**FORM      10-Q**

**JACOBS      FINANCIAL GROUP, INC.**

| Delaware                                                           | 84-0922335                                       |
|--------------------------------------------------------------------|--------------------------------------------------|
| (State                or other jurisdiction of incorporation) | (IRS                Employer Identification No.) |

| 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 |
|                                                                                    |

| Yes | [x] | No | [ ] |
|-----|-----|----|----------|

| Large                accelerated                filer           [  ] | Accelerated                filer                   [  ] |
|---------------------------------------------------------------------------------------------------------------------------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| Non-accelerated                filer             [  ]      | Smaller                reporting company  [x]                                                                                                          |

----

| Yes | [  ] | No | [X] |
|-----|----------------|----|-----|

**PART      I — FINANCIAL INFORMATION**

**Item      1. Financial Statements**

| Financial                  Statements (Unaudited)                                                                                          |   | Page   |
|--------------------------------------------------------------------------------------------------------------------------------------------|--------|--------|
|                                                                                                                                       |   |   |
| Consolidated                Condensed Balance Sheets                                                                                       |   | F-1    |
| Consolidated                Condensed Statements of Operations                                                                             |   | F-2    |
| Consolidated                Condensed Statements of Comprehensive Income (Loss)                                                            |   | F-3    |
| Consolidated                Condensed Statements of Cash Flows                                                                             |   | F-4    |
| Consolidated                Condensed Statement of Mandatorily Redeemable Preferred Stock and                Stockholders Equity (Deficit) |   | F-5    |
| Notes                to Consolidated Condensed Financial Statements                                                                        |   | F-6    |

----

| **Jacobs                    Financial Group, Inc.**                                                                                                                                                                                                                                                                                              |   |                                   |        |   |                                   |   |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|----------------------------------------|-------------|--------|----------------------------------------|--------|
| **Consolidated                    Condensed Balance Sheets (Unaudited)**                                                                                                                                                                                                                                                                         |   |                                   |        |   |                                   |   |
|                                                                                                                                                                                                                                                                                                                                             |   |                                   |        |   |                                   |   |
|                                                                                                                                                                                                                                                                                                                                             |   | **August                    31, 2008** |        |   | **May                    31,****2008** |   |
| **ASSETS**                                                                                                                                                                                                                                                                                                                                       |   |                                   |        |   |                                   |   |
|                                                                                                                                                                                                                                                                                                                                             |   |                                   |        |   |                                   |   |
| **Investments                    and Cash:**                                                                                                                                                                                                                                                                                                     |   |                                   |        |   |                                   |   |
|                                                                                                                                                                                                                                                                                                                                             |   |                                   |        |   |                                   |   |
| Bonds                    available for sale, at market value                                                                                                                                                                                                                                                                                     |   | $                                      | 715,631     |   |                                   | $      | 105,866 |   |
| (amortized                    cost - 08/31/08 $712,379; 05/31/08 $98,774)                                                                                                                                                                                                                                                                        |   |                                   |        |   |                                   |   |   |   |
| Bonds                    held to maturity, at amortized costs                                                                                                                                                                                                                                                                                    |   |                                   | 200,000     |   |                                   |   | - |   |
| (market                    value -  08/31/08 $200,260)                                                                                                                                                                                                                                                                                 |   |                                   |        |   |                                   |   |   |   |
| Mortgage-back                    securities held to maturity, at amortized costs                                                                                                                                                                                                                                                                 |   |                                   | 4,553,458   |   |                                   |   | 3,826,688 |   |
| (market                    value - 08/31/08 $4,508,511; 05/31/08 $3,800,909)                                                                                                                                                                                                                                                                     |   |                                   |        |   |                                   |   |   |   |
| Short-term                    investments, at cost (approximates market value)                                                                                                                                                                                                                                                                   |   |                                   | 323,484     |   |                                   |   | 1,176,056 |   |
| Cash                                                                                                                                                                                                                                                                                                                                             |   |                                   | 65,837      |   |                                   |   | 48,640 |   |
| **Total                    Investments and Cash**                                                                                                                                                                                                                                                                                                |   |                                   | 5,858,410   |   |                                   |   | 5,157,250 |   |
|                                                                                                                                                                                                                                                                                                                                             |   |                                   |        |   |                                   |   |   |   |
| Investment                    income due and accrued                                                                                                                                                                                                                                                                                             |   |                                   | 28,563      |   |                                   |   | 19,892 |   |
| Premiums                    and other accounts receivable                                                                                                                                                                                                                                                                                        |   |                                   | 52,394      |   |                                   |   | 47,353 |   |
| Deferred                    policy acquisition costs                                                                                                                                                                                                                                                                                             |   |                                   | 79,096      |   |                                   |   | 75,940 |   |
| Furniture                    and equipment, net of accumulated depreciation of $124,126 and                    $120,931,                    respectively                                                                                                                                                                                         |   |                                   | 25,973      |   |                                   |   | 29,168 |   |
| Other                    assets                                                                                                                                                                                                                                                                                                                  |   |                                   | 210,559     |   |                                   |   | 298,163 |   |
| Intangible                    assets                                                                                                                                                                                                                                                                                                             |   |                                   | 150,000     |   |                                   |   | 150,000 |   |
