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

                                    FORM 10-K

(Mark One)

(X)    ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES  EXCHANGE
       ACT OF 1934

For the fiscal year ended October 31, 2003

                                       OR

( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
     ACT OF 1934

For the transition period from _____________________ to______________________

Commission file number


                              M.B.A. HOLDINGS, INC.
           (Exact name of business issuer as specified in its charter)

             Nevada                                   87-0522680
  (State or other jurisdiction of                   (I.R.S. Employer
  incorporation or organization)                   Identification No.)

 9419 E. San Salvador, Suite 105
       Scottsdale, Arizona                             85258-5510
(Address of principal executive offices)               (Zip Code)


Registrant's telephone number, including area code  (480) 860-2288

Securities registered under Section 12(b) of the Exchange Act: None.


         Securities registered under Section 12(g) of the Exchange Act:
                          Common Stock, $.001 par value
                                (Title of class)

Indicate by check mark  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
[X] No [ ].

Indicate by check mark if disclosure of delinquent  filers  pursuant to Item 405
of Regulation S-K (ss. 229.405of this chapter) is not contained herein, and will
not 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-K
or any amendment to this Form 10-K. [ ]

State the aggregate market value of the voting and non-voting common equity held
by  non-affiliates  of the  registrant.  The  aggregate  market  value  shall be
computed by reference to the price at which the common  equity was sold,  or the
average bid and asked  prices of such  common  equity,  as of a  specified  date
within  60 days  prior to the date of  filing.  As of  December  31,  2003,  the
aggregate market value  non-affiliates  of the registrant as reported on NASDAQ,
was $468,520.

Indicate the number of shares outstanding of each of the registrant's classes of
common stock, as of the latest  practicable  date.

As of December  31, 2003,  there were  2,061,787  shares of the issuer's  common
stock issued and 2,030,187 outstanding.
<PAGE>

                       DOCUMENTS INCORPORATED BY REFERENCE

List hereunder the following documents if incorporated by reference and the Part
of the Form 10-K  (e.g.,  Part I, Part II,  etc.)  into  which the  document  is
incorporated:  (1) Any  annual  report  to  security  holders;  (2) Any proxy or
information  statement;  and (3) Any prospectus  filed pursuant to Rule 42(b) or
(c) or under the Securities Act of 1933. The listed  documents should be clearly
described for identification  purposes (e.g.,  annual report to security holders
for the fiscal year ended December 24, 1980). None

                                     Part I

Item 1. Business

M.B.A.  Holdings,  Inc. (the  "Company"),  through its wholly owned  subsidiary,
Mechanical  Breakdown  Administrators,  Inc., markets and administers  vehicular
mechanical  breakdown  insurance ("MBI") policies and sells contracts for repair
services to vehicles  ("VSCs").  The MBI policies and VSC  contracts are for the
repair of automobiles,  light trucks, recreational vehicles,  motorcycles, boats
and certain automotive components.

MECHANICAL BREAKDOWN INSURANCE

The  Company  acts as an agent  for  insurance  companies  and  sells  their MBI
policies.  In addition, it provides marketing  educational/support  services and
arranges  for  sub-agents  to sell the  policies.  After the sale,  the  Company
provides  third-party   administrative  policy  services  (claims  adjudication,
cancellation  processing and technical  computer  services) for policies sold by
the Company or its  sub-agents.  The MBI policies are contracts of insurance for
repair  services  to  vehicles  that are  entered  into  between  the  insurance
companies and the ultimate consumer/purchaser. The insurance company is directly
liable  for the  costs of claims  that  arise  under the terms of the  insurance
policy.  The Company  currently  has agency  and/or  servicing  agreements  with
American  Bankers  Insurance  Group of Florida,  Kemper Cost  Management,  Inc.,
Heritage  Warranty Mutual Insurance RRG, Inc.,  Fireman's Fund Insurance Company
and American Security Insurance Company.

MBI policies have terms that range from twelve (12) to  eighty-four  (84) months
and  generally   contain   elapsed  mileage   limitations.   Actual  repairs  or
replacements  covered by the policies are made by independent repair facilities.
The costs of the repairs remain the responsibility of the insurance company that
provided the MBI policy.

The policy premium has been established by the insurance companies and agreed to
by the Company and insurance  regulators.  In general, at the time an MBI policy
is sold,  approximately  51% - 60% of the premium is  retained by the  insurance
company,  approximately  20%-36%  of the  premium is paid to the  sub-agent  (if
applicable).  The remainder is paid to the Company as its sales  commission  and
fee for providing administrative policy services.

For the years ended October 31, 2003,  2002, and 2001, the net revenues  related
to sales and servicing of MBI policies  represented  approximately  50%, 71% and
64%,  respectively,  of the Company's net revenues less direct acquisition costs
of vehicle service contracts.

VEHICLE SERVICE CONTRACTS

The  Company   markets  and   administers   VSC  programs  that  supplement  the
manufacturer's   warranty  and  enhance  the   profitability   of  the  sale  of
automobiles,  light  trucks,  recreational  vehicles,   motorcycles,  boats  and
automotive components. These contracts are sold principally through dealerships.
A VSC is a contract between the Company and the  consumer/purchaser  that offers
repair  coverage  for periods  ranging from one (1) to  eighty-four  (84) months
and/or  with  mileage  limitations  ranging  from  1,000 to 100,000  miles.  The
coverage is for a broad range of possible failures of mechanical components that
may occur during the term of the contract.  The coverage is  supplemental to the
manufacturers'   warranty.   The  Company  is  primarily   responsible  for  the
administration  of the  contract  and  related  claims  during  the  life of the
contract.

At the time a VSC is sold,  the  Company  purchases  an  insurance  policy  that
insures its' liability.  This coverage provides  indemnification  to the Company
against loss resulting from service contract claims. The insurance protection is
provided by highly rated  independent  insurance  companies  including  Heritage
Warranty Mutual Insurance RRG, Inc. and Fireman's Fund Insurance Company.


                                        2
<PAGE>

For the years ended October 31, 2003,  2002, and 2001, the net VSC revenues less
direct  acquisition  costs  related to sales and  servicing of VSCs  represented
approximately  50%,  29% and  36%,  respectively,  of the  Company's  total  net
revenues  less  direct  acquisition  costs of  vehicle  service  contracts.  The
relative  increase in VSC revenues as a percent of total business written is the
result of the Company's ability to establish selling agency  relationships  with
Internet  direct  marketers  like  Consumers'  Guide  and  to  increases  in the
Company's direct Internet sales.

VIRTUAL PRIVATE NETWORK

The Company has developed a computerized sales system using the Internet that it
calls  its  Virtual  Private  Network   ("VPN").   The  VPN  enables   financial
institutions,  dealerships  and the  general  public  to  obtain  individualized
policy/contract  pricing using their personal computer. The system user provides
the VPN with the  vehicle  identification  number of the vehicle  being  insured
together  with a few other  specific  data  items.  The VPN  returns an accurate
premium  quotation  and provides  the customer  with the ability to purchase the
policy/contract on line. When an Internet purchase is made, the system transmits
the  completed  application,  approval and policy data directly to the financial
institution/dealership/purchaser  and prints the  insurance  policy itself on an
on-site  printer.   The  information   gathered  in  the  quotation  process  is
transmitted  directly to the Company's policy  management  system.  Payments for
Internet  sales are  accomplished  either by credit  card or by a billing to the
financial institution/dealership.

SIGNIFICANT CUSTOMERS

In 2003, a national  insurance  brokerage  firm  accounted for $2,433,000 of VSC
sales while another major  customer  accounted for $1,673,000 of 2003 VSC sales.
These two firms  combined  accounted for 77% of all 2003 VSC sales.  The Company
services these accounts under contracts that are subject to renewal annually.

COMPETITION

M.B.A.  Holdings,  Inc.  competes with a number of  independent  administrators,
divisions of distributors,  manufacturers,  financial institutions and insurance
companies.  While the Company  believes that it occupies a strong position among
competitors in its field, it is not the largest  marketer and  administrator  of
MBIs  and  VSCs.  Some  competitors  have  greater  operating  experience,  more
employees and/or greater financial resources. Furthermore, many manufacturers of
motor  vehicles  market and  administer  their own VSC  programs for and through
their captive dealers.

SALES AND MARKETING

The  Company  maintains  its own staff of sales and  marketing  personnel.  This
individual  conducts the sales training and  motivational  programs that are the
primary  form  of  specialized   assistance  provided  by  the  Company  to  its
retailers/dealers and financial  institutions.  As an adjunct to these programs,
the Company develops the training  materials that are used at these  educational
seminars.  In addition,  the Company markets its products  directly to consumers
through its VPN and through selected automobile magazine advertisements.

The number of policies and contracts sold annually  during the last three fiscal
years are:

                                                               Number of
Time Period                                             Policies and Contracts
-----------                                           --------------------------
For the twelve months ended October 31, 2003                   4,858
For the twelve months ended October 31, 2002                   8,130
For the twelve months ended October 31, 2001                  15,847


The decline in the numbers of policies  and  contracts  sold is due to a loss of
market share by the Company's  associated  credit  unions.  This loss was due to
increased  competition  for the  financing  of  vehicle  sales and the  extended
warranties  that are sold at the time of  financing.  The  loans by the  vehicle
manufacturers  including  zero interest rate loans and cash refunds have changed
the manner in which vehicle buyers  finance their  purchases of both the vehicle
and  the  extended  warranty  program.   Furthermore,   recent  federal  privacy
legislation has forced the


                                        3
<PAGE>

Company to eliminate its' very successful direct mail program. The Company is no
longer able to obtain customer  information from state vehicle licensing bureaus
and is therefore unable to mail the marketing literature.

The Company will continue to look for ways to increase sales including strategic
alliances  with  vehicle  sellers and others,  the  inclusion  of other types of
mechanical  equipment such as watercraft  and off-road  vehicles and the further
expansion of its VPN system to more  directly  reach the ultimate  consumer with
its product information.

