**UNITED
      STATES**


**SECURITIES
      AND EXCHANGE COMMISSION**


Washington,
      D.C. 20549




**Form
      10-KSB**




(Mark
      One)




**x
      ANNUAL REPORT UNDER
      SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF**


1934




For
      the
      fiscal year ended December 31, 2006




**o
      TRANSITION REPORT UNDER
      SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT**


**OF
      1934**




For
      the
      transition period from ______________ to________________




*Commission
      file number 000-* *51464*




**AMERICAN
      BASKETBALL ASSOCIATION, INC.**


(Name
      of
      small business issuer)


Utah
              87-0376691(State
                  of other jurisdiction
              (I.R.S.
                  Employerof
                  incorporation or organization)
              Identification
                  No.)9421
                  Holliday Road Indianapolis, IN
              46201(Address
                  of principal executive offices)
              (Zip
                  Code)




Registrant's
      telephone number, including area code: (407) 540-0452




Securities
      registered under Section 12(b) of the Exchange Act:


Title
                  of each class
              Name
                  of each exchange on which registeredNone
              ___________________________________





Securities
      registered under Section 12(g) of the Exchange Act:




**Common
      Stock No Par**







(Title
      of
      class)





(Title
      of
      class)




Check
      whether the issuer is not required to file reports pursuant to Section 13 or
      15(d)
      of the Exchange Act. o




Check
      whether the issuer (1) filed all reports required to be filed by Section 13
      or
      15(d) of the Exchange Act during the past 12 months (or for such shorter period
      that the registrant was required to file such reports), and (2) has been subject
      to such filing requirements for the past 90 days. Yes o No x




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




Indicate
      by check mark whether the registrant is a shell company (as defined in Rule
      12b-2 of the Exchange Act). Yes o No
x




State
      issuer's revenues for its most recent fiscal year. $609,752




The
      aggregate market value of the voting and non-voting common equity held by
      non-affiliates computed by reference to the price at which the common equity
      was
      sold was approximately $1,738,373 based upon the average bid and asked price
      of
      $0.20 as reported by the OTC Bulletin Board as of April 24, 2007.




The
      Company had 26,597,017 shares of common stock outstanding, as of April 11,
      2007.




**DOCUMENTS
      INCORPORATED BY REFERENCE**




None




Transitional
      Small Business Disclosure Format (Check one): Yes o No x









**PRIVATE
      SECURITIES LITIGATION REFORM ACT SAFE HARBOR STATEMENT**




When
      used
      in this Annual Report on Form 10-KSB, the words "may," "will," "expect,"
      "anticipate," "continue," "estimate," "intend," "plans", and similar expressions
      are intended to identify forward-looking statements within the meaning of
      Section 27A of the Securities Act of 1933 and Section 21E of the Securities
      Exchange Act of 1934 regarding events, conditions and financial trends which
      may
      affect American Basketball Association, Inc.’s (the “Company”) future plans of
      operations, business strategy, operating results and financial position. Such
      statements are not guarantees of future performance and are subject to risks
      and
      uncertainties and actual results may differ materially from those included
      within the forward-looking statements as a result of various factors. Such
      factors include, among others: (i) the Company's ability to obtain additional
      sources of capital to fund continuing operations; in the event it is unable
      to
      timely generate revenues (ii) the Company's ability to retain existing or obtain
      additional licensees who will act as distributors of its products; (iii) other
      economic, competitive and governmental factors affecting the Company's
      operations, market, products and services. Additional factors are described
      in
      the Company's other public reports and filings with the Securities and Exchange
      Commission. Readers are cautioned not to place undue reliance on these
      forward-looking statements, which speak only as of the date made. The Company
      undertakes no obligation to publicly release the result of any revision of
      these
      forward-looking statements to reflect events or circumstances after the date
      they are made or to reflect the occurrence of unanticipated events.





2


**ITEM
      1. BUSINESS**




**Overview**




Our
      primary business is (i) operating the American Basketball Association (the
      “League”), a professional basketball league currently composed of 47
      independently-owned teams located in the United States, Mexico and Canada,
      (ii)
      marketing League-related merchandise and other products and services offered
      by
      the Company and the League and (iii) developing or expanding media outlets
      and
      ancillary entertainment businesses that complement the League’s operations.





**Background**





The
      original American Basketball Association league (the “Original ABA”) existed for
      nine full seasons, starting in 1967. It was known as the “lively” league that
      created the three-point shot, and it was the “frontier” league that brought
      modern professional basketball to many “hoops-crazy” cities. During that time,
      the Original ABA competed with the more established, rival NBA for players,
      fans, and media attention until 1976 when ABA teams were absorbed into the
      NBA
      and the original ABA ceased to exist.





The
      League commenced play under the current banner and management in 2004 as the
      American Basketball Association. The League is a new professional basketball
      league and is not a continuation of the Original ABA whose teams were absorbed
      into the NBA in 1976. Since 2004, the League has grown to more than 30 teams
      competing in last year’s League championship, composed of 47 teams competing
      during 2006. We have created the League with the focus of gaining acceptance
      as
      a fan-pleasing entertainment experience that emphasizes basketball skills and
      fast-paced games at affordable prices. The League continues the Original ABA
      tradition of innovation in its efforts to bring diverse, fan-friendly, exciting
      basketball to its fans. Management believes that the “ABA” name remains
      synonymous with innovative and spirited basketball, the 3-point play, “Dr. J.”
(former star player Julius Erving) and slam dunk contests, all of which we
      believe have contributed significantly to the growth and development of
      professional basketball as it has become known throughout the
      world.





***The
      Company’s Role*** .





Management
      views one of its principal operating challenges ahead to be how to maximize
      the
      League’s brand recognition in combination with new initiatives and today’s new
      revenue possibilities. Management believes that, in addition to basketball,
      the
      League’s fans also share an interest in music and emerging pop culture and that
      they provide reference points for what are new and hot trends in the
      pop-culture. In essence, these fans, by their habits and spending patterns,
      are
      the initiators or predictors of pop trends. The Company intends to capitalize
      on
      the demographic composition of that fan base and branch into music and
      entertainment, as described below. In the process, management believes that
      fans
      will not only pay $10-12 ticket price but that the League will be transformed
      into a formidable sports and family entertainment experience. While League
      cities will be both large and small (including, for example, New York, Los
      Angeles, Dallas, Chicago and Detroit, as well as Bellingham, Washington,
      Burlington, Vermont and Waco, Texas) all are expected to have basketball and
      music fans in significant and growing numbers.





The
      Company’s main responsibilities will be to





(i)
            set
                rules for the scheduling and playing of all League games,


(ii)
            seek
                national and international products and sponsors and


(iii)
            establish
                and enforce guidelines and benchmarks for team ownership.





As
      steward of the “ABA” brand name, the Company will seek to leverage and monetize
      that brand through various forms of media and merchandise sales. In that regard,
      the Company will be responsible for generating national revenue such as may
      flow
      from TV deals, apparel, corporate sponsorships, and distribution of the League’s
      games via multiple media platforms. In addition, the Company intends to
      centralize the League’s merchandise sales and Internet traffic that is currently
      dispersed among the teams, creating more traffic and volume for the League
      while
      providing higher quality products and higher margins for the teams. This
      exchange will allow the League and the Company to profit from revenue streams
      that were previously only available to the local teams, while maintaining and
      enhancing the local team’s income. Management expects that revenue-sharing
      agreements will provide the bulk of Company’s income.




3





***The
      License*** .





The
      commercial use of the trademarks “ABA” and “American Basketball Association”
(the “Licensed Marks”) by the Company, alone or in combination with other words,
      phrases and designs, is governed by a license agreement (the “License”) with NBA
      Properties, Inc. (the “NBA”). **** The
      NBA
      granted the current License to the Company and two other entities.  These
      two other entities are owned by persons who include principal shareholders
      of the Company.  These other entities are currently inactive and management
      expects that these entities will be dissolved. Although the Company believes
      that other equity owners of these inactive entities have no valid rights to
      or claims against the ABA under the License, no assurance can be given that
      these entities or their other beneficial owners will not make any claims
      against the ABA under the License or otherwise. The
      scope
      of the License covers services and products, as well as manufacturing,
      distribution and selling practices. The License contains product quality
      language.





The
      license with the NBA contains quality approval provisions that require the
      licensee to cause licensed services and licensed products to meet and conform
      to
      high standards of style, quality and appearance. As such, the NBA has
      discretion, using good faith, to revoke its approval of particular uses of
      the
      Licensed Marks that relate to gambling, adult content, or any other subject
      matter that would





(i)
            damage
                or reflect unfavorably upon the NBA, any of its member teams, or
                the
                original ABA,


(ii)
            violate
                provisions of the License or


(iii)
            misuse,
                mutilate, dilute or otherwise tarnish the Licensed Marks.





The
      right
      to use the Licensed Marks under the License discontinues upon expiration or
      termination of the License, except for sell-off of inventory. The License can
      end if the League ceases operations, is no longer owned or operated by a
      licensee, in the event of a chance of control or material change of management
      or if product quality concerns are not corrected after notice. In the event
      the
      NBA permits the License to continue following a change in control or material
      change of management, the Company will be subject to a $500,000 payment to
      the
      NBA. Management believes that the Company has complied with the requirements
      and
      conditions of the License and intends to meet its requirements and conditions,
      and has received no notice otherwise. All royalties due under the License have
      been satisfied.





***The
      League*** **.**





*The
      Teams* .
      At the
      center of the League’s and the Company’s future growth is the creation of a
      league of active teams and dedicated fans. To that end, the Company has created
      comprehensive guidelines and methodologies to minimize the start-up cost of
      creating a team, maximize ticket sales through sales and marketing efforts,
      and
      improve financial management. Strong, viable teams lead to increased spirit
      at
      games, wider geographic coverage and a stronger “ABA” brand.





The
      League currently has 47 teams for this season (divided into three conferences,
      Red, White and Blue). The League anticipates that players will play under a
      $120,000 per team salary cap and each team will keep all local revenues
      (tickets, sponsors, television, etc.) and pay no League assessment aside from
      the one-time market reservation fee.




*The
      Players* .
      The
      approximately 1,700 basketball players who graduate from Division I and IA
      colleges and universities each year assure a rich talent pool of skilled
      athletes who can offer a quality game experience for the fans (the NBA draft
      and
      NBA player releases total approximately 60 players each year). The incentive
      for
      the players is to be seen by the NBA or another league and be paid while
      continuing their passion for playing basketball.




4





*The
      Fan Base* .
      Management believes the ABA brand of basketball is fan friendly, affordable
      family entertainment. We expect the fan base to include many young people and
      families who may be attracted to see and experience, first hand, ABA basketball
      games that are affordable, fast paced and entertaining. Because we expect ABA
      games to attract fans of all ages, the ABA anticipates being able to offer
      companies seeking to market new and cutting-edge products and services an
      attractive, cost effective means to accomplish these objectives. Overall, the
      Company believes that the League presents opportunities by





·
            selling
                tickets and marketing an array of products and services to fans and
                supporters, and


·
            engaging
                in joint marketing initiatives with other companies and sports leagues.





***Opportunities
      for Growth*** .





Management
      believes that a principal key to growth lies in the Company’s ability to project
      the League’s brand to a wider audience and consolidate the ABA’s standing as a
      growing force in entertainment. The Company’s business model centers on
      exploiting the content created by its live events, principally the League games
      and concerts (as described below). The Company will, in turn, attempt to
      monetize the demographics those events attract through television programming,
      home video, pay-per-view, the Internet, advertising and sponsorships,
      merchandise sales and live concerts. Broadening and then maximizing the
      distribution of its content, whether in the form of a TV show or T-shirt, are
      among the Company’s primary marketing goals. The Company does not share in
      revenues generated by teams from their ticket sales.





Management
      is also pursuing opportunities in ancillary sectors such as merchandise sales
      and licensing of its brand name for other products. Management intends to
      structure these business relationships on a revenue-sharing basis to decrease
      capital investments or large working capital requirements.





Described
      below are revenue-generating initiatives the Company has begun to explore.
      Management believes that these revenue-generating initiatives, if successfully
      implemented, may become principal revenue sources for the Company. Ancillary
      revenue sources being explored by management include text messaging and related
      technology, League basketballs, apparel, marketing, radio broadcasting and
      more.
      As the League grows its fan base, management anticipates that other added
      potential sources of revenue will be evaluated and added including those noted
      below.





*Television
      and Radio* .
      Management has held discussions with national TV networks, cable channels,
      and
      radio networks that have expressed an interest in broadcasting League games,
      including the All-Star Game and Championship Playoff games. With a growing
      need
      for programming and “content,” management believes that cable, television and
      radio may all be expected to provide additional revenues.





*Merchandise* .
      The
      Company intends to exploit its ABA brand through both licensing and direct
      sales
      of branded merchandise, including a full line of apparel, accessories and shoes
      using its unique and widely recognized logo. Team logo-based apparel and
      accessories revenues will be shared between the Company and the teams. By
      aggregating merchandise demand through the League and a seasoned merchandise
      company, the Company expects to lower the overall cost of the products sold
      and
      minimize the operating expenses, while ensuring consistent quality and product
      availability. Additionally, the Company intends to boost its sales of
      basketballs through an expanded distribution channel while lowering current
      costs by sourcing products directly from the manufacturers. Management expects
      that the League’s basketballs, because of their unique color and trademark, may
      prove to be a significant revenue source. As attendees of League games and
      visitors at the ABALive.com website increase, the Company will attempt to
      leverage the League’s increased popularity to enter into further and varied
      licensing transactions, although no assurance can be given that the Company
      will
      be successful in doing so.





*ABALive.com* .
      Management intends to overhaul the ABALive.com website to deliver comprehensive
      game news, team information and entertainment content to the fans. Thereafter,
      management proposes to regularly add content and features to the website,
      ultimately delivering a full array of entertainment options, such as
      broadcasting games, game highlights, inside analysis, and team and player
      interviews, among others.




5





The
      goals
      of the overhaul are to (i) improve *ABALive.com’s* content
      including, daily stories, ABA history, rules, teams, coaches, players, etc.,
      (ii) optimize advertising location, technology and vendors, (iii) provide more
      intuitive and user-friendly navigation within the various pages, (iv) provide
      a
      more professional “ABA Store” layout and buying experience, (v) create team
      websites so as to stream all team site fans through a master website and (vi)
      add features that may include:





·
            ABA
                All Access Radio - a platform for online interviews with anyone and
                everyone.





·
            ABA
                Salute - a not-for-profit program that salutes the military and provides
                support to military organizations through ABA Auctions (described
                below)
                and other fund-raising activities. ABA Salute will make regular donations
                to the American Legion Legacy Scholarship Fund, Disable Sports USA,
                Wounded Warriors, Fisher House and Salute American
                Heroes.





·
            ABA
                Auctions - In addition to its own auction site for sports memorabilia,
                the
                Company intends to join with*www.ubid.com*to
                provide opportunities for the sale of tickets to League games, League
                and
                team merchandise and additional sports memorabilia. The Company believes
                that an arrangement with uBid.com will drive internet traffic to
                uBid in
                exchange for a cash payment.





Upon
      successful completion of the overhaul, the website will be more streamlined,
      easier to navigate and more interactive. In addition, the website will aggregate
      the websites of all League teams under its, thus alleviating the need for each
      team to build it own website and maintaining a consistent “look” for the
      League’s brand. We expect that the uniform platform for the team websites will
      not only promote the consistency of the “ABA” brand identity, but ought also to
      stream even more users through the ABALive.com “master” site and stimulate
      online merchandise sales. We further expect that the increased web traffic
      should increase ad placements and revenue while also enhancing paid sponsorship
      opportunities.





***ABA
      Entertainment*** .





With
      47
      teams, the League has scheduled over 1,000 games for the upcoming 2007-2008
      season. As the Company’s non-basketball entertainment division, ABA
      Entertainment will work with major booking companies and entertainment
      management to stage concerts (both in-game and free-standing) throughout the
      basketball season. The Company believes there is an ample supply of artists
      and
      performers who would relish the opportunity to perform in front of live
      demographically responsive audiences and have an opportunity to be discovered
      and to refine their techniques in front of live audiences.




***Marketing
      Strategy*** **.**





The
      Company hopes to initiate a publicity and marketing campaign to project the
      “ABA” brand within North America.  Promotion and publicity events are
      collectively expected to result in (i) higher traffic to the ABALive.com
      website, (ii) added merchandise sales, (iii) increased leverage during
      negotiations between the Company and potential League advertisers.





6




***Government
      Regulation*** .





The
      Company anticipates that its business operations will be subject to minimal
      government regulation.  However, as a public company, the Company is
      subject to the disclosure and other filing requirements of the federal
      securities laws, including the filing with the U.S. Securities and Exchange
      Commission of quarterly and annual reports, as well as the requirements of
      the
      stock market or quotation service on which the Company’s shares may thereafter
      be traded, as further discussed below.





***Offices
      and Personnel*** **.**





The
      Company’s headquarters are located in leased premises at 9421 Holliday Drive,
      Indianapolis, Indiana  46260, and its telephone number is (317) 844-7502.
 The Company currently has three full-time employees.   As
      needed, the Company will also engage additional employees, consultants and/or
      independent contractors which it believes are necessary or appropriate to carry
      out its operations.  The Company’s goal is to keep its corporate structure
      simple and small, so as to allow for quick decision making, control, and low
      operating budgets.




**Litigation**





In
      a case titled *Troy
      Fisher and 3 Ball Management, LLC. vs. American Basketball Association, RAG,
      LLC, Richardson Consulting Group, Ricardo Richardson, Reginald Jones, Robert
      Blackwell, and  Indiana Alley Cats* pending
      in the Marion County Superior Court, Indiana under Cause No. 
49D120511CT043427, the Plaintiffs seek to recover alleged damages from the
      Company after their team was suspended from the League for failure to follow
      the
      ABA Team Operations Manual. The
      Company intends to defend this litigation aggressively, expects that the courts
      will concur with the Company’s views that these actions and claims are without
      merit and currently believes that the outcome, other than costs of suit, will
      not be materially adverse to the ABA. Nevertheless, an adverse judgment on
      these
      actions could materially harm the business of the Company. No assurance can
      be
      given that the Company’s position will be upheld or will prove to be correct
      over the course of litigation.





*American
      Arbitration Association case: 52 180 E 00612 06 Jaren W. Jackson v. The American
      Basketball Association, LLC, the Philadelphia Fusion, Wayne Butler and Jeffrey
      Wilson.* In
      November 2006 Jaren Jackson commenced arbitration against the Company for unpaid
      wages of
      about
      $15,000 owed by
      the Philadelphia Fusion, one of the teams of the ABA that played during
      the 2004 ABA season . 
      The arbitration is to be held in Indianapolis, Indiana but no date has been
      set.





*Steven
      Jaloza and Salvatore Fradella v. Joseph Newman, Richard P. Tinkham, Jr., and
      the
      American Basketball Association, Inc* .,
      pending in the Marion County Circuit Court under Cause
      No.:49C010611PL0046089.  In this action, filed in November
      2006, plaintiffs assert that Joseph Newman and Richard Tinkham breached
      fiduciary duties owed to them under the Operating Agreement of a separate
      entity, ABA Founders and Properties, LLC. The Company is not a party to the
      Operating Agreement. Plaintiffs
      seek to add the Company as a defendant as an alter ego of Newman and
      Tinkham.  Hearing
      on the Company’s Motion to Dismiss is set for February 5, 2007.  This
      motion by the Company is based on an action pending in the Marion County
      Superior Court, under Cause No. 49D010608PL033078, filed by the same plaintiffs,
      that also asserts breach of fiduciary duties owed by Joseph Newman to them
      under
      the Operating Agreement of ABA Founders and Properties, LLC.  In that
      action the Company, after hearing, was found not subject to the remedies sought
      in that action. The
      Company intends to defend this litigation aggressively, expects that the courts
      will concur with the Company’s views that these actions and claims are without
      merit and currently believes that the outcome, other than costs of suit, will
      not be materially adverse to the ABA. Nevertheless, an adverse judgment on
      these
      actions could materially harm the business of the Company. No assurance can
      be
      given that the Company’s position will be upheld or will prove to be correct
      over the course of litigation.