|                                                                                                                                                                                                                                                                                                                                             |   |                                   |        |   |                                   |   |   |   |
| **TOTAL                    ASSETS**                                                                                                                                                                                                                                                                                                              |   | $                                      | 6,404,995   |   |                                   | $      | 5,777,766 |   |
|                                                                                                                                                                                                                                                                                                                                             |   |                                   |        |   |                                   |   |   |   |
|                                                                                                                                                                                                                                                                                                                                             |   |                                   |        |   |                                   |   |   |   |
| **LIABILITIES                    AND STOCKHOLDERS' EQUITY (DEFICIT)**                                                                                                                                                                                                                                                                            |   |                                   |        |   |                                   |   |   |   |
|                                                                                                                                                                                                                                                                                                                                             |   |                                   |        |   |                                   |   |   |   |
| Reserve                    for losses and loss expenses                                                                                                                                                                                                                                                                                          |   | $                                      | 291,435     |   |                                   | $      | 246,651 |   |
| Reserve                    for unearned premiums                                                                                                                                                                                                                                                                                                 |   |                                   | 322,562     |   |                                   |   | 277,208 |   |
| Accrued                    expenses and professional fees                                                                                                                                                                                                                                                                                        |   |                                   | 422,480     |   |                                   |   | 412,039 |   |
| Accounts                    payable                                                                                                                                                                                                                                                                                                              |   |                                   | 256,018     |   |                                   |   | 315,577 |   |
| Notes                    payable                                                                                                                                                                                                                                                                                                                 |   |                                   | 3,787,432   |   |                                   |   | 2,968,016 |   |
| Accrued                    interest payable                                                                                                                                                                                                                                                                                                      |   |                                   | 158,125     |   |                                   |   | 71,483 |   |
| Other                    liabilities                                                                                                                                                                                                                                                                                                             |   |                                   | 17,379      |   |                                   |   | 16,402 |   |
| **Total                    Liabilities**                                                                                                                                                                                                                                                                                                         |   |                                   | 5,255,431   |   |                                   |   | 4,307,376 |   |
|                                                                                                                                                                                                                                                                                                                                             |   |                                   |        |   |                                   |   |   |   |
| **Series                    A Preferred Stock**, $.0001 par value per share; 1 million shares                    authorized; 2,348 and 2,230 shares issued and outstanding at                    August 31 and                    May 31, 2008, respectively; stated liquidation value of $1,000                    per                    share |   |                                   | 2,454,434   |   |                                   |   | 2,308,933 |   |
| **Series                    B Preferred Stock**, $.0001 par value per share; 9,941.341 shares                    authorized; 9,621.940 shares issued and outstanding at August                    31 and May                    31, 2008 and 2007; stated liquidation value of $1,000 per                    share                               |   |                                   | 10,298,664  |   |                                   |   | 9,936,866 |   |
| **Total                    Mandatorily Redeemable Preferred Stock**                                                                                                                                                                                                                                                                              |   |                                   | 12,753,098  |   |                                   |   | 12,245,799 |   |
|                                                                                                                                                                                                                                                                                                                                             |   |                                   |        |   |                                   |   |   |   |
| **Commitments                    and Contingencies (See Notes)**                                                                                                                                                                                                                                                                                 |   |                                   |        |   |                                   |   |   |   |
|                                                                                                                                                                                                                                                                                                                                             |   |                                   |        |   |                                   |   |   |   |
| **Stockholders'                    Equity (Deficit)**                                                                                                                                                                                                                                                                                            |   |                                   |        |   |                                   |   |   |   |
|                                                                                                                                                                                                                                                                                                                                             |   |                                   |        |   |                                   |   |   |   |
| Common                    stock, $.0001 par value per share; 490 million shares authorized;                    169,206,823 and 166,091,242 shares issued and outstanding at                    August 31 and                    May 31, 2008, respectively                                                                                       |   |                                   | 16,921      |   |                                   |   | 16,609 |   |
| Additional                    paid in capital                                                                                                                                                                                                                                                                                                    |   |                                   | 2,486,000   |   |                                   |   | 2,423,537 |   |
| Accumulated                    deficit                                                                                                                                                                                                                                                                                                           |   |                                   | (14,108,066 | )      |                                   |   | (13,222,038 | ) |
| Accumulated                    other comprehensive income (loss)                                                                                                                                                                                                                                                                                 |   |                                   | 1,611       |   |                                   |   | 6,483 |   |
| **Total                    Stockholders' Equity (Deficit)**                                                                                                                                                                                                                                                                                      |   |                                   | (11,603,534 | )      |                                   |   | (10,775,409 | ) |
|                                                                                                                                                                                                                                                                                                                                             |   |                                   |        |   |                                   |   |   |   |
| **TOTAL                    LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)**                                                                                                                                                                                                                                                                      |   | $                                      | 6,404,995   |   |                                   | $      | 5,777,766 |   |
|                                                                                                                                                                                                                                                                                                                                             |   |                                   |        |   |                                   |   |   |   |