FEDERAL AND STATE REGULATION

Federal law and the  statutes of most states  regulate  the MBI and VSC programs
that are developed and marketed by the Company.  The Company continually reviews
all  existing  and  proposed   statutes  and   regulations  to  ascertain  their
applicability to its existing and future operations. Generally, these state laws
regulate the type of coverage that is allowed to be offered within that state.

The Company or its  principals  are licensed in the following  states:  Alabama,
Arizona, California,  Colorado, Connecticut,  Delaware, Florida, Georgia, Idaho,
Illinois,   Indiana,  Iowa,  Kansas,  Kentucky,   Louisiana,   Maine,  Maryland,
Massachusetts,  Michigan, Minnesota,  Mississippi,  Missouri, Montana, Nebraska,
Nevada, New Hampshire,  New Jersey, New Mexico, New York, North Carolina,  North
Dakota,  Ohio, Oklahoma,  Oregon,  Pennsylvania,  South Carolina,  South Dakota,
Tennessee, Texas, Utah, Washington, West Virginia, Wisconsin, and Wyoming.

The  Company  makes  every  effort to comply with all  applicable  statutes  and
regulations.  Nevertheless,  it cannot be assured that its  interpretations,  if
challenged,  would be upheld by a court or regulatory  body.  On every  occasion
that the  Company  has been  notified  that it is not in  compliance  with state
regulation,  the  Company has been able to take the steps  necessary  to achieve
compliance.  The Company has recently been notified by the state of Arizona that
certain  changes will be required in order to continue sales in that state.  The
Company is working with Arizona  Department of Insurance  officials to find ways
to meet Arizona's requirements.

In the event the Company's  authorization  to do business in a specific state is
challenged successfully, the Company may be required to cease operations in that
state and could suffer financial  sanctions.  These actions,  should they occur,
could have  materially  adverse  consequences  and could  affect  the  Company's
ability  to  continue  operating.  However,  within  the  framework  of  current
statutes, the Company does not believe that this is a present concern.

EMPLOYEES

The Company and its  subsidiary  employed 29 individuals at October 31, 2003 and
32 at October 31, 2002. There is one external sales person who is responsible to
recruit  and train the  insurance  agents or  representatives  of the  financial
institutions  and  dealerships  in the M.B.A.  product  line.  In addition,  the
Company has assigned five  individuals  to handle  customer  inquiries that many
times  result in direct  sales.  The  remainder  of the staff is assigned to the
management and support departments including:  claims adjudication,  data entry,
information systems, finance and administration.

The Company is not a party to a collective bargaining agreement.

Item 2. Properties

The Company's  executive  offices are located in leased  premises at 9419 E. San
Salvador Drive, Suite 105, Scottsdale, Arizona. The Company leases approximately
19,750  square feet from  Cactus  Family  Investments,  LLC, a firm in which the
Company's Chief Executive Officer and Vice President are principals. The current
lease has an original five-year term that expired December 31, 2003. The Company
has entered into a lease extension  agreement that provides for a month-to-month
rental pending  renegotiation.  The original lease provided for annual base rent
payments ranging from $212,000 to $276,000. The lease extension requires monthly
payments  equal  to that  required  in the  last  month  of the  original  lease
(Approximately  $25,000 per month).  The  expiring  lease terms and pricing have
been established at fair market value that was determined by comparison to other
leases in the area for similar  space.  (See Item 14 Certain  Relationships  and
Related Transactions).


                                        4
<PAGE>

Item 3. Legal Proceedings

The Company is subject to claims and lawsuits that arise in the ordinary  course
of business,  consisting  principally of alleged errors and omissions  connected
with the sale of  insurance,  with  personnel  matters  and with  disputes  over
outstanding accounts. The Company is currently involved in a dispute with one of
its associated insurance companies over alleged wrongdoing, an alleged breach of
its Administrative Agreement and over reimbursement for claims and cancellations
expenditures. The Company maintains a reserve for claims arising in the ordinary
course of business and believes  that this  reserve is  sufficient  to cover the
costs  of  such  claims.  Based  on  the  information  presently  available  and
considering the Company's Executive and Officers' Liability coverage, management
does not believe  the  settlement  of any such  claims or  lawsuits  will have a
material adverse effect on the financial position, results of operations or cash
flows of the Company.

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

There were no matters submitted to a vote of security holders during this fiscal
year, through the solicitation of proxies or otherwise.

Controls and Procedures

In the year ended October 31, 2003, we did not make any significant  changes in,
nor take any corrective actions regarding our internal controls or other factors
that could  significantly  affect these  controls.  We  periodically  review our
internal  controls for  effectiveness  and we have  performed an  evaluation  of
disclosure  controls and procedures during this final quarter. We will conduct a
similar evaluation each quarter.

Part II

Item 5. Market for Registrant's Common Equity and Related Stockholder Matters

The  Company's  Common  Stock has been  reported  in NASDAQ,  and  currently  is
reported on NASDAQ's OTC: BB under the trading symbol "MBAI".  As of October 31,
2003,  there were 2,061,787 common shares issued and 2,030,187  outstanding.  On
that date, the closing bid price for the Company's  common stock, as reported by
NASDAQ was $1.60. The following is a summary of the price range of the Company's
common stock during its 2003 and 2002 fiscal years:

                                                      Bid
                                              ------------------
      Common Stock                            High           Low
-----------------------------------------------------------------
Quarter of Fiscal 2003
First                                         1.05          1.00
Second                                        2.00          1.01
Third                                         1.60          1.37
Fourth                                        1.60          1.60

Quarter of Fiscal 2002
First                                         1.85          1.65
Second                                        1.65          1.50
Third                                         1.50          1.05
Fourth                                        1.05          1.05

The Company has never paid cash dividends on any shares of its common stock, and
the  Company's  Board of  Directors  intends  to  continue  this  policy for the
foreseeable  future.  Earnings,  if any, will be used to finance the development
and expansion of the Company's business. Future dividend policy will depend upon
the Company's  earnings,  capital  requirements,  financial  condition and other
factors considered relevant by the Company's Board of Directors.

During the fiscal year ended 2003, the Company issued 50,000 unregistered common
shares.


                                        5
<PAGE>

Item 6. Selected Financial Data
<TABLE>
<CAPTION>
Fiscal Year ended October 31,                              2003            2002             2001            2000           1999
------------------------------------------------------------------------------------------------------------------------------------
<S>                                                  <C>              <C>              <C>              <C>             <C>
Net revenues                                         $  5,628,408     $  5,935,478     $ 16,468,434     $  8,323,876    $  5,597,524
Net (loss) income                                      (1,785,460)        (847,797)        (212,546)         177,149         148,016
Net (loss) income per common share (basic)                   (.90)            (.43)            (.11)             .09             .07
Total assets                                            9,747,162       11,212,975        9,423,030       16,647,549      14,735,278

Long-term obligation and redeemable preferred stock         8,301               --            8,077           18,840              --
Cash dividends declared per common share                       --               --               --               --              --
</TABLE>

Item 7. Management's  Discussion and Analysis of Financial Condition and Results
of Operations.

The  following  discussion  should  be read in  conjunction  with the  financial
statements and footnotes that appear elsewhere in this report.

This discussion and analysis  provides  information that management  believes is
relevant  to an  assessment  and  understanding  of  the  Company's  results  of
operations  and  financial  condition.  The selected  financial  information  is
derived from the Company's historical financial statements and should be read in
conjunction with such financial statements and notes thereto set forth elsewhere
herein and the "Forward-Looking Statements" explanation included herein.


CRITICAL ACCOUNTING POLICIES

The Management's  Discussion and Analysis of Financial  Condition and Results of
Operations,  set forth below,  discusses our consolidated  financial  statements
that have been  prepared in  accordance  with  accounting  principles  generally
accepted in the United States of America.  The  preparation  of these  financial
statements  requires  us to make  estimates  and  assumptions  that  affect  the
reported  amount  of  assets  and  liabilities  at the  date  of  the  financial
statements, the disclosure of contingent assets and liabilities at that date and
the reported amounts of revenues and expenses during the reporting period. On an
on-going basis, we evaluate our estimates and judgments, including those related
to  revenue  recognition,  valuation  allowances  for  deferred  tax  assets and
accounts  receivable.  In addition,  we consider the potential impairment of our
long-lived assets. We base our estimates and judgments on historical  experience
and on various  other  factors  that are  believed  to be  reasonable  under the
circumstances.  The result of these  estimates and judgments  form the basis for
making  conclusions  about the carrying value of assets and liabilities that are
not readily  apparent from other  sources.  Actual results may differ from these
estimates under different assumptions or conditions.

A critical  accounting policy is one which is both important to the portrayal of
the Company's financial condition and results and one that requires management's
most difficult,  subjective or complex judgments,  often as a result of the need
to make  estimates  about the effect of matters that are  inherently  uncertain.
Management  believes the following critical  accounting policies affect its more
significant  judgments  and  estimates in the  preparation  of its  consolidated
financial statements.

        Revenue Recognition - Net revenues  includes the  commissions  earned on
                sales of MBI, fees for providing  administrative claims services
                related  to the MBI sold and  revenues  related to the sales and
                servicing of VSC.

                The  Company  receives  a  commission  from the sale of each MBI
                policy.  That commission is payment for marketing the policy and
                for providing  administrative claims and cancellation  services.
                The Company has elected early  adoption of Emerging  Issues Task
                Force  Issue No.  00-21,  "Revenue  Arrangements  with  Multiple
                Deliverables".  It will  recognize the revenue  earned from each
                MBI  policy  on a  straight-line  basis  over  the  term of that
                policy.

                Customers  generally  have the right to cancel  their  policy or
                vehicle service  contract at any time.  When a customer  cancels
                the  policy or  contract,  the  unused  portion of the policy or
                contract premium is returned to


                                        6
<PAGE>

                the customer after deduction of a cancellation fee. The Company,
                the insurance  companies,  and the  sub-agents  (if  applicable)
                repay their unearned balance on the policy to the customer.  The
                cancellation  fee is retained  entirely by the  Company.  When a
                policy is cancelled,  the Company records the Company's  portion
                of the  cancellation  repayment  (net  of any  cancellation  fee
                received and net of any related deferred revenue) as a reduction
                or increase (as applicable) in total revenues.

