENTAL DISCLOSURES:
    Interest paid                                     $       100,484   $       54,077    $      157,582    $       102,805
    Income taxes paid                                               -                -                 -                  -
    Non-cash investing and financing transactions:
      Additional consideration paid for issuance of debt            -           26,896                 -             26,896
      Accrued interest converted to notes payable              20,740                -            20,740                  -

</TABLE>









                            See accompanying notes.

                                      F-3
<PAGE>

JACOBS FINANCIAL GROUP, INC.
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS

NOTE A - BASIS OF PRESENTATION

The accompanying  unaudited financial  statements are of Jacobs Financial Group,
Inc. (the "Company" or "JFG").  References  herein to the Company  include NELX,
Inc.,  of which the JFG is successor by  reincorporation  merger and name change
effected on or about December 29, 2005. These financial statements were prepared
in  accordance  with  generally  accepted  accounting   principles  for  interim
financial information and Article 10 of Regulation S-X. Accordingly, they do not
include all of the  information  and  footnotes  required by generally  accepted
accounting  principles  for  complete  financial  statements.  In the opinion of
management,  all adjustments considered necessary for a fair presentation of the
results of operations  and financial  condition for the periods  presented  have
been included. Such adjustments are of a normal recurring nature. The results of
operations  for the three and six month periods ended November 30, 2005, are not
necessarily indicative of the results of operations that can be expected for the
fiscal year ending May 31, 2006. For further information, refer to the Company's
audited  financial  statements and footnotes thereto included in Item 7. of Form
10-KSB filed on September 12, 2005.

NOTE B - NEW ACCOUNTING PRONOUNCEMENTS

In  December  2004,  the FASB  issued a  revision  to FASB  Statement  No.  123,
Accounting for Stock Based Compensation.  This Statement  supersedes APB Opinion
No. 25, Accounting for Stock Issued to Employees, and its related implementation
guidance.   This  Statement   establishes   standards  for  the  accounting  for
transactions  in which an entity  exchanges its equity  instruments for goods or
services.  It also addresses  transactions in which an entity incurs liabilities
in  exchange  for  goods or  services  that are  based on the fair  value of the
entity's  equity  instruments  or that may be settled by the  issuance  of those
equity   instruments.   This  Statement  focuses  primarily  on  accounting  for
transactions in which an entity obtains employee services in share-based payment
transactions.  This  Statement  does not  change  the  accounting  guidance  for
share-based  payment  transactions with parties other than employees provided in
Statement 123 as originally  issued and EITF Issue No.  96-18,  "Accounting  for
Equity Instruments That Are Issued to Other Than Employees for Acquiring,  or in
Conjunction  with Selling,  Goods or Services."  This Statement does not address
the accounting for employee share  ownership  plans,  which are subject to AICPA
Statement of Position 93-6,  Employers'  Accounting for Employee Stock Ownership
Plans.

A nonpublic  entity  will  measure  the cost of  employee  services  received in
exchange for an award of equity  instruments  based on the grant-date fair value
of those instruments, except in certain circumstances.

A public entity will initially measure the cost of employee services received in
exchange for an award of liability  instruments based on its current fair value;
the fair value of that award will be re-measured  subsequently at each reporting
date through the  settlement  date.  Changes in fair value during the  requisite
service  period will be  recognized  as  compensation  cost over that period.  A
nonpublic  entity may elect to measure its liability  awards at their  intrinsic
value through the date of settlement.

                                       F-4
<PAGE>

The grant-date fair value of employee share options and similar instruments will
be  estimated   using  the   option-pricing   models  adjusted  for  the  unique
characteristics  of those instruments  (unless  observable market prices for the
same or similar instruments are available).

Excess tax  benefits,  as defined by this  Statement,  will be  recognized as an
addition  to  paid-in-capital.  Cash  retained  as a result of those  excess tax
benefits  will be  presented in the  statement  of cash flows as financing  cash
inflows.  The  write-off  of  deferred  tax assets  relating to  unrealized  tax
benefits  associated  with  recognized  compensation  cost will be recognized as
income tax expense  unless there are excess tax benefits  from  previous  awards
remaining in paid-in capital to which it can be offset.