7




*Steven
      Jaloza and Salvatore Fradella vs. ABA Founders & Properties, LLC, ABA Sports
      and Entertainment, Inc., a/k/a ABA Enterprises, Inc., ABA International, Inc.,
      ABA League, LLC, ABA Operations, LLC, ABA Properties, LLC, ABA Rental, Inc.
      and
      ABA Services, Inc* .
      In the
      Marion Superior Court, Room No 5, Indiana. Cause No. 49D010608PL033078. Steven
      Jaloza (“Jaloza”) and Salvatore Fradella (“Fradella”) seek damages from ABA
      Founders & Properties, LLC, ABA Sports and Entertainment, Inc., a/k/a ABA
      Enterprises, Inc., ABA International, Inc., ABA League, LLC, ABA Operations,
      LLC, ABA Properties, LLC, ABA Rental, Inc., and ABA Services, Inc. for alleged
      breach of fiduciary duties allegedly arising under the Operating Agreement
      of
      ABA Founders & Properties, LLC. The suit was filed in August, 2006. A
      hearing for prejudgment attachment and to appoint a receiver over ABA Indiana
      was held on October 30, 2006. Prejudgment attachment was not granted and a
      receiver was not appointed. Neither ABA Utah nor ABA Indiana is a party to
      the
      action. The Plaintiffs have not pursued the action in this court since the
      date
      of the receivership hearing. This matter is covered by the Indemnification
      Agreement. The ABA intends to contest the case vigorously. The potential for
      an
      unfavorable outcome is not significant. The plaintiffs did not appeal the denial
      of the request for prejudgment attachment or the decision not to appoint a
      receiver. Jaloza and Fradella disassociated from ABA Founders & Properties,
      LLC in June, 2001. The Operating Agreement of ABA Founders & Properties, LLC
      allowed Newman and Tinkham to engage in or possess interests in other business
      ventures of every kind and description for their own account. *Credentials
      Plus, LLC v. Calderson* ,
      230 F.
      Supp.2d (N.D. Ind 2002) holds that fiduciary duties of members of an Indiana
      LLC
      are governed by I.C. 23-18-4-2(b) and can be eliminated by provisions in the
      Operating Agreement. The action should be disposed by summary judgment but
      has
      been held open in view of the matter pending in the Marion County Circuit Court
      under Cause No.:49C010611PL0046089.





*Ricardo
      Richardson and Richardson Consulting vs. American Basketball Association, a/k/a
      ABA Founders & Properties, a/k/a ABA Sports & Entertainment, Inc., Joe
      Newman, in his official capacity and Richard P. Tinkham, Jr., in his official
      capacity* .
      In the
      Marion Superior Court, Indiana. Cause No. 49D11-0608-PL-33933. Richardson
      asserts that as a minority shareholder in ABA Sports & Entertainment, Inc.
      he has a right to prevent use of its unspecified proprietary rights which he
      alleges it sold to Brax Capital Group. Neither ABA Utah nor ABA Indiana is
      a
      party to this action. The lawsuit was filed in August, 2006. ABA Sports &
Entertainment, Inc, Newman and Tinkham filed answers. The Court granted the
      defendant’s motion to require that Richardson take the matter to the board of
      directors of ABA Sports & Entertainment, Inc as required in a derivative
      shareholder action. Richardson has not done this. This matter is covered by
      the
      Indemnification Agreement. The ABA intends to contest the case vigorously.




8





*Jeff
      Noordgaard, Michael Hart, Daimon Bethea, Coleco Buie, Deron Hayes, Michael
      Robinson and Tremaine Wingfield vs. Joe Newman, ABA Operations, LLC and ABA
      League, LLC* .
      In the
      Marion Superior Court, Indiana. Cause No. 49D11-0207-CC-001122. Ryan Hoover,
      Jeff Nordgaard, Michael Hart, Daimon Bethea, Coleco Buie, Deron Hayes, Michael
      Robinson and Tremaine Wingfield (the “Players”) seek damages under the legal
      theory of breach of contract and under the statutory theory of the Wage Payment
      Statute for alleged non-payment of wages. Progress of Claim - The lawsuit was
      filed in 2003. Summary Judgment was entered against ABA Operations, LLC
      (“Operations”) and ABA League, LLC (“League”) on January 5, 2007 in the amount
      of $762,331.43. An appeal of this decision was filed with the Indiana Court
      of
      Appeals on March 8, 2007. This matter is covered by the Indemnification
      Agreement. Prior to December 19, 2006, funds of ABA Indiana were held in a
      bank
      account titled in the name of ABA League, LLC as trustee. Since December 19,
      2006, all funds of ABA Utah and ABA Indiana have been held in bank accounts
      titled in the name of ABA Indiana. The Players have vigorously attempted to
      collect this judgment from ABA Utah and ABA Indiana. The ABA intends to contest
      the case vigorously. Undersigned counsel has hired Indianapolis attorney, Paul
      Ludwig, to represent the interests of ABA Utah and ABA Indiana in this matter.
      ABA Utah or ABA Indiana has been named as a Garnishee Defendant. Neither ABA
      Utah nor ABA Indiana has funds or contract owed to ABA League, LLC. The bank
      account that Players seek to garnish has $32,000 in it. A garnishment hearing
      on
      this bank account is set for June 5, 2007. In the meantime, a hearing to set
      an
      appeal bond to stay enforcement of the judgment pending appeal is set for May
      5,
      2007. Collateral is required to post a supercedas bond with the trial court
      pending appeal. Severko Hrywnak (“Hrywnak”) has promised to provide the
      collateral. The strategy is to have a portion or the entire judgment amount
      overturned on appeal. The tactic is to settle this matter using non ABA Indiana
      or ABA Utah assets. ABA Management believes that the judgment will be overturned
      on appeal. The Company intends to defend this litigation aggressively, expects
      that the courts will concur with the Company’s views that these actions and
      claims are without merit and currently believes that the outcome, other than
      costs of suit, will not be materially adverse to the ABA. Nevertheless, an
      adverse judgment on these actions could materially harm the business of the
      Company. No assurance can be given that the Company’s position will be upheld or
      will prove to be correct over the course of litigation .




*James
      P. Dod vs. Perry R. Hall, a/k/a Pierre Hall, d/b/a Next Level Sports Franchise
      Development, LLC, d/b/a The Cleveland Rockers, d/b/a The Lake Erie Rockers,
      Ralph W. Underhill, American Basketball Association, Inc., and American
      Basketball Association, LLC.* In the
      Cleveland Municipal Court, Cuyahoga County, Ohio. Cause No. 06CVF0032421. James
      P. Dod (“Dod”) seeks $13,000 in damages under the theory of negligent
      misrepresentation from ABA Indiana and American Basketball Association, LLC
      as a
      result of information about *The
      Cleveland Rockers* appearing on the ABA website. The lawsuit was filed December 8, 2006. ABA
      Indiana filed its answer and cross claim on February 15, 2007. The case is
      set
      for a pre-trial hearing on June 11, 2007. This matter is covered by the
      Indemnification Agreement. The ABA intends to contest the case. The potential
      for an unfavorable outcome of $13,000 is not significant. The elements of the
      tort of negligent misrepresentation are: one who, in the course of his business,
      profession or employment, or in any other transaction in which he has a
      pecuniary interest, supplies false information for the guidance of others in
      their business transactions, is subject to liability for pecuniary loss caused
      to them by their justifiable reliance upon the information, if he fails to
      exercise reasonable care or competence in obtaining or communicating the
      information. The ABA is not in the business of supplying information for the
      guidance of others.  Such businesses typically include attorneys,
      surveyors, abstractors of title and banks dealing with no-depositors'
      checks.  The ABA was not hired or paid by Dod to supply information. 
The ABA does not hold a duty to supply Dod with information nor did it
      communicate any affirmative false statement to Dod. If not settled the matter
      should be disposed at hearing.




9





*Severko
      Hrywnak v. Joseph Newman* .
      Filed
      in the Circuit Court of Cook County, Illinois. Cause No. 2007L001101 and removed
      to the United States District Court for the Northern District of Illinois and
      assigned Cause No. 1:07-cv-00771. Severko Hrywnak (“Hrywnak”) seeks damages
      under the legal theories of breach of contract, promissory estoppel and fraud.
      Hrywnak alleges that Newman promised to repay losses Hrywnak incurred in hosting
      the 2006 ABA all star game by tendering 400,000 shares of ABA Utah stock.
      Neither ABA Utah nor ABA Indiana is a party to this lawsuit. The lawsuit was
      filed on January 30, 2007. An answer was filed. The matter was settled however,
      Hrywnak has not performed a promise of the settlement agreement to provide
      collateral for the supercedas appeal bond in the Indiana Legends player case.
      Initially, Hrywnaks asserted claims against ABA Utah and not Newman. The claims
      against Newman derive from his capacity as CEO of ABA Utah. This matter is
      covered by the Indemnification Agreement. The ABA intends to vigorously contest
      the case until Hrywnak performs his promise to provide collateral for the
      supercedas bond. Potential for Unfavorable Outcome and amount/range of potential
      loss - The claims should be dismissed based on the current settlement
      negotiations. In any event, no monetary damages can be awarded against either
      ABA Utah or ABA Indiana.





*Thaddeus
      A. Wier, Jr. v. American Basketball Association, Inc* .
      In the
      Superior Court of Erie County, New York. Index No. 2007-001971. On December
      5,
      2006, Thaddeus A Weir, Jr. (“Weir”) agreed to fund the ABA Indiana with $200,000
      and raise $4,000,000 (the Alternate Financing Plan”) in the event ABA Indiana
      could not come to terms with Purchasers under a pending Stock Purchase Agreement
      (‘the “SPA”). On December 5, 2006, as part of the Alternate Financing Plan, ABA
      Indiana and Big Apple Consulting USA, Inc. (“Big Apple”) entered into a
      contingent agreement (the “Big Apple Agreement”) pursuant to which, Big Apple
      was to provide investor management services to ABA Indiana in the event it
      did
      not come to terms with Purchasers under the SPA. On December 13, 2006, as part
      of the Alternate Financing Plan, Weir and ABA Indiana entered into a contingent
      advisory agreement (the “Weir Agreement”) in the event ABA Indiana did not come
      to terms with Purchasers under the SPA. Weir failed to wire the $200,000 to
      ABA
      Indiana. ABA Indiana notified Weir of the termination of the Big Apple Agreement
      and the Weir Agreement. ABA Indiana entered into the SPA on December 19, 2006.
      On January 9, 2007, Weir asserted that ABA Utah was obligated to perform the
      Big
      Apple Agreement and the Weir Agreement. On January 29, 2007, ABA Indiana and
      ABA
      Utah advised Weir that the Alternate Financing Plan was separate and distinct
      from the SPA and that the Weir Agreement and the Big Apple Agreement had been
      terminated in December, 2006 due to lack of performance. Without service of
      summons, Weir filed the action in the Superior Court of Erie County, New York
      on
      February 20. Without service of summons no response is due. The matter was
      settled on February 20, 2007. However, promises under the settlement agreement
      have not been performed. The ABA intends to come to satisfactory terms with
      Wier. Potential for Unfavorable Outcome and amount/range of potential loss
      - The
      potential amount of loss is significant. $200,000 was accrued for this issue.
      The Company intends to defend this litigation aggressively, expects that the
      courts will concur with the Company’s views that these actions and claims are
      without merit and currently believes that the outcome, other than costs of
      suit,
      will not be materially adverse to the ABA. Nevertheless, an adverse judgment
      on
      these actions could materially harm the business of the Company. No assurance
      can be given that the Company’s position will be upheld or will prove to be
      correct over the course of litigation.




10




**Intellectual
      Property**




We
      intend
      to rely on a combination of copyright, patent, trademark, trade secret and
      other
      intellectual property law, nondisclosure agreements and other protective
      measures to protect our proprietary rights. We also utilize unpatented
      proprietary know-how and trade secrets and employ various methods to protect
      such intellectual property. Taken as a whole, we believe our intellectual
      property rights are significant and that the loss of all or a substantial
      portion of such rights could have a material adverse effect on our results
      of
      operations. We cannot assure you that our intellectual property protection
      measures will be sufficient to prevent misappropriation of our technology.
      In
      addition, the laws of many foreign countries do not protect our intellectual
      properties to the same extent as the laws of the United States. From time to
      time, third parties have or may assert infringement claims against us or against
      our customers in connection with their use of our products or services. In
      addition, we may desire or be required to renew or to obtain licenses from
      others in order to further develop and market commercially viable products
      or
      services effectively. We cannot assure you that any necessary licenses will
      be
      available on reasonable terms.




**RISK
      FACTORS**




You
      should carefully consider the risks described below. These risks are not the
      only ones that we may face. Additional risks and uncertainties that we are
      unaware of, or that we currently deem immaterial, also may become important
      factors that affect us. If any of the following risks occurs, our business,
      financial condition or results of operations may be adversely affected.





**Risks
      Related to Our Business**





***The
      Company has a limited operating history that has generated
      losses*** *.*





The
      Company’s principal operations are comprised of the operation of the League.
      League play under the “American Basketball Association” banner resumed in 2004
      when the Company’s current management took over League operations and there are
      risks and difficulties frequently encountered by early-stage companies such
      as
      the Company.  Unanticipated problems, expenses and delays are frequently
      encountered in establishing a new business, and a new sports league, along
      with
      developing new products and services.  The Company may not be successful in
      addressing some or all of those risks, in which case there could be a material
      negative effect on its business and the value of the Company’s common stock that
      could also cause the Company to reduce, curtail or cease operations.  The
      Company has incurred losses since inception and may never become profitable
      if
      revenue growth is lower and operating expenses are higher than
      anticipated.




11





***Our
      auditors have given us a “going concern” qualification*** .





The
      Company’s audited consolidated financial statements for the years ended December
      31, 2006 and December 31, 2005 have been prepared assuming that the Company
      will
      continue as a going concern.  As noted in the financial statements, the
      Company has had no significant operating history, and from April 21, 2004
      (inception) to December 31, 2006, has generated a cumulative net loss of
      approximately $19,644,549. For the year ended December 31, 2006 the ABA had
      revenue of $609,752 and losses of $4,381,907.  As of December 31, 2006, the
      Company has $1,198,567 cash on hand. The Company expects that it will be able
      to
      meet its cash requirements until September 2007. If it is not able to raise
      additional funds at such point, it will be forced to curtail or cease its
      operations.




***We
      may need to raise substantial additional capital in the future to fund our
      operations and we do not have any current or future commitments of
      capital*** *.*





If
      the
      Company’s capital requirements or cash flow vary materially from management’s
      budgeted projections, or if unforeseen circumstances occur, the Company will
      require additional financing. A nticipated,
      but as yet unproven, revenue from sponsorships, television, licensing, special
      events, and market reservations are expected by management to provide sufficient
      working capital for on-going  operations . No
      assurances can be given that these objectives can be achieved or that these
      expectations will prove accurate in any respect.  If
      the
      Company raises additional funds by issuing equity or convertible debt
      securities, the percentage ownership of its then-current shareholders will
      be
      reduced, and such securities may have rights, preferences or privileges senior
      to those of such shareholders. There can be no assurance that additional
      financing will be available on terms favorable to the Company, if at all.
 If adequate funds are not available or are not available on acceptable
      terms, the Company’s ability to meet its working capital and capital expenditure
      needs and take advantage of unanticipated opportunities, develop or enhance
      services or products or otherwise respond to competitive pressures, will be
      significantly limited. That would, in turn, harm the Company’s business.





***As
      a result of our limited operating history, we may not be able to estimate
      correctly our future operating expenses and anticipated revenue sources, which
      could lead to cash shortfalls.***





We
      have a
      limited operating history, and as a result our historical financial and other
      operating data may be of limited value in estimating future operating revenue,
      revenue sources and expenses. Our budgeted expense levels are based in part
      on
      our expectations concerning future revenue and future revenue sources. The
      amount and sources of these revenues will depend on the success of the League,
      its teams, our marketing efforts, our ability to secure new sponsorships, our
      perception by fans and the general public and other factors that are difficult
      to forecast accurately.





***If
      we fail to maintain an effective system of internal controls, we may not be
      able
      to report accurately on our financial results or to prevent fraud. As a result,
      current and potential shareholders could lose confidence in our financial
      reporting which could harm our reputation, our business and the trading price
      of
      our stock*** .





Effective
      internal controls are necessary for us to provide financial reports, to monitor
      cash flows and capital needs, or to prevent fraud. If we cannot provide accurate
      reports our business reputation, operating results and our standing with team
      owners, fans and sponsors could be harmed. Inferior internal controls could
      cause investors to lose confidence in our reported financial information which
      could have a negative effect on the trading price of our stock.





12




***We
      encounter substantial competition from various sources.***





****** In
      order
      to attract fans and market League-related merchandise and other products and
      services offered by the Company and the League, the Company and the League
      must
      successfully compete with (i) other basketball teams, including those in the
      National Basketball Association (“NBA”), to a certain extent the Women’s
      National Basketball Association  (“WNBA”) and the National Collegiate
      Athletic Association (“NCAA”), (ii) other professional and NCAA sports teams and
      (iii) other sporting and non-sporting sources of entertainment.  Given the
      established nature of many of those competitors, there can be no guarantee
      that
      the Company and the League will attract enough revenue from fans and other
      sources to be profitable.





***We
      are dependent on our management team and the loss of these individuals would
      harm our business.*** **





The
      Company’s business is materially dependent on the continued services of it
      senior management and other key personnel, particularly Joe Newman, Richard
      Tinkham, Brad Hester and Darren Cioffi.  While the Company expects to enter
      into two-year employment agreements with those persons, it does not carry "key
      person" insurance on any of them or any other employees.  There is no
      assurance that any of the members of our team will remain employed by us. The
      Company also expects that it will need to hire additional personnel during
      the
      next twelve months. Because of competition for personnel, the Company may be
      unable to retain its current key employees or attract or retain other highly
      qualified employees in the future.  If the Company does not succeed in
      attracting new personnel or retaining and motivating current personnel, its
      business could be adversely affected.




***Dependence
      on Success of Teams and League*** *.*





Although
      the Company will derive no revenue from ticket sales made by the teams in the
      League, the Company and the League are dependent upon the continued operation
      of
      individual teams.  The Company has limited control over team management,
      team funding and sponsorship and may not be able to assure compliance with
      play, promotion
      and other commitments required. If a substantial number of the teams do not
      operate, the Company’s merchandising sponsorships and other revenue-generating
      possibilities will be materially harmed.





***License
      from NBA*** *.*





The
      commercial use of the trademarks “ABA” and “American Basketball Association”
(the “Licensed Marks”) by the Company, alone or in combination with other words,
      phrases and designs, is governed by a license agreement (the “License”) with NBA
      Properties, Inc. (the “NBA”). The NBA granted the current License to the Company
      and two other entities.  These two other entities have no involvement in
      the ownership or operation of the Company or of the League.  These two
      other entities are owned by persons who include principal shareholders of
      the Company.  These other entities are currently inactive and have been
      dissolved.  Although the Company believes that other equity owners of these
      inactive entities have no valid rights to or claims against the Company
      under the License, no assurance can be given that these entities or their other
      beneficial owners will not make any claims against the Company under
      the License or otherwise. The scope of the License covers services and products,
      as well as manufacturing, distribution and selling practices.  The License
      contains product quality language.  Under trademark law, if a trademark
      owner issues a license without retaining the right to control product quality,
      it risks losing its ownership rights to the trademark.  Quality approval
      provisions require the licensee to cause licensed services and licensed products
      to meet and conform to high standards of style, quality and appearance.
 The Company’s use of the Licensed Marks is deemed approval.
 Notwithstanding, the NBA has discretion, using good faith, to revoke its
      approval of particular uses of the Licensed Marks that relate to gambling,
      adult
      content, or any other subject matter that would (i) damage or reflect
      unfavorably upon the NBA, any of its member teams, or the original ABA, (ii)
      violate provisions of the License or (iii) misuse, mutilate, dilute or otherwise
      tarnish the Licensed Marks.  The right to use the Licensed Marks under the
      License discontinues upon expiration or termination of the License, except
      for
      sell-off of inventory.  The License can end if the League ceases
      operations, is no longer owned or operated by a licensee, in the event of a
      change of control or material change of management or if product quality
      concerns are not corrected after notice. Management believes that the Company
      has complied with the requirements and conditions of the License and intends
      to
      meet its requirements and conditions, and has received no notice otherwise.
       The Company’s loss of rights to the Licensed Marks would be materially
      harmful to the Company and the League and could result in a complete loss of
      investment.




13





***“Specific
      Business Risks.”***





Recently
      filed litigation could adversely affect the Company’s intellectual property. In
      or around December 2006 the ABA was advised that Steve Jaloza and Sol Fradella,
      50% owners of ABA Founders & Properties LLC, filed an action against Joseph
      F. Newman, Richard P. Tinkham and American Basketball Association, Inc. The
      plaintiffs have alleged that they have non-exclusive rights to the same
      intellectual property and rights “that is the subject of the corporate
      transactions between and among ABA and/or Brax Capital Group and/or Souvall
      Page” and that “potentially the plaintiffs in conjunction with another
      individual control the majority ownership of all ABA rights.” The Company
      believes that the pending actions and allegations are not meritorious,
      particularly insofar as they relate to the ABA and to the use of its
      intellectual property. The Company intends to defend this litigation
      aggressively, expects that the courts will concur with the Company’s views that
      these actions and claims are without merit and currently believes that the
      outcome, other than costs of suit, will not be materially adverse to the ABA.
      Nevertheless, an adverse judgment on these actions could materially harm the
      business of the Company. No assurance can be given that the Company’s position
      will be upheld or will prove to be correct over the course of litigation.