                VSCs are contracts  between the Company and the  purchaser.  The
                Company insures its obligations by obtaining an insurance policy
                that guarantees the Company's obligations under the contract. In
                accordance with Financial  Accounting  Standards Board Technical
                Bulletin 90-1 Accounting for Separately Priced Extended Warranty
                and Product Maintenance Contracts, revenues and costs associated
                with the sales of these contracts are deferred and recognized in
                income on a  straight-line  basis  over the  actual  life of the
                contracts.

        Deferred Income  Taxes -  Deferred  income  tax is  recorded  based upon
               differences  between  the  financial  statement  and tax basis of
               assets  and  liabilities  using  income  tax rates  currently  in
               effect.  The  decline  in the  number of  contracts  sold and the
               losses that the Company has  experienced in both the current year
               and  prior  years  have  placed  serious  doubt on the  Company's
               ability to realize  the value of the  deferred  income tax assets
               that were  recorded in earlier  years.  Accordingly,  a valuation
               allowance  equal to 100% of the value of the deferred  income tax
               asset has been provided in the current year.

        The    Company  will  continue  to  evaluate  its  critical   accounting
               policies and adjust them as circumstances dictate.

RESULTS OF OPERATIONS

COMPARISON OF FISCAL YEAR 2003 AND FISCAL YEAR 2002

NET REVENUES

Net revenues for the year ended October 31, 2003 totaled $5,628,000,  a decrease
of $307,000 from the year ended October 31, 2002 net revenues of $5,935,000. The
decrease in net  revenues  is the result of  increased  competition  for vehicle
sales and loans by the vehicle manufacturers  including zero interest rate loans
and expanded initial warranty programs.  As discusses above, during Fiscal 2003,
the Company  elected to adopt EITF 00-21,  "Revenue  Arrangements  with Multiple
Deliverables".  The effect of this  action is to defer all MBI  related  revenue
over the life of the  underlying  policy.  This policy  adoption has resulted in
less MBI revenue being recognized in the current year. The Company is attempting
to reverse this downward trend with its VPN system and with increased  marketing
contacts with other Internet vendors.

In 2001 two underwriters  transferred the  responsibility for the administration
of their  contracts  and  policies to an  unrelated  third party  relieving  the
Company  of  the  majority  of  its  continuing  responsibilities.  The  Company
continues to perform certain  administrative  duties relating to the calculation
and administration of policy and contract  cancellation for these  underwriters.
Approximately  $11,000 of net  deferred  income  remains at October  31, 2003 to
offset  costs  to be  incurred  in  administrating  the  cancellations  of these
policies.

OPERATING EXPENSES

Operating  expenses  decreased  $409,000 to $6,915,000 in the year ended October
31, 2003 compared to the similar  period ended  October 31, 2002.  Excluding VSC
direct acquisition  costs,  operating expenses declined $249,000 and were 33% of
net revenues in 2003 compared to 36% in 2002 as the Company  continued to reduce
expenses where ever possible.  These efforts  resulted in total  personnel costs
being  reduced  $150,897  from the  prior  year.  The  expense  reductions  were
accomplished through task combinations and staffing reductions.

OTHER INCOME (EXPENSE)

Other income increased  $31,000 to $64,000  primarily as a result of the Company
collecting a contractual override from one of its insurance companies.  Interest
income declined $7,000 from $14,000 in fiscal 2002 to $7,000 in fiscal


                                        7
<PAGE>

2003 as a result of the nation-wide decline in interest rates and to the decline
in funds  available  for  investment.  There were  $3,000 of  realized  gains on
investments in 2003. There were no realized gains in 2002.

INCOME TAXES

Provisions  for income  taxes in the period  ended  October 31, 2003 reflect the
fact that the  Company is no longer  able to carry back  current  year losses to
recover  federal income taxes paid in previous  years.  The period ended October
31, 2002  included  provisions  for such loss carry back.  The Company  received
$431,000  during the year from the carry back of those  prior year  losses.  The
differences in the effective tax rates in fiscal 2003 compared to fiscal 2002 is
the result of changes in the deferrals,  an increase in the valuation  allowance
to 100% and the receipt of the federal income tax loss carry back refund.

PENDING ACCOUNTING STANDARDS

In January 2003, the FASB issued FIN No. 46,  Consolidation of Variable Interest
Entities ("FIN 46") which is an interpretation  of Accounting  Research Bulletin
No. 51, Consolidated  Financial Statements.  FIN 46 requires a variable interest
entity  ("VIE") to be  consolidated  by a company that is  considered  to be the
primary  beneficiary  of that VIE. In December  2003, the FASB issued FIN No. 46
(revised December 2003),  "Consolidation  of Variable  Interest  Entities" ("FIN
46-R") to address certain FIN 46 implementation issues. The Company is currently
evaluating   the   application  of  FIN  46  as  it  relates  to  the  potential
consolidation of Cactus Family Investments, LLC, an entity owned by the majority
shareholders of the Company.

COMPARISON OF FISCAL YEAR 2002 AND FISCAL YEAR 2001

NET REVENUES

Net revenues for the year ended October 31, 2002 totaled $5,935,000,  a decrease
of $10,533,000 from the year ended October 31, 2001 net revenues of $16,468,000.
The decrease in net revenues is the result of the  recognition  of $8,488,000 of
deferred VSC  revenues in fiscal 2001 that were  derived from two  underwriters.
These  underwriters  transferred the  responsibility  for the  administration of
certain contracts and policies to an unrelated third party relieving the Company
of the  majority  of its  continuing  responsibilities.  At the same  time,  the
Company  also  recognized   $8,089,000  of  deferred  direct  acquisition  costs
associated  with the same  contracts  and  policies.  The  remainder  of the net
revenue  decline is the result of increased  competition  for vehicle  sales and
loans by the vehicle  manufacturers  including  the zero  interest rate loan and
expanded  initial warranty  programs.  The Company is attempting to reverse this
downward  trend with its VPN system and with increased  marketing  contacts with
other Internet vendors.

The Company continues to perform certain  administrative  duties relating to the
calculation and administration of policy and contract cancellations. At the date
the  responsibility  transfer was  recognized  (July 31,  2001),  the  remaining
balance in deferred  revenue and deferred direct  acquisition  costs relating to
these  underwriters  that is available  to offset  against  future  cancellation
administration equaled $1,537,000 of deferred revenue and $1,455,000 of deferred
direct  acquisition  costs.  The Company will recognize this revenue and expense
over the remaining life of the policies or contracts. If an individual policy or
contract is cancelled,  the company will recognize the remaining  portion of the
unearned revenue and direct  acquisition cost as a current event.  Approximately
$56,000 of net deferred income remains at October 31, 2002 to offset costs to be
incurred in administrating the cancellations of these policies.

The Company  also wrote off a  receivable  from the  underwriters  for  deferred
administrative costs. When a policy or contract is sold, the Company would remit
a portion of their commission to the underwriter for an administrative  services
reserve.  As these policies and contracts expire,  the underwriters would return
that  portion  of  the  administrative  services  reserve  to the  Company.  The
administrative  release  agreements  contained  provisions  whereby  the Company
agreed to forfeit  all of the  deferred  administrative  costs  remitted  to the
underwriters.  The total amount written off was $254,000.  The net effect of the
above adjustments was to increase fiscal 2001 net operating income by $490,000.


                                        8
<PAGE>

OPERATING EXPENSES

Operating expenses decreased  $9,402,000 to $7,324,000 in the year ended October
31, 2002 compared to the similar  period ended October 31, 2001. As explained in
the net revenue  discussion  above,  the Company  recognized the deferred direct
acquisition  costs of VSC that were  associated  with the contracts that were no
longer  administered  by the Company.  Excluding VSC direct  acquisition  costs,
operating  expenses  declined  $189,000  but were 36.0% of net  revenues in 2002
compared  to  14.1% in 2001 as the  Company  could no  longer  reduce  operating
expenses at a rate equal to the decline in net revenues.  The Company  continued
to  aggressively  cut costs and expenses in most expense  categories.  Increases
were  experienced in license and fee costs as a result of the Company's  efforts
to replace the lost underwriters'  business, in professional fees as the Company
defended  itself in the law suit described  above, in rent and lease expense due
to the  terms  of the  lease  escalator,  in  advertising  expense  and in other
operating expenses as a result of a charge to increase the law suit reserve

OTHER INCOME (EXPENSE)

Finance fee income  increased  30.3% as more  purchasers of policies  elected to
finance  premiums.  Interest income declined $37,000 from $51,000 in fiscal 2001
to $14,000 in fiscal  2002 as a result of the  nation-wide  decline in  interest
rates and to the  decline  in funds  available  for  investment.  There  were no
realized gains on investments in 2002.

INCOME TAXES

Provisions  for  income  taxes in the period  ended  October  31,  2002 and 2001
reflect the  Company's  intent to carry back the current  year losses to recover
federal income taxes paid in previous years.  Similar provisions for recoverable
state  income  taxes were not  provided,  as Arizona law does not allow for loss
carry back.  The  differences in the effective tax rates in fiscal 2002 compared
to fiscal 2001 is the result of the valuation  allowance placed on the state net
operating  loss carry forward and the  recording of the federal  income tax loss
carry back. The Company received $425,000 in such refunds during fiscal 2002.