The notes to the financial statements of both public and nonpublic entities will
disclose information to assist users of financial  information to understand the
nature of share-based payment transactions and the effects of those transactions
on the financial statements.

The  effective  date for  public  entities  that do not  file as small  business
issuers  will be as of the  beginning of the first  interim or annual  reporting
period that begins after June 15, 2005.  For public  entities that file as small
business  issuers and nonpublic  entities the  effective  date will be as of the
beginning  of the first  interim or annual  reporting  period that begins  after
December  15,  2005.  Management  intends to comply with this  Statement  at the
scheduled effective date for the relevant financial statements of the Company.

In June 2005,  the FASB  issued  FASB Staff  Position  ("FSP")  FAS 115-1,  "The
Meaning  of Other  Than  Temporary  Impairment  and Its  Application  to Certain
Investments",  which clarifies that an investor  should  recognize an impairment
loss no later than when the impairment is deemed other-than-temporary, even if a
decision  to sell  has not  been  made.  FSP FAS  115-1  will be  effective  for
other-than-temporary  impairment  analysis  conducted in periods beginning after
September  15,  2005.  The Company does not  anticipate  that FSP FAS 115-1 will
materially  impact the Company's  financial  condition or results of operations.
The  FASB  recently  said  that no  further  guidance  on  other-than  temporary
impairment would be forthcoming.

NOTE C - NOTES PAYABLE

At November 30, 2005,  related party borrowings  amounted to $2,130,287.  During
the six month period ended November 30, 2005,  borrowings  from related  parties
amounted  to  $492,570  and  repayments  of  principal  on  such  related  party
borrowings amounted to $226,066.  Included in related party borrowings are three
notes payable totaling  160,000 that are due on demand,  carry a stated interest
rate of 10% per annum and are  convertible  into  shares of the  Company  during
their term at $.10 (ten cents) per share (or lower price implicit in a qualified
financing).  Related party  borrowings also include  advances from the Company's
larges  shareholder  and chief  executive  office of $345,450 and  repayments of
these advances of $203,824.

During the six-month  period ended  November 30, 2005,  $338,500 was borrowed by
the Company from several  unrelated  parties.  Included in these  borrowings are
notes totaling  $157,500 that are due on demand and carry a stated interest rate
of 12%. The remainder of the notes carry a stated interest rate of 10% per annum
and are  convertible  into shares of the Company  during their term at $.10 (ten
cents)  per  share (or lower  price  implicit  in a  qualified  financing).  The
resulting  unpaid  balance of notes  payable to  unrelated  parties  amounted to
$1,555,300 as of November 30, 2005.

                                       F-5
<PAGE>

FOOTNOTE D - SEVERANCE ARRANGEMENT

On October 12, 2005, the board of directors approved a severance arrangement for
a long-time  employee of the Company  terminated  by reason of  disability.  The
arrangement  included (i) continuing  salary and benefits through May, 2006, and
(ii) an award of 1,000,000 options to acquire common shares at an exercise price
of $.04 per share,  contingent upon  shareholder  approval of an option plan. As
determined by management,  the estimated value of continuing salary and benefits
was approximately  $30,000, and the estimated value of the options to be awarded
was approximately $20,000.


NOTE E - SUBSEQUENT EVENTS

On  December  8,  2005,   the   shareholders   of  the  Company   approved   the
reincorporation  merger of the Company for the purpose of amending  the articles
of incorporation and bylaws of the Company and moving the state of incorporation
of the Company from Kansas to Delaware.  This transaction was accomplished on or
about December 29, 2005.