***Securities
      of the Company are Speculative “Penny” Stock.*** ****





The
      Company’s Shares are deemed a low-priced “penny” stock. An investment in the
      Company’s capital stock should be considered high risk and subject to
      marketability limitations.  Additionally, the Company’s shares are likely
      to continue to be thinly traded in the near future. As a result investors may
      be
      unable to sell at or near ask prices or at all if they desire or need to
      liquidate shares.





As
      defined in Rule 3a51-1 under the Securities Exchange Act, it will be more
      difficult for investors to liquidate their investment even if and when a market
      develops for the common stock. Until the trading price of the common stock
      rises
      above $5.00 per share, if ever, trading in the common stock is subject to the
      penny stock rules of the Securities Exchange Act specified in rules 15g-1
      through 15g-10. Those rules require broker-dealers, before effecting
      transactions in any penny stock, to: (i) deliver to the customer, and obtain
      a
      written receipt for, a disclosure document; (ii) disclose certain price
      information about the stock; (iii) disclose the amount of compensation received
      by the broker-dealer or any associated person of the broker-dealer; (iv) send
      monthly statements to customers with market and price information about the
      penny stock; and (v) in some circumstances, approve the purchaser's account
      under certain standards and deliver written statements to the customer with
      information specified in the rules. Consequently, the penny stock rules may
      restrict the ability or willingness of broker-dealers to sell the common stock
      and may affect the ability of holders to sell their common stock in the
      secondary market and the price at which such holders can sell any such
      securities. These additional procedures could also limit our ability to raise
      additional capital in the future.




14





The
      Company’s common stock is listed for trading on the OTC Bulletin Board but
      currently trades sporadically or by appointment, meaning that the number of
      persons interested in purchasing common shares at or near ask prices, or at
      all,
      at any given time may be relatively small or non-existent. This situation is
      attributable to a number of factors, including the fact that the Company is
      a
      small company that is relatively unknown to stock analysts, stock brokers,
      institutional investors and others in the investment community that generate
      or
      influence sales volume. Even if the Company comes to the attention of such
      persons, these persons tend to be risk-averse and may be reluctant to follow
      an
      unproven, early stage company such as the Company or purchase or recommend
      the
      purchase of our shares until such time as we became more seasoned and viable.
      An
      active trading market for our common stock may never develop or if it develops,
      it may not be sustained, which could affect the ability of purchasers to sell
      their securities. There may be periods of several days or more when trading
      activity in shares is minimal or non-existent, as compared to the trading
      activity of a more seasoned issuer which has a large and steady volume of
      trading activity that will generally support continuous sales without an adverse
      effect on share price. There is no assurance that a broader or more active
      public trading market for common shares will develop or be sustained, or that
      any trading levels will be sustained.





There
      has
      been no active market for our common stock and our stock price may be volatile
      and could decline, resulting in substantial losses for those who purchase our
      securities.





Quoted
      prices for shares are affected by various factors, including stockholder
      expectations, financial results, the introduction of new products by us and
      our
      competitors, success of the League, general economic and market conditions,
      estimates and projections by the investment community and public comments by
      other persons and many other factors, many of which are beyond our control.
      The
      Company may be unable to achieve earnings forecasts, which may be based on
      projected volumes and sales of many product types and/or new products, certain
      of which are more profitable than others. There can be no assurance that the
      Company will achieve projected levels or mixes of product sales that it will
      attract new teams, capable team ownership or substantial fan interest. As a
      result, stock prices may be subject to significant volatility and stockholders
      may not be able to sell stock at attractive prices, if at all.




**ITEM
      2: DESCRIPTION OF PROPERTY**




The
      Company maintains their office at the residence of the CEO.




**ITEM
      3: LEGAL PROCEEDINGS**





In
      a case titled *Troy
      Fisher and 3 Ball Management, LLC. vs. American Basketball Association, RAG,
      LLC, Richardson Consulting Group, Ricardo Richardson, Reginald Jones, Robert
      Blackwell, and  Indiana Alley Cats* pending
      in the Marion County Superior Court, Indiana under Cause No. 
49D120511CT043427, the Plaintiffs seek to recover alleged damages from the
      Company after their team was suspended from the League for failure to follow
      the
      ABA Team Operations Manual. The
      Company intends to defend this litigation aggressively, expects that the courts
      will concur with the Company’s views that these actions and claims are without
      merit and currently believes that the outcome, other than costs of suit, will
      not be materially adverse to the ABA. Nevertheless, an adverse judgment on
      these
      actions could materially harm the business of the Company. No assurance can
      be
      given that the Company’s position will be upheld or will prove to be correct
      over the course of litigation.





15





*American
      Arbitration Association case: 52 180 E 00612 06 Jaren W. Jackson v. The American
      Basketball Association, LLC, the Philadelphia Fusion, Wayne Butler and Jeffrey
      Wilson.* In
      November 2006 Jaren Jackson commenced arbitration against the Company for unpaid
      wages of
      about
      $15,000 owed by
      the Philadelphia Fusion, one of the teams of the ABA that played during
      the 2004 ABA season . 
      The arbitration is to be held in Indianapolis, Indiana but no date has been
      set.





*Steven
      Jaloza and Salvatore Fradella v. Joseph Newman, Richard P. Tinkham, Jr., and
      the
      American Basketball Association, Inc* .,
      pending in the Marion County Circuit Court under Cause
      No.:49C010611PL0046089.  In this action, filed in November
      2006, plaintiffs assert that Joseph Newman and Richard Tinkham breached
      fiduciary duties owed to them under the Operating Agreement of a separate
      entity, ABA Founders and Properties, LLC. The Company is not a party to the
      Operating Agreement. Plaintiffs
      seek to add the Company as a defendant as an alter ego of Newman and
      Tinkham.  Hearing
      on the Company’s Motion to Dismiss is set for February 5, 2007.  This
      motion by the Company is based on an action pending in the Marion County
      Superior Court, under Cause No. 49D010608PL033078, filed by the same plaintiffs,
      that also asserts breach of fiduciary duties owed by Joseph Newman to them
      under
      the Operating Agreement of ABA Founders and Properties, LLC.  In that
      action the Company, after hearing, was found not subject to the remedies sought
      in that action. The
      Company intends to defend this litigation aggressively, expects that the courts
      will concur with the Company’s views that these actions and claims are without
      merit and currently believes that the outcome, other than costs of suit, will
      not be materially adverse to the ABA. Nevertheless, an adverse judgment on
      these
      actions could materially harm the business of the Company. No assurance can
      be
      given that the Company’s position will be upheld or will prove to be correct
      over the course of litigation.




*Steven
      Jaloza and Salvatore Fradella vs. ABA Founders & Properties, LLC, ABA Sports
      and Entertainment, Inc., a/k/a ABA Enterprises, Inc., ABA International, Inc.,
      ABA League, LLC, ABA Operations, LLC, ABA Properties, LLC, ABA Rental, Inc.
      and
      ABA Services, Inc* .
      In the
      Marion Superior Court, Room No 5, Indiana. Cause No. 49D010608PL033078. Steven
      Jaloza (“Jaloza”) and Salvatore Fradella (“Fradella”) seek damages from ABA
      Founders & Properties, LLC, ABA Sports and Entertainment, Inc., a/k/a ABA
      Enterprises, Inc., ABA International, Inc., ABA League, LLC, ABA Operations,
      LLC, ABA Properties, LLC, ABA Rental, Inc., and ABA Services, Inc. for alleged
      breach of fiduciary duties allegedly arising under the Operating Agreement
      of
      ABA Founders & Properties, LLC. The suit was filed in August, 2006. A
      hearing for prejudgment attachment and to appoint a receiver over ABA Indiana
      was held on October 30, 2006. Prejudgment attachment was not granted and a
      receiver was not appointed. Neither ABA Utah nor ABA Indiana is a party to
      the
      action. The Plaintiffs have not pursued the action in this court since the
      date
      of the receivership hearing. This matter is covered by the Indemnification
      Agreement. The ABA intends to contest the case vigorously. The potential for
      an
      unfavorable outcome is not significant. The plaintiffs did not appeal the denial
      of the request for prejudgment attachment or the decision not to appoint a
      receiver. Jaloza and Fradella disassociated from ABA Founders & Properties,
      LLC in June, 2001. The Operating Agreement of ABA Founders & Properties, LLC
      allowed Newman and Tinkham to engage in or possess interests in other business
      ventures of every kind and description for their own account. *Credentials
      Plus, LLC v. Calderson* ,
      230 F.
      Supp.2d (N.D. Ind 2002) holds that fiduciary duties of members of an Indiana
      LLC
      are governed by I.C. 23-18-4-2(b) and can be eliminated by provisions in the
      Operating Agreement. The action should be disposed by summary judgment but
      has
      been held open in view of the matter pending in the Marion County Circuit Court
      under Cause No.:49C010611PL0046089.




16





*Ricardo
      Richardson and Richardson Consulting vs. American Basketball Association, a/k/a
      ABA Founders & Properties, a/k/a ABA Sports & Entertainment, Inc., Joe
      Newman, in his official capacity and Richard P. Tinkham, Jr., in his official
      capacity* .
      In the
      Marion Superior Court, Indiana. Cause No. 49D11-0608-PL-33933. Richardson
      asserts that as a minority shareholder in ABA Sports & Entertainment, Inc.
      he has a right to prevent use of its unspecified proprietary rights which he
      alleges it sold to Brax Capital Group. Neither ABA Utah nor ABA Indiana is
      a
      party to this action. The lawsuit was filed in August, 2006. ABA Sports &
Entertainment, Inc, Newman and Tinkham filed answers. The Court granted the
      defendant’s motion to require that Richardson take the matter to the board of
      directors of ABA Sports & Entertainment, Inc as required in a derivative
      shareholder action. Richardson has not done this. This matter is covered by
      the
      Indemnification Agreement. The ABA intends to contest the case vigorously.





*Jeff
      Noordgaard, Michael Hart, Daimon Bethea, Coleco Buie, Deron Hayes, Michael
      Robinson and Tremaine Wingfield vs. Joe Newman, ABA Operations, LLC and ABA
      League, LLC* .
      In the
      Marion Superior Court, Indiana. Cause No. 49D11-0207-CC-001122. Ryan Hoover,
      Jeff Nordgaard, Michael Hart, Daimon Bethea, Coleco Buie, Deron Hayes, Michael
      Robinson and Tremaine Wingfield (the “Players”) seek damages under the legal
      theory of breach of contract and under the statutory theory of the Wage Payment
      Statute for alleged non-payment of wages. Progress of Claim - The lawsuit was
      filed in 2003. Summary Judgment was entered against ABA Operations, LLC
      (“Operations”) and ABA League, LLC (“League”) on January 5, 2007 in the amount
      of $762,331.43. An appeal of this decision was filed with the Indiana Court
      of
      Appeals on March 8, 2007. This matter is covered by the Indemnification
      Agreement. Prior to December 19, 2006, funds of ABA Indiana were held in a
      bank
      account titled in the name of ABA League, LLC as trustee. Since December 19,
      2006, all funds of ABA Utah and ABA Indiana have been held in bank accounts
      titled in the name of ABA Indiana. The Players have vigorously attempted to
      collect this judgment from ABA Utah and ABA Indiana. The ABA intends to contest
      the case vigorously. Undersigned counsel has hired Indianapolis attorney, Paul
      Ludwig, to represent the interests of ABA Utah and ABA Indiana in this matter.
      ABA Utah or ABA Indiana has been named as a Garnishee Defendant. Neither ABA
      Utah nor ABA Indiana has funds or contract owed to ABA League, LLC. The bank
      account that Players seek to garnish has $32,000 in it. A garnishment hearing
      on
      this bank account is set for June 5, 2007. In the meantime, a hearing to set
      an
      appeal bond to stay enforcement of the judgment pending appeal is set for May
      5,
      2007. Collateral is required to post a supercedas bond with the trial court
      pending appeal. Severko Hrywnak (“Hrywnak”) has promised to provide the
      collateral. The strategy is to have a portion or the entire judgment amount
      overturned on appeal. The tactic is to settle this matter using non ABA Indiana
      or ABA Utah assets. ABA Management believes that the judgment will be overturned
      on appeal. The Company intends to defend this litigation aggressively, expects
      that the courts will concur with the Company’s views that these actions and
      claims are without merit and currently believes that the outcome, other than
      costs of suit, will not be materially adverse to the ABA. Nevertheless, an
      adverse judgment on these actions could materially harm the business of the
      Company. No assurance can be given that the Company’s position will be upheld or
      will prove to be correct over the course of litigation .





17





*James
      P. Dod vs. Perry R. Hall, a/k/a Pierre Hall, d/b/a Next Level Sports Franchise
      Development, LLC, d/b/a The Cleveland Rockers, d/b/a The Lake Erie Rockers,
      Ralph W. Underhill, American Basketball Association, Inc., and American
      Basketball Association, LLC.* In the
      Cleveland Municipal Court, Cuyahoga County, Ohio. Cause No. 06CVF0032421. James
      P. Dod (“Dod”) seeks $13,000 in damages under the theory of negligent
      misrepresentation from ABA Indiana and American Basketball Association, LLC
      as a
      result of information about *The
      Cleveland Rockers* appearing on the ABA website. The lawsuit was filed December 8, 2006. ABA
      Indiana filed its answer and cross claim on February 15, 2007. The case is
      set
      for a pre-trial hearing on June 11, 2007. This matter is covered by the
      Indemnification Agreement. The ABA intends to contest the case. The potential
      for an unfavorable outcome of $13,000 is not significant. The elements of the
      tort of negligent misrepresentation are: one who, in the course of his business,
      profession or employment, or in any other transaction in which he has a
      pecuniary interest, supplies false information for the guidance of others in
      their business transactions, is subject to liability for pecuniary loss caused
      to them by their justifiable reliance upon the information, if he fails to
      exercise reasonable care or competence in obtaining or communicating the
      information. The ABA is not in the business of supplying information for the
      guidance of others.  Such businesses typically include attorneys,
      surveyors, abstractors of title and banks dealing with no-depositors'
      checks.  The ABA was not hired or paid by Dod to supply information. 
The ABA does not hold a duty to supply Dod with information nor did it
      communicate any affirmative false statement to Dod. If not settled the matter
      should be disposed at hearing.





*Severko
      Hrywnak v. Joseph Newman* .
      Filed
      in the Circuit Court of Cook County, Illinois. Cause No. 2007L001101 and removed
      to the United States District Court for the Northern District of Illinois and
      assigned Cause No. 1:07-cv-00771. Severko Hrywnak (“Hrywnak”) seeks damages
      under the legal theories of breach of contract, promissory estoppel and fraud.
      Hrywnak alleges that Newman promised to repay losses Hrywnak incurred in hosting
      the 2006 ABA all star game by tendering 400,000 shares of ABA Utah stock.
      Neither ABA Utah nor ABA Indiana is a party to this lawsuit. The lawsuit was
      filed on January 30, 2007. An answer was filed. The matter was settled however,
      Hrywnak has not performed a promise of the settlement agreement to provide
      collateral for the supercedas appeal bond in the Indiana Legends player case.
      Initially, Hrywnaks asserted claims against ABA Utah and not Newman. The claims
      against Newman derive from his capacity as CEO of ABA Utah. This matter is
      covered by the Indemnification Agreement. The ABA intends to vigorously contest
      the case until Hrywnak performs his promise to provide collateral for the
      supercedas bond. Potential for Unfavorable Outcome and amount/range of potential
      loss - The claims should be dismissed based on the current settlement
      negotiations. In any event, no monetary damages can be awarded against either
      ABA Utah or ABA Indiana.




18





*Thaddeus
      A. Wier, Jr. v. American Basketball Association, Inc* .
      In the
      Superior Court of Erie County, New York. Index No. 2007-001971. On December
      5,
      2006, Thaddeus A Weir, Jr. (“Weir”) agreed to fund the ABA Indiana with $200,000
      and raise $4,000,000 (the Alternate Financing Plan”) in the event ABA Indiana
      could not come to terms with Purchasers under a pending Stock Purchase Agreement
      (‘the “SPA”). On December 5, 2006, as part of the Alternate Financing Plan, ABA
      Indiana and Big Apple Consulting USA, Inc. (“Big Apple”) entered a contingent
      agreement (the “Big Apple Agreement”) pursuant to which, Big Apple was to
      provide investor management services to ABA Indiana in the event it did not
      come
      to terms with Purchasers under the SPA. On December 13, 2006, as part of the
      Alternate Financing Plan, Weir and ABA Indiana entered into a contingent
      advisory agreement (the “Weir Agreement”) in the event ABA Indiana did not come
      to terms with Purchasers under the SPA. Weir failed to wire the $200,000 to
      ABA
      Indiana. ABA Indiana notified Weir of the termination of the Big Apple Agreement
      and the Weir Agreement. ABA Indiana entered into the SPA on December 19, 2006.
      On January 9, 2007, Weir asserted that ABA Utah was obligated to perform the
      Big
      Apple Agreement and the Weir Agreement. On January 29, 2007, ABA Indiana and
      ABA
      Utah advised Weir that the Alternate Financing Plan was separate and distinct
      from the SPA and that the Weir Agreement and the Big Apple Agreement had been
      terminated in December, 2006 due to lack of performance. Without service of
      summons, Weir filed the action in the Superior Court of Erie County, New York
      on
      February 20. Without service of summons no response is due. The matter was
      settled on February 20, 2007. However, promises under the settlement agreement
      have not been performed. The ABA intends to come to satisfactory terms with
      Wier. Potential for Unfavorable Outcome and amount/range of potential loss
      - The
      potential amount of loss is significant. $200,000 was accrued for this
      issue. The Company intends to defend this litigation aggressively, expects
      that the courts will concur with the Company’s views that these actions and
      claims are without merit and currently believes that the outcome, other than
      costs of suit, will not be materially adverse to the ABA. Nevertheless, an
      adverse judgment on these actions could materially harm the business of the
      Company. No assurance can be given that the Company’s position will be upheld or
      will prove to be correct over the course of litigation.




**ITEM
      4: SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS**




There
      were no matters submitted to the Company's security holders for a vote during
      the fiscal year.




19




**PART
      II**




**ITEM
      5: MARKET FOR COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND SMALL BUSINESS
      ISSUER PURCHASES OF EQUITY SECURITTIES**




Our
      common stock presently trades on the Over-the-Counter Bulletin Board or OTCBB
      and trades under the symbol “ABKB”.





Fiscal
                2007
            
            Fiscal
                2006COMMON
                STOCK
            
            High
            
            Low
            
            High
            
            LowFirst
                Quarter
            
            $
            2.71
            
            $
            0.10
            
            $
            —
            
            $
            —Second
                Quarter
            
            
            —
            
            
            —
            
            
            —
            
            
            —Third
                Quarter
            
            
            —
            
            
            —
            
            
            —
            
            
            —Fourth
                Quarter
            
            
            —
            
            
            —
            
            $
            2.50
            
            $
            2.00




The
      quotations reflect interdealer prices without retail markup, markdown, or a
      commission, and may not necessarily represent actual transactions.




As
      of
      April 11, 2007, there were 26,597,017 shares issued and outstanding and we
      had
      214 registered holders of our common shares.




**Dividends**




We
      have
      not paid any dividends on our common stock since inception. We do not anticipate
      declaration or payment of any dividends at any time in the foreseeable future.
      Our Series AA preferred stock provides for a 7% cumulative
      dividend.




20





**ITEM
      6: MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
      OF
      OPERATIONS OVERVIEW**





MANAGEMENT'S
      DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
      OPERATIONS




BUSINESS
      PLAN OVERVIEW





Our
      primary business is (i) operating the American Basketball Association (the
      “League”), a professional basketball league composed of 47 independently-owned
      teams located in the United States, Mexico and Canada, (ii) marketing
      League-related merchandise and other products and services offered by the
      Company and the League and (iii) developing or expanding media outlets and
      ancillary entertainment businesses that complement the League’s operations.





**Background**





The
      original American Basketball Association league (the “Original ABA”) existed for
      nine full seasons, starting in 1967. It was known as the “lively” league that
      created the three-point shot, and it was the “frontier” league that brought
      modern professional basketball to many “hoops-crazy” cities. During that time,
      the Original ABA competed with the more established, rival NBA for players,
      fans, and media attention until 1976 when ABA teams were absorbed into the
      NBA
      and the original ABA ceased to exist. At that time, four of the strongest
      Original ABA teams joined the NBA, while the remaining Original ABA teams
      vanished along with the Original ABA itself.