LIQUIDITY AND CAPITAL RESOURCES

COMPARISON OF OCTOBER 31, 2003 AND OCTOBER 31, 2002

The Company incurred  significant  losses during the current fiscal year and has
experienced additional losses in prior years. A related party has advanced funds
on demand notes and through the deferral of rent  payments (See Note 4) in order
to overcome working capital deficiencies during the year.  Subsequent to October
31, 2003, the Company granted the related party, Cactus Family Investments, LLC,
a security  interest in all of its  unencumbered  assets.  There is no assurance
that additional advances will be made if additional working capital is required.
The lack of continuing working capital infusions could affect future operations.
Accordingly,  the accompanying  financial statements have been prepared assuming
the Company will continue as a going concern. The Company has incurred a loss in
November  and December  2003 and expects such losses to continue  into the early
months of 2004.  The Company  continues to pursue cost  cutting  measures and to
seek additional business to reduce working capital needs

Working  capital at October 31, 2003  consisted of current  assets of $4,825,000
and current liabilities of $6,412,000, or a current ratio of 0.75: 1. At October
31, 2002,  the current ratio was 0.97:1 with current  assets of  $6,156,000  and
current liabilities of $6,325,000.

As of October 31, 2003, the Company's  cash position  decreased to $740,000 from
$896,000  at October  31,  2002.  Of this  amount,  $291,000  is  classified  as
restricted  cash in 2003 and  $285,000  in 2002.  The largest  component  of the
restricted  cash  represented  claims  payment  advances  provided by  insurance
companies.  These advances  enable the Company to make claims payments on behalf
of the insurance  companies.  The increase in restricted  cash in 2003 is due to
timing of reimbursements. The continuing decline in sales volume has resulted in
lower premiums being held on deposit pending payment to the insurance  companies
and therefore lower cash balances.

Deferred  direct costs,  including  both the current and  non-current  portions,
decreased  $271,000 to $8,535,000 at October 31, 2003 from $8,806,000 at October
31, 2002.  Direct costs are costs that are directly related to the sale of VSCs.
These costs are deferred in the same manner as are VSC revenue.  The decrease is
the result of a continuation of lower than normal sales levels.


                                        9
<PAGE>

The Company collects funds throughout the year and remits a portion of the funds
to the  insurance  companies.  As of October  31,  2003,  the amount owed to the
insurance  companies  decreased by $57,000 to $736,000  from $793,000 at October
31,  2002.  The  change  is  due to  the  timing  of  payments  remitted  to and
reimbursements received from the insurance companies.

Deferred  revenues,   including  both  the  current  and  non-current  portions,
decreased $243,000 to $9,880,000 at October 31, 2003 from $10,123,000 at October
31,  2002.   Deferred   revenue  consists  of  VSC  gross  sales  and  estimated
administrative  service fees relating to the sales of MBI policies. The decrease
is due to the continuing decline in sales volume in 2003.

The Company is  operating  with a working  capital  line of credit from  Merrill
Lynch  that  expired  November  30,  2003.  The  Company  intends  to repay this
indebtedness in the near future.  The Company has received advances from related
parties  that are secured by a short-term  note  payable to its Chief  Executive
Officer.  As of October 31,  2003,  the  related  party  indebtedness  increased
$328,000 to $545,000 from $217,000 at October 31, 2002. The Company's ability to
fund its  operations  over the  short-term is not hindered by lack of short-term
funding as the Chief  Executive  Officer and principal  shareholder has provided
additional  funds as needed.  The Company  uses  premiums  received to pay agent
commissions,  to fund  operations  and to  supplement  claims  payment  advances
provided by  insurance  companies  to  administer  and pay  claims.  The Company
believes  its  future   operations  may  require  advances  from  its  principal
shareholder. There is no assurance that such advances will be made.

This Annual Report on Form 10-K contains certain forward-looking  statements and
information  which we  believe  are 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.  The forward looking statements contained herein can be
identified  by the  use  of  forward-looking  terminology  such  as  "believes,"
"expects," "may," "will," "should," or "anticipates," or the negative thereof or
other  variations  thereon  or  comparable  terminology,  or by  discussions  of
strategy that involve risks and uncertainties. The Company wishes to caution the
reader that these forward-looking  statements that are not historical facts, are
only predictions.  No assurances can be given that the future results indicated,
whether expressed or implied,  will be achieved.  While sometimes presented with
numerical  specificity,  these projections and other forward-looking  statements
are based upon a variety of assumptions relating to the business of the Company,
which,  although  considered  reasonable  by the  Company,  may not be realized.
Because  of the  number  and  range  of  assumptions  underlying  the  Company's
projections  and  forward-looking  statements,  many of  which  are  subject  to
significant  uncertainties  and  contingencies  that are beyond  the  reasonable
control of the Company, some of the assumptions inevitably will not materialize,
and  unanticipated  events and circumstances may occur subsequent to the date of
this  report.  Examples  of  uncertainties  that could  cause  such  differences
include,  but are not  limited  to, the  ability of the  Company to attract  and
retain key personnel, the ability of the Company to secure additional capital to
finance its business  plan,  and  competition  from other  companies in the same
industry. These forward-looking statements are based on current expectations and
the Company  assumes no obligation to update this  information.  Therefore,  the
actual  experience  of the Company and the  results  achieved  during the period
covered by any particular  projections or forward-looking  statements may differ
substantially from those projected.  Consequently,  the inclusion of projections
and other forward-looking  statements should not be regarded as a representation
by the Company or any other person that these estimates and projections  will be
realized, and actual results may vary materially. There can be no assurance that
any of these  expectations  will be realized or that any of the  forward-looking
statements contained herein will prove to be accurate.

Item 7A.  Qualitative Information about Market Risk

Since the Company does not underwrite its own policies,  a change in the current
rate of inflation is not expected to have a material effect on the Company.  The
precise effect of inflation on operations however cannot be determined.

The Company does not have any long-term  receivables and its line of credit debt
is fully  secured by  marketable  securities.  Therefore,  it is not  subject to
significant interest rate risk.

The Company has a net loss of $1,785,000 for the twelve months ended October 31,
2003.  This net loss is due to the Company  having a substantial  decline in MBI
market share from  increased  competition.  The future effect of this  increased
competition may have an adverse effect on future earnings.


                                       10
<PAGE>

Item 8. Financial Statements and Supplementary Data

FINANCIAL STATEMENTS

Index to Consolidated Financial Statements for the years ended October 31, 2003,
2002, and 2001:

Report of Independent Certified Public Accountants

Consolidated Balance Sheets

Consolidated Statements of Operations and Comprehensive Income (Loss)

Consolidated Statements of Stockholders' Deficit

Consolidated Statements of Cash Flows

Notes to Consolidated Financial Statements


                                       11
<PAGE>

REPORT OF MANAGEMENT
Board of Directors and Stockholders
M.B.A. Holdings, Inc.
Scottsdale, Arizona
January  29, 2004

Management  is  responsible   for  the   accompanying   consolidated   financial
statements,  which have been prepared in conformity with  accounting  principles
generally  accepted in the United States of America.  In preparing the financial
statements,  it is necessary  for  management to make  informed  judgements  and
estimates which it believes are appropriate under the  circumstances.  Financial
information presented elsewhere in this annual report is consistent with that in
the financial statements.

In meeting its responsibility for preparing reliable financial  statements,  the
Company maintains a system of internal  accounting  controls designed to provide
reasonable  assurance that assets are safeguarded and  transactions are properly
recorded  and  executed  in  accordance  with  corporate  policy and  management
authorization.  The Company believes its accounting  controls provide reasonable
assurance  that  errors  or  irregularities,  which  could  be  material  to the
financial statements, are prevented or would be detected within a timely period.
In designing  such control  procedures,  management  recognizes  judgements  are
required  to  assess  costs  and  expected  benefits  of a  system  of  internal
accounting  controls.  Adherence to these  policies and  procedures  is reviewed
through a coordinated  effort of the Company's  accounting staff and independent
auditors.

The Audit  Committee of the Board of  Directors  is comprised  solely of outside
directors and is  responsible  for  overseeing and monitoring the quality of the
Company's  accounting and auditing practices.  The independent  accountants have
full and free  access  to the Audit  Committee  and meet  periodically  with the
committee to discuss accounting, auditing and financial reporting matters.


/s/ Gaylen M. Brotherson

Gaylen M. Brotherson
Chairman and Chief Executive Officer


/s/ Dennis M. O'Connor

Dennis M. O'Connor
Chief Financial Officer


                                       12
<PAGE>

REPORT of INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
Board of Directors and Stockholders
M.B.A. Holdings, Inc.
Scottsdale, Arizona

We have audited the accompanying consolidated balance sheets of M.B.A. Holdings,
Inc.  and  subsidiary  (the  "Company")  as of October 31, 2003 and 2002 and the
related   consolidated   statements  of  operations  and   comprehensive   loss,
stockholders'  (deficit) equity,  and cash flows for the years then ended. These
financial  statements are the  responsibility of the Company's  management.  Our
responsibility  is to express an opinion on these financial  statements based on
our audits. The financial  statements of the Company as of October 31, 2001 were
audited by other  auditors  whose  report dated  January 10, 2002,  expressed an
unqualified opinion on those statements.

We conducted our audits in accordance with auditing standards generally accepted
in the  United  States of  America.  Those  standards  require  that we plan and
perform the audit to obtain  reasonable  assurance  about  whether the financial
statements are free of material misstatement.  An audit includes examining, on a
test basis,  evidence  supporting  the amounts and  disclosures in the financial
statements.  An audit also includes 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 financial  position of the Company as of
October 31, 2003 and 2002,  and the results of its operations and its cash flows
for the year then  ended 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 2 to the
consolidated  financial statements,  the Company has incurred significant losses
from  operations,  anticipates  additional  losses  in the  next  year  and  has
insufficient  working capital as of October 31, 2003 to fund such losses.  These
conditions raise  substantial doubt as to the ability of the Company to continue
as a going concern.  These consolidated  financial statements do not include any
adjustments that might result from such uncertainty.