Pursuant to regulatory  approvals of the Company's  acquisition of West Virginia
Fire and Casualty Company (WVFCC),  the Company completed a private placement of
preferred  stock and warrants on December  30, 2005,  for a total issue price of
$3,335,000  and, with $2,900,000 of the proceeds  thereof,  purchased all of the
outstanding  stock  of  WVFCC.  In  addition,  approximately  $3,600,000  of the
Company's  outstanding  indebtedness  was converted into the same combination of
securities  purchased  in the  private  placement.  On January  3,  2006,  these
transactions were reported on Form 8K.

In the first week of January 2006, the Company issued  16,263,221  common shares
upon  the  exercise  of  certain  of  the  warrants   issued  in  the  financing
accomplished on December 30, 2005.














                                       F-6



<PAGE>

ITEM 2. MANAGEMENT'S  DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
        OF OPERATIONS

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

Our discussion and analysis of our financial condition and results of operations
are based upon our consolidated  financial statements,  which have been prepared
in accordance with accounting principles generally accepted in the United States
of America.  The preparation of these financial  statements  requires us to make
estimates and judgments that affect the reported amounts of assets, liabilities,
revenues  and  expenses,   and  related  disclosure  of  contingent  assets  and
liabilities.  On an on-going basis,  we evaluate our estimates,  including those
related to stock-based  compensation,  allowance for uncollectible  receivables,
impairment  and income taxes.  We base our  estimates on historical  experience,
current and  anticipated  business  conditions,  the  condition of the financial
markets,  and various other assumptions that are believed to be reasonable under
existing conditions. Actual results may differ from these estimates.

We believe  that the  following  critical  accounting  policies  affect our more
significant  judgments and estimates used in the preparation of our consolidated
financial statements:

ALLOWANCE FOR  UNCOLLECTIBLE  RECEIVABLES.  The majority of our fee revenues are
generated  by  services  provided to  companies  throughout  the Eastern  United
States.  We evaluate the need for a reserve for the amount of these  receivables
that may be uncollectible,  based upon historical  collection  activity adjusted
for current  conditions.  Based on this  evaluation,  management  believes  that
substantially  all accounts  receivable are  collectible,  and therefore has not
established an allowance for estimated uncollectible accounts.

IMPAIRMENT.  We evaluate  long-lived assets,  including our undeveloped  mineral
spring  lease,  for  impairment  annually,  or  whenever  events or  changes  in
circumstances indicate that the assets may not be recoverable. The impairment is
measured  by  calculating  the  estimated  future  cash  flows  expected  to  be
generated,  and comparing this amount to the carrying  value of the asset.  Cash
flows are calculated utilizing forecasts and projections for the estimated lives
of the assets being analyzed. Should actual results differ from those forecasted
and  projected,  we are subject to future  impairment  charges  related to these
facilities.

INCOME TAXES.  We currently have net operating loss ("NOL")  carryforwards  that
can be utilized  to offset  future  income for  federal and state tax  purposes.
These NOLs generate a significant deferred tax asset.  However, we have recorded
a valuation allowance against this deferred tax asset as we have determined that
it is more likely  than not that we will not be able to fully  utilize the NOLs.
Should our assumptions  regarding the  utilization of these NOLs change,  we may
reduce  some or all of this  valuation  allowance,  which  would  result  in the
recording of an income tax benefit.

                                       2
<PAGE>

STOCK-BASED  COMPENSATION.  We have adopted the fair value method of  accounting
for  stock-based  compensation  recommended  by SFAS  No.  123,  Accounting  for
Stock-based Compensation.

The fair value of stock  options is  estimated at the grant date using the Black
Scholes  Option  Pricing  Model.  This model  requires  the input of a number of
assumptions,   including   expected   dividend  yields,   expected  stock  price
volatility,  risk-free  interest  rates,  and an expected  life of the  options.
Although the assumptions used reflect  management's best estimate,  they involve
inherent  uncertainties based on market conditions generally outside the control
of our company.  If future market  conditions are different than the assumptions
used, stock-based compensation expense could be significantly different.