The
      League commended play under the current banner and management in 2004 as the
      American Basketball Association. The League is a new professional basketball
      league and is not a continuation of the Original ABA whose teams were absorbed
      into the NBA in 1976. Since 2004, the League has grown to more than 30 teams
      competing in last year’s League championship, and 47 teams competing during
      2006. The League continues to gain acceptance as a fan-pleasing entertainment
      experience that emphasizes basketball skills and fast-paced games at affordable
      prices. The League continues the Original ABA tradition of innovation in its
      efforts to bring diverse, fan-friendly, exciting basketball to its fans.
      Management believes that the “ABA” name remains synonymous with innovative and
      spirited basketball, the 3-point play, “Dr. J.” (former star player Julius
      Erving) and slam dunk contests, all of which have contributed significantly
      to
      the growth and development of professional basketball as it has become known
      throughout the world.





***The
      Company’s Role*** .
      Management views one of its principal operating challenges ahead to be how
      to
      maximize the League’s brand recognition in combination with new initiatives and
      today’s new revenue possibilities. Management believes that, in addition to
      basketball, the League’s fans also share an interest in music and emerging pop
      culture and that they provide reference points for what are new and hot trends
      in the pop-culture. In essence, these fans, by their habits and spending
      patterns, are the initiators or predictors of pop trends. The Company intends
      to
      capitalize on the demographic composition of that fan base and branch into
      music
      and entertainment, as described below. In the process, management believes
      that
      fans will not only competitively attractive value for the $10-12 ticket price
      and that the League will be transformed into a formidable sports and family
      entertainment experience. This approach to League expansion will in management’s
      view provide the League with the potential to grow until the total market reach
      may be as high as 100 cities and towns in the United States, Mexico, and Canada.
      While League cities will be both large and small (including, for example, New
      York, Los Angeles, Dallas, Chicago and Detroit, as well as Bellingham,
      Washington, Rockville, Maryland, Burlington, Vermont and Waco, Texas) all are
      expected to have basketball and music fans in significant and growing
      numbers.





21




CRITICAL
      ACCOUNTING POLICIES AND ESTIMATES





**Financial
      Statements**





The
      financial statements and notes are representations of the Company’s management,
      who is responsible for their integrity and objectivity. The accounting policies
      conform to accounting principles generally accepted in the United States of
      America and have been consistently applied in the preparation of the financial
      statements.





The
      accompanying financial statements have been prepared using generally accepted
      accounting principles applicable to a going concern which contemplates the
      realization of assets and liquidation of liabilities in the normal course of
      business. As reported in the financial statements, the Company has incurred
      losses of approximately $19,644,549 from inception of the Company through
      December 31, 2006, and has negative cash flows from operations. The Company's
      stockholders' deficiency at December 31, 2006 was $527,852 and its current
      liabilities and claims and contingencies exceeded its current assets by
      $533,746. These factors combined, raise substantial doubt about the Company's
      ability to continue as a going concern. Management's plans to address and
      alleviate these concerns are as follows:





The
      Company's management continues to develop a strategy of exploring all options
      available to it so that it can develop successful operations and have sufficient
      funds to be able to operate over the next twelve months. As a part of this
      plan,
      management is currently in negotiations with their target industries' key
      players to develop additional business opportunities. In addition, management
      is
      exploring options in order to raise additional operating capital through debt
      and/or equity financing. No assurance can be given that funds will be available,
      or, if available, that it will be on terms deemed satisfactory to
      management.





The
      ability of the Company to continue as a going concern is dependent upon its
      ability to successfully accomplish the plans described in the preceding
      paragraph and eventually attain profitable operations. The accompanying
      financial statements do not include any adjustments relating to the
      recoverability and classification of asset carrying amounts or the amount and
      classification of liabilities that might result from the outcome of these
      uncertainties.





**Use
      of Estimates and Assumptions**





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




22


**Cash
        and Cash Equivalents**
 
 The
        Company considers all highly liquid instruments that are purchased within
        three
        months or less of an instruments maturity date to be cash
        equivalents.
 
 **Accounts
        Receivable**
 
 The
        Company carries its accounts receivable at invoiced amounts less an allowance
        for doubtful accounts. On a periodic basis, the Company evaluates its accounts
        receivable and establishes an allowance for doubtful accounts, based on history
        of past write-offs and collections and current credit conditions. The Company’s
        policy is not to accrue interest on past due trade receivables. Management
        has
        established an allowance for doubtful accounts of $119,500 as of December
        31,  2006
        which reduced the net accounts receivable balance to $95,400 as of December
        31,
        2006. The Company carried $0 in accounts receivable at December 31,
        2005 , net
        of
        allowance for doubtful accounts.


**Property
      and Equipment**





Property
      and equipment are recorded at cost and includes expenditures for new additions
      and those, which substantially increase the useful lives of existing assets.
      Depreciation is provided using the straight-line method over the estimated
      useful lives of the assets, which is generally five years. Expenditures for
      repairs or maintenance are charged to expense as incurred. The cost of property
      or equipment retired or otherwise disposed of and the related accumulated
      depreciation are removed from the accounts in the year of disposal with the
      resulting gain or loss
      reflected in earnings.




**Revenue
        Recognition**
 
 Revenues
        are expected to be generated from a number of sources including national
        sponsorships, market reservation fees, broadcasting revenue and basketball
        and
        other merchandise sales. It is expected that sponsorship and broadcasting
        revenue will be recognized over the period of the agreements; market reservation
        fees will be recognized when receipt is assured; and merchandise sales less
        returns and allowances will generally be recognized when title and risk of
        product loss is transferred to the buyer. Such risk of product loss is expected
        to generally coincide with the time of shipment.


23




**Income
      Taxes**




Deferred
      tax assets are recognized for taxable temporary differences, tax credit and
      net
      operating loss carryforwards. These assets are reduced by a valuation allowance,
      which is established when it is more likely than not that some portion or all
      of
      the deferred tax assets will not be realized. In 2006, based on this evaluation;
      the Company recorded a 100% valuation allowance on the consolidated balance
      sheet for its deferred tax assets.  In addition, management is required to
      estimate taxable income for future years by taxing jurisdictions and to consider
      this when making its judgment to determine whether or not to record a valuation
      allowance for part or all of a deferred tax asset. A one percent change in
      the
      Company’s overall statutory tax rate for 2006 would not have a material effect
      in the carrying value of the net deferred tax assets or
      liabilities.




The
      Company may have future operations in multiple taxing jurisdictions and would
      be
      subject to audit in these jurisdictions. Tax audits by their nature are often
      complex and can require several years to resolve. Accruals of tax contingencies
      require management to make estimates and judgments with respect to the ultimate
      outcome of tax audits. Actual results could vary from these
      estimates.




**Earnings
      per Share**





Basic
      earnings (loss) per share is computed by dividing income (loss) available to
      common stockholders by the weighted average number of common shares available.
      Diluted earnings (loss) per share is computed similar to basic earnings (loss)
      per share except that the denominator is increased to include the number of
      additional common shares that would have been outstanding if the potential
      common shares had been issued and if the additional common shares were dilutive.
      At December 31, 2006 and 2005, all common stock equivalents were
      anti-dilutive.





RESULTS
      OF OPERATIONS





The
      following discussion relates to the historical financial statements of American
      basketball Association and should be read in conjunction with the consolidated
      financial statements and related notes.




COMPARISON
      OF YEAR ENDED DECEMBER 31, 2006 AND 2005





Net
      revenues increased by 35.6% from $449,666 for the year ended December 31, 2005
      to $609,752 for the year ended December 31, 2006. The improvement in revenues
      was a result from merchandise sales and market reservation fees.





Cost
      of
      revenues as a percentage of net revenues decreased from 19.5% of net revenues
      for the year ended December 31, 2005 to 7.5% of net revenues for the year ended
      December 31, 2006. The decrease is in direct relation to the increase in market
      reservation fees as a component of net revenues.





Compensatory
      element of stock transactions decreased from $13,451,110 for the year ended
      December 31, 2005 to $1,808,725, for the same period ended December 31, 2006.





Selling,
      general and administrative expenses increased from $840,826 for the year ended
      December 31, 2005, to $1,890,043 for the year ended December 31, 2006. The
      increase is due the addition of personnel as well as increased accounting,
      legal
      and other professional services related to the Company’s reverse merger with
      Souvall-Page as disclosed in Note 1 in the Consolidated Financial
      Statements.




24





LIQUIDITY
      AND CAPITAL RESOURCES





At
      December 31, 2006, our cash totaled $1,198,567.





Net
      cash
      used in operating activities was $369,837 for the year ended December 31, 2005
      compared to cash used in operating activities was $1,232,592 for the year ended
      December 31, 2006. The increase in cash used relates to the hiring of additional
      administrative staff required to implement the Company's business plan as well
      as additional accounting, legal and professionals needed to prepare the company
      for the reverse merger.





Net
      cash
      used in investing activities was $7,786 for the year ended December 31, 2005
      compared to net cash used in investing activities of $0 for the year ended
      December 31, 2006.





Net
      cash
      provided from financing activities was $361,848 for the year ended December
      31,
      2005 as compared to net cash provided from financing activities of $2,410,000
      for the year ended December 31, 2006. The $2,410,000 represents proceeds from
      the sale of common stock and convertible bridge loans provided by
      investors.





In
      view
      of our accumulated deficit and recurring losses there is substantial doubt
      about
      our ability to continue as a going concern. In this regard management is
      adopting a plan for the development of our merchandising, sponsorship, media
      and
      market reservation product lines as well as seeking additional capital through
      the private sale of our debt or equity securities. There is no assurance that
      we
      will complete any financing or that we will achieve profitable operations.
      The
      financial statements do not include any adjustments that might result from
      the
      outcome of this uncertainty.





We
      expect
      to fund development expenditures and incur losses until we are able to generate
      sufficient income and cash flows to meet such expenditures and other
      requirements. We do not currently have adequate cash reserves to continue to
      cover such anticipated expenditures and cash requirements. These factors, among
      others, raise substantial doubt about our ability to continue as a going
      concern.




The
      discussion and analysis of our financial condition and results of operations
      are
      based upon our consolidated financial statements, which have been prepared
      in
      accordance with accounting principles generally accepted in the United States.
      The preparation of these financial statements requires us to make estimates
      and
      judgments that affect the reported amounts of assets, liabilities, revenues
      and
      expenses, and related disclosure of contingent assets and liabilities. On an
      on-going basis, we evaluate our estimates, including those related to income
      tax
      and marketing related agreements with our affiliates. We base our estimates
      on
      historical experience and on various other assumptions that are believed to
      be
      reasonable under the circumstances, the results of which form the basis for
      making judgments about the carrying values of assets and liabilities that are
      not readily apparent from other sources. Actual results may differ from these
      estimates under different assumptions or conditions.





FORWARD-LOOKING
      STATEMENTS; MARKET DATA





The
      discussion in this Report on Form 10KSB contains forward-looking statements
      that
      involve risks and uncertainties. The statements contained in this Report that
      are not purely historical are forward-looking statements within the meaning
      of
      Section 27A of the Securities Act of 1933, as amended, and Section 21E of the
      Securities Exchange Act of 1934, as amended, including statements regarding
      our
      expectations, beliefs, intentions or strategies regarding the future. All
      forward-looking statements included in this document are based on information
      available to us on the date hereof, and we assume no obligation to update any
      such forward-looking statements. Our actual results could differ materially
      from
      those described in our forward-looking statements. Factors that could cause
      or
      contribute to such differences include, but are not limited to, our unproven
      business model and a limited operating history in a new and rapidly evolving
      industry; our ability to implement our business plan; and our ability to manage
      our growth, retain and grow our customer base and expand our service
      offerings.





We
      make
      forward-looking statements in the "Management's Discussion and Analysis of
      Financial Condition and, Results of Operations" above. These forward-looking
      statements include, but are not limited to, statements about our plans,
      objectives, expectations, intentions and assumptions and other statements that
      are not historical facts. We generally intend the, words "expect", "anticipate",
      "intend", "plan", "believe", "seek", "estimate" and similar expressions to
      identify forward-looking statements.





This
      Report on Form 10KSB contains certain estimates and plans related to us and
      the
      industry in which we operate, which assumes certain events, trends and
      activities will occur and the projected information based on those assumptions.
      We do not know that all of our assumptions are accurate. In particular, we
      do
      not know what level of growth will exist in our industry, if any, and
      particularly in the foreign markets in which we operate, have devoted resources
      and in which we shall seek to expand. If our assumptions are wrong about any
      events, trends and activities, then our estimates for future growth for our
      business may also be wrong. There can be no assurances that any of our estimates
      as to our business growth will be achieved.





25




**RECENT
      ACCOUNTING PRONOUNCEMENTS**




In
      June
      2006, the Financial Accounting Standards Board (“FASB”) issued FASB
      Interpretation (“FIN”) No. 48, *“Accounting
      for Uncertainty in Income Taxes”* ,
      which
      clarifies the accounting for uncertainty in income taxes recognized in financial
      statements in accordance with Statement No. 109, *“Accounting
      for Income Taxes.”* This
      Interpretation prescribes a recognition threshold and measurement attribute
      for
      the financial statement recognition and measurement of a tax position taken
      or
      expected to be taken in a tax return. The Interpretation requires that the
      Company recognize in the financial statements the impact of a tax position
      if
      that position is more likely than not of being sustained on audit, based on
      the
      technical merits of the position. The Interpretation also provides guidance
      on
      derecognition, classification, interest and penalties, accounting in interim
      periods, disclosure and transition. FIN 48 is effective for fiscal years
      beginning after December 15, 2006. The Company is currently evaluating the
      impact this interpretation will have on its financial statements.





In
      March 2006, the FASB issued FASB Statement No. 156, “Accounting for
      Servicing of Financial Assets.” ** Statement
      156 amends FASB Statement No. 140, “Accounting for Transfers and Servicing
      of Financial Assets and Extinguishments of Liabilities,” and requires all
      separately recognized servicing assets and servicing liabilities to be initially
      measured at fair value, if practicable, and permits an entity to subsequently
      measure those servicing assets and servicing liabilities at fair value. This
      statement is effective for fiscal years beginning after September 15, 2006.
      The Company does not expect this statement to have a material impact on its
      financial position, results of operations or cash flows.





In
      February 2006, the FASB issued SFAS No. 155, “Accounting for Certain
      Hybrid Financial Instruments — An Amendment of FASB Statements No. 133
      and 140.” SFAS No. 155 provides entities with relief from having to
      separately determine the fair value of an embedded derivative that would
      otherwise be required to be bifurcated from its host contract in accordance
      with
      SFAS No. 133. SFAS No. 155 allows an entity to make an irrevocable
      election to measure such a hybrid financial instrument at fair value in its
      entirety, with changes in fair value recognized in earnings. SFAS No. 155
      is effective for all financial instruments acquired, issued or subject to a
      remeasurement event occurring after the beginning of an entity’s first fiscal
      year that begins after September 15, 2006. The Company is currently
      evaluating the impact this interpretation will have on its financial
      statements.





In
      May
      2005, the FASB issued Statement SFAS No. 154 “Accounting Changes and Error
      Corrections” (SFAS 154) which supersedes APB Opinion No. 20, Accounting Changes”
and SFAS No. 3, “Reporting Accounting Changes in Interim Financial Statements”.
      SFAS 154 provides guidance on the accounting for and reporting of accounting
      changes and error corrections. It establishes, unless impractical, retrospective
      application as the required method for reporting a change in accounting
      principle in the absence of explicit transition requirements specific to the
      newly adopted accounting principle. The correction of an error in previously
      issued financial statements is not an accounting change. However, the reporting
      of an error correction involves adjustments to previously issued financial
      statements similar to those generally applicable to reporting an accounting
      change retroactively. Therefore, the reporting of a correction of an error
      by
      restating previously issued financial statements is also addressed by this
      Statement. SFAS 154 is effective for accounting changes and corrections of
      errors made in fiscal years beginning after December 15, 2005. The Company
      does
      not believe this standard has a material impact on its financial
      statements.





In
      December 2004, the FASB issued Statement No. 123R (SFAS 123R), “Share-Based
      Payment”. This statement is a revision of SFAS 123, “Accounting for Stock-Based
      Compensation” (SFAS 123), and supersedes Accounting Principles Board Opinion No.
      25, “Accounting for Stock Issued to Employees” (APB 25). SFAS 123R focuses
      primarily on accounting for transactions in which an entity obtains employee
      services in share-based payment transactions. The Statement required entities
      to
      recognize compensation expense for awards of equity instruments to employees
      based on the grant-date fair value of those awards (with limited exceptions).
      SFAS 123R also requires the benefits of tax deductions in excess of recognized
      compensation expense to be reported as a financing cash flow, rather than as
      an
      operating cash flow as prescribed under the prior accounting rules. On December
      31, 2006, the Company adopted the provisions of SFAS 123R using the modified
      prospective method, the results of which did not have a material impact on
      its
      financial position, results of operations or cash flows.




**COMMITMENTS**




Our
      commitments that are required to be disclosed in tabular form as of December
      31,
      2006 including a subsequent employment and consulting agreements entered into
      through March 31, 2007, are as follows;


2006
              
              2007
              
              2008
              
              2009
              
              2010Employment
                  agreements
              
              $
              500,000
              
              
              320,000
              
              
              320,000
              
              
              320,000
              
              
              320,000Consulting
                  agreements
              
              
              —
              
              
              102,000
              
              
              —
              
              
              —
              
              
              —




26




**OFF
      BALANCE SHEET ARRANGEMENTS**




We
      do not
      have any off balance sheet arrangements.




**ITEM
      7: CONSOLIDATED FINANCIAL STATEMENTS AND SUPPLEMENTAL DATA**




27


**Report
      of Independent Registered Public Accounting Firm**




**To
      the Board of Directors and Stockholders**


**AMERICAN
      BASKETBALL ASSOCIATION, INC.**


**Indianapolis,
      Indiana**




We
      have
      audited the accompanying consolidated balance sheet of AMERICAN BASKETBALL
      ASSOCIATION, INC., and Subsidiary (the Company) as of December 31, 2006, and
      the
      related consolidated statements of operations, changes in stockholders’
deficiency, and cash flows for the years ended December 31, 2006 and 2005.
       These consolidated financial statements are the responsibility of the
      Company’s management. Our responsibility is to express an opinion on these
      consolidated financial statements based on our audits.





We
      conducted our audits in accordance with the standards of the Public Company
      Accounting Oversight Board (United States).  Those standards require that
      we plan and perform the audits to obtain reasonable assurance about whether
      the
      financial statements are free of material misstatement.  The Company is not
      required to have, nor were we engaged to perform, an audit of its internal
      control over financial reporting.   Our audits included consideration
      of internal control over financial reporting as a basis for designing audit
      procedures that are appropriate in the circumstances, but not for the purpose
      of
      expressing an opinion on the effectiveness of the Company’s internal control
      over financial reporting. Accordingly, we express no such opinion.  An
      audit also includes examining, on a test basis, evidence supporting the amounts
      and disclosures in the financial statements, assessing the accounting principles
      used and significant estimates made by management, as well as evaluating the
      overall financial statement presentation.  We believe that our audits
      provide a reasonable basis for our opinion.





In
      our
      opinion, the consolidated financial statements referred to above present fairly,
      in all material respects, the consolidated financial position of AMERICAN
      BASKETBALL ASSOCIATION, INC. and Subsidiary at December 31, 2006 and the
      consolidated results of its operations and its cash flows for the years ended
      December 31, 2006 and 2005, in conformity with accounting principles generally
      accepted in the United States of America.





The
      accompanying consolidated financial statements have been prepared assuming
      that
      the Company will continue as a going concern.  As discussed in Note 1 to
      the consolidated financial statements, the Company has experienced significant
      losses from inception, has negative cash flows from operations, has a working
      capital deficit, and an accumulated deficit in stockholders deficiency. This
      raises substantial doubt about the Company’s ability to continue as a going
      concern.  Management’s plans concerning these matters are also described in
      Note 1.  The consolidated financial statements do not include any
      adjustments that might result from the outcome of this uncertainty.







Somerset
      CPAs, P.C.