----

| **Jacobs                    Financial Group, Inc,**                                |   |                                                                       |        |   |     |   |
|------------------------------------------------------------------------------------|--------|----------------------------------------------------------------------------|-------------|--------|----------|--------|
| **Consolidated                    Condensed Statements of Operations (Unaudited)** |   |                                                                       |        |   |
|                                                                               |   |                                                                       |        |   |     |   |
|                                                                               |   |                                                                       |        |   |     |   |
|                                                                               |   |                                                                       |        |   |     |   |
|                                                                               |   |                                                                       |        |   |     |   |
|                                                                               |   |                                                                       |        |   |     |   |
|                                                                               |   | **Three                    Months Ended****August                    31,** |        |
|                                                                               |   |                                                                       |        |   |     |   |
|                                                                               |   | **2008**                                                                   |        |   | **2007** |   |
|                                                                               |   |                                                                       |        |   |     |   |
| **Revenues:**                                                                      |   |                                                                       |        |   |     |   |
|                                                                               |   |                                                                       |        |   |     |   |
| Investment                    advisory services                                    |   | $                                                                          | 59,529      |   |     | $      | 66,320 |   |
| Insurance                    premiums and commissions                              |   |                                                                       | 157,506     |   |     |   | 91,237 |   |
| Net                    investment income                                           |   |                                                                       | 68,680      |   |     |   | 53,839 |   |
| **Total                    Revenues**                                              |   |                                                                       | 285,715     |   |     |   | 211,396 |   |
|                                                                               |   |                                                                       |        |   |     |   |   |   |
|                                                                               |   |                                                                       |        |   |     |   |   |   |
| **Expenses:**                                                                      |   |                                                                       |        |   |     |   |   |   |
|                                                                               |   |                                                                       |        |   |     |   |   |   |
| Incurred                    policy losses                                          |   |                                                                       | 44,785      |   |     |   | 25,315 |   |
| Insurance                    policy acquisition costs                              |   |                                                                       | 39,029      |   |     |   | 25,943 |   |
| General                    and administrative                                      |   |                                                                       | 535,939     |   |     |   | 306,752 |   |
| Mutual                    fund costs                                               |   |                                                                       | 41,567      |   |     |   | 40,332 |   |
| Depreciation                                                                       |   |                                                                       | 3,195       |   |     |   | 2,149 |   |
| **Total                    Expenses**                                              |   |                                                                       | 664,515     |   |     |   | 400,491 |   |
|                                                                               |   |                                                                       |        |   |     |   |   |   |
| **Net                    Income (Loss) from Operations**                           |   |                                                                       | (378,800    | )      |     |   | (189,095 | ) |
|                                                                               |   |                                                                       |        |   |     |   |   |   |
| Interest                    expense                                                |   |                                                                       | (118,778    | )      |     |   | (30,992 | ) |
| Interest                    income                                                 |   |                                                                       | 849         |   |     |   | 3 |   |
|                                                                               |   |                                                                       |        |   |     |   |   |   |
| **Net                    Income (Loss)**                                           |   |                                                                       | (496,729    | )      |     |   | (220,084 | ) |
|                                                                               |   |                                                                       |        |   |     |   |   |   |
| Accretion                    of Mandatorily Redeemable Convertible                 |   |                                                                       |        |   |     |   |   |   |
| Preferred                    Stock, including accrued dividends                    |   |                                                                       | (389,299    | )      |     |   | (354,091 | ) |
|                                                                               |   |                                                                       |        |   |     |   |   |   |
| **Net                    Income (Loss) Attributable to Common Stockholders**       |   | $                                                                          | (886,028    | )      |     | $      | (574,175 | ) |
|                                                                               |   |                                                                       |        |   |     |   |   |   |
|                                                                               |   |                                                                       |        |   |     |   |   |   |
| **Basic                    and Dilutive Net Income (Loss) Per Share:**             |   |                                                                       |        |   |     |   |   |   |
|                                                                               |   |                                                                       |        |   |     |   |   |   |
| **Net                    Income (Loss) Per Share**                                 |   | $                                                                          | (0.01       | )      |     | $      | - |   |
|                                                                               |   |                                                                       |        |   |     |   |   |   |
|                                                                               |   |                                                                       |        |   |     |   |   |   |
| **Weighted-Average                    Shares Outstanding**                         |   |                                                                       | 168,666,964 |   |     |   | 157,025,282 |   |
|                                                                               |   |                                                                       |        |   |     |   |   |   |

----

| **Jacobs                  Financial Group, Inc,**                                                                                     |   |                                    |     |   |     |   |
|---------------------------------------------------------------------------------------------------------------------------------------|--------|-----------------------------------------|----------|--------|----------|--------|
| **Consolidated                  Condensed Statements of Comprehensive Income (Loss)                  (Unaudited)**                    |   |
|                                                                                                                                  |   |                                    |     |   |     |   |
|                                                                                                                                  |   |                                    |     |   |     |   |
|                                                                                                                                  |   |                                    |     |   |     |   |
|                                                                                                                                  |   |                                    |     |   |     |   |
|                                                                                                                                  |   |                                    |     |   |     |   |
|                                                                                                                                  |   | **Three                  Months Ended** |     |
|                                                                                                                                  |   | **August                  31**          |     |
|                                                                                                                                  |   |                                    |     |   |     |   |
|                                                                                                                                  |   | **2008**                                |     |   | **2007** |   |
|                                                                                                                                  |   |                                    |     |   |     |   |
| **Comprehensive                  income (loss):**                                                                                     |   |                                    |     |   |     |   |
|                                                                                                                                  |   |                                    |     |   |     |   |
| Net                  income (loss) attributable to common stockholders                                                                |   | $                                       | (886,028 | )      |     | $      | (574,175 | ) |
|                                                                                                                                  |   |                                    |     |   |     |   |   |   |
|                                                                                                                                  |   |                                    |     |   |     |   |   |   |
| **Other                  comprehensive income (loss):**                                                                               |   |                                    |     |   |     |   |   |   |
|                                                                                                                                  |   |                                    |     |   |     |   |   |   |
| Net                  unrealized gain (loss) of available-for-sale investments arising                  during                  period |   |                                    | (4,872   | )      |     |   | - |   |
|                                                                                                                                  |   |                                    |     |   |     |   |   |   |
|                                                                                                                                  |   |                                    |     |   |     |   |   |   |
| **Comprehensive                  income (loss) attributable to common stockholders**                                                  |   | $                                       | (890,900 | )      |     | $      | (574,175 | ) |