CONTRACTUAL OBLIGATIONS AND COMMERCIAL COMMITMENTS

The Company has $3,685,587 of long-term debt, including current installments and
excluding  fair value  adjustments,  outstanding  at November 30,  2005.  Future
payments required under these and other obligations are as follows:
<TABLE>
<CAPTION>
<S>                                        <C>           <C>         <C>        <C>        <C>       <C>             <C>
------------------------------------------ ------------- ----------- ---------- ---------- --------- --------------- -------------
Certain Contractual Obligations              Current        2006        2007       2008       2009      Thereafter      Total
------------------------------------------ ------------- ----------- ---------- ---------- --------- --------------- -------------
Long-term debt, including current           3,248,985     365,166     18,317      39,248     11,789       2,082          3,685,587
installments
------------------------------------------ ------------- ----------- ---------- ---------- --------- --------------- -------------
Operating lease commitments                     7,326       6,851      6,851       6,852      6,852           0             27,881
------------------------------------------ ------------- ----------- ---------- ---------- --------- --------------- -------------
</TABLE>

RESULTS OF OPERATIONS FOR THE THREE MONTH PERIOD ENDED NOVEMBER 30, 2005

The Company  experienced a loss for the  three-month  period ended  November 30,
2005 in the amount of  $415,855  as  compared  with a loss of  $250,877  for the
corresponding  period ended  November  30, 2004,  and a loss of $297,274 for the
previous quarter ended August 31, 2005.

Revenues  for the  three-month  period  ended  November 30, 2005 were $53,872 as
compared  to $71,336 for the  corresponding  period  ended  November  30,  2004,
representing a 24.5%  decrease.  As compared to the previous  quarter,  revenues
were down by approximately $5,800 (from $59,627).

Quarterly  revenues from the investment  management segment were $53,946 for the
three-month period ended November 30, 2005 as compared with $67,861 for the same
period  in  the  previous  year,  a  decrease  of  $13,916.  For  the  preceding
three-month period ended August 31, 2005, such revenues amounted to $50,116, for
an increase of $3,756. As investment advisory fees are based on the market value
of assets under  management,  some  fluctuation will occur due to overall market
conditions,  especially during periods of extreme  adjustments such as have been
recently  experienced.  For the most part,  however,  such  revenues will remain
relatively  constant from quarter to quarter with any large  fluctuations  being
attributable to the growth or loss of assets under  management.  The decrease in
revenues from the  corresponding  quarter of the previous year is  substantially
attributable to the loss of certain managed  collateral  accounts resulting from
the expiration or  non-renewal  of the surety bonds that such accounts  secured.
The lack of  availability  of  bonding  in the  marketplace  has  prevented  the
replacement of this business.

                                       3
<PAGE>

Quarterly  net revenues from the surety  segment were $(74) for the  three-month
period ended November 30, 2005 versus $3,475 for the same period in the previous
year, a decrease of $3,549.  For the preceding  three-month  period ended August
31, 2005, such revenues  amounted to $9,511,  for a decrease of $9,585.  Revenue
for this segment of the business is more  "seasonable"  from quarter to quarter,
due merely to the  timing of the  issuance  or  renewal  of bonds  placed by the
Company.  Due to the  nature  of  surety  bonds,  fluctuations  in  revenue  for
comparable periods largely reflect the overall growth or loss of business.

Operating  expenses  for the  three-month  period  ended  November 30, 2005 were
$469,727 as compared with $327,899 for the comparable  period ended November 30,
2004,  an increase of $141,828.  Such  increase was largely  attributable  to an
increase in interest  expense of $49,787 and an increase in  professional  fees,
including legal and accounting and other consulting fees of $85,806, all largely
attributable  to matters  relating to the Company's  proposed  acquisition of an
insurance  company  and the  regulatory  approvals  necessary  thereto.  For the
preceding  three-month period ended August 31, 2005, operating expenses amounted
to $356,901,  resulting in an increase of  $112,826.  This  increase was largely
attributable  in part to the  Company's  agreement  to purchase  the stock of an
insurance company and application for regulatory approval of such acquisition.