/s/  Semple & Cooper, LLP
Phoenix, Arizona
January  16, 2004


                                       13
<PAGE>
M.B.A. HOLDINGS, INC. AND SUBSIDIARY

CONSOLIDATED BALANCE SHEETS
OCTOBER 31, 2003 AND 2002
<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------
ASSETS                                                                2003             2002
                                                                 ------------     ------------
<S>                                                              <C>              <C>
CURRENT ASSETS:
  Cash and cash equivalents                                      $    448,240     $    611,520
  Restricted cash                                                     291,437          284,966
  Investments (Note 5)                                                117,203          159,042
  Accounts receivable, net of allowance for doubtful accounts
      of $0 (2003 and 2002)                                           232,184          182,300
  Prepaid expenses and other current assets                             5,248           10,429
  Deferred direct costs                                             3,730,410        4,206,456
  Income tax receivable (Note 6)                                           --          436,778
  Deferred income tax asset (Note 6)                                       --          264,198
                                                                 ------------     ------------
           Total current assets                                     4,824,722        6,155,689
                                                                 ------------     ------------
PROPERTY AND EQUIPMENT:
  Computer equipment                                                  309,128          285,894
  Office equipment and furniture                                      140,259          140,259
  Vehicle                                                              15,000           16,400
  Leasehold improvements                                               80,182           80,182
                                                                 ------------     ------------
           Total property and equipment                               544,569          522,735
  Accumulated depreciation and amortization                          (426,661)        (368,065)
                                                                 ------------     ------------
           Property and equipment - net                               117,908          154,670

DEFERRED DIRECT COSTS                                               4,804,532        4,599,368
DEFERRED INCOME TAX ASSET (Note 6)                                         --          303,248
                                                                 ------------     ------------
TOTAL ASSETS                                                     $  9,747,162     $ 11,212,975
                                                                 ============     ============
</TABLE>

See notes to consolidated financial statements.


                                       14
<PAGE>

M.B.A. HOLDINGS, INC. AND SUBSIDIARY

CONSOLIDATED BALANCE SHEETS
OCTOBER 31, 2003 AND 2002
<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------
LIABILITIES AND STOCKHOLDERS' DEFICIT                                 2003             2002
                                                                  ------------     ------------
<S>                                                               <C>              <C>
CURRENT LIABILITIES:
  Net premiums payable to insurance companies                     $    736,442     $    793,389
  Accounts payable and accrued expenses                                622,756          522,136
  Line of credit borrowings                                            196,897               --
  Accounts and note payable - officer (Note 8)                         516,309          216,931
  Capital lease obligations (Note 8)                                     7,882            8,222
  Deferred revenues                                                  4,332,133        4,783,991
                                                                  ------------     ------------
           Total current liabilities                                 6,412,419        6,324,669
Capital lease obligation - net of current portion  (Note 8)              8,301               --
Other liabilities                                                           --           49,572
Deferred rent                                                            4,809           31,064
Deferred income taxes                                                    4,666               --
Deferred revenues - net of current portion                           5,548,214        5,338,994
                                                                  ------------     ------------
           Total liabilities                                        11,978,409       11,744,299
                                                                  ------------     ------------
COMMITMENTS AND CONTINGENCIES (Notes 7,8, 9 and 10)                         --               --
STOCKHOLDERS' DEFICIT (Note 2 and 7):
  Preferred stock, $.001 par value; 20,000,000 shares
    authorized; none issued and outstanding                                 --               --
  Common stock, $.001 par value; 80,000,000 shares
    authorized; 2,061,787 shares issued; 2,030,187 outstanding           2,062            2,012
  Additional paid-in-capital                                           280,801          200,851
  Accumulated other comprehensive income (loss), net of tax                119           (5,418)
  Retained deficit                                                  (2,458,729)        (673,269)
  Less: 31,600 shares of common stock in treasury, at cost             (55,500)         (55,500)
                                                                  ------------     ------------
        Total stockholders' deficit                                 (2,231,247)        (531,324)
                                                                  ------------     ------------
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT                       $  9,747,162     $ 11,212,975
                                                                  ============     ============
</TABLE>

See notes to consolidated financial statements.


                                       15
<PAGE>

M.B.A. HOLDINGS, INC. AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)
YEARS ENDED OCTOBER 31, 2003, 2002 AND 2001
<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------------------------------

                                                                         2003             2002             2001
<S>                                                              <C>              <C>              <C>
NET REVENUES:
  Vehicle service contract gross income                          $  5,328,915     $  5,406,387     $ 15,136,581
  Net mechanical breakdown insurance income                           299,493          529,091        1,331,853
                                                                 ------------     ------------     ------------
Total net revenues                                                  5,628,408        5,935,478       16,468,434
                                                                 ------------     ------------     ------------
OPERATING EXPENSES:
  Direct acquisition costs of vehicle service contracts             5,029,185        5,189,412       14,402,029
  Salaries and employee benefits                                    1,036,242        1,187,139        1,399,267
  Mailings and postage                                                 17,932          101,287          121,416
  Related party rent expense                                          311,912          251,625          248,010
  Lease expense                                                        13,842           20,636           34,498
  Professional fees                                                   132,232          160,379           91,357
  Telephone                                                           147,346           89,907           96,896
  Depreciation and amortization                                        59,996           79,866           78,833
  Merchant and bank charges                                             6,475            8,853           20,783
  Insurance                                                            21,587           32,613           32,959
  Supplies                                                             11,990           13,884           28,709
  License and fees                                                     21,493           26,717           24,104
  Other operating expenses                                            104,578          162,080          146,958
                                                                 ------------     ------------     ------------
           Total operating expenses                                 6,914,810        7,324,398       16,725,819
                                                                 ------------     ------------     ------------
OPERATING LOSS                                                     (1,286,402)      (1,388,920)        (257,385)
                                                                 ------------     ------------     ------------
OTHER INCOME (EXPENSE):
  Finance fee income                                                   21,476           26,210           20,120
  Interest income                                                       7,414           13,870           51,288
  Interest expense                                                    (13,924)          (8,121)         (10,775)
  Other income (expense)                                               63,906           33,333             (293)
  Realized gains on investments                                         2,914               --           15,629
                                                                 ------------     ------------     ------------
        Other income - net                                             81,786           65,292           75,969
                                                                 ------------     ------------     ------------
LOSS BEFORE INCOME TAXES                                           (1,204,616)      (1,323,628)        (181,416)
INCOME TAXES (Note 6)                                                 580,844         (475,831)          31,130
                                                                 ------------     ------------     ------------
NET LOSS                                                         $ (1,785,460)    $   (847,797)    $   (212,546)
                                                                 ============     ============     ============
BASIC NET LOSS PER SHARE                                         $      (0.90)    $      (0.43)    $      (0.11)
                                                                 ============     ============     ============
DILUTED NET LOSS PER SHARE                                       $      (0.90)    $      (0.43)    $      (0.11)
                                                                 ============     ============     ============
AVERAGE NUMBER OF COMMON SHARES
  OUTSTANDING - BASIC                                               1,982,653        1,980,187        1,980,187
                                                                 ============     ============     ============
AVERAGE NUMBER OF COMMON AND
  DILUTIVE SHARES OUTSTANDING                                       1,982,653        1,980,187        1,980,187
                                                                 ============     ============     ============
Net loss                                                         $ (1,785,460)    $   (847,797)    $   (212,546)
Other comprehensive income net of tax:
  Net unrealized gain (loss) on available-for-sale securities           5,537           (2,269)         (15,364)
                                                                 ------------     ------------     ------------
Comprehensive loss                                               $ (1,779,923)    $   (850,066)    $   (227,910)
                                                                 ============     ============     ============
</TABLE>
See notes to consolidated financial statements.


                                       16
<PAGE>

M.B.A. HOLDINGS, INC. AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' DEFICIT
YEARS ENDED OCTOBER 31, 2003, 2002 AND 2001
<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------------------------------
                                                                          Accumulated                                      Total
                                         Common Stock        Additional      Other        Retained                     Stockholders'
                                    ----------------------      Paid     Comprehensive    Earnings        Treasury        Deficit)
                                      Shares       Amount    In-Capital     Income        (Deficit)         Stock          Equity

<S>                                  <C>           <C>        <C>          <C>           <C>              <C>              <C>
BALANCE, NOVEMBER 1, 2000            2,011,787     $2,012     $200,851     $ 12,215      $   387,074      (55,500.00)      546,652

  Unrealized loss on
    available-for-sale securities                                           (15,364)                                       (15,364)

  Net loss                                                                                  (212,546)                     (212,546)
                                     ---------     ------     --------     --------      -----------      --------     ------------

BALANCE, OCTOBER 31, 2001            2,011,787      2,012      200,851       (3,149)         174,528       (55,500)        318,742

  Unrealized loss on
    available-for-sale securities                                            (2,269)                                        (2,269)

  Net loss                                                                                  (847,797)                     (847,797)
                                     ---------     ------     --------     --------      -----------      --------     ------------

BALANCE, OCTOBER 31, 2002            2,011,787      2,012      200,851       (5,418)        (673,269)      (55,500)       (531,324)

  Unrealized gain on
    available-for-sale securities                                             5,537                                          5,537
  Issuance of common shares             50,000         50       79,950                                                      80,000

  Net loss                                                                                (1,785,460)                   (1,785,460)
                                     ---------     ------     --------     --------      -----------      --------     ------------

BALANCE, OCTOBER 31, 2003            2,061,787     $2,062     $280,801     $    119      $(2,458,729)     $(55,500)    $(2,231,247)
                                     ===============================================================================================
</TABLE>