----

| **Jacobs                    Financial Group, Inc,**                                                            |   |                                                 |     |   |     |   |
|----------------------------------------------------------------------------------------------------------------|--------|------------------------------------------------------|----------|--------|----------|--------|
| **Consolidated                    Condensed Statements of Cash Flows (Unaudited)**                             |   |                                                 |     |   |
|                                                                                                           |   |                                                 |     |   |     |   |
|                                                                                                           |   | **Three                    Months Ended August 31,** |     |
|                                                                                                           |   |                                                 |     |   |     |   |
|                                                                                                           |   | **2008**                                             |     |   | **2007** |   |
|                                                                                                           |   |                                                 |     |   |     |   |
| **CASH                    FLOWS FROM OPERATING ACTIVITIES**                                                    |   |                                                 |     |   |     |   |
|                                                                                                           |   |                                                 |     |   |     |   |
| Net                    Income (Loss)                                                                           |   | $                                                    | (496,729 | )      |     | $      | (220,084 | ) |
|                                                                                                           |   |                                                 |     |   |     |   |   |   |
| Adjustments                    to reconcile net income (loss) to                                               |   |                                                 |     |   |     |   |   |   |
| net                    cash provided by (used in) operating activities:                                        |   |                                                 |     |   |     |   |   |   |
|                                                                                                           |   |                                                 |     |   |     |   |   |   |
| Unearned                    premium                                                                            |   |                                                 | 45,354   |   |     |   | (47,673 | ) |
| Stock                    option expense                                                                        |   |                                                 | 13,491   |   |     |   | 28,593 |   |
| Stock                    issued (or to be issued) in connection with financing                    arrangements |   |                                                 | 23,227   |   |     |   | 2,426 |   |
| Provision                    for loss reserves                                                                 |   |                                                 | 44,784   |   |     |   | 25,315 |   |
| Amortization                    of premium                                                                     |   |                                                 | 8,764    |   |     |   | 3,390 |   |
| Depreciation                                                                                                   |   |                                                 | 3,195    |   |     |   | 2,149 |   |
| Premium                    and other receivables                                                               |   |                                                 | (5,041   | )      |     |   | (3,346 | ) |
| Accretion                    of discount                                                                       |   |                                                 | (1,278   | )      |     |   | (3,035 | ) |
| Investment                    income due and accrued                                                           |   |                                                 | (7,091   | )      |     |   | 787 |   |
| Deferred                    policy acquisition costs                                                           |   |                                                 | (3,156   | )      |     |   | (10,191 | ) |
| Change                    in operating assets and liabilities:                                                 |   |                                                 | -        |   |     |   |   |   |
| Other                    assets                                                                                |   |                                                 | 112,629  |   |     |   | 7,900 |   |
| Accounts                    payable and cash overdraft                                                         |   |                                                 | (59,559  | )      |     |   | (54,013 | ) |
| Accrued                    expenses and other liabilities                                                      |   |                                                 | 98,060   |   |     |   | 15,483 |   |
|                                                                                                           |   |                                                 |     |   |     |   |   |   |
| **Net                    cash flows from (used in) operating activities**                                      |   |                                                 | (223,350 | )      |     |   | (252,299 | ) |
|                                                                                                           |   |                                                 |     |   |     |   |   |   |
| **CASH                    FLOWS FROM INVESTING ACTIVITIES**                                                    |   |                                                 |     |   |     |   |   |   |
|                                                                                                           |   |                                                 |     |   |     |   |   |   |
| (Increase)                    decrease in short-term investments                                               |   |                                                 | 852,572  |   |     |   | (125,258 | ) |
| Purchases                    of securities available for sale                                                  |   |                                                 | (620,059 | )      |     |   | - |   |
| Costs                    of bonds acquired                                                                     |   |                                                 | (200,712 | )      |     |   | - |   |
| Costs                    of mortgage-backed securities acquired                                                |   |                                                 | (921,795 | )      |     |   | - |   |
| Repayment                    of mortgage-backed securities                                                     |   |                                                 | 193,125  |   |     |   | 68,664 |   |
|                                                                                                           |   |                                                 |     |   |     |   |   |   |
| **Net                    cash flows from (used in) investing activities**                                      |   |                                                 | (696,869 | )      |     |   | (56,594 | ) |
|                                                                                                           |   |                                                 |     |   |     |   |   |   |
| **CASH                    FLOWS FROM FINANCING ACTIVITIES**                                                    |   |                                                 |     |   |     |   |   |   |
|                                                                                                           |   |                                                 |     |   |     |   |   |   |
| Proceeds                    from issuance of Series A preferred stock                                          |   |                                                 | 118,000  |   |     |   | 40,000 |   |
| Proceeds                    from issuance of Series B preferred stock                                          |   |                                                 | -        |   |     |   | 24,510 |   |
| Proceeds                    from the issuance of common stock                                                  |   |                                                 | -        |   |     |   | 490 |   |
| Proceeds                    from related party debt                                                            |   |                                                 | 28,000   |   |     |   | 127,200 |   |
| Repayment                    of related party debt                                                             |   |                                                 | (29,000  | )      |     |   | (15,763 | ) |
| Proceeds                    from borrowings                                                                    |   |                                                 | 940,000  |   |     |   | 150,000 |   |
| Repayment                    of borrowings                                                                     |   |                                                 | (119,584 | )      |     |   | (15,236 | ) |
|                                                                                                           |   |                                                 |     |   |     |   |   |   |
| **Net                    cash flows from financing activities**                                                |   |                                                 | 937,416  |   |     |   | 311,201 |   |
|                                                                                                           |   |                                                 |     |   |     |   |   |   |
| **NET                    INCREASE (DECREASE) IN CASH**                                                         |   |                                                 | 17,197   |   |     |   | 2,308 |   |
|                                                                                                           |   |                                                 |     |   |     |   |   |   |
| **CASH                    AT BEGINNING OF PERIOD**                                                             |   |                                                 | 48,640   |   |     |   | 25,298 |   |
|                                                                                                           |   |                                                 |     |   |     |   |   |   |
| **CASH                    AT END OF PERIOD**                                                                   |   | $                                                    | 65,837   |   |     | $      | 27,606 |   |
|                                                                                                           |   |                                                 |     |   |     |   |   |   |
|                                                                                                           |   |                                                 |     |   |     |   |   |   |
| **SUPPLEMENTAL                    DISCLOSURES**                                                                |   |                                                 |     |   |     |   |   |   |
|                                                                                                           |   |                                                 |     |   |     |   |   |   |
| Interest                    paid                                                                               |   | $                                                    | 8,127    |   |     | $      | 22,507 |   |
| Income                    taxes paid                                                                           |   |                                                 | -        |   |     |   | - |   |
| Non-cash                    investing and financing transactions:                                              |   |                                                 |     |   |     |   |   |   |
| Additional                    consideration for issuance of debt                                               |   |                                                 | 23,227   |   |     |   | 2,426 |   |