Jacobs & Company  ("Jacobs"),  a wholly owned subsidiary of the Company,  is the
investment  advisor to the Jacobs & Company Mutual Fund (the "Fund").  While the
Fund is responsible for its own operating expenses,  Jacobs, as the advisor, has
agreed to limit the Fund's aggregate  annual operating  expenses to 2.00% of the
average net assets.  Under this expense  limitation  agreement,  Jacobs absorbed
approximately  $20,000 of the Fund's  operating  expenses during the three-month
period  ended  November 30, 2005  compared  with  approximately  $28,022 for the
previous three months.  As the Fund grows in size (of assets under  management),
expenses (in excess of the 2% level) absorbed by Jacobs will decrease until such
time as the Fund  reaches  sufficient  size to support  its  on-going  operating
costs. In contrast, as the Fund grows in size, revenues from investment advisory
fees will increase. Additionally, should the Fund's operating expense ratio fall
below the 2.00% level,  the costs absorbed by the Company are reimbursable to it
for a period of up to five years. For the three-month  period ended November 30,
2005, the Fund's  investment  advisory fees amounted to $23,186 as compared with
$8,426 for the previous  quarter,  the difference being largely  attributable to
market   fluctuations  in  the  value  of  the  assets  of  the  Fund.  For  the
corresponding  period ended  November 30, 2004, the Fund's  investment  advisory
fees amounted to $20,023, for a decrease of $3,985.

As  compared  with the  previous  quarter,  general and  administrative  expense
increased by  approximately  $70,837 from  $234,355 for the  three-month  period
ended August 31, 2005 to $305,192 for the three-month  period ended November 30,
2005.  This  increase is  primarily  attributable  to increased  general  office
expenses  incurred,  as well as an  increase  in  professional  fees  during the
period.  For the  corresponding  period ended  November  30,  2004,  general and
administrative expenses amounted to $220,279, for an increase of $84,913.

Interest expense for the three-month period ended November 30, 2005 was $119,874
as compared with $70,087 for the  corresponding  period ended November 30, 2004.
For the preceding  three-month period interest expense amounted to $84,623,  for
an increase of $35,251. The increase in interest expense is largely attributable
to the increase in the Company's  short and long-term  indebtedness  incurred to
fund ongoing operations.

                                       4
<PAGE>

RESULTS OF OPERATIONS FOR THE SIX MONTH PERIOD ENDED NOVEMBER 30, 2005

For the six-month period ended November 30, 2005, the Company experienced a loss
of $713,129 as compared  with a loss of $482,473  for the  corresponding  period
ended November 30, 2004.

Revenues for the six-month  period ended November 30, 2005 were $113,499  versus
$145,628 for the  corresponding  period ended  November 30, 2004  representing a
22.0% decrease.

Revenues from the investment  management segment were $104,062 for the six-month
period ended  November 30, 2005 as compared with $136,467 for the same period in
the previous year, a decrease of $32,405.  As investment advisory fees are based
on the market value of assets under management,  some fluctuation will occur due
to overall market conditions,  especially during periods of extreme  adjustments
such as have  been  recently  experienced.  For the  most  part,  however,  such
revenues will remain relatively  constant from period to period,  with any large
fluctuations   being  attributable  to  the  growth  or  loss  of  assets  under
management.  The decrease in revenues is substantially  attributable to the loss
of  certain  managed  collateral  accounts  resulting  from  the  expiration  or
non-renewal  of the  surety  bonds  that  such  accounts  secured.  The  lack of
availability of bonding in the marketplace has prevented the replacement of this
business.

Revenues  from the surety  segment  were $9,437 for the  six-month  period ended
November  30, 2005 as compared  with $9,161 for the same period in the  previous
year, an increase of $276. Revenue for this segment of the business is typically
more  "seasonable"  from  period to  period,  due  merely  to the  timing of the
issuance or renewal of bonds placed by the Company.  Due to the nature of surety
bonds, fluctuations in revenue for comparable periods would normally reflect the
overall growth or loss of business,  but in this case is largely attributable to
a reduction in the  commission  rate paid by the  principal  market in which the
Company places its business.