See notes to consolidated financial statements


                                       17
<PAGE>

CONSOLIDATED STATEMENTS OF CASH FLOWS
YEARS ENDED OCTOBER 31, 2003, 2002 AND 2001
<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------------
                                                                                       OCTOBER 31,
                                                                           2003           2002             2001
                                                                       -----------     -----------     -----------
<S>                                                                    <C>             <C>             <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
  Net loss                                                             $(1,785,460)    $  (847,797)    $  (212,546)
  Adjustments to reconcile net loss to net cash used in
    operating activities:
      Depreciation and amortization                                         59,996          79,866          78,833
      (Gain) loss on sale of equipment                                          --         (22,500)         22,237
      Related party rent expense accrued but not paid                      311,912              --              --
      Deferred income taxes                                                572,112         (26,737)        343,117
      Changes in assets and liabilities:
        Restricted cash                                                     (6,471)       (124,564)        326,613
        Accounts receivable                                                (49,884)        (35,990)        258,060
        Prepaid expenses and other current assets                            5,181          69,921          80,894
        Deferred direct costs                                              270,882      (2,166,872)      6,059,515
        Income tax receivable                                              436,778         (41,291)       (240,050)
        Net premiums payable to insurance companies                        (56,947)        408,276         (52,101)
        Accounts payable and accrued expenses                              100,620         143,311        (128,060)
        Other liabilities                                                  (49,572)       (175,838)         88,876
        Deferred rent                                                      (26,255)        (11,192)            717
        Deferred revenues                                                 (242,638)      2,179,649      (6,896,833)
                                                                       -----------     -----------     -----------
           Net cash used in operating activities                          (459,746)       (571,758)       (270,728)
                                                                       -----------     -----------     -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
  Purchase of property and equipment                                        (3,833)        (17,593)        (55,382)
  Proceeds from sale of equipment                                               --          22,500          24,000
  Purchase of investments                                                   (2,612)           (458)       (129,481)
  Proceeds from sales and maturities of investments                         49,988              --         288,327
                                                                       -----------     -----------     -----------
          Net cash provided by investing activities                         43,543           4,449         127,464
                                                                       -----------     -----------     -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
  Drawings on line of credit                                               196,897         643,654              --
  Repayments of line of credit drawings                                         --        (643,654)             --
  Proceeds of note payable - officer                                        67,466         106,548              --
  Payments on capital lease obligations                                    (11,440)        (10,743)         (9,208)
                                                                       -----------     -----------     -----------
          Net cash provided by (used in) financing activities              252,923          95,805          (9,208)
                                                                       -----------     -----------     -----------
NET DECREASE IN CASH AND CASH EQUIVALENTS                                 (163,280)       (471,504)       (152,472)
CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR                               611,520       1,083,024       1,235,496
                                                                       -----------     -----------     -----------
CASH AND CASH EQUIVALENTS, END OF YEAR                                 $   448,240     $   611,520     $ 1,083,024
                                                                       ===========     ===========     ===========
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
  Cash paid for interest                                               $     3,644     $     4,902     $    10,660
                                                                       ===========     ===========     ===========

  Cash paid for (recovered from) income taxes                          $  (431,186)    $  (425,396)    $        --
                                                                       ===========     ===========     ===========

NON-CASH TRANSACTIONS:
   Related party notes payable satisfied by issuing common shares
       and services provided                                           $    80,000     $        --     $        --
                                                                       ===========     ===========     ===========

   Unrealized gains (losses) on available -for-sale securities         $     5,537     $    (2,269)    $   (15,364)
                                                                       ===========     ===========     ===========

     Property and equipment financed with capital lease obligations    $    19,401     $        --     $        --
                                                                       ===========     ===========     ===========
</TABLE>

See notes to consolidated financial statements.



                                       18
<PAGE>

M.B.A. HOLDINGS, INC. AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED OCTOBER 31, 2003, 2002 AND 2001
--------------------------------------------------------------------------------


1. DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Description of Business - M.B.A.  Holdings,  Inc. and subsidiary (the "Company")
are  located  in  Scottsdale,  Arizona  and are  principally  engaged in selling
mechanical  breakdown  insurance  policies  ("MBI")  (as an agent for  insurance
companies),  selling  vehicle  service  contracts  ("VSC") for new  automobiles,
trucks,  recreational  vehicles,  and  travel  trailers,  and  providing  claims
administrative  services  for MBI  and  VSC  sold.  The  consolidated  financial
statements  include the accounts of M.B.A.  Holdings,  Inc. and its wholly owned
subsidiary,   Mechanical   Breakdown   Administrators,   Inc.  All   significant
intercompany balances and transactions have been eliminated.

The Company  prepares its financial  statements in  accordance  with  accounting
principles  generally  accepted  in the United  States of  America.  Significant
accounting policies are as follows:

         a.       Cash and Cash  Equivalents - The Company  considers all highly
                  liquid investments with original maturities of three months or
                  less when purchased to be cash equivalents.

         b.       Restricted cash represents claims payment advances provided by
                  the  insurance  companies to enable the Company to make claims
                  payments on their behalf.

         c.       Investments  that are  primarily  marketable  debt and  equity
                  securities,  are  classified  as  available-for-sale  and  are
                  stated at  estimated  fair  value as of October  31,  2003 and
                  2002.  Fair value is estimated  based on quoted market prices.
                  Unrealized  gains  (losses)  are  excluded  from  earnings and
                  reported,  net of  income  tax,  as a  separate  component  of
                  shareholders' equity (deficit).

         d.       Accounts  receivable  consist  primarily  of amounts  due from
                  insurance  companies  for  reimbursement  of  previously  paid
                  claims.  For the  years  ended  October  31,  2003  and  2002,
                  management  believes  that all  outstanding  balances  will be
                  realized. Accounts receivable are unsecured and do not include
                  finance charges.

         e.       Property  and  Equipment  - The  historical  cost of  computer
                  equipment,  office  equipment and furniture is  depreciated by
                  accelerated  and  straight-line  methods over their  estimated
                  useful lives, which range from three to seven years. Leasehold
                  improvements are amortized over the shorter of the life of the
                  asset or the related lease term. The costs of maintenance  and
                  repairs are charged to expense in the year incurred.

                  The  Company  reviews  its  long-lived   assets  for  possible
                  impairment in accordance with SFAS No. 144, Accounting for the
                  Impairment or Disposal of Long-Lived Assets,  which supercedes
                  SFAS No. 121,  Accounting  for the  Impairment  of  Long-Lived
                  Assets and for Long-Lived  Assets to Be Disposed Of and amends
                  Accounting  Principles  Board  Opinion No. 30,  Reporting  the
                  Results of Operations - Reporting the Effects of Disposal of a
                  Segment  of  a  Business,   and  Extraordinary,   Unusual  and
                  Infrequently Occurring Events and Transactions.  The new rules
                  apply to the classification and impairment  analysis conducted
                  on  long-lived  assets other than certain  intangible  assets,
                  resolve  existing  conflicting  treatment on the impairment of
                  long-lived   assets  and   provide   implementation   guidance
                  regarding impairment  calculations.  SFAS No. 144 also expands
                  the scope to  include  all  distinguishable  components  of an
                  entity that will be  eliminated  from ongoing  operations in a
                  disposal  transaction.  The  Company  has  concluded  that  no
                  impairment charge is necessary during 2003 and 2002.

         f.       Benefit Plan - The Company maintains the Mechanical  Breakdown
                  Administrators    401(k)   Profit    Sharing   Plan   covering
                  substantially   all  employees.   Participation   in  employer
                  discretionary  contributions  commences on the  earliest  plan
                  entry date after an employee meets  eligibility  requirements.
                  Employees


                                       19
<PAGE>

                  may elect to  contribute  to the plan and the Company may make
                  discretionary  contributions.  No discretionary  contributions
                  were made during the years ended  October  31,  2003,  2002 or
                  2001.

         f.       Net premiums payable to insurance companies represent premiums
                  collected  from the  policyholders  on behalf of the insurance
                  companies.  Amounts collected are periodically remitted to the
                  appropriate insurance company.

         g.       Revenue  Recognition - Net revenues  includes the  commissions
                  earned  on sales of MBI,  fees  for  providing  administrative
                  claims services  related to the MBI sold and revenues  related
                  to the sales and servicing of VSC.

                  The Company  receives a  commission  from the sale of each MBI
                  policy.  That  commission  is payment for marketing the policy
                  and  for  providing  administrative  claims  and  cancellation
                  services.  The Company has elected early  adoption on November
                  1,  2002 of  Emerging  Issues  Task  Force  Issue  No.  00-21,
                  Revenue  Arrangements  with  Multiple  Deliverables.  It  will
                  recognize  the  revenue  earned  from  each  MBI  policy  on a
                  straight-line  basis  over  the term of that  policy.  The net
                  effect of this  change in 2003 is a deferral  of  revenues  of
                  $87,000.

                  Customers  generally  have the right to cancel their policy or
                  vehicle service  contract at any time. When a customer cancels
                  the policy or  contract,  the unused  portion of the policy or
                  contract  premium is returned to the customer after  deduction
                  of a cancellation fee. The Company,  the insurance  companies,
                  and  the  sub-agents  (if  applicable)  repay  their  unearned
                  balance on the policy to the customer. The cancellation fee is
                  retained entirely by the Company.  When a policy is cancelled,
                  the Company records the Company's  portion of the cancellation
                  repayment (net of any cancellation fee received and net of any
                  related  deferred  revenue)  as a reduction  or  increase  (as
                  applicable) in total revenues.

                  VSCs are contracts between the Company and the purchaser.  The
                  Company  insures its  obligations  by  obtaining  an insurance
                  policy that  guarantees  the Company's  obligations  under the
                  contract.  In accordance with Financial  Accounting  Standards
                  Board Technical Bulletin 90-1 Accounting for Separately Priced
                  Extended Warranty and Product Maintenance Contracts,  revenues
                  and costs  associated  with the sales of these  contracts  are
                  deferred and  recognized  in income on a  straight-line  basis
                  over the actual life of the contracts.

                  The Company  applies  Emerging  Issues Task Force ("EITF") No.
                  99-19 "Reporting Revenue Gross as a Principal versus Net as an
                  Agent." Accordingly,  revenues from MBI are presented on a net
                  basis  as the  Company  acts  only as an agent  for  Insurance
                  companies.  Conversely,  VSC  revenues  and related  costs are
                  presented  gross because the Company is  contracting  directly
                  with the policyholders.

         h.       Income  Taxes - Provision  for  recoverable  income  taxes and
                  related  income tax  receivable  in the year ended October 31,
                  2002  reflect the  Company's  intent to carry back the current
                  year losses to recover  federal  income taxes paid in previous
                  years.  Arizona  law does not  provide  for the carry  back of
                  losses and therefore  provisions for recoverable  state income
                  taxes have not been provided.