----

| **Jacobs                    Financial Group, Inc.**                                                                                                                                    |   |                                          |   |   |                                          |   |      |            |   |   |       |   |   |                                                  |       |   |            |   |        |              |   |   |        |   |   |                                 |      |   |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-----------------------------------------------|--------|--------|-----------------------------------------------|--------|-----------|-----------------|--------|--------|------------|--------|--------|-------------------------------------------------------|------------|--------|-----------------|--------|-------------|-------------------|--------|--------|-------------|--------|--------|--------------------------------------|-----------|--------|
| **Consolidated                    Condensed Statement of Mandatorily Redeemable Preferred Stock                    and                    Stockholders' Equity (Deficit) (Unaudited)** |   |                                          |   |   |
| **For                    the Three Month Period Ended August 31, 2008**                                                                                                                |   |                                          |   |   |                                          |   |      |            |   |   |       |   |   |                                                  |       |   |            |   |        |              |   |   |
|                                                                                                                                                                                   |   |                                          |   |   |                                          |   |      |            |   |   |       |   |   |                                                  |       |   |            |   |        |              |   |   |        |   |   |                                 |      |   |   |   |
|                                                                                                                                                                                   |   |                                          |   |   |                                          |   |      |            |   |   |       |   |   |                                                  |       |   |            |   |        |              |   |   |        |   |   |                                 |      |   |   |   |
|                                                                                                                                                                                   |   |                                          |   |   |                                          |   |      |            |   |   |       |   |   | **Stockholders'                    Equity (Deficit)** |       |
|                                                                                                                                                                                   |   | **Series                    A**               |   |   | **Series                    B**               |   |      |            |   |   |       |   |   |                                                  |       |   |            |   |        |              |   |   |        |   |
|                                                                                                                                                                                   |   | **Mandatorily                    Redeemable** |   |   | **Mandatorily                    Redeemable** |   |      |            |   |   |       |   |   |                                                  |       |   |            |   |        | **Accumulated**   |   |   |
|                                                                                                                                                                                   |   |                                          |   |   |                                          |   |      | **Convertible** |   |   |       |   |   |                                                  |       |   | **Additional**  |   |        |              |   |   | **Other**   |   |   |                                 |      |
|                                                                                                                                                                                   |   | **Preferred                    Stock**        |   |   | **Preferred                    Stock**        |   |      |            |   |   |       |   |   | **Paid-In**                                           |       |   | **Accumulated** |   |        | **Comprehensive** |   |   |
|                                                                                                                                                                                   |   | **Shares**                                    |   |   | **Amount**                                    |   |      | **Shares**      |   |   | **Amount** |   |   | **Shares**                                            |       |   | **Amount**      |   |        | **Capital**       |   |   | **Deficit** |   |   | **Income                    (Loss)** |      |   | **Total** |   |
|                                                                                                                                                                                   |   |                                          |   |   |                                          |   |      |            |   |   |       |   |   |                                                  |       |   |            |   |        |              |   |   |        |   |   |                                 |      |   |   |   |
| **Balance,                    May 31, 2008**                                                                                                                                           |   |                                          | 2,230  |   |                                          | $      | 2,308,933 |            |   |   | 9,621.940  |   |   | $                                                     | 9,936,866  |   |            |   | 166,091,242 |              |   | $      | 16,609      |   |   | $                                    | 2,423,537 |   |   | $ | (13,222,038 | ) |   | $ | 6,483 |   |   | $ | (10,775,409 | ) |
|                                                                                                                                                                                   |   |                                          |   |   |                                          |   |      |            |   |   |       |   |   |                                                  |       |   |            |   |        |              |   |   |        |   |   |                                 |      |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Issuance                    of Series A and B Preferred Stock and common stock                                                                                                         |   |                                          | 118    |   |                                          |   | 118,000   |            |   |   | -          |   |   |                                                  | -          |   |            |   | -           |              |   |   | -           |   |   |                                 | -         |   |   |   | - |   |   |   | - |   |   |   | - |   |
|                                                                                                                                                                                   |   |                                          |   |   |                                          |   |      |            |   |   |       |   |   |                                                  |       |   |            |   |        |              |   |   |        |   |   |                                 |      |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Issuance                    of common stock as additional consideration for financing                    arrangements                                                                  |   |                                          | -      |   |                                          |   | -         |            |   |   | -          |   |   |                                                  | -          |   |            |   | 3,115,581   |              |   |   | 312         |   |   |                                 | 27,814    |   |   |   | - |   |   |   | - |   |   |   | 28,126 |   |
|                                                                                                                                                                                   |   |                                          |   |   |                                          |   |      |            |   |   |       |   |   |                                                  |       |   |            |   |        |              |   |   |        |   |   |                                 |      |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Accretion                    of mandatorily redeemable convertible preferred stock                                                                                                     |   |                                          | -      |   |                                          |   | 4,149     |            |   |   | -          |   |   |                                                  | 134,085    |   |            |   | -           |              |   |   | -           |   |   |                                 | -         |   |   |   | (138,234 | ) |   |   | - |   |   |   | (138,234 | ) |
|                                                                                                                                                                                   |   |                                          |   |   |                                          |   |      |            |   |   |       |   |   |                                                  |       |   |            |   |        |              |   |   |        |   |   |                                 |      |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Accrued                    dividends of mandatorily redeemable convertible preferred                    stock                                                                          |   |                                          | -      |   |                                          |   | 23,352    |            |   |   | -          |   |   |                                                  | 227,713    |   |            |   | -           |              |   |   | -           |   |   |                                 | -         |   |   |   | (251,065 | ) |   |   | - |   |   |   | (251,065 | ) |
|                                                                                                                                                                                   |   |                                          |   |   |                                          |   |      |            |   |   |       |   |   |                                                  |       |   |            |   |        |              |   |   |        |   |   |                                 |      |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Expense                    of common shares to be issued in connection with financing                    arrangements                                                                  |   |                                          | -      |   |                                          |   | -         |            |   |   | -          |   |   |                                                  | -          |   |            |   | -           |              |   |   | -           |   |   |                                 | 21,158    |   |   |   | - |   |   |   | - |   |   |   | 21,158 |   |
| Common                    stock option expense                                                                                                                                         |   |                                          | -      |   |                                          |   | -         |            |   |   | -          |   |   |                                                  | -          |   |            |   | -           |              |   |   | -           |   |   |                                 | 13,491    |   |   |   | - |   |   |   | - |   |   |   | 13,491 |   |
| Unrealized                    net gain on available for sale securities                                                                                                                |   |                                          | -      |   |                                          |   | -         |            |   |   | -          |   |   |                                                  | -          |   |            |   | -           |              |   |   | -           |   |   |                                 | -         |   |   |   | - |   |   |   | (4,872 | ) |   |   | (4,872 | ) |
|                                                                                                                                                                                   |   |                                          |   |   |                                          |   |      |            |   |   |       |   |   |                                                  |       |   |            |   |        |              |   |   |        |   |   |                                 |      |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net                    income (loss), three month period ended August 31, 2008                                                                                                         |   |                                          | -      |   |                                          |   | -         |            |   |   | -          |   |   |                                                  | -          |   |            |   | -           |              |   |   | -           |   |   |                                 | -         |   |   |   | (496,729 | ) |   |   | - |   |   |   | (496,729 | ) |
|                                                                                                                                                                                   |   |                                          |   |   |                                          |   |      |            |   |   |       |   |   |                                                  |       |   |            |   |        |              |   |   |        |   |   |                                 |      |   |   |   |   |   |   |   |   |   |   |   |   |   |
| **Balance,                    August 31, 2008**                                                                                                                                        |   |                                          | 2,348  |   |                                          | $      | 2,454,434 |            |   |   | 9,621.940  |   |   | $                                                     | 10,298,664 |   |            |   | 169,206,823 |              |   | $      | 16,921      |   |   | $                                    | 2,486,000 |   |   | $ | (14,108,066 | ) |   | $ | 1,611 |   |   | $ | (11,603,534 | ) |
|                                                                                                                                                                                   |   |                                          |   |   |                                          |   |      |            |   |   |       |   |   |                                                  |       |   |            |   |        |              |   |   |        |   |   |                                 |      |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                                                                                                                   |   |                                          |   |   |                                          |   |      |            |   |   |       |   |   |                                                  |       |   |            |   |        |              |   |   |        |   |   |                                 |      |   |   |   |   |   |   |   |   |   |   |   |   |   |