Operating  expenses  for the  six-month  period  ended  November  30,  2005 were
$826,628 as compared with $638,005 for the comparable  period ended November 30,
2004,  an increase of $188,623.  The principal  elements of accounting  for this
increase were an increase in interest expense of $40,472, as well as an increase
in professional fees, including legal, accounting and other consulting fees from
$60,597 for the period ended  November 30, 2004 to $164,243 for the period ended
November 30, 2005.  There were also increases in payroll and related expenses of
$33,204,  and an increase in shareholders  services of $10,313.  The increase in
these expenses was largely associated with the Company's proposed acquisition of
an insurance company.

Interest  expense for the six-month  period ended November 30, 2005 was $204,497
as compared with $164,025 for the corresponding  period ended November 30, 2004.
The increase in interest expense of $40,472 is substantially attributable to the
increase in the  Company's  short and  long-term  indebtedness  incurred to fund
ongoing operations.

                                       5
<PAGE>

FUTURE DIRECTION OF COMPANY

On  December  30,  2005,  the  Company  completed  the  financing  necessary  to
accomplish  and close its  acquisition of all of the  outstanding  stock of West
Virginia Fire and Casualty  Company  (WVFCC),  an insurance  company licensed to
engage in business in West Virginia,  Ohio and Indiana. The acquisition followed
the approval of the  transaction  by the West Virginia  Department of Insurance,
which included  approval of the Company's  business plan to operate the acquired
insurance company as a surety,  and other necessary  regulatory  approvals.  The
financing for the transaction  consisted of a combination of a private placement
of  preferred  stock and  warrants  to acquire  common  stock of the  Company in
exchange for cash subscriptions totaling $3,335,000,  of which amount $2,900,000
was used to pay the purchase price for the stock of WVFCC, and the conversion of
approximately $3,600,000 of indebtedness of the Company into preferred stock and
warrants.  These  transactions are reported in Form 8K filed on January 3, 2006,
as indicated in Part II, Item 6B. Following the  acquisition,  the name of WVFCC
was changed to First Surety Corporation (First Surety).

First  Surety is now  obtaining  final  regulatory  approval  of  contracts  and
positioning  itself to commence  business  operations.  In  accordance  with its
approved  business  plan,  First Surety intends to market and issue surety bonds
utilizing programs developed by the Company's  subsidiary,  FS Investments,  Inc
(FSI). FSI's subsidiary,  Triangle Surety Agency,  Inc. (Triangle) will serve as
managing general agent for First Surety, and the collateral accounts required as
a condition  of the  issuance  of surety  bonds  under the  insurance  company's
programs will be managed by the investment  advisory  subsidiary of the Company,
Jacobs.  Thus,  the  successful  implementation  of the business  plan for First
Surety will create revenue sources for each of Triangle and Jacobs,  in addition
to the revenues  generated by the insurance  company  directly from premiums for
the issuance of surety bonds.  The  development  of the business of First Surety
and  associated  expansion of the ongoing  business  activities  of Triangle and
Jacobs  will  be the  principal  focus  of  management  of the  Company  for the
foreseeable future.


ANALYSIS OF LIQUIDITY, CAPITAL RESOURCES AND FINANCIAL POSITION

As of November 30, 2005, a deficiency in working capital exists as the Company's
current  liabilities  exceed its  current  assets by  approximately  $4,550,000.
Management was seeking to raise additional  funds through private  placements of
stock at prices that would not be dilutive to current shareholders. In addition,
the Company was actively attempting to raise financing for the acquisition of an
insurance  company. A financing was accomplished on December 30, 2005, the terms
of which were reported on Form 8K, filed on January 3, 2006.

Going  concern  contingency:  The Company has incurred  significant  losses from
operations since inception, and, notwithstanding the acquisition of First Surety
and  financing  accomplished  on December 30, 2005,  such losses are expected to
continue until First Surety  develops  substantial  business.  In addition,  the
Company experienced negative cash flow from operations of approximately $796,000
in fiscal 2005, and $351,000 for the fiscal quarter ended November 30, 2005, and
had no significant working capital as of November 30, 2005. The foregoing raises
substantial  doubt about the Company's  ability to continue as a going  concern.
The consolidated  financial statements do not include any adjustments that might
result from the outcome of this uncertainty.