Indianapolis,
      Indiana


April
      24,
      2007


28


AMERICAN
                  BASKETBALL ASSOCIATION, INC. AND SUBSIDIARYCONSOLIDATED
                  BALANCE SHEETDecember
                  31, 2006
  ASSETSCURRENT
                  ASSETSCash
              
              $
              1,198,567Accounts
                  receivable and other current assets
              
              
              95,400Total
                  Current Assets
              
              
              1,293,967PROPERTY
                  AND EQUIPMENT,Net
              
              
              5,894TOTAL
                  ASSETS
              
              $
              1,299,861LIABILITIES
                  AND STOCKHOLDERS' DEFICIENCYCURRENT
                  LIABILITIESAccounts
                  payable and accrued expenses
              
              $
              782,383TOTAL
                  CURRENT LIABILITIES
              
              
              782,383CLAIMS
                  AND CONTINGENCIES
              
              
              1,045,331STOCKHOLDERS'
                  DEFICIENCYCommon
                  stock - no par value; 50,000,000 sharesauthorized;
                  25,572,017 shares issued and outstanding
              
              
              1,000Additional
                  paid in capital
              
              
              19,115,697Accumulated
                  deficit
              
              
              (19,644,549
              )TOTAL
                  STOCKHOLDERS' DEFICIENCY
              
              
              (527,853
              )TOTAL
                  LIABILITIES ANDSTOCKHOLDERS'
                  DEFICIENCY
              
              $
              1,299,861
  The
                  Accompanying Notes Are An Integral Part Of These Consolidated Financial
                  Statements


29
  AMERICAN
                    BASKETBALL ASSOCIATION, INC. AND SUBSIDIARYCONSOLIDATED
                    STATEMENTS OF OPERATIONS
  For
                    the Year EndedDecember
                    31,2006
                
                2005Market
                    Reservation Fee
                
                $
                551,377
                
                $
                376,585Merchandise
                  Sales
                
                
                58,375
                
                
                9,081Sponsorship
                  Revenue
                
                
                —
                
                
                64,000Net
                  Revenue
                
                
                609,752
                
                
                449,666COSTS
                    AND EXPENSESCost
                    of revenue
                
                
                57,245
                
                
                87,689Compensatory
                    element of stock transactions
                
                
                1,808,725
                
                
                13,451,110Depreciation
                    and amortization
                
                
                1,557
                
                
                335Selling
                    and administrative expenses
                
                
                1,878,524
                
                
                840,491TOTAL
                    COSTS AND EXPENSES
                
                
                3,746,051
                
                
                14,379,625OPERATING
                    LOSS
                
                
                (3,136,299
                )
                
                (13,929,959
                )OTHER
                    INCOME (EXPENSES)Interest
                
                
                (24,078
                )
                
                (11,095
                )Other
                    income
                
                
                3,400
                
                
                318Claims
                    and contingencies
                
                
                (1,045,331
                )
                
                —Merger
                    costs
                
                
                (179,599
                )
                
                —TOTAL
                    OTHER INCOME (EXPENSES)
                
                
                (1,245,608
                )
                
                (10,777
                )NET
                    LOSS
                
                $
                (4,381,907
                )
                $
                (13,940,736
                )Basic
                    Loss Per Share
                
                $
                (0.29
                )
                $
                (1.61
                )Weighted
                    Average Number of CommonShares
                    Outstanding - Basic
                
                
                15,156,105
                
                
                8,668,691Fully
                    Diluted Net Loss Per Share
                
                $
                (0.26)
                
                $
                (1.55)Weighted
                    Average Number of CommonShares
                    Outstanding - Fully Diluted
                
                
                16,615,009
                
                
                9,002,938
  The
                    Accompanying Notes Are An Integral Part Of These Consolidated
                    Financial
                    Statements





30




**American
                Basketball Association, Inc. And Subsidiary****Consolidated
                Statements of Changes in Stockholders' Equity
                (Deficiency)****For
                the Years Ended December 31, 2006****and
                December 31, 2005**




**Total****Additional**
            
            
            
            **Stockholders'****Common
                Stock**
            
            **Paid
                in**
            
            **Accumulated**
            
            **Equity****Shares**
            
            **Amount**
            
            **Capital**
            
            **Deficit**
            
            ****(Deficiency)****Balances,
                December 31, 2004
            
            
            1,000
            
            
            1,000
            
            
            -
            
            
            (863,716
            )
            
            (862,716
            )Issuance
                of no par value common stock forcompensation
                services on May 1, 2005
            
            
            14,350,760
            
            
            -
            
            
            14,350,760
            
            
            -
            
            
            14,350,760Conversion
                of note payable and accrued interest to nopar
                value common stock on August 1, 2005
            
            
            510,943
            
            
            -
            
            
            510,943
            
            
            -
            
            
            510,943Direct
                costs related to debentures and accrued interestconverted
                to no par value common stock on August 1, 2005
            
            
            
            
            
            
            
            
            (138,000
            )
            
            -
            
            
            (138,000
            )Net
                loss
            
            
            -
            
            
            -
            
            
            -
            
            
            (13,940,736
            )
            
            (13,940,736
            )Balances,
                December 31, 2005
            
            
            14,862,703
            
            $
            1,000
            
            $
            14,723,703
            
            $
            (14,804,452
            )
            $
            (79,749
            )Conversion
                of note payable and accrued interest to nopar
                value common stock on December 22, 2006
            
            
            920,909
            
            
            -
            
            
            415,088
            
            
            -
            
            
            415,088Issuance
                of no par value common stock for
            
            
            2,714,541
            
            
            -
            
            
            1,628,725
            
            
            -
            
            
            1,628,725compensation
                services on December 22, 2006Issuance
                of common stock for cash on December 22, 2006
            
            
            4,050,000
            
            
            -
            
            
            2,010,000
            
            
            -
            
            
            2,010,000Recapitalization
                of American Basketball Associationthrough
                reverse merger with Souvall-Page on
                December 22, 2006
            
            
            2,723,864
            
            
            -
            
            
            458,181
            
            
            (458,190
            )
            
            (9
            )Cash
                paid in racapitalization of American BasketballAssociation
                through reverse merger with Souvall-Page
            
            
            -
            
            
            
            
            
            (300,000
            )
            
            -
            
            
            (300,000
            )Shares
                issued in racapitalization of American Basketball Associaiton
                throughreverse
                merger with Souvall-Page on
                December 22, 2006
            
            
            300,000
            
            
            -
            
            
            180,000
            
            
            -
            
            
            180,000Net
                Loss
            
            
            -
            
            
            -
            
            
            -
            
            
            (4,381,907
            )
            
            (4,381,907
            )Balances,
                December 31, 2006
            
            
            25,572,017
            
            
            1,000
            
            
            19,115,697
            
            
            (19,644,549
            )
            
            (527,852
            )




The
                Accompanying Notes Are An Integral Part Of These Consolidated Financial
                Statements




31





AMERICAN
                BASKETBALL ASSOCIATION, INC. AND SUBSIDIARYCONSOLIDATED
                STATEMENT OF CASH FLOWS




For
                the Year EndedDecember
                312006
            
            2005CASH
                FLOWS FROM OPERATING ACTIVITIESNet
                loss
            
            $
            (4,381,907
            )
            $
            (13,940,736
            )Adjustments
                to reconcile net loss to netcash
                used in operating activities:Depreciation
                and amortization
            
            
            1,557
            
            
            335Provision
                for bad debts expense
            
            
            119,500
            
            
            -0-Compensatory
                element of stock transactions
            
            
            1,808,725
            
            
            13,451,110Interest
                expense converted to common stock
            
            
            15,078
            
            
            11,095Changes
                in operating assets and liabilities:Accounts
                receivable and other current assets
            
            
            (213,999
            )
            
            —Accrued
                expenses and other current liabilities
            
            
            1,418,454
            
            
            108,359TOTAL
                ADJUSTMENTS
            
            
            3,149,315
            
            
            13,570,899NET
                CASH USED IN OPERATINGACTIVITIES
            
            
            (1,232,592
            )
            
            (369,837
            )CASH
                FLOWS FROM INVESTING ACTIVITIESCapital
                expenditures
            
            
            —
            
            
            (7,786
            )NET
                CASH USED ININVESTING
                ACTIVITIES
            
            
            —
            
            
            (7,786
            )CASH
                FLOWS FROM FINANCING ACTIVITIESProceeds
                from sale of common stock
            
            
            2,010,000
            
            
            499,848Direct
                costs on conversion of debentures
            
            
            —
            
            
            (138,000
            )Proceeds
                of bridge loans
            
            
            400,000
            
            
            —NET
                CASH PROVIDED BYFINANCING
                ACTIVITIES
            
            $
            2,410,000
            
            $
            361,848




32





AMERICAN
                BASKETBALL ASSOCIATION, INC. AND SUBSIDIARYCONSOLIDATED
                STATEMENT OF CASH FLOWS, CONTINUED




For
                the Year EndedDecember
                312006
            
            2005NET
                (DECREASE) INCREASE IN CASH
            
            $
            1,177,408
            
            $
            (15,775
            )CASH
                -Beginning
            
            
            21,159
            
            
            36,934CASH
                -Ending
            
            $
            1,198,567
            
            $
            21,159SUPPLEMENTAL
                DISCLOSURES OF CASH FLOW INFORMATIONCash
                paid during the years for:Interest
            
            $
            —
            
            $
            —Taxes
            
            $
            —
            
            $
            —Issuance
                of common stock for compensation servicesand
                interest expenses
            
            $
            1,823,803
            
            $
            13,462,205Converted
                debentures to common stock
            
            $
            400,000
            
            $
            —




The
                Accompanying Notes Are An Integral Part Of These Consolidated Financial
                Statements




33




Note
      1 -
      Nature of Operations and Summary of Significant Accounting
      Policies:





**Organization
      and Nature of Operations**





American
      Basketball Association, Inc., is an Indiana corporation which was formed on April
      21,
      2004, for
      the
      purpose of providing basketball and sports entertainment for people of all
      ages.
      The league currently has over 47 teams located in the United States of America
      (USA), Canada, and Mexico to begin play in 2007-2008 basketball season.





Basketball
      operations under the American Basketball Association banner was revived in
      the
      year 2000 after approximately 25 years of inactivity following the original
      American Basketball Association league’s merger with the National Basketball
      league. American Basketball Association league play was operated by different
      management and a distinct entity during the 2000-2001 and 2001-2002 basketball
      seasons. League play was suspended during the 2002-2003 season. American
      Basketball Association league play resumed for the 2003-2004 season. The Company
      took over league operations for the 2004-2005, 2005-2006, 2006-2007 seasons
      as
      well as the upcoming 2007-2008 season. Prior entities which operated the league
      have either been legally dissolved, administratively dissolved, or have ceased
      operations as of the inception date, and have no relationship to the
      Company.





Concurrent
      with the closing of the Share Purchase that is described below, Souvall-Page
      and
      Company, Inc., a Utah corporation (the “Registrant” or “Company”), ABA
      Acquisition Corp., Inc., an Indiana corporation and a subsidiary of Registrant
      (the “Sub”), and the ABA executed and delivered that certain Agreement and Plan
      of Merger (the “Merger Agreement”), whereby (i) 22,518,153 issued and
      outstanding shares of common stock of the ABA, constituting all of its issued
      and outstanding shares, were exchanged, on a 1:1 share ratio for shares of
      the
      Company (inclusive of shares issued upon conversion of the Bridge Loans, as
      defined below), (ii) each of the Purchaser Warrants (defined below), and (iii)
      each of the ABA’s other extant warrants giving the holders thereof the right to
      purchase in the aggregate 1,000,000 shares of common stock, was exchanged,
      respectively, for a warrant to acquire one share of the Company’s common stock
      (the shares and warrants being issued pursuant to the preceding clauses (i)
      -
      (iii) being, the “Exchanged Shares” and “Exchanged Warrants”, respectively and
      the exchange transaction being the “Share Exchange”). Each of the Placement
      Warrants was exchanged for a warrant on units, each of which allows the holder
      to acquire two shares of the Company’s common stock and one warrant to acquire a
      share of the Company’s common stock (collectively the “Exchanged Placement
      Warrants”). Holders of the Exchanged Shares will be entitled to receive
      dividends, if any, that are paid on the Company’s common stock. The Exchanged
      Warrants and the Exchanged Placement Warrants are subject to adjustment or
      modification in the event of a stock split or other change to the Company’s
      capital structure so as to maintain the initial share ratio between or among
      the
      Exchanged Shares, the Exchanged Warrants, the Exchanged Placement Warrants
      and
      the Company’s common shares. The Company believes that the securities issued in
      connection with the merger were exempt from registration requirements pursuant
      to the provisions or standards of Regulation D promulgated under the Securities
      Act of 1933, as amended.





In
      connection with the merger the Company paid $300,000 to David Merrell a former
      officer, director and principal beneficial owner of the Company’s common stock,
      and also issued to him 300,000 shares of common stock in consideration for
      which
      David Merrell agreed to indemnify the Company for and against liabilities of
      and
      claims against the Company existing as of and through the date of the merger.
      Effective December 21, 2006, Chiricahua Investments, LLC, a company controlled
      by David Merrell, returned 26,400,000 shares to the Company and those shares
      were canceled pursuant to the terms of the Merger Agreement. All other existing
      shareholders of Souvall-Page retained 2,723,864 shares of the Company’s common
      stock.




34





In
      connection with the merger, Joseph F. Newman and Richard P. Tinkham agreed
      to
      indemnify the ABA for and against certain liabilities of and claims against
      the
      ABA existing as of and through the date of the Merger. Mr. Newman and Mr.
      Tinkham have each agreed to deposit 500,000 shares of common stock into an
      escrow as further security for this indemnity agreement.




**Financial
      Statements**





The
      financial statements and notes are representations of the Company’s management,
      who is responsible for their integrity and objectivity. The accounting policies
      conform to accounting principles generally accepted in the United States of
      America and have been consistently applied in the preparation of the financial
      statements.





The
      accompanying financial statements have been prepared using generally accepted
      accounting principles applicable to a going concern which contemplates the
      realization of assets and liquidation of liabilities in the normal course of
      business. As reported in the financial statements, the Company has incurred
      losses of approximately $19,644,549 from inception of the Company through
      December 31, 2006, and has negative cash flows from operations. The Company's
      stockholders' deficiency at December 31, 2006 was $527,852 and its current
      liabilities and claims and contingencies exceeded its current assets by
      $533,746. These factors combined, raise substantial doubt about the Company's
      ability to continue as a going concern. Management's plans to address and
      alleviate these concerns are as follows:





The
      Company's management continues to develop a strategy of exploring all options
      available to it so that it can develop successful operations and have sufficient
      funds to be able to operate over the next twelve months. As a part of this
      plan,
      management is currently in negotiations with their target industries' key
      players to develop additional business opportunities. In addition, management
      is exploring options in order to raise additional operating capital through
      debt
      and/or equity financing. No assurance can be given that funds will be available,
      or, if available, that it will be on terms deemed satisfactory to
      management.





The
      ability of the Company to continue as a going concern is dependent upon its
      ability to successfully accomplish the plans described in the preceding
      paragraph and eventually attain profitable operations. The accompanying
      financial statements do not include any adjustments relating to the
      recoverability and classification of asset carrying amounts or the amount and
      classification of liabilities that might result from the outcome of these
      uncertainties.




35


Note
      1 -
      Nature of Operations and Summary of Significant Accounting Policies
      (Continued):





**Use
      of Estimates and Assumptions**





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





**Cash
      and Cash Equivalents**





The
      Company considers all highly liquid instruments that are purchased within three
      months or less of an instruments maturity date to be cash
      equivalents.





**Accounts
      Receivable**





The
      Company carries its accounts receivable at invoiced amounts less an allowance
      for doubtful accounts. On a periodic basis, the Company evaluates its accounts
      receivable and establishes an allowance for doubtful accounts, based on history
      of past write-offs and collections and current credit conditions. The Company’s
      policy is not to accrue interest on past due trade receivables. Management
      has
      established an allowance for doubtful accounts of $119,500 as of December 31,
      2006 which reduced the net accounts receivable balance to $95,400 as of December
      31, 2006. The Company carried $0 of accounts receivable at December 31, 2005
      net
      of an allowance for doubtful accounts.


.


**Property
      and Equipment**





Property
      and equipment are recorded at cost and includes expenditures for new additions
      and those, which substantially increase the useful lives of existing assets.
      Depreciation is provided using the straight-line method over the estimated
      useful lives of the assets, which is generally five years. Expenditures for
      repairs or maintenance are charged to expense as incurred. The cost of property
      or equipment retired or otherwise disposed of and the related accumulated
      depreciation are removed from the accounts in the year of disposal with the
      resulting gain or loss reflected in earnings.




36


Note
      1 -
      Nature of Operations and Summary of Significant Accounting Policies
      (Continued):





**New
      Accounting Pronouncements**





In
      June
      2006, the Financial Accounting Standards Board (“FASB”) issued FASB
      Interpretation (“FIN”) No. 48, *“Accounting
      for Uncertainty in Income Taxes”* ,
      which
      clarifies the accounting for uncertainty in income taxes recognized in financial
      statements in accordance with Statement No. 109, *“Accounting
      for Income Taxes.”* This
      Interpretation prescribes a recognition threshold and measurement attribute
      for
      the financial statement recognition and measurement of a tax position taken
      or
      expected to be taken in a tax return. The Interpretation requires that the
      Company recognize in the financial statements the impact of a tax position
      if
      that position is more likely than not of being sustained on audit, based on
      the
      technical merits of the position. The Interpretation also provides guidance
      on
      derecognition, classification, interest and penalties, accounting in interim
      periods, disclosure and transition. FIN 48 is effective for fiscal years
      beginning after December 15, 2006. The Company is currently evaluating the
      impact this interpretation will have on its financial statements.





In
      March 2006, the FASB issued FASB Statement No. 156, “Accounting for
      Servicing of Financial Assets.” ** Statement
      156 amends FASB Statement No. 140, “Accounting for Transfers and Servicing
      of Financial Assets and Extinguishments of Liabilities,” and requires all
      separately recognized servicing assets and servicing liabilities to be initially
      measured at fair value, if practicable, and permits an entity to subsequently
      measure those servicing assets and servicing liabilities at fair value. This
      statement is effective for fiscal years beginning after September 15, 2006.
      The Company does not expect this statement to have a material impact on its
      financial position, results of operations or cash flows.





In
      February 2006, the FASB issued SFAS No. 155, “Accounting for Certain
      Hybrid Financial Instruments — An Amendment of FASB Statements No. 133
      and 140.” SFAS No. 155 provides entities with relief from having to
      separately determine the fair value of an embedded derivative that would
      otherwise be required to be bifurcated from its host contract in accordance
      with
      SFAS No. 133. SFAS No. 155 allows an entity to make an irrevocable
      election to measure such a hybrid financial instrument at fair value in its
      entirety, with changes in fair value recognized in earnings. SFAS No. 155
      is effective for all financial instruments acquired, issued or subject to a
      remeasurement event occurring after the beginning of an entity’s first fiscal
      year that begins after September 15, 2006. The Company is currently
      evaluating the impact this interpretation will have on its financial
      statements.





In
      May
      2005, the FASB issued Statement SFAS No. 154 “Accounting Changes and Error
      Corrections” (SFAS 154) which supersedes APB Opinion No. 20, Accounting Changes”
and SFAS No. 3, “Reporting Accounting Changes in Interim Financial Statements”.
      SFAS 154 provides guidance on the accounting for and reporting of accounting
      changes and error corrections. It establishes, unless impractical, retrospective
      application as the required method for reporting a change in accounting
      principle in the absence of explicit transition requirements specific to the
      newly adopted accounting principle. The correction of an error in previously
      issued financial statements is not an accounting change. However, the reporting
      of an error correction involves adjustments to previously issued financial
      statements similar to those generally applicable to reporting an accounting
      change retroactively. Therefore, the reporting of a correction of an error
      by
      restating previously issued financial statements is also addressed by this
      Statement. SFAS 154 is effective for accounting changes and corrections of
      errors made in fiscal years beginning after December 15, 2005. The Company
      does
      not believe this standard has a material impact on its financial
      statements.





In
      December 2004, the FASB issued Statement No. 123R (SFAS 123R), “Share-Based
      Payment”. This statement is a revision of SFAS 123, “Accounting for Stock-Based
      Compensation” (SFAS 123), and supersedes Accounting Principles Board Opinion No.
      25, “Accounting for Stock Issued to Employees” (APB 25). SFAS 123R focuses
      primarily on accounting for transactions in which an entity obtains employee
      services in share-based payment transactions. The Statement required entities
      to
      recognize compensation
      expense for awards of equity instruments to employees based on the grant-date
      fair value of those awards (with limited exceptions). SFAS 123R also requires
      the benefits of tax deductions in excess of recognized compensation expense
      to
      be reported as a financing cash flow, rather than as an operating cash flow
      as
      prescribed under the prior accounting rules. On December 31, 2006, the Company
      adopted the provisions of SFAS 123R using the modified prospective method,
      the
      results of which did not have a material impact on its financial position,
      results of operations or cash flows.