----

**Jacobs                Financial Group, Inc.**

**NOTES                TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS                (UNAUDITED)**

**Note        A – Basis of Presentation**

*Liquidity        and Going Concern*

----

**Jacobs                Financial Group,                Inc.**

**NOTES              TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS              (UNAUDITED)**

**Note        B – Recent Accounting Pronouncements**

----

**Jacobs                Financial Group,                Inc.**

**NOTES              TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS              (UNAUDITED)**

----

**Jacobs                Financial Group,                Inc.**

**NOTES              TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS              (UNAUDITED)**

----

**Jacobs                Financial Group,                Inc.**

**NOTES              TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS              (UNAUDITED)**

**Note        C – Investments**

|                                                               |   | Amortized Cost |    |   | Gross                  Unrealized Gains |   |   | Gross                  Unrealized Losses |   |   | Fair                  Market Value |   |
|--------------------------------------------------------------------|--------|---------------------|---------|--------|-----------------------------------------|--------|--------|------------------------------------------|--------|--------|------------------------------------|--------|
| U.S.                  Government agency mortgage-backed securities |   | $                   | 612,327 |   |                                    | $      | -      |                                     |   | $      | 3,164                              |   |   | $ | 609,163 |   |
| State                  and municipal securities                    |   |                | 100,052 |   |                                    |   | 6,416  |                                     |   |   | -                                  |   |   |   | 106,468 |   |
|  Equity                  securities1                          |   |                | 25,438  |   |                                    |   | -      |                                     |   |   | 1,640                              |   |   |   | 23,798 |   |
|                                                               |   | $                   | 737,817 |   |                                    | $      | 6,416  |                                     |   | $      | 4,804                              |   |   | $ | 739,429 |   |

|                                                              |   | Amortized Cost |      |   | Gross                  Unrealized Gains |   |   | Gross                  Unrealized Losses |   |   | Fair                  Market Value |   |
|-------------------------------------------------------------------|--------|---------------------|-----------|--------|-----------------------------------------|--------|--------|------------------------------------------|--------|--------|------------------------------------|--------|
| U.S                  Government agency                            |   | $                   | 200,000   |   |                                    | $      | 260    |                                     |   | $      | -                                  |   |   | $ | 200,260 |   |
| U.S                  Government agency mortgage-backed securities |   |                | 4,553,458 |   |                                    |   | 16,001 |                                     |   |   | 60,948                             |   |   |   | 4,508,511 |   |
|                                                              |   | $                   | 4,753,458 |   |                                    | $      | 16,261 |                                     |   | $      | 60,948                             |   |   | $ | 4,708,771 |   |

**Note        D – Other Assets**

|                                                       |   | August                  31,2008 |    |   | May                  31, 2008 |   |
|------------------------------------------------------------|--------|---------------------------------|---------|--------|-------------------------------|--------|
| Advance                  deposits for professional fees    |   | $                               | 19,151  |   |                          | $      | 133,498 |   |
| Escrow                  deposits for proposed acquisitions |   |                            | 125,000 |   |                          |   | 125,000 |   |
| Mutual                  fund investment at market          |   |                            | 23,798  |   |                          |   | 24,829 |   |
| Unamortized                  loan acquisition costs        |   |                            | 28,337  |   |                          |   | 3,060 |   |
| Prepaid                  expense and other deposits        |   |                            | 14,273  |   |                          |   | 11,776 |   |
| Total                                                      |   | $                               | 210,559 |   |                          | $      | 298,163 |   |

----

**Jacobs                Financial Group,                Inc.**

**NOTES              TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS              (UNAUDITED)**

**Note        E – Notes Payable and Advances from Related Party**

|                                                                                                                                                                                                                                                 |   | August                  31,2008 |      |   | May                  31,2008 |   |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|---------------------------------|-----------|--------|------------------------------|--------|
| Unsecured                  demand notes payable to individuals and others; interest rate fixed                  @                  10.00%                                                                                                            |   | $                               | 95,000    |   |                         | $      | 127,000 |   |
|                                                                                                                                                                                                                                                 |   |                            |      |   |                         |   |   |   |
| Unsecured                  short-term advances from principal shareholder and chief executive                  officer; interest rate fixed @ 12.00%                                                                                                 |   |                            | -         |   |                         |   | 1,000 |   |
|                                                                                                                                                                                                                                                 |   |                            |      |   |                         |   |   |   |
| Unsecured                  note(s)payable to individual(s) under a bridge- financing arrangement                  described below                                                                                                                    |   |                            | 3,500,000 |   |                         |   | 2,635,000 |   |
|                                                                                                                                                                                                                                                 |   |                            |      |   |                         |   |   |   |
| Unsecured                  term note payable to commercial bank in the original amount of                  $250,000                  and payable in equal monthly payments of $5,738; interest rate                  fixed @                  13.25% |   |                            | 192,432   |   |                         |   | 205,016 |   |
|                                                                                                                                                                                                                                                 |   | $                               | 3,787,432 |   |                         | $      | 2,968,016 |   |