                                       6
<PAGE>


ITEM 3. CONTROLS AND PROCEDURES

EVALUATION OF INTERNAL AND DISCLOSURE CONTROLS

As required by Rule 13a-15 under the Securities  Exchange Act of 1934, as of the
end of the period covered by the quarterly report,  being September 30, 2005, we
have carried out an evaluation of the  effectiveness of the design and operation
of our company's disclosure controls and procedures. This evaluation was carried
out  under  the  supervision  and  with  the   participation  of  our  company's
management, including our company's president and chief executive officer. Based
upon that  evaluation,  our  company's  president  concluded  that our company's
disclosure  controls and  procedures  are  effective as at the end of the period
covered by this report. There have been no changes in our internal controls over
financial  reporting  that occurred  during our most recent fiscal  quarter that
have materially  affected,  our are reasonably  likely to materially  affect our
internal controls over financial reporting.

Disclosure  controls and  procedures and other  procedures  that are designed to
ensure  that  information  required  to be  disclosed  in our  reports  filed or
submitted  under the  Securities  Exchange Act of 1934 is  recorded,  processed,
summarized and reported,  within the time period 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 in our reports filed under the  Securities
Exchange Act of 1934 is accumulated and  communicated  to management,  including
our president and chief executive officer,  to allow timely decisions  regarding
required disclosure.

                           PART II - OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS.

None.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

On September 30, 2005, the Company  received a commitment to purchase  preferred
stock and warrants in a private  placement  for an aggregate  purchase  price of
$1,500,000.  A  deposit  of  $150,000  was  placed  in  escrow  to  secure  such
commitment.  When combined with prior commitments received by the Company, total
commitments to purchase  unregistered  securities  consisting of preferred stock
and warrants  were  $3,000,000.  Details  regarding  these  commitments  and the
Company's  obligations  with  respect  thereto  were  disclosed on Form 8K dated
October 5, 2005, and filed with the Commission on October 6, 2005.

In  consideration  of the  introduction  to the Company of the  investor  whose
commitment was received on September 30, 2005, as described  above,  the Company
agreed to compensate  the person who made such  introduction  by the issuance of
750,000  shares of common  stock.  The issuance of such  unregistered  shares is
conditioned upon the prior closing of the investment pursuant to the commitment.

                                       7
<PAGE>

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.


ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

None.


ITEM 5. OTHER INFORMATION

None.


ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.

     A. EXHIBITS

          31.1 Certification of Chief Executive Officer and Principal  Financial
               Officer  pursuant  to  Rule  13a-146.1   promulgated   under  the
               Securities Exchange Act of 1934

          32.1 Certification  pursuant  to 18 U.S.C.  Section  1950,  as adopted
               pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

     B. FORMS 8K

          Filed January 3, 2006,  reporting  sales of  unregistered  securities;
          amendments  to the  Company's  Articles of  Incorporation  and Bylaws,
          including  change of the  Company's  name and state of  incorporation;
          change of the Company's  stock symbol to "JFGI";  and  acquisition  of
          West Virginia Fire and Casualty Company.

          Filed  October 6, 2005,  reporting  commitments  to sell  unregistered
          securities and elimination of financing  contingency under contract to
          acquire  the  outstanding  stock of West  Virginia  Fire and  Casualty
          Company.




                                       8
<PAGE>




SIGNATURES


In accordance with the  requirements of the Exchange Act, the registrant  caused
this  report to be  signed on its  behalf  by the  undersigned,  thereunto  duly
authorized.

                                         Jacobs Financial Group, Inc.
                                         (Registrant)

Dated:  January 19, 2006                 By:  /s/John M. Jacobs
        ----------------                 ---------------------------------------
                                         John M. Jacobs
                                         President and Director

























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