37


Note
      1 -
      Nature of Operations and Summary of Significant Accounting Policies
      (Continued):




**Revenue
      Recognition**





Revenues
      are expected to be generated from a number of sources including national
      sponsorships, market reservation fees, broadcasting revenue and basketball
      and
      other merchandise sales. It is expected that sponsorship and broadcasting
      revenue will be recognized over the period of the agreements; market reservation
      fees will be recognized when receipt is assured; and merchandise sales less
      returns and allowances will generally be recognized when title and risk of
      product loss is transferred to the buyer. Such risk of product loss is expected
      to generally coincide with the time of shipment.





**Advertising**





The
      Company charges advertising costs to expense as incurred. Advertising expenses
      amounted to $0 for the year ended December 31, 2006, and $4,199 for the year
      ended December 31, 2005.




**Income
      Taxes** ****




Deferred
      tax assets are recognized for taxable temporary differences, tax credit and
      net
      operating loss carryforwards. These assets are reduced by a valuation allowance,
      which is established when it is more likely than not that some portion or all
      of
      the deferred tax assets will not be realized. In 2006, based on this evaluation;
      the Company recorded a 100% valuation allowance on the consolidated balance
      sheet for its deferred tax assets.  In addition, management is required to
      estimate taxable income for future years by taxing jurisdictions and to consider
      this when making its judgment to determine whether or not to record a valuation
      allowance for part or all of a deferred tax asset. A one percent change in
      the
      Company’s overall statutory tax rate for 2006 would not have a material effect
      in the carrying value of the net deferred tax assets or
      liabilities.




The
      Company may have future operations in multiple taxing jurisdictions and would
      be
      subject to audit in these jurisdictions. Tax audits by their nature are often
      complex and can require several years to resolve. Accruals of tax contingencies
      require management to make estimates and judgments with respect to the ultimate
      outcome of tax audits. Actual results could vary from these
      estimates.




38




Note
      1 -
      Nature of Operations and Summary of Significant Accounting Policies
      (Continued):





**Earnings
      per Share**





Basic
      earnings (loss) per share is computed by dividing income (loss) available to
      common stockholders by the weighted average number of common shares available.
      Diluted earnings (loss) per share is computed similar to basic earnings (loss)
      per share except that the denominator is increased to include the number of
      additional common shares that would have been outstanding if the potential
      common shares had been issued and if the additional common shares were dilutive.
      At December 31, 2006 and 2005, all common stock equivalents were
      anti-dilutive.




39


**Note
      2 - Property and Equipment:**





Property
      and equipment consist of the following as of December 31, 2006 and
      2005:


**2006**
              
              **2005**Computer
                  equipment
              
              $
              7,786
              
              $
              7,786Less
                  accumulated depreciation
              
              
              1,892
              
              
              335$
              5,894
              
              $
              7,451


The
      company recorder depreciation expenses of $1,557 and $335 for the year ending
      December 31, 2006 and 2005.





**Note
      3 - Accrued Compensation and Conversion to Common Stock:**





The
      Company’s Board of Directors approved cumulative compensation of $500,000 for
      two members of  management
      for both (a) year ended December 31, 2005 and (b) the period April 21, 2004
      (inception) through December 31, 2004. The Company also assumed additional
      liabilities for deferred compensation owed to the same members of management
      in
      the amount of $496,750 on April 21, 2004 (inception). Through May 1, 2005,
      the
      Company paid a portion of such compensation when sufficient cash flow was
      available. Cumulative compensation paid from these arrangements amounted to
      $240,300 and $97,100 for 2005 and 2004, respectively. On May 1, 2005 the Company
      converted its entire $1,159,350 outstanding balance of accrued compensation
      to
      14,350,760 shares of the Company’s no par value common stock in exchange for
      full satisfaction of the liability. As such, accrued compensation on the
      Company’s December 31, 2005 and 2004 balance sheets amounted to $0 and
      $899,650, respectively. Management estimates the fair value of the common stock
      to be $1.00 per share at the date of issuance. In addition to recording $899,650
      of deferred compensation from April 21, 2004 (inception) through December 31,
      2004, management recognized non-cash stock based compensation expense amounting
      to $13,451,110 on May 1, 2005. The stock based compensation is included in
      the
      Company’s Statements of Operations as a component of operating expense for the
      year ended December 31, 2005. The Company has recorded accrued compensation
      of
      $262,499 as of December 31, 2006 and $0 as of December 31, 2005.





**Note
      4 - Convertible Debentures and Warrants:**





**Convertible
      Debentures**





On
      June
      1, 2005, the Company issued approximately $500,000 of long-term convertible
      debentures to unrelated investors. The convertible notes were due June 15,
      2008
      with annual interest of 12% and no minimum monthly payment requirement. Each
      $1
      outstanding on the debentures and applicable accrued interest was convertible
      to
      1 share of the Company’s no par value common stock (or a 1:1 conversion ratio)
      at the investors’ discretion. In August 2005, the holders of the debentures
      exercised their right to convert all the outstanding notes and accrued interest
      into common stock. As a result, convertible debentures liability and accrued
      interest were $0 at December 31, 2005. The interest amount of $11,095 was
      converted to 11,095 shares of common stock and is included as non-cash interest
      expense in the Company’s Statements of Operations for the year ended December
      31, 2005. In addition, the Company charged $138,000 of direct costs attributable
      to the transaction to equity on the conversion date. On June 29, 2006, the
      Company issued approximately $400,000 of long-term convertible debentures to
      unrelated investors. The convertible notes were due upon completion of equity
      financing with annual interest of 9% and no minimum monthly payment requirement.
      The notes were converted on December 21, 2006 into 920,909 shares of the
      Company’s common stock at 25% discount to the pricing of the equity raise.




40





**Warrants
      Outstanding**





In
      connection with the issuance of the convertible debentures, the Company also
      issued 500,000 common stock purchase warrants. Upon surrender of the warrant,
      the holder is entitled to purchase one share of the Company’s no par value
      common stock for $.25 per share. The warrants will entitle the holder to
      purchase common stock shares commencing on the date of the agreement (June
      1,
      2005) through the expiration date defined in the agreement as the later of:
      (a) January 1, 2010 or (b) two years from the date on which all sums
      due under the convertible debentures are paid in full. Since the notes were
      converted to common stock on August 1, 2005, the expiration date for the
      warrants is August 1, 2008. No warrants have been exercised as of the date
      of
      the report. In connection with the Securities Purchase Agreement in
      conjunction with the Company’s reverse merger with Souvall-Page 1,675,000
      warrants were issued to purchase one share of common stock at $1.20 per share
      for a period of 5 years. In addition the Company issued 500,000 warrants to
      purchase 500,000 shares of common at an exercise price of $0.75. The weighted
      average exercise price of the warrants is $0.94 and the weighted average
      remaining contractual life is 4 year and 6 months. Management estimates the
      warrants strike price of $0.94 per share is more than fair market value at
      the
      issuance date and December 31, 2006.





**Note
      5 - Stockholders' Equity:**





The
      following summarizes the Company's shares of common stock as of December 31,
      2006 and 2005:


**2006**
                
                **2005**Authorized
                
                
                *
                
                
                50,000,000
                
                
                30,000,000Issued
                
                
                *
                
                
                25,572,017
                
                
                14,862,703Outstanding
                
                
                *
                
                
                25,572,017
                
                
                14,862,703




The
      Company has one class of capital stock which is no par value common stock with
      equal voting rights *.*





Issuance
      of Common Stock prior to recapitalization on December 22, 2006:





In
      April
      2004, the Company issued 1,000 shares of its no par value common stock to its
      co-founders in exchange for services rendered. In May 2005, the Company issued
      each co-founder an additional 7,175,380 shares of common stock for services
      rendered (see Note 3). In August 2005, 510,943 shares were issued to unrelated
      investors for convertible debentures and accrued interest (see Note 4).





Issuance
      of Common Stock in conjunction with recapitalization on December 22,
      2006:





As
      discussed in Note 1, the Company entered into a merger agreement on December
      21,
      2006. The merger agreement forced the Company into a recapitalization on or
      around this date. The Company issued shares of its common stock to sellers,
      investors and employees as disclosed in the Share Purchase Agreement (SPA)
      included in the merger agreement as disclosed below.





The
      Company received a $400,000 bridge loan from investors included in the SPA
      to
      assist the Company with certain offering related costs in preparation of the
      merger agreement. The proceeds were received by the Company at various dates
      ranging from June 2006 through September 2006. On December 22, 2006, the Company
      converted the bridge loan, discount and accrued interest to 920,909 shares
      of
      common stock. The common stock was valued at the offering price included in
      the
      SPA of $0.60 per common share.




41





**Note
      5 - Stockholders' Equity - continued**





On
      December 22, 2006, the Company issued 2,714,541 shares of common stock to
      consultants for services performed related to the SPA and key employees expected
      to be associated with the Company’s future league operations. The common stock
      was valued at the offering price included in the SPA of $0.60 per common share.
      The expense is included as a component of Compensatory Element of Stock
      Transactions in the Company’s Consolidated Statement of Operations for the year
      ended December 31, 2006.





On
      December 22, 2006, the Company issued 4,050,000 shares of common stock to
      investors for cash proceeds of $2,010,000, net of direct offering costs of
      $420,000. The common stock was valued at the offering price included in the
      SPA
      of $0.60 per common share.





On
      December 22, 2006, the Company issued 2,723,864 shares of stock to the seller
      in
      conjunction with the merger agreement. The agreement required a 1:1 conversion
      of 2,723,864 shares of seller stock in exchange for the Company’s common stock.





On
      December 22, 2006 the Company issued 300,000 shares to a seller’s former officer
      and director in consideration for items described in Note 1. The common stock
      was valued at the offering price included in the SPA of $0.60 per common share.





**Note
      6 - Related Party Transactions:**





ABA
      Salute, a related entity through common management, receives approximately
      $200
      per month from the Company for charitable purposes during the year ended
      December 31, 2005; no funds were issued during the year ended December 31,
      2006.  The
      Company is not aware of other related
      party transactions that may have a material impact on the Company’s operations,
      cash flows, or financial condition.




**Note
      7 - Concentrations of Credit Risk:**





Financial
      instruments, which potentially subject the Company to concentration of credit
      risk, consist primarily of cash and cash equivalents. The Company maintains
      its
      cash and cash equivalents with high credit quality institutions which, at times,
      may exceed federally insured limits. Accounts are guaranteed by the Federal
      Deposit Insurance Corporation (FDIC) up to $100,000. The Company has not
      experienced any losses in such accounts and does not believe it is exposed
      to
      any significant credit risk on cash and cash equivalents, which may, at times,
      exceed federally insured limits. The Company routinely assesses the financial
      strength of its stockholders and employees and, as a consequence, believes
      that
      its receivable credit risk exposure is limited.





**Note
      8 - Licensing Agreement:**





The
      commercial use of the trademarks “ABA” and “American Basketball Association” by
      the Company, alone or in combination with other words, phrases and design,
      is
      governed by a license agreement with NBA Properties, Inc. (NBA).  The scope
      of the license covers services and products as well as manufacturing,
      distributing and selling practices.  The license contains product quality
      language. Under trademark law, if a trademark owner issues a license without
      retaining the right to control product quality, it risks losing its ownership
      rights to the trademark.  Quality Approval provisions require the licensee
      to cause licensed Services and licensed Products to meet and conform to high
      standards of style, quality and appearance.  Licensee’s use of the Licensed
      Marks are deemed approved.  Notwithstanding, NBA has discretion, using good
      faith, to revoke its approval of particular uses of the Licensed Mark that
      relate to gambling, adult content, or any other subject matter that would damage
      or reflect unfavorably upon the NBA, any of its member teams, or the Original
      ABA; violate provisions of the License; or misuse, mutilate, dilute or otherwise
      tarnish the Licensed Mark. The right to use of the marks under the license
      discontinues on expiration or termination of the agreement
      except for sell off of inventory.  The agreement can end if the league
      ceases operations, is no longer owned or operated by a licensee, or if product
      quality concerns are not corrected after notice.  Management believes the
      Company has complied with the requirements and conditions of the license,
      intends to meet its requirements and conditions and has received no notice
      otherwise.  All royalties due under the license have been
      satisfied.




42





**Note
      9 - Other Significant Agreements:**





During
      2005, the Company entered into a sponsorship agreement to promote and advertise
      a vehicle model from February 14 through March 21, 2005, in exchange for $50,000
      cash.





The
      Company entered into a sponsorship agreement with a manufacturer of basketballs
      (“Manufacturer”) whereby the Company would receive minimum royalties of $50,000
      as well as other royalties based on sales of basketballs not to exceed $100,000.
      In addition, Manufacturer is to provide a set number of basketballs to the
      teams
      and league. In exchange, the Manufacturer receives certain marketing and
      promotional opportunities as well as tickets to basketball games for teams
      included in the league. This agreement was terminated in 2006.





Management
      represents that other agreements exist and were executed for the year ended
      December 31, 2006 and 2005. However, management believes the financial effects
      from the agreements are immaterial to the financial statements as a whole.




**Note
      10 - Commitments and Contingencies:**





Various
      entities have been created by current and predecessor members of management
      since the year 2000. These entities include ABA, LLC, ABA Bounce, ABA Founders
      & Properties, LLC, ABA League, LLC, and ABA Operations, LLC. The Company’s
      independent legal counsel and management represent such entities either cease
      to
      exist, or are administratively dissolved at December 31, 2005. No material
      commitments or contingencies exist from these entities that would effect the
      financial position, operations, and cash flows of the Company for the year
      ended
      December 31, 2006 and for the year ended December 31, 2005.




43




**Note
      10 - Commitments and Contingencies - continued**





The
      Company is involved with a variety of lawsuits for the years ended December
      31,
      2006. Independent legal counsel has provided the Company with a summary of
      estimated claims and contingencies and believe certain cases will result in
      an
      unfavorable outcome. As a result the Company has included $1,045,331 of
      estimated accrued contingencies in its consolidated balance sheet at December
      31, 2006





**Note
      11 - Legal proceedings:**





In
      a case titled *Troy
      Fisher and 3 Ball Management, LLC. vs. American Basketball Association, RAG,
      LLC, Richardson Consulting Group, Ricardo Richardson, Reginald Jones, Robert
      Blackwell, and  Indiana Alley Cats* pending
      in the Marion County Superior Court, Indiana under Cause No. 
49D120511CT043427, the Plaintiffs seek to recover alleged damages from the
      Company after their team was suspended from the League for failure to follow
      the
      ABA Team Operations Manual. The
      Company intends to defend this litigation aggressively, expects that the courts
      will concur with the Company’s views that these actions and claims are without
      merit and currently believes that the outcome, other than costs of suit, will
      not be materially adverse to the ABA. Nevertheless, an adverse judgment on
      these
      actions could materially harm the business of the Company. No assurance can
      be
      given that the Company’s position will be upheld or will prove to be correct
      over the course of litigation.





*American
      Arbitration Association case: 52 180 E 00612 06 Jaren W. Jackson v. The American
      Basketball Association, LLC, the Philadelphia Fusion, Wayne Butler and Jeffrey
      Wilson.* In
      November 2006 Jaren Jackson commenced arbitration against the Company for unpaid
      wages of
      about
      $15,000 owed by
      the Philadelphia Fusion, one of the teams of the ABA that played during
      the 2004 ABA season . 
      The arbitration is to be held in Indianapolis, Indiana but no date has been
      set.





*Steven
      Jaloza and Salvatore Fradella v. Joseph Newman, Richard P. Tinkham, Jr., and
      the
      American Basketball Association, Inc* .,
      pending in the Marion County Circuit Court under Cause
      No.:49C010611PL0046089.  In this action, filed in November
      2006, plaintiffs assert that Joseph Newman and Richard Tinkham breached
      fiduciary duties owed to them under the Operating Agreement of a separate
      entity, ABA Founders and Properties, LLC. The Company is not a party to the
      Operating Agreement. Plaintiffs
      seek to add the Company as a defendant as an alter ego of Newman and
      Tinkham.  Hearing
      on the Company’s Motion to Dismiss is set for February 5, 2007.  This
      motion by the Company is based on an action pending in the Marion County
      Superior Court, under Cause No. 49D010608PL033078, filed by the same plaintiffs,
      that also asserts breach of fiduciary duties owed by Joseph Newman to them
      under
      the Operating Agreement of ABA Founders and Properties, LLC.  In that
      action the Company, after hearing, was found not subject to the remedies sought
      in that action. The
      Company intends to defend this litigation aggressively, expects that the courts
      will concur with the Company’s views that these actions and claims are without
      merit and currently believes that the outcome, other than costs of suit, will
      not be materially adverse to the ABA. Nevertheless, an adverse judgment on
      these
      actions could materially harm the business of the Company. No assurance can
      be
      given that the Company’s position will be upheld or will prove to be correct
      over the course of litigation.




*Steven
      Jaloza and Salvatore Fradella vs. ABA Founders & Properties, LLC, ABA Sports
      and Entertainment, Inc., a/k/a ABA Enterprises, Inc., ABA International, Inc.,
      ABA League, LLC, ABA Operations, LLC, ABA Properties, LLC, ABA Rental, Inc.
      and
      ABA Services, Inc* .
      In the
      Marion Superior Court, Room No 5, Indiana. Cause No. 49D010608PL033078. Steven
      Jaloza (“Jaloza”) and Salvatore Fradella (“Fradella”) seek damages from ABA
      Founders & Properties, LLC, ABA Sports and Entertainment, Inc., a/k/a ABA
      Enterprises, Inc., ABA International, Inc., ABA League, LLC, ABA Operations,
      LLC, ABA Properties, LLC, ABA Rental, Inc., and ABA Services, Inc. for alleged
      breach of fiduciary duties allegedly arising under the Operating Agreement
      of
      ABA Founders & Properties, LLC. The suit was filed in August, 2006. A
      hearing for prejudgment attachment
      and to appoint a receiver over ABA Indiana was held on October 30, 2006.
      Prejudgment attachment was not granted and a receiver was not appointed. Neither
      ABA Utah nor ABA Indiana is a party to the action. The Plaintiffs have not
      pursued the action in this court since the date of the receivership hearing.
      This matter is covered by the Indemnification Agreement. The ABA intends to
      contest the case vigorously. The potential for an unfavorable outcome is not
      significant. The plaintiffs did not appeal the denial of the request for
      prejudgment attachment or the decision not to appoint a receiver. Jaloza and
      Fradella disassociated from ABA Founders & Properties, LLC in June, 2001.
      The Operating Agreement of ABA Founders & Properties, LLC allowed Newman and
      Tinkham to engage in or possess interests in other business ventures of every
      kind and description for their own account.*Credentials
      Plus, LLC v. Calderson*,
      230 F.
      Supp.2d (N.D. Ind 2002) holds that fiduciary duties of members of an Indiana
      LLC
      are governed by I.C. 23-18-4-2(b) and can be eliminated by provisions in the
      Operating Agreement. The action should be disposed by summary judgment but
      has
      been held open in view of the matter pending in the Marion County Circuit Court
      under Cause No.:49C010611PL0046089.




44





**Note
      11 - Legal proceedings - continued**





*Ricardo
      Richardson and Richardson Consulting vs. American Basketball Association, a/k/a
      ABA Founders & Properties, a/k/a ABA Sports & Entertainment, Inc., Joe
      Newman, in his official capacity and Richard P. Tinkham, Jr., in his official
      capacity* .
      In the
      Marion Superior Court, Indiana. Cause No. 49D11-0608-PL-33933. Richardson
      asserts that as a minority shareholder in ABA Sports & Entertainment, Inc.
      he has a right to prevent use of its unspecified proprietary rights which he
      alleges it sold to Brax Capital Group. Neither ABA Utah nor ABA Indiana is
      a
      party to this action. The lawsuit was filed in August, 2006. ABA Sports &
Entertainment, Inc, Newman and Tinkham filed answers. The Court granted the
      defendant’s motion to require that Richardson take the matter to the board of
      directors of ABA Sports & Entertainment, Inc as required in a derivative
      shareholder action. Richardson has not done this. This matter is covered by
      the
      Indemnification Agreement. The ABA intends to contest the case vigorously.