                  Deferred income tax is recorded based upon differences between
                  the   financial   statement   and  tax  basis  of  assets  and
                  liabilities  using  income tax rates  currently  in effect.  A
                  valuation  allowance is recorded  against  deferred tax assets
                  when it is likely that the value of a deferred  tax asset will
                  not be realized.

         i.       Net Income Per Share - Net income per share is  calculated  in
                  accordance  with  SFAS  No.  128,  Earnings  Per  Share  which
                  requires  dual  presentation  of basic and  diluted EPS on the
                  face of the statements of income and requires a reconciliation
                  of the  numerator  and  denominator  of basic and  diluted EPS
                  calculations. Basic income per common share is computed on the
                  weighted average number of shares of common stock  outstanding
                  during each period.  Income per common share assuming dilution
                  is computed on the weighted average number of shares of common
                  stock  outstanding  plus additional  shares  representing  the
                  exercise  of  outstanding   common  stock  options  using  the
                  treasury stock method.  No dilutive  effect is assumed in loss
                  years. Below is the reconciliation required by SFAS No. 128.


                                       20
<PAGE>

Number of shares used in computing income per share
     Year Ended October 31,                       2003        2002       2001
                                               ---------   ---------   ---------
Average number of common shares
outstanding - Basic                            1,982,653   1,980,187   1,980,187

Dilutive shares from common stock options
calculated using the treasury stock method            --          --          --
                                               ---------   ---------   ---------

Average number of common and dilutive
shares outstanding                             1,982,653   1,980,187   1,980,187
                                               =========   =========   =========


         k.       Stock-Based  Compensation  - At October 31, 2003,  the Company
                  had   options   outstanding   that   related  to   stock-based
                  compensation from prior years. These options are accounted for
                  under the recognition and measurement principles of Accounting
                  Principles  Board Opinion No. 25 "Accounting  for stock issued
                  to  employees"  and  related  interpretations,  as more  fully
                  described  in Note 7.  Pro  Forma  information  regarding  the
                  impact of stock-based  compensation on net income and loss per
                  share is required by SFAS No. 123, "Accounting for Stock-Based
                  Compensation"  and SFAS No. 148,  "Accounting  for Stock-Based
                  Compensation  - Transition  and  Disclosure".  For years ended
                  October  31,  2003,   2002,  2001,  there  are  no  pro  forma
                  adjustments  necessary  to net loss and basic and diluted loss
                  per  share  information,  had the  Company  accounted  for its
                  employee stock options under the fair  recognition  provisions
                  of SFAS No. 123.

         l.       Comprehensive  income  consists  of net income and other gains
                  and  losses   affecting   stockholders'   equity  that,  under
                  generally accepted accounting principles are excluded from net
                  income.  For the  Company,  such items  consist  primarily  of
                  unrealized  gains and  losses on  marketable  debt and  equity
                  investments.

         m.       Use of Estimates - 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,  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.

         n.       Pending  Accounting  Standards  - In  October  2002,  the FASB
                  issued  SFAS  No.  147,   Acquisitions  of  Certain  Financial
                  Institutions, which amends SFAS No. 72, Accounting for Certain
                  Acquisitions of Banking or Thrift Institutions,  and no longer
                  requires the separate recognition and subsequent  amortization
                  of goodwill that was originally  required by SFAS No. 72. SFAS
                  No.  147  also  amends  SFAS  No.  144,   Accounting  for  the
                  Impairment or Disposal of Long-Lived Assets, to include in its
                  scope long-term consumer-relationship  intangible assets (such
                  as core deposit  intangibles).  Effective October 1, 2002, the
                  Company  adopted  SFAS  147,  and the  adoption  did not  have
                  material effect on the financial statements.

                  In December 2002, the FASB issued SFAS No. 148, Accounting for
                  Stock-Based  Compensation - Transition and  Disclosure,  which
                  amends SFAS No. 123, "Accounting for Stock-Based Compensation"
                  ("FAS  123").  SFAS  148  provides   alternative   methods  of
                  transition for a voluntary change to the fair


                                       21
<PAGE>

                  value based  method of  accounting  for  stock-based  employee
                  compensation.  In  addition,  SFAS 148 amends  the  disclosure
                  requirement  of SFAS 123 to require  more  prominent  and more
                  frequent disclosures in financial statements of the effects of
                  stock-based  compensation.  The transition guidance and annual
                  disclosure  provisions  of SFAS 148 are  effective  for fiscal
                  years ending after December 15, 2002.  The interim  disclosure
                  provisions  are  effective for  financial  reports  containing
                  condensed  financial  statements for interim periods beginning
                  after  December 15, 2002. The Company has adopted SFAS 148 and
                  has   accordingly   modified   its   disclosures   related  to
                  stock-based compensation.

                  In April 2003,  the FASB issued  SFAS No.  149,  Amendment  of
                  Statement   133  on   Derivative   Instruments   and   Hedging
                  Activities. This Statement amends and clarifies the accounting
                  for  derivative  instruments,   including  certain  derivative
                  instruments  embedded  in  other  contracts  and  for  hedging
                  activities under SFAS No. 133. In particular, SFAS No. 149 (1)
                  clarifies under what  circumstances a contract with an initial
                  net  investment  meets the  characteristic  of a derivative as
                  discussed  in SFAS No. 133,  (2)  clarifies  when a derivative
                  contains a financing  component,  (3) amends the definition of
                  an underlying derivative to conform it to the language used in
                  FASB   Interpretation   No.  45,   Guarantor   Accounting  and
                  Disclosure  Requirements  for Guarantees,  Including  Indirect
                  Guarantees of Indebtedness  of Others,  and (4) amends certain
                  other  existing  pronouncements.  SFAS  No.  149 is  generally
                  effective  for contracts  entered into or modified  after June
                  30, 2003.  The Company has adopted SFAS No. 149 effective July
                  1, 2003,  and it did not  materially  effect the  consolidated
                  financial position or results of operations.

                  In May 2003,  the FASB  issued SFAS No.  150,  Accounting  for
                  Certain  Financial  Instruments with  Characteristics  of both
                  Liabilities and Equity. This Statement  establishes  standards
                  for classifying and measuring as liabilities certain financial
                  instruments  that  embody  obligations  of the issuer and have
                  characteristics  of both liabilities and equity.  SFAS No. 150
                  is effective  at the  beginning  of the first  interim  period
                  beginning  after  June  15,  2003;   including  all  financial
                  instruments  created or modified after May 31, 2003.  SFAS No.
                  150 currently has no impact on the Company.

                  In November 2002, the FASB issued FASB  Interpretation No. 45,
                  Guarantor's   Accounting  for  Disclosure   Requirements   for
                  Guarantees,  Including Indirect  Guarantees of Indebtedness of
                  Others,  an  interpretation  of FASB Statements No. 5, 57, and
                  107 and rescission of FASB  Interpretation  No. 34, Disclosure
                  of Indirect  Guarantees of  Indebtedness of Others ("FIN 45").
                  FIN 45 clarifies the requirements for a guarantor's accounting
                  for  and   disclosure   of  certain   guarantees   issued  and
                  outstanding. It also requires a guarantor to recognize, at the
                  inception  of a guarantee,  a liability  for the fair value of
                  the  obligation  undertaken  in issuing  the  guarantee.  This
                  Interpretation also incorporates  without  reconsideration the
                  guidance  in  FASB  Interpretation  No.  34,  which  is  being
                  superseded.  The Company has adopted this standard, and it did
                  not materially affect the consolidated  financial  position or
                  results of operations.

                  In January 2003, the FASB issued FIN No. 46,  Consolidation of
                  Variable   Interest   Entities"  ("FIN   46")   which   is  an
                  interpretation   of  Accounting   Research  Bulletin  No.  51,
                  Consolidated Financial Statements.  FIN 46 requires a variable
                  interest  entity ("VIE") to be  consolidated by a company that
                  is  considered to be the primary  beneficiary  of that VIE. In
                  December  2003,  the FASB issued FIN No. 46 (revised  December
                  2003),  Consolidation  of  Variable  Interest  Entities  ("FIN
                  46-R") to address certain FIN 46  implementation  issues.  The
                  Company is currently  evaluating the  application of FIN 46 as
                  it relates to Cactus Family Investments,  LLC, an entity owned
                  by the majority shareholders of the Company.

         o.       Concentrations of Credit Risk - The Company maintains its cash
                  balances in financial  institutions.  Deposits,  not to exceed
                  $100,000,   are  insured  by  the  Federal  Deposit  Insurance
                  Corporation.  At October 31, 2003,  2002 and 2001, the Company
                  had uninsured  cash of  approximately  $619,000,  $536,000 and
                  $411,000, respectively.

         p.       Advertising costs are expensed as incurred and are included in
                  other   operating   expenses.   Advertising   expense  totaled
                  approximately $19,000, $23,000 and $18,000 for the years ended
                  October 31, 2003, 2002 and 2001, respectively.


                                       22
<PAGE>

         q.       Reclassifications - Certain  reclassifications  have been made
                  to  the  2002  and  2001   amounts  to  conform  to  the  2003
                  presentation.

2. LIQUIDITY AND GOING CONCERN

The Company incurred  significant  losses during the current fiscal year and has
experienced additional losses in prior years. A related party has advanced funds
on demand notes and through the deferral of rent  payments (See Note 4) in order
to overcome working capital deficiencies during the year.  Subsequent to October
31, 2003, the Company granted the related party, Cactus Family Investments, LLC,
a security  interest in all of its  unencumbered  assets.  There is no assurance
that additional advances will be made if additional working capital is required.
The  Company  has been  notified  by the State of Arizona  that it does not meet
Arizona's  requirement  that the Company be solvent to make sales in that state.
The Company is seeking  alternatives to meet Arizona's  regulations.  Based upon
the foregoing, the accompanying financial statements have been prepared assuming
the Company will continue as a going concern. The Company has incurred a loss in
November  and December  2003 and expects such losses to continue  into the early
months of 2004.  The Company  continues to pursue cost  cutting  measures and to
seek additional business to reduce working capital needs.