----

**Jacobs              Financial Group,              Inc.**

**NOTES            TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS            (UNAUDITED)**

| 2009(including                  demand notes) |   | $      | 566,483   |   |
|-----------------------------------------------|--------|--------|-----------|--------|
| 2010                                          |   |   | 665,796   |   |
| 2011                                          |   |   | 736,960   |   |
| 2012                                          |   |   | 775,135   |   |
| 2013                                          |   |   | 824,019   |   |
| 2014                                          |   |   | 219,039   |   |
|                                          |   | $      | 3,787,432 |   |

**Note        F-Stockholders Equity**

**Note        G – Commitments and Material Agreements**

----

**Jacobs                Financial Group,                Inc.**

**NOTES              TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS              (UNAUDITED)**

**Note        H – Segment Reporting**

|                                           |   | **Three-Month                  Period Ended** |     |
|------------------------------------------------|--------|-----------------------------------------------|----------|
| **Industry                  Segment**          |   | **August                  31,****2008**       |     |   | **August                  31,****2007** |   |
| **Revenues:**                                  |   |                                          |     |   |   |   |
|  Investment                  advisory     |   | $                                             | 59,529   |   |   | $ | 66,320 |   |
|  Surety                  insurance        |   |                                          | 226,186  |   |   |   | 145,076 |   |
|  Corporate                                |   |                                          | 849      |   |   |   | - |   |
|  Total                  revenues          |   | $                                             | 286,564  |   |   | $ | 211,396 |   |
|                                           |   |                                          |     |   |   |   |   |   |
| **Net                  Income (Loss):**        |   |                                          |     |   |   |   |   |   |
|  Investment                  advisory     |   | $                                             | (54,911  | ) |   | $ | (64,105 | ) |
|  Surety                  insurance        |   |                                          | 40,053   |   |   |   | 32,471 |   |
|  Corporate                                |   |                                          | (481,871 | ) |   |   | (188,450 | ) |
|  Total                  net income (loss) |   | $                                             | (496,729 | ) |   | $ | (220,084 | ) |

**Note        I – Subsequent Events**

----

**Item      2**
**Management’s Discussion and Analysis of Financial Condition      and Results of Operations**

***Results      of Operations for the Three-Month Period Ended August 31,      2008***

|                                         |   | Three-month                Period Ended |   |
|----------------------------------------------|--------|-----------------------------------------|--------|
|                                         |   | August                31,               |   |
|                                         |   | 2008                                    |   |   | 2007 |   |
|                                         |   |                                    |   |   |   |   |
| Individually                managed accounts |   | $                                       | 52,536 |   |   | $ | 54,142 |   |
| Mutual                fund                   |   |                                    | 6,993  |   |   |   | 12,178 |   |
| Total                                        |   | $                                       | 59,529 |   |   | $ | 66,320 |   |

----

|                                 |   | Three-month                Period Ended |    |
|--------------------------------------|--------|-----------------------------------------|---------|
|                                 |   | August                31,               |    |
|                                 |   | 2008                                    |    |   | 2007 |   |
|                                 |   |                                    |    |   |   |   |
| Premium                earned        |   | $                                       | 149,309 |   |   | $ | 84,537 |   |
| Net                investment income |   |                                    | 68,680  |   |   |   | 53,839 |   |
| Commissions                earned    |   |                                    | 8,197   |   |   |   | 6,700 |   |
| Total                                |   | $                                       | 226,186 |   |   | $ | 145,076 |   |

----

|                                                  |   | Three-month                Period EndedAugust                31, |    |   |   |   |
|-------------------------------------------------------|--------|------------------------------------------------------------------|---------|--------|--------|--------|
|                                                  |   | 2008                                                             |    |   | 2007   |   |   | Difference |   |
|                                                  |   |                                                             |    |   |   |   |   |   |   |
| Salaries                and related costs             |   | $                                                                | 165,862 |   |   | $      | 169,186 |   |   | $ | (3,324 | ) |
| General                office expense                 |   |                                                             | 27,680  |   |   |   | 25,746 |   |   |   | 1,934 |   |
| Legal                and other professional fees      |   |                                                             | 252,287 |   |   |   | 26,857 |   |   |   | 225,430 |   |
| Audit,                accounting and related services |   |                                                             | 22,910  |   |   |   | 22,953 |   |   |   | (43 | ) |
| Travel,                meals and entertainment        |   |                                                             | 19,844  |   |   |   | 10,670 |   |   |   | 9,174 |   |
| Other                general and administrative       |   |                                                             | 47,356  |   |   |   | 51,340 |   |   |   | (3,984 | ) |
| Total                general and administrative       |   | $                                                                | 535,939 |   |   | $      | 306,752 |   |   | $ | 229,187 |   |

|                                             |   | Three-month                Period EndedAugust                31, |    |   |   |   |
|--------------------------------------------------|--------|------------------------------------------------------------------|---------|--------|--------|--------|
|                                             |   | 2008                                                             |    |   | 2007   |   |   | Difference |   |
|                                             |   |                                                             |    |   |   |   |   |   |   |
| Salaries                and taxes                |   | $                                                                | 151,689 |   |   | $      | 149,495 |   |   | $ | 2,194 |   |
| Commissions                                      |   |                                                             | 5,307   |   |   |   | 223 |   |   |   | 5,084 |   |
| Stock                option expense              |   |                                                             | 13,491  |   |   |   | 28,593 |   |   |   | (15,102 | ) |
| Fringe                benefits                   |   |                                                             | 17,017  |   |   |   | 15,700 |   |   |   | 1,317 |   |
| Key-man                life insurance            |   |                                                             | 12,224  |   |   |   | 4,420 |   |   |   | 7,804 |   |
| Deferred                policy acquisition costs |   |                                                             | (33,866 | )      |   |   | (29,245 | ) |   |   | (4,621 | ) |
| Total                salaries and related costs  |   | $                                                                | 165,862 |   |   | $      | 169,186 |   |   | $ | (3,324 | ) |