*Jeff
      Noordgaard, Michael Hart, Daimon Bethea, Coleco Buie, Deron Hayes, Michael
      Robinson and Tremaine Wingfield vs. Joe Newman, ABA Operations, LLC and ABA
      League, LLC* .
      In the
      Marion Superior Court, Indiana. Cause No. 49D11-0207-CC-001122. Ryan Hoover,
      Jeff Nordgaard, Michael Hart, Daimon Bethea, Coleco Buie, Deron Hayes, Michael
      Robinson and Tremaine Wingfield (the “Players”) seek damages under the legal
      theory of breach of contract and under the statutory theory of the Wage Payment
      Statute for alleged non-payment of wages. Progress of Claim - The lawsuit was
      filed in 2003. Summary Judgment was entered against ABA Operations, LLC
      (“Operations”) and ABA League, LLC (“League”) on January 5, 2007 in the amount
      of $762,331.43. An appeal of this decision was filed with the Indiana Court
      of
      Appeals on March 8, 2007. This matter is covered by the Indemnification
      Agreement. Prior to December 19, 2006, funds of ABA Indiana were held in a
      bank
      account titled in the name of ABA League, LLC as trustee. Since December 19,
      2006, all funds of ABA Utah and ABA Indiana have been held in bank accounts
      titled in the name of ABA Indiana. The Players have vigorously attempted to
      collect this judgment from ABA Utah and ABA Indiana. The ABA intends to contest
      the case vigorously. Undersigned counsel has hired Indianapolis attorney, Paul
      Ludwig, to represent the interests of ABA Utah and ABA Indiana in this matter.
      ABA Utah or ABA Indiana has been named as a Garnishee Defendant. Neither ABA
      Utah nor ABA Indiana has funds or contract owed to ABA League, LLC. The bank
      account that Players seek to garnish has $32,000 in it. A garnishment hearing
      on
      this bank account is set for June 5, 2007. In the meantime, a hearing to set
      an
      appeal bond to stay enforcement of the judgment pending appeal is set for May
      5,
      2007. Collateral is required to post a supercedas bond with the trial court
      pending appeal. Severko Hrywnak (“Hrywnak”) has promised to provide the
      collateral. The strategy is to have a portion or the entire judgment amount
      overturned on appeal. The tactic is to settle this matter using non ABA Indiana
      or ABA Utah assets. ABA Management believes that the judgment will be overturned
      on appeal. The Company intends to defend this litigation aggressively, expects
      that the courts will concur with the Company’s views that these actions and
      claims are without merit and currently believes that the outcome, other than
      costs of suit, will not be materially adverse to the ABA. Nevertheless, an
      adverse judgment on
      these
      actions could materially harm the business of the Company. No assurance can
      be
      given that the Company’s position will be upheld or will prove to be correct
      over the course of litigation.




45





**Note
      11 - Legal proceedings - continued**





*James
      P. Dod vs. Perry R. Hall, a/k/a Pierre Hall, d/b/a Next Level Sports Franchise
      Development, LLC, d/b/a The Cleveland Rockers, d/b/a The Lake Erie Rockers,
      Ralph W. Underhill, American Basketball Association, Inc., and American
      Basketball Association, LLC.* In the
      Cleveland Municipal Court, Cuyahoga County, Ohio. Cause No. 06CVF0032421. James
      P. Dod (“Dod”) seeks $13,000 in damages under the theory of negligent
      misrepresentation from ABA Indiana and American Basketball Association, LLC
      as a
      result of information about *The
      Cleveland Rockers* appearing on the ABA website. The lawsuit was filed December 8, 2006. ABA
      Indiana filed its answer and cross claim on February 15, 2007. The case is
      set
      for a pre-trial hearing on June 11, 2007. This matter is covered by the
      Indemnification Agreement. The ABA intends to contest the case. The potential
      for an unfavorable outcome of $13,000 is not significant. The elements of the
      tort of negligent misrepresentation are: one who, in the course of his business,
      profession or employment, or in any other transaction in which he has a
      pecuniary interest, supplies false information for the guidance of others in
      their business transactions, is subject to liability for pecuniary loss caused
      to them by their justifiable reliance upon the information, if he fails to
      exercise reasonable care or competence in obtaining or communicating the
      information. The ABA is not in the business of supplying information for the
      guidance of others.  Such businesses typically include attorneys,
      surveyors, abstractors of title and banks dealing with no-depositors'
      checks.  The ABA was not hired or paid by Dod to supply information. 
The ABA does not hold a duty to supply Dod with information nor did it
      communicate any affirmative false statement to Dod. If not settled the matter
      should be disposed at hearing.





*Severko
      Hrywnak v. Joseph Newman* .
      Filed
      in the Circuit Court of Cook County, Illinois. Cause No. 2007L001101 and removed
      to the United States District Court for the Northern District of Illinois and
      assigned Cause No. 1:07-cv-00771. Severko Hrywnak (“Hrywnak”) seeks damages
      under the legal theories of breach of contract, promissory estoppel and fraud.
      Hrywnak alleges that Newman promised to repay losses Hrywnak incurred in hosting
      the 2006 ABA all star game by tendering 400,000 shares of ABA Utah stock.
      Neither ABA Utah nor ABA Indiana is a party to this lawsuit. The lawsuit was
      filed on January 30, 2007. An answer was filed. The matter was settled however,
      Hrywnak has not performed a promise of the settlement agreement to provide
      collateral for the supercedas appeal bond in the Indiana Legends player case.
      Initially, Hrywnaks asseted claims against ABA Utah and not Newman. The claims
      against Newman derive from his capacity as CEO of ABA Utah. This matter is
      covered by the Indemnification Agreement. The ABA intends to vigorously contest
      the case until Hrywnak performs his promise to provide collateral for the
      supercedas bond. Potential for Unfavorable Outcome and amount/range of potential
      loss - The claims should be dismissed based on the current settlement
      negotiations. In any event, no monetary damages can be awarded against either
      ABA Utah or ABA Indiana.





*Thaddeus
      A. Wier, Jr. v. American Basketball Association, Inc* .
      In the
      Superior Court of Erie County, New York. Index No. 2007-001971. On December
      5,
      2006, Thaddeus A Weir, Jr. (“Weir”) agreed to fund the ABA Indiana with $200,000
      and raise $4,000,000 (the Alternate Financing Plan”) in the event ABA Indiana
      could not come to terms with Purchasers under a pending Stock Purchase Agreement
      (‘the “SPA”). On December 5, 2006, as part of the Alternate Financing Plan, ABA
      Indiana and Big Apple Consulting USA, Inc. (“Big Apple”) entered a contingent
      agreement (the “Big Apple Agreement”) pursuant to which, Big Apple was to
      provide investor management services to ABA Indiana in the event it did not
      come
      to terms with Purchasers under the SPA. On December 13, 2006, as part of the
      Alternate Financing Plan, Weir and ABA Indiana entered into a contingent
      advisory agreement (the “Weir Agreement”) in the event ABA Indiana did not come
      to terms with Purchasers under the SPA. Weir failed to wire the $200,000 to
      ABA
      Indiana. ABA Indiana notified Weir of the
      termination of the Big Apple Agreement and the Weir Agreement. ABA Indiana
      entered into the SPA on December 19, 2006. On January 9, 2007, Weir asserted
      that ABA Utah was obligated to perform the Big Apple Agreement and the Weir
      Agreement. On January 29, 2007, ABA Indiana and ABA Utah advised Weir that
      the
      Alternate Financing Plan was separate and distinct from the SPA and that the
      Weir Agreement and the Big Apple Agreement had been terminated in December,
      2006
      due to lack of performance. Without service of summons, Weir filed the action
      in
      the Superior Court of Erie County, New York on February 20. Without service
      of
      summons no response is due. The matter was settled on February 20, 2007.
      However, promises under the settlement agreement have not been performed. The
      ABA intends to come to satisfactory terms with Wier. Potential for Unfavorable
      Outcome and amount/range of potential loss - The potential amount of loss is
      significant. However, the likelihood of an unfavorable outcome is not
      significant. The Company intends to defend this litigation aggressively, expects
      that the courts will concur with the Company’s views that these actions and
      claims are without merit and currently believes that the outcome, other than
      costs of suit, will not be materially adverse to the ABA. Nevertheless, an
      adverse judgment on these actions could materially harm the business of the
      Company. No assurance can be given that the Company’s position will be upheld or
      will prove to be correct over the course of litigation.




46




**NOTE
      12 - INCOME TAXES**





The
      reconciliation for the 2006 and 2005 income tax expense (benefit) computed
      at
      the U.S. Federal statutory tax rate to the Company's effective income rate
      is as
      follows:





December
                31,
            
            December
                31,2006
            
            2005Tax
                at U.S. Federal statutory rate
            
            
            34.0
            %
            
            34.0
            %State
                and local taxes, net of federal benefit
            
            
            5.6
            
            
            5.6Other
            
            
            -
            
            
            -Change
                in valuation allowance
            
            
            (39.6
            )
            
            (39.6
            )0.0
            %
            
            0.0
            %





Significant
      components of the provision for income tax expense (benefit) from continuing
      operations are as follows:


Years
                  EndedDecember
                  31, 2006
              
              
              December
                  31, 2005Current:Federal
              
              $
              900,000
              
              $
              550,000State
              
              
              130,000
              
              
              125,000Deferred:Federal
              
              
              50,000
              
              
              40,000State
              
              
              20,000
              
              
              15,000Change
                  in valuation allowance
              
              
              (1,200,000
              )
              
              (730,000
              )Net
                  income tax (benefit)
              
              $
              0
              
              $
              0






47




**NOTE
      12 - INCOME TAXES - continued**





Deferred
      income taxes reflect the net tax effects of temporary differences between the
      carrying amount of assets and liabilities for financial statement purposes
      and
      the amounts used for income tax purposes. The significant components of the
      Company's deferred tax asset are as follows:





December
                31,2006Current:Allowances
                for doubtful accounts and inventory
            
            $
            50,000Accrued
                liabilities and other
            
            
            425,000Noncurrent:Net
                operating losses and other carryforwards
            
            
            2,400,0002,875,000Valuation
                allowance
            
            
            2,875,000Total
                deferred tax assets
            
            $
            0





SFAS
      109
      requires a valuation allowance to reduce the deferred tax assets reported if,
      at
      December 31, 2006, the Company had federal tax operating loss based on the
      weight of the evidence, it is more likely than not that some portion or all
      of
      the deferred tax assets will not be realized. After consideration of the
      evidence, both positive and negative, management has determined that a
      $2,875,000 valuation allowance at December 31, 2006 is necessary to reduce
      the
      deferred tax assets to the amount that will more likely than not be realized.
      The change in the valuation allowance for the current period is $1,200,000.
      At
      December 31, 2006 the Company has federal and state net operating loss
      carryforwards of approximately $3,000,000 which expire between 2024 and 2026.





**Note
      13 - Subsequent Events:**




On
      January 9, 2007, American Basketball Association, Inc. (the “Company”) entered
      into a Consulting agreement with Cioffi Business Management Services. The
      Consulting Agreement is for an initial term of twelve (12) months. The Company
      has agreed to compensate the consultant $102,000 as well as issue the Consultant
      550,000 shares of its common stock for the initial 12 month term. During the
      term of the Consulting Agreement, the principal shareholder of the consultant,
      Mr. Darren Cioffi, will act as the Company's Chief Financial
      Officer.





The
      Company has secured the marketing and other product consulting services of
      Meriwether Capital Group of which David Howitt, a director of the Company,
      is a
      controlling person. On January 3, 2007 The Meriwether Group Inc., entered into
      a
      consulting agreement with the ABA that is dated as of the agreement’s effective
      date of January 15, 2007. The agreement has a term of 24 months. Meriwether
      agreed to assist the ABA in developing and implementing a strategic sponsorship
      and licensing program for key merchandising categories that include uniforms,
      footwear, apparel, accessories, sport beverage, memorabilia and other agreed
      to
      categories. Meriwether also agreed to use its relationships with key brand
      managers and executives of internationally known sports, lifestyle, and food
      and
      beverage companies to assist the ABA in developing strategic licensing /supplier
      agreements and relationships. The ABA agreed to pay Meriwether


An
        initial payment of $12,500,
  48


**Note
      13 - Subsequent Events - continued**




A
      retainer of $2,500 per month,





A
      $10,000
      bonus for each major licensing/sponsorship transaction secured by Meriwether
      and
      deemed earned after the ABA has derived at least $50,000 or more in revenue
      over
      its term,





A
      4%
      royalty from all revenue earned from any transaction that Meriwether brings
      to
      the ABA,





An
      award
      of 225,000 shares of common stock as a performance incentive, and





All
      reasonable and approved travel and out of pocket expenses incurred by Meriwether
      in providing its services to the ABA.




On
      February 2, 2007 the Company signed a manufacturing deal with spalding to
      produce official ABA basketballs. The deal calls for Royalties of 2% of sales
      with a guaranteed $10,000 minimum per year.




49


**ITEM
      8: CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL
      DISCLOSURES**




On
      March
      1, 2007, Child, Van Wagoner & Bradshaw, PLLC (“Auditor”) resigned as the
      independent registered public accountants for the Company after being informed
      that the Company had engaged the auditor for American Basketball Association,
      Inc., an Indiana corporation (“ABA-Indiana”), which was acquired by the Company
      in January 2007.





During
      the last two fiscal years ended December 31, 2005 and 2004, and through March
      1,
      2007, (i) there were no disagreements between the Company and Auditor on any
      matter of accounting principles or practices, financial statement disclosure
      or
      auditing scope or procedure which, if not resolved to the satisfaction of
      Auditor would have caused Auditor to make reference to the matter in its reports
      on the Company’s financial statements, and (ii) Auditor’s report on the
      Company’s financial statements did not contain any adverse opinion, disclaimer
      of opinion, or modification or qualification of opinion except for the issuance
      of a going concern uncertainty explanatory paragraph. During the last two fiscal
      years ended December 31, 2005 and 2004, and through March 1, 2007, there were
      no
      reportable events as the term described in Item 304(a)(I)(iv) of Regulation
      S-B.





The
      Company has requested that Auditor furnish it with a letter addressed to the
      Securities and Exchange Commission stating whether it agrees with the statements
      contained herein which is attached hereto as Exhibit 16.1 to this Form 8-K.





On
      March
      1, 2007, the Company approved the engagement of the firm of Somerset CPAs,
      P.C.
      as the Company’s independent auditors. During the Company’s two most recent
      fiscal years or any subsequent interim period prior to engaging Somerset CPAs,
      P.C., the Company had not consulted Somerset CPAs, P.C. regarding any of the
      accounting or auditing concerns stated in Item 304(a)(2) of Regulation S-B.
      Somerset CPAs, P.C. audited the two years ended December 31, 2004 and 2005
      for
      ABA-Indiana. Somerset CPAs, P.C. also provided other accounting
      services to ABA-Indiana up through the merger date with Souvall-Page
      and Company, Inc. on December 21, 2006.




50




**Item
      8A.** ***Controls and Procedures***




The
      Company maintains disclosure controls and procedures that are designed to ensure
      that information required to be disclosed in the reports the Company file
      pursuant to the Securities Exchange Act of 1934 is recorded, processed,
      summarized and reported within the time periods specified in the SEC’s rules and
      forms and that such information is accumulated and communicated to the Company’s
      management, including its Chief Executive Officer and Chief Financial Officer,
      as appropriate, to allow timely decisions regarding required disclosure. The
      Company’s management, including the Chief Executive Officer and Chief Financial
      Officer, recognizes that, because the design of any system of controls is based
      in part upon certain assumptions about the likelihood of future events and
      also
      is subject to other inherent limitations, disclosure controls and procedures,
      no
      matter how well designed and operated, can provide only reasonable, and not
      absolute, assurance of achieving the desired objectives.




Under
      the
      supervision and with the participation of the Company’s management, including
      the Company’s Chief Executive Officer and Chief Financial Officer, the Company
      has evaluated the effectiveness of the Company’s disclosure controls and
      procedures as of December 31, 2006. Based on this evaluation, the Chief
      Executive Officer and Chief Financial Officer have concluded that, for the
      reasons more fully set forth below, the Company’s disclosure controls and
      procedures were not effective on December 31, 2006 in providing reasonable
      assurance that information required to be disclosed in the reports the Company
      file pursuant to the Securities Exchange Act of 1934 was recorded, processed,
      summarized and reported within the time periods specified in the SEC’s rules and
      forms.




More
      specifically, the Company’s management has concluded that (i) additional
      accounting personnel were needed  at December 31, 2006 to ensure that
      certain disclosure controls and procedures were operating effectively; (ii)
      greater segregation of duties was needed in the accounting functions; and (iii)
      certain procedures should be documented to ensure that personnel turnover does
      not result in a failure of those procedures; and other documentation is
      necessary to support balances and disclosures contained in our financial
      statements.  The Company feels these risks are mitigated by other
      procedures performed to substantiate the balances and disclosures in our
      financial statements at December 31, 2006. The Company will continue to
      evaluate the need for additional staff, but given our size,  the Company
      expects to face challenges in attracting and retaining qualified
      personnel.  Management continues to evaluate the effectiveness of this
      segregation and the need for additional enhancements, including, but not limited
      to, improvement in documentation and other control related processes.




**ITEM
      8A(T). CONTROLS AND PROCEDURES**





Not
      applicable.




51





**PART
      III**




**ITEM
      9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS; COMPLIANCE
      WITH
      SECTION 16(a) OF THE EXCHANGE ACT**





Each
      director shall be elected or the term of one year and until his successor is
      elected and qualified, or until his earlier resignation, death, or removal.
      Officers of the Company serve at the discretion of the Board of Directors.
      As of
      March 31, 2006, our executive officers and directors are as
      follows:


Name
              
              Age
              
              Position
              
              AppointedJoseph
                  F. Newman
              
              
              
              70
              
              Chairman
                  of the Board (a Director position) and Chief Executive
                  OfficerRichard
                  P. Tinkham, Jr.
              
              
              
              74
              
              Secretary,
                  Special Counsel and a DirectorDarren
                  J. Cioffi
              
              
              
              41
              
              Chief
                  Financial Officer and ControllerBrad
                  Hester
              
              
              
              40
              
              Vice
                  President of Team Operations





***Joseph
      F. Newman*** ** has
      been
      Chairman of the Board of the Company and its Chief Executive Officer since
      2004.
      Mr. Newman has a background in the advertising and media business, having served
      for twenty years as owner, Chief Executive Officer and President of Joe Newman
      Advertising, Inc., an Indianapolis-based advertising agency (the “Agency”). The
      Agency worked with companies such as the Indiana Pacers, Paramount Pictures,
      Ice
      Capades, Ringling Bros. Circus, RCA, Whirlpool, KFC, Arby's Roast Beef and
      Burger King. During that time, Mr. Newman also owned The Remote Unit, an
      audio-video production company, and KVOV Radio in Las Vegas, NV. After selling
      the Agency in 1983, Mr. Newman entered the broadcast business as President,
      Chief Executive Officer and co-owner of Alliance Broadcasting Group, Inc.,
      the
      owner of 16 radio stations in Florida, North Carolina, South Carolina, Indiana
      and Michigan. He was also the owner of several KFC restaurants and Chief
      Executive Officer of Dylan USA, a manufacturer of magnesium racing wheels.
      Mr.
      Newman and his wife Connie have also appeared on television and radio for many
      years with a series of shows, including “The House Detective,” “Dining Out with
      Connie and Joe,” “No Holds Barred” and the “Sunday Morning Sales Meeting.” A
      noted sales consultant, Mr. Newman’s “People First Selling” course is offered
      via the Internet at www.peoplefirstselling.com. He has received numerous
      community service awards, including Casper Awards for his work with the YMCA
      of
      Greater Indianapolis and Indiana Black Expo, the Spirit of Life Award from
      the
      City of Hope Hospital in Los Angeles, and several “Man of the Year” Awards from
      Hispanic groups and chambers of commerce in Chicago.





***Richard
      P. Tinkham, Jr.*** has been
      a Director of the Company and its Secretary since 2004. Mr. Tinkham has served
      on active duty in the U.S. Marine Corps Reserves, attaining the rank of captain
      and conducted more than 100 trials as a general court-martial attorney. In
      1962,
      he co-founded an Indianapolis law firm that today is one of Indianapolis’
largest firms. In 1975, he left that firm and began a merger and acquisition
      practice that specializes in helping small and medium-sized companies deal
      with
      the legal and financial complexities of start-up, growth and acquisition. In
      1967, Mr. Tinkham co-founded the American Basketball Association (“ABA”) and the
      Indiana Pacer professional basketball franchise, and served for two years as
      President of the ABA Board of Trustees. During 1972-75, he was instrumental
      in
      the creation of Market Square Arena in Indianapolis and co-chaired the ABA
      merger committee that sent four ABA teams into the NBA and helped lead the
      ABA/NBA consolidation. In 1987, Mr. Tinkham and his wife, Wynn, founded the
      Food
      Link, a church-based initiative, which distributes food and other necessities
      in
      inner city Indianapolis residents and they received the “Spirits of Indy” Award
      in 1994 from Catholic Social Services. Mr. Tinkham is a native of Hammond,
      Indiana, where he was inducted into the DePauw University Sports Hall of Fame
      in
      1999. He played varsity basketball at DePauw University and was co-captain
      his
      senior year. He also ran track and was State Champion in the quarter mile,
      half
      mile and mile relay. After graduation from DePauw University, Mr. Tinkham earned
      his law degree at the University of Michigan in 1957.