3. SIGNIFICANT EVENTS

In 2001, two of the Company's underwriters transferred the administration of the
contracts/policies  sold  and  administered  by  M.B.A.  to a third  party.  The
transfer of this  responsibility  relieved the Company of its obligations  under
the agency agreement except for obligations  relating to future  contract/policy
cancellations.  As a result,  $8,488,000 of deferred VSC revenue,  $8,089,000 of
deferred  direct  acquisition  costs and  $345,000  of  deferred  administrative
service fee revenue  were  recognized  as income and  operating  expenses in the
third quarter of 2001.

In 2001,  the Company  also wrote off a  receivable  from the  underwriters  for
deferred  administrative  costs.  When a  contract/policy  was sold, the Company
remitted  a portion  of its  commission  to the  underwriter  as a  reserve  for
administrative  services.  As the  contracts/policies  expired,  the underwriter
would  return the reserve  submitted.  As a part of the  administrative  release
agreements,  the Company agreed to forfeit $254,000 of the reserves for deferred
administrative costs held by the underwriters.

The net effect of the above  transactions is an increase in net operating income
of $490,000 in fiscal 2001.

The Company continues to perform certain  administrative  duties relating to the
calculation and  administration of  contract/policy  cancellations.  The balance
included in deferred revenue and deferred direct  acquisition  costs at July 31,
2001 for these cancellations,  $1,537,000 and $1,455,000  respectively,  will be
recognized in income and expense over the remaining life of the contract/policy.
If the  contract/policy  is cancelled,  the company will recognize the remaining
portion of the  unearned  revenue  and direct  acquisition  cost in the month of
cancellation.  Approximately  $11,000 of net deferred  income remains at October
31, 2003 to offset costs that are expected to be incurred in administrating  the
cancellations of these contracts/policies.

4. RELATED PARTY TRANSACTIONS

Included in accounts  and note payable - officer at October 31, 2003 and 2002 is
$349,000 and $160,000 of accrued rent for office space  payable to Cactus Family
Investments,  LLC, an entity owned by the Company's majority stockholders.  Rent
expense for the years  ending  October  31,  2003,  2002 and 2001 was  $312,000,
$252,000 and $248,000,  respectively.  The lease expiring  December 31, 2003 was
signed with an affiliate on January 1, 1999. A month-to-month lease extension at
the December 2003 rate (approximately  $25,000 per month) was signed in December
2003.  The  expiring  lease  included  escalating  rent  amounts  that have been
recorded as expense on a straight-line basis over the lease term.

At various times beginning in February 2002,  Gaylen  Brotherson,  the Company's
Chief Executive Officer,  has loaned the Company funds for working capital.  The
loan  balances  were  $167,709  and  $106,548  at  October  31,  2003  and  2002
respectively.  The loans mature  annually on October 31st and bear interest at a
rate of 6%. Subsequent to


                                       23
<PAGE>

October 31, 2003,  the Company  renegotiated  the terms of the notes and granted
the related party, Cactus Family Investments, LLC, a security interest in all of
its  unencumbered  assets.  The  current  note is  payable  on demand  and bears
interest at 6%.

The Company pays a substantial portion of its claims obligations through the use
of credit  cards held  personally  by its majority  shareholders  and repays the
credit card companies directly. The Company has agreed to indemnify the majority
shareholders from its obligations arising from the use of these credit cards.

5. MARKETABLE SECURITIES

The following table summarizes the Company's available for sale securities as of
October 31, 2003 and October 31, 2002:
<TABLE>
<CAPTION>
October 31, 2003                                                Gross        Gross
                                                   Amortized  Unrealized   Unrealized      Fair
                                                     Costs      Gains        Losses        Value
                                                   --------    --------     --------     --------
<S>                                                <C>         <C>          <C>          <C>
Marketable Securities:
      Corporate bonds                              $ 33,642    $  4,158                  $ 37,800
      Mutual Funds                                   61,861       2,074                    63,935
      Equities                                       27,601                 $(12,133)      15,468
                                                   --------    --------     --------     --------

Total Marketable Securities at October 31, 2003    $123,104    $  6,232     $(12,133)    $117,203
                                                   ========    ========     ========     ========
<CAPTION>
October 31, 2002                                                Gross         Gross
                                                   Amortized  Unrealized    Unrealized      Fair
                                                     Costs      Gains         Losses        Value
                                                   --------    --------      --------     --------
<S>                                                <C>         <C>          <C>          <C>
Marketable Securities:
      Corporate bonds                              $ 33,642    $   4,018                  $ 37,660
      Mutual Funds                                  106,179        3,827                   110,006
      Equities                                       27,601                  $(16,225)      11,376
                                                   --------    ---------     --------     --------

Total Marketable Securities at October 31, 2002    $167,422    $   7,845     $(16,225)    $159,042
                                                   ========    =========     ========     ========
</TABLE>

6. INCOME TAXES

Income taxes were as follows for the years ended October 31:

                                        2003         2002          2001
                                      --------    ---------     ---------

Current                                     --    $(450,668)    $(311,987)
Deferred                               580,844      (25,163)      343,117
                                      --------    ---------     ---------

Total income tax (benefit) expense    $580,844    $(475,831)     $ 31,130
                                      ========    =========      ========


                                       24
<PAGE>

The effective income tax rate differs from the federal statutory income tax rate
in effect each year as a result of the following items:

                                        2003        2002         2001
                                        ----        ----         ----
Federal statutory income tax rate         34%         34%          34%
State taxes                                6           6            6
Operating loss utilization                --         (34)          --
Net operating loss carryback              --         (34)          --
Valuation Allowance                      (40)         (6)         (49)
Deferred revenues, net                     8          (2)          --
Other                                     40          --           (8)
                                        ----        ----         ----
Effective income tax  rate                48%        (36)%        (17)%
                                        ====        ====         ====



At October 31, 2003,  the Company had a state net  operating  loss carry forward
deductions  available  of $973,000,  which  expires in 2006,  $1,237,000,  which
expires in 2007 and  $1,137,000  which  expires in 2008.  The Company will carry
forward the current  year  taxable  loss of  $1,137,000  for federal  income tax
purposes as well.

The  deferred tax  liabilities  at October 31, 2003 and 2002 are composed of the
tax effects of:

                                          2003            2002
                                          ----            ----
Excess of net book basis of
fixed assets over tax basis            $ 4,666          $19,073
                                       =======          =======

7. STOCK OPTIONS AND STOCK AWARDS

During the year ended  October 31, 1998,  the Company  issued  stock  options to
certain  employees.   The  Company  applies  APB  Opinion  No.  25  and  related
interpretations in measuring compensation expense for its stock options.  During
the years ended  October 31, 2003,  2002 and 2001, no  compensation  expense was
recognized.

A summary  of the  Company's  outstanding  options  as of  October  31,  2003 is
presented below:

                                                           Weighted Average
                       Exercise        Expiration          Contractual Life
      Options           Price             Date                (In Years)


       33,334          $ 2.25        February 15, 2006           2.30
       25,000            1.20       September 30, 2008           4.92
        1,667            1.20        October 31, 2008            5.01
      100,000            0.94          June 1, 2008              4.59
       20,000            1.05       September 30, 2008           4.92
        5,000            1.05        October 31, 2008            5.01
    ---------                                                    ----
      185,001                                                    4.27
    ---------                                                    ----


                                       25
<PAGE>

A summary of the activity  regarding the Company's  outstanding  options for the
years ended October 31 is presented below:
<TABLE>
<CAPTION>
                                                        2003                       2002                         2001
                                               -------------------------    -----------------------     ----------------------
                                                               Weighted                   Weighted                    Weighted
                                                               Average                    Average                     Average
                                                               Exercise                   Exercise                    Exercise
                                                Shares           Price      Shares          Price       Shares          Price

<S>                                             <C>            <C>          <C>            <C>          <C>            <C>
Options outstanding at beginning of year        185,001        $   1.23     185,001        $   1.23     185,001        $   1.23
Options granted                                      --           --             --           --             --           --
Options exercised                                    --           --             --           --             --           --
Options cancelled                                    --           --             --           --             --           --
                                                -------        --------     -------        --------     -------        --------
Options outstanding at end of year              185,001        $   1.23     185,001        $   1.23     185,001        $   1.23
                                                =======        ========     =======        ========     =======        ========
</TABLE>

In addition to the options and shares  issued  during the year ended October 31,
1998,  discussed  above,  the Company also has reserved,  for issuance,  various
options and shares to  employees,  which are based on the  occurrence  of future
events including the Company reaching certain sales levels. Under an arrangement
approved  by the Board of  Directors,  the CEO and  Vice-President  each will be
granted  options if sales  growth  goals are met.  For every $5 million in sales
growth,  the CEO will  receive  options to purchase  1,667 shares at an exercise
price of 80  percent  of  market  price at the date  sales  goals  are met.  The
President will receive  options to purchase 5,000 shares at an exercise price of
70  percent of the market  price at the date sales  goals are met,  for every $5
million in sales growth.

8. OPERATING AND CAPITAL LEASES

The Company has  operating  leases for office space and  equipment and a capital
lease for equipment that expire on various dates through the year ending October
31,  2004.  The  equipment  under  capital  lease is included  in  property  and
equipment  at  October  31,  2003 and 2002 with  values of  $28,873  and  $9,472
respectively,   net  of   accumulated   amortization   of  $49,463  and  $21,528
respectively.  Total rental expense was  approximately,  $312,000,  $294,000 and
$283,000 for the years ended October 31, 2003, 2002 and 2001, respectively.

 Future minimum lease payments under  non-cancelable lease agreements at October
31, 2003 are as follows:

                                         Operating        Capital
                