----

|                                                       |   | Three-month                Period EndedAugust                31, |    |   |   |   |
|------------------------------------------------------------|--------|------------------------------------------------------------------|---------|--------|--------|--------|
|                                                       |   | 2008                                                             |    |   | 2007   |   |   | Difference |   |
|                                                       |   |                                                             |    |   |   |   |   |   |   |
| General                corporate services                  |   | $                                                                | 14,163  |   |   | $      | 3,131 |   |   | $ | 11,032 |   |
| Expansion                of surety license to other states |   |                                                             | 35,662  |   |   |   | - |   |   |   | 35,662 |   |
| Acquisition                and financing related services  |   |                                                             | 202,462 |   |   |   | 23,726 |   |   |   | 178,736 |   |
| Total                legal and other professional fees     |   | $                                                                | 252,287 |   |   | $      | 26,857 |   |   | $ | 225,430 |   |

** **
** **
** **

----

|                                                                                                                                                       |   | Three-month                Period EndedAugust                31, |    |   |   |   |
|------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|------------------------------------------------------------------|---------|--------|--------|--------|
|                                                                                                                                                       |   | 2008                                                             |    |   | 2007   |   |   | Difference |   |
|                                                                                                                                                       |   |                                                             |    |   |   |   |   |   |   |
| Interest                expense on bridge financing                                                                                                        |   | $                                                                | 83,884  |   |   | $      | 630 |   |   | $ | 83,254 |   |
| Expense                of common shares issued or to be issued in connection with bridge                financing and other arrangements                   |   |                                                             | 24,008  |   |   |   | 2,426 |   |   |   | 21,582 |   |
| Interest                expense on demand and term notes                                                                                                   |   |                                                             | 10,365  |   |   |   | 13,920 |   |   |   | (3,555 | ) |
| Interest                expense accrued on debt obligations subsequently settled and recorded                as                gain on debt extinguishment |   |                                                             | -       |   |   |   | 9,775 |   |   |   | (9,775 | ) |
| Other                finance charges                                                                                                                       |   |                                                             | 521     |   |   |   | 4,241 |   |   |   | (3,720 | ) |
| Total                interest expense                                                                                                                      |   | $                                                                | 118,778 |   |   | $      | 30,992 |   |   | $ | 87,786 |   |

|                                         |   | Three-month                Period EndedAugust                31, |    |   |   |   |
|----------------------------------------------|--------|------------------------------------------------------------------|---------|--------|--------|--------|
|                                         |   | 2008                                                             |    |   | 2007   |   |   | Difference |   |
|                                         |   |                                                             |    |   |   |   |   |   |   |
| Accretion                of discount         |   | $                                                                | 138,233 |   |   | $      | 128,848 |   |   | $ | 9,385 |   |
| Accrued                dividends             |   |                                                             | 251,066 |   |   |   | 225,243 |   |   |   | 25,823 |   |
| Total                accretion and dividends |   | $                                                                | 389,299 |   |   | $      | 354,091 |   |   | $ | 35,208 |   |

----

***Critical      Accounting Policies and Estimates***

----

***Analysis      of Liquidity, Capital Resources and Financial Position and Recent Developments      and Future Direction of Company***

----

----

**Item      3. Quantitative and Qualitative Disclosures About Market      Risk**

**Item      4T. Controls and Procedures**

----

**PART      II – OTHER INFORMATION**

**Item      1.      Legal Proceedings**

**Item      1A.   Risk Factors**

**Item      2. Unregistered Sales of Equity Securities**

**Item      3. Defaults upon Senior Securities**

----

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

**Item      5. Other Information**

**Item      6. Exhibits**

| 3.1    | Company’s                Articles of Incorporation (1)                                                                                                                                                  |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 3.2    | Company’s                By-laws (1)                                                                                                                                                                    |
| 3.3    | Certificate                of the Designations, Powers, Preferences and Rights of Series A Preferred                Stock of Jacobs Financial Group (1)                                                       |
| 3.4    | Certificate                of the Designations, Powers, Preferences and Rights of Series B Preferred                Stock of Jacobs Financial Group (1)                                                       |
| 4.1    | Certificate                of the Designations, Powers, Preferences and Rights of Series A Preferred                Stock of Jacobs Financial Group (1)                                                       |
| 4.2    | Certificate                of the Designations, Powers, Preferences and Rights of Series B Preferred                Stock of Jacobs Financial Group (1)                                                       |
| 10.1   | Agreement                to acquire by merger Reclamation Surety Holding Company, Inc. (2)                (4)                                                                                                 |
| 10.2   | Stock                Purchase Agreement with National Indemnity Company to purchase Unione                Italiana Insurance Company of America dated August 20, 2008                (5)                      |
| 31.1   | Certification                of Chief Executive Officer pursuant to Rule 13a-146.1 promulgated                under                the Securities Exchange Act of 1934                                        |
| 31.2   | Certification                of Chief Financial Officer pursuant to Rule 13a-146.1 promulgated                under                the Securities Exchange Act of 1934                                        |
| 32.1   | Certification                of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as                adopted                pursuant to Section 906 of the Sarbanes-Oxley Act of                2002 |
| 32.2   | Certification                of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as                adopted                pursuant to Section 906 of the Sarbanes-Oxley Act of                2002 |
| 99.1   | Form                of Subscription Agreement and Promissory                Note  (Bridge-financing) (3)                                                                                            |
|   | (1)                                                                                                                                                                                                           | Incorporated                by reference to the Company’s Current Report on form 8-K dated December                29, 2005. |
|   | (2)                                                                                                                                                                                                           | Incorporated                by reference to the Company’s Current Report on form 8-K dated February 8,                2008. |
|   | (3)                                                                                                                                                                                                           | Incorporated                by reference to the Company’s Current Report on form 8-K dated June 6,                2008 |
|   | (4)                                                                                                                                                                                                           | Incorporated                by reference to the Company’s Current Report on form 8-K dated June 24,                2008 |
|   | (5)                                                                                                                                                                                                           | Incorporated                by reference to the Company’s Current Report on form 8-K dated August 20,                2008 |

----

**SIGNATURES**

| Date:                October 20, 2008 | JACOBS                FINANCIAL GROUP, INC. |
|---------------------------------------|---------------------------------------------|
|                                  | (Registrant)                                |
|  By:                             |                                        |
|                                  | /s/John                M. Jacobs            |
|                                  | John                M. Jacobs, President    |