**Darren
      J. Cioffi** has been
      chief financial officer of the Company since January 2007. Since 2001, when
      he
      established Cioffi Business Management Services Mr. Cioffi has assisted small
      and medium businesses, including public companies, on SEC accounting/filing,
      Sarbanes Oxley , other standard compliance measures as well as financial
      reporting and management. Mr. Cioffi has served as Chief Financial Officer
      of
      Web2 Corp since September 2004. He is a co-owner of the Strong Island Sound,
      a
      professional basketball club which is also a member of the American Basketball
      Association. Mr. Cioffi has held several positions in the consulting and
      technology industry including Chief Operating Officer of Thinkersgroup.com,
      where he was responsible for the development and implementation of the
      organizational structure as well as day-to-day operations. Vice President of
      Consulting Services for Total Business Solutions, where he specialized in the
      implementation and sales of Customer Relationship Management and Back office
      Accounting Solutions through one on one and group collaboration with Total
      Business Solutions clients. From 1995 - 1998, he served as Controller and Vice
      President of Sales for Comptech Resources. While at Comptech, he helped the
      company earn the distinction as the first Platinum reseller of GoldMine software
      on Long Island. He also developed Long Island's first GoldMine authorized
      training center. Mr. Cioffi has consulted and implemented Great Plains,
      RealWorld and Solomon Accounting Software systems for a variety of businesses.
      In October 1998, following Paratech Resources, Inc.'s acquisition of Comptech,
      Mr. Cioffi was named General Manager of Consulting Services. He also spent
      two
      years in public accounting for the firm of Pannell. Kerr Forster and served
      as
      Assistant Controller for the Seafield Center from 1991-1995.Mr. Cioffi earned
      a
      BS in Accounting from Long Island University. He is also a member of the
      National Society of Accountants and is accredited by the Accreditation Council
      for Accounting & Taxation, Inc.




52




***Brad
      Heste*** *r* became
      the Company's Vice President of Team Operations in 2006. Prior to joining the
      Company, Mr. Hester served for twelve years in the management of Lowes, where
      he
      specialized in operations, human resources and marketing. Mr. Hester is the
      stepson of Joseph Newman.




Directors’
      Compensation





We
      have a
      policy of not granting fees to directors who attend a regularly scheduled or
      special board meeting, however, we may reimburse out-of-state directors for
      their cost of travel and lodging to attend such meeting.





Code
      of
      Ethics





We
      have
      adopted a Code of Ethics and Business Conduct for our officers and directors
      and
      a Code of Ethics for Financial Executives that applies to all of our executive
      officers, directors and financial executives. Copies of these codes are filed
      as
      exhibits to this Form 10-KSB report.




Compliance
      with Section 16(a) of the Exchange Act





Section
      16(a) of the Securities Exchange Act of 1934 requires the Company’s directors
      and executive officers and persons who own more than ten percent of a registered
      class of the Company’s equity securities to file with the Securities and
      Exchange Commission initial reports of ownership and reports of changes in
      ownership of common stock and other equity securities of the Company. Officers,
      directors and greater than ten percent shareholder are required by SEC
      regulation to furnish the Company with copies of all Section 16(a) forms they
      file.





To
      the
      Company’s knowledge, based solely on review of the copies of such reports
      furnished to the Company and written representations that no other reports
      were
      required, during the fiscal year ended December 31, 2006 all Section 16(a)
      filings requirements applicable to its officers, directors and greater than
      ten
      percent beneficial owners were complied with.





The
      Company presently does not have an audit committee.




**Item
      9A.** ***Controls and Procedures***




The
      Company maintains disclosure controls and procedures that are designed to ensure
      that information required to be disclosed in the reports the Company file
      pursuant to the Securities Exchange Act of 1934 is recorded, processed,
      summarized and reported within the time periods specified in the SEC’s rules and
      forms and that such information is accumulated and communicated to the Company’s
      management, including its Chief Executive Officer and Chief Financial Officer,
      as appropriate, to allow timely decisions regarding required disclosure. The
      Company’s management, including the Chief Executive Officer and Chief Financial
      Officer, recognizes that, because the design of any system of controls is based
      in part upon certain assumptions about the likelihood of future events and
      also
      is subject to other inherent limitations, disclosure controls and procedures,
      no
      matter how well designed and operated, can provide only reasonable, and not
      absolute, assurance of achieving the desired objectives.




53




Under
      the
      supervision and with the participation of the Company’s management, including
      the Company’s Chief Executive Officer and Chief Financial Officer, the Company
      has evaluated the effectiveness of the Company’s disclosure controls and
      procedures as of December 31, 2006. Based on this evaluation, the Chief
      Executive Officer and Chief Financial Officer have concluded that, for the
      reasons more fully set forth below, the Company’s disclosure controls and
      procedures were not effective on December 31, 2006 in providing reasonable
      assurance that information required to be disclosed in the reports the Company
      file pursuant to the Securities Exchange Act of 1934 was recorded, processed,
      summarized and reported within the time periods specified in the SEC’s rules and
      forms.




More
      specifically, the Company’s management has concluded that (i) additional
      accounting personnel were needed  at December 31, 2006 to ensure that
      certain disclosure controls and procedures were operating effectively; (ii)
      greater segregation of duties was needed in the accounting functions; and (iii)
      certain procedures should be documented to ensure that personnel turnover does
      not result in a failure of those procedures; and other documentation is
      necessary to support balances and disclosures contained in our financial
      statements.  The Company feels these risks are mitigated by other
      procedures performed to substantiate the balances and disclosures in our
      financial statements at December 31, 2006.  The Company will continue to
      evaluate the need for additional staff, but given our size,  the Company
      expects to face challenges in attracting and retaining qualified
      personnel.  Management continues to evaluate the effectiveness of this
      segregation and the need for additional enhancements, including, but not limited
      to, improvement in documentation and other control related processes.




**ITEM
      10. EXECUTIVE COMPENSATION**




The
      Summary Compensation Table shows certain compensation information for services
      rendered in all capacities for the fiscal years ended December 31, 2004, 2005
      and 2006. Other than as set forth herein, no executive officer’s salary and
      bonus exceeded $200,000 in any of the applicable years. The following
      information includes the dollar value of base salaries, bonus awards, the number
      of stock options granted and certain other compensation, if any, whether paid
      or
      deferred.




**SUMMARY
      COMPENSATION TABLE**




Name
                  andPrincipal
                  Position
              
              Year
              
              Salary
                  ($) (1)
              
              Bonus
                  ($)
              
              Stock
                  Awards ($)
              
              Option
                  Awards ($)
              
              Non-Equity
                  Incentive Plan Compensation
                ($)
              
              Change
                  in Pension Value and Non-Qualified Deferred Compensation Earnings
                  ($)
              
              All
                  Other Compensation ($)
              
              Total
                  ($)Joseph
                  F. Newman (1),
              
              
              2006
              
              
              250,000
              
              
              0
              
              
              0
              
              
              0
              
              
              0
              
              
              0
              
              
              0
              
              
              250,000Chief
                  Executive Officer
              
              
              2005
              
              
              250,000
              
              
              0
              
              
              0
              
              
              0
              
              
              0
              
              
              0
              
              
              0
              
              
              250,0002004
              
              
              250,000
              
              
              0
              
              
              0
              
              
              0
              
              
              0
              
              
              0
              
              
              0
              
              
              250,000Darren
                  Cioffi, (2)
              
              
              2006
              
              
              0
              
              
              0
              
              
              0
              
              
              0
              
              
              0
              
              
              0
              
              
              0
              
              
              0Chief
                  Financial Officer
              
              
              2005
              
              
              0
              
              
              0
              
              
              0
              
              
              0
              
              
              0
              
              
              0
              
              
              0
              
              
              02004
              
              
              0
              
              
              0
              
              
              0
              
              
              0
              
              
              0
              
              
              0
              
              
              0
              
              
              0Richard
                  Tinkham, (3)
              
              
              2006
              
              
              250,000
              
              
              0
              
              
              0
              
              
              0
              
              
              0
              
              
              0
              
              
              0
              
              
              250,000Secretary
              
              
              2005
              
              
              250,000
              
              
              0
              
              
              0
              
              
              0
              
              
              0
              
              
              0
              
              
              0
              
              
              250,0002004
              
              
              250,000
              
              
              0
              
              
              0
              
              
              0
              
              
              0
              
              
              0
              
              
              0
              
              
              250,000Brad
                  Hester, (4)
              
              
              2006
              
              
              60,000
              
              
              0
              
              
              0
              
              
              0
              
              
              0
              
              
              0
              
              
              0
              
              
              60,000VP
                  Team Operations
              
              
              2005
              
              
              0
              
              
              0
              
              
              0
              
              
              0
              
              
              0
              
              
              0
              
              
              0
              
              
              02004
              
              
              0
              
              
              0
              
              
              0
              
              
              0
              
              
              0
              
              
              0
              
              
              0
              
              
              0




(1)  Mr.
      Newman became the Company’s Chief Executive Officer on December 22,
      2006




54


(2)  Mr.
        Cioffi became the Company’s Chief Financial Officer on January 9,
        2007.
  (3)  Mr.
        Tinkham became the Company’s Secretary on December 22, 2006.
  (4)
        Mr.
        Hester became the Company’s VP of Operations on December 22, 2006.


**OUTSTANDING
      EQUITY AWARDS**




None




55




Except
      as
      set forth above, no other named executive officer has received an equity
      award.





**DIRECTOR
      COMPENSATION**





No
      director fees were paid in 2006. We do not pay directors compensation for their
      service as directors. We may in the future develop a compensation policy for
      our
      directors.





***Employment
      Agreements and Other Compensation Arrangements*** **.** The
      Company proposes to enter into employment agreements having a two year term
      with
      each of Joseph Newman, Richard Tinkham, and Brad Hester providing for the annual
      salaries substantially as shown above, these agreements have been drafted but
      remain unsigned as of April 24, 2007. The Company entered into a consulting
      agreement, having a base term of 24 months, with a management services company
      of which Mr. Cioffi is a principal and under the terms of which he will act
      as
      the chief financial officer of the Company




On
      January 9, 2007, the Company entered into a Consulting agreement with Cioffi
      Business Management Services. The Consulting Agreement is for an initial term
      of
      twelve (12) months. The Company has agreed to compensate the consultant $102,000
      as well as issue the Consultant 550,000 shares of its common stock for the
      initial 12 month term. During the term of the Consulting Agreement, the
      principal shareholder of the consultant, Mr. Darren Cioffi, will act as the
      Company's Chief Financial Officer.




**ITEM
      11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
      MANAGEMENT**





The
      following table sets forth, as of April 24, 2007, information with respect
      to
      the securities holdings of all persons which we, pursuant to filings with the
      Securities and Exchange Commission, have reason to believe may be deemed the
      beneficial owners of more than 5% of our outstanding common stock. Also set
      forth in the table is the beneficial ownership of all shares of our outstanding
      stock, as of such date, of all officers and directors, individually and as
      a
      group.


Joseph
                  F. Newman
              
              Chief
                  Executive Officer and Director
              
              6,405,575
              
              24.08Richard
                  P. Tinkham
              
              Secretary
                  and Director
              
              6,405,574
              
              24.08Darren
                  J. Cioffi
                Brad
                  Hester
              
              Chief
                  Financial Officer
                Vice
                  President Operations
              
              550,000
                250,000
              
              2.07
                1.03**Stockholders
                  owning 5% or more:**Brax
                  Capital Group LLC (1)
              
              
              
              2,419,000
              
              9.109440
                  S. Santa Monica Boulevard, Suite 710
                Beverly
                  Hills, California 90210Millennium
                  Partners,
              
              
              
              1,875,000
              
              7.05LP  (3)666
                  Fifth AvenueNew
                  York, New York 10019All
                  executive officers and directors as a group (5 persons)
              
              
              
              17,905,145
              
              67.3
              %




(1)
            Thomas
                E. Doyle and A.J. Discala, a principal of Brax Capital Group LLC,
                (the
                “Optionees”) have entered into an option agreement with Joseph F. Newman
                and Richard P. Tinkham which, upon exercise in full, will result
                in the
                Optionees owning substantially in excess of 51% of the outstanding
                Common
                Stock of the Company. Joseph F. Newman and Richard P. Tinkham are
                officers, directors and principal shareholders of the Company. The
                Company
                is not a party to this Agreement. The foregoing table does not give
                effect
                to this option in favor of the
                Optionees.




56




(2)
            Includes(i) 345,168shares
                beneficially owned by Meriwether Capital Partners, of which David
                Howitt
                is general partner, issued on conversion of Bridge Notes in the original
                principal amount of $150,000, and (ii) 225,000 shares issuable to
                Meriwether under consulting agreement entered into January 3, 2007
                that
                has an effective date as of January 15,
                2007.




(3)
            Includes
                and gives effect to presently exercisable warrants to purchase 625,000
                shares of common stock.




**ITEM
      12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS**





In
      connection with their services, Thomas E. Doyle and John Salley were each
      granted 637,500 shares of common stock by the ABA prior to the Merger. Thomas
      E.
      Doyle is President and Chief Operating Officer of the Company, John Salley
      was
      League Commissioner, and each was a director of the Company. On February 20,
      2007 Mr. Doyle and Mr. Salley agreed to resign as officer and directors of
      the
      Company effective January 31, 2007.





One
      officer of the Company is an owner of ABA team. Darren Cioffi is a principal
      owner of Strong Island Sound. Although the Company is currently unaware of
      such
      circumstances, their team ownership interest may not be aligned at all times
      with the interests and objectives of the Company.





In
      connection with the merger the Company paid $300,000 to David Merrell a former
      officer, director and principal beneficial owner of Souvell-Page, and also
      issued to him 300,000 shares of common stock in consideration for which David
      Merrell agreed to indemnify the Company for and against liabilities of and
      claims against the Company existing as of and through the date of the merger.
      Effective December 21, 2006, Chiricahua Investments, LLC, a company controlled
      by David Merrell, returned 26,400,000 shares to the Company and those shares
      were canceled pursuant to the terms of the Merger Agreement.





In
      connection with the merger, Joseph F. Newman and Richard P. Tinkham agreed
      to
      indemnify the ABA for and against certain liabilities of and claims against
      the
      ABA existing as of and through the date of the Merger. Mr. Newman and Mr.
      Tinkham have each agreed to deposit 500,000 shares of common stock into an
      escrow as further security for this indemnity agreement.





The
      Company has secured the marketing and other product consulting services of
      Meriwether Capital Group of which David Howitt, a director of the Company,
      is a
      controlling person. On January 3, 2007 The Meriwether Group Inc., of which
      David
      Howitt, a director of the Company, is an officer and controlling person entered
      into a consulting agreement with the ABA that is dated as of the agreement’s
      effective date of January 15, 2007. The agreement has a term of 24 months.
      Meriwether agreed to assist the ABA in developing and implementing a strategic
      sponsorship and licensing program for key merchandising categories that include
      uniforms, footwear, apparel, accessories, sport beverage, memorabilia and other
      agreed to categories. Meriwether also agreed to use its relationships with
      key
      brand managers and executives of internationally known sports, lifestyle, and
      food and beverage companies to assist the ABA in developing strategic licensing
      /supplier agreements and relationships. The ABA agreed to pay Meriwether





An
      initial payment of $12,500,





A
      retainer of $2,500 per month,




57





A
      $10,000
      bonus for each major licensing/sponsorship transaction secured by Meriwether
      and
      deemed earned after the ABA has derived at least $50,000 or more in revenue
      over
      its term,





A
      4%
      royalty from all revenue earned from any transaction that Meriwether brings
      to
      the ABA,





An
      award
      of 225,000 shares of common stock as a performance incentive, and





All
      reasonable and approved travel and out of pocket expenses incurred by Meriwether
      in providing its services to the ABA.





58




**ITEM
      13. EXHIBITS**




(a)
      The
      following exhibits are filed as part of this report:





2.1
            
            Agreement
                and Plan of Merger Among Souvall-Page and Company, Inc. and ABA
                Acquisition Corp. and American Basketball Association, Inc.
                (1)2.2
            
            Securities
                Purchase Agreement (1)10.1
            
            Form
                of Investor Warrant (1)10.2
            
            Employment
                Agreement - Joseph Newman (1)10.3
            
            Employment
                Agreement - Richard P. Tinkham (1)10.4
            
            Employment
                Agreement - Thomas E. Doyle (1)10.5
            
            Employment
                Agreement - John Salley (1)10.6
            
            Employment
                Agreement - Brad Hester (1)10.7
            
            Form
                of ABA Team Reservation Agreement (1)10.8
            
            Indemnification
                Agreement (1)10.9
            
            Independent
                Consulting Agreement between American Basketball Association, Inc.
                and The
                Meriwether Group, Inc. (1)10.10
            
            Consulting
                Agreement dated January 9, 2007 between the Company and Cioffi Business
                Management Services. (2)10.11
            
            Agreement
                entered by and between the Company and Big Apple Consulting USA,
                Inc.
                (3)10.12
            
            Advisory
                Agreement entered by and between the Company and Thaddeus A. Wier,
                Jr.
                (3)99.1
            
            Press
                Release dated December 21, 2006 (1)99.2
            
            Press
                Release (2)




59




21
            Subsidiaries
                of the Registrant (filed herewith)




31.1
            Certification
                of Chief Executive Officer of Periodic Report pursuant to Rule 13a-14a
                and
                Rule 15d-14(a).




31.2
            Certification
                of Chief Financial Officer of Periodic Report pursuant to Rule 13a-14a
                and
                Rule 15d-14(a).




32.1
            Certification
                of Chief Executive Officer of pursuant to 18 U.S.C. -Section
                1350.




32.2
            Certification
                of Chief Financial Officer of pursuant to 18 U.S.C. -Section
                1350.







(1)
            Incorporated
                by reference to the Form 8k Current Report filed with the Securities
                and
                Exchange Commission on January 8,
                2007




(2)
            Incorporated
                by reference to the Form 8k Current Report filed with the Securities
                and
                Exchange Commission on January 19,
                2007




(3)
            Incorporated
                by reference to the Form 8k Current Report filed with the Securities
                and
                Exchange Commission on February 7,
                2007




**ITEM
      14: PRINCIPAL ACCOUNTANT FEES AND SERVICES**




Audit
      Fees. The aggregate fees billed and unbilled for the fiscal years ended December
      31, 2004 and 2005 for professional services rendered by our principal
      accountants for the audits of our annual financial statements, and the review
      of
      our financial statements included in our quarterly reports on Form 10-QSB were
      approximately $77,500 and $40,000, respectively.




**Audit-Related
      Fees**




There
      were no audit-related fees for the fiscal years ended December 31, 2004 and
      2005
      for assurance and related services rendered by our principal accountants related
      to the performance of the audit or review of our financial statements,
      specifically accounting research.




**Tax
      and Other Fees**




There
      aggregate fees billed for the fiscal years ended December 31, 2004 and 2005
      for
      tax related or other services rendered by our other accountants in connection
      with the preparation of our federal and state tax returns was $8,000 and $5,200,
      respectively.




**Approval
      of Non-audit Services and Fees**




We
      did
      not have an audit committee during fiscal 2005 or 2004 and did not have any
      independent directors.




60





**SIGNATURES**




Pursuant
      to the requirements of the Securities Exchange Act of 1934, the Registrant
      has
      caused this report to be signed on its behalf by the undersigned thereunto
      duly
      authorized.


Dated:
              April 27,
              2007
            American
              Basketball Association, INC.By:
            /s/ Joseph
              F.
              NewmanJoseph
                F. NewmanChief
                Executive Officer and Chairman


By:
              /s/ Darren
                CioffiDarren
                  CioffiChief
                  Financial Officer and Controller


In
      accordance with the Exchange Act, this report has been signed below by the
      following persons on behalf of the registrant and in the capacities and on
      the
      dates indicated.




SIGNATURE
            
            TITLE
            
            DATE/s/
                Joseph F. Newman
              Joseph
                F. Newman
            
            Chairman
                of the Board (a Director position) and Chief Executive
                Officer
            
            April
                27, 2007/s/Richard
                P. Tinkham, Jr.
              Richard
                P. Tinkham, Jr.
            
            Secretary,
                Special Counsel and a Director
            
            April
                27, 2007/s/Darren
                Cioffi
              Darren
                Cioffi
            
            Chief
                Financial Officer and Controller
            
            April
                27, 2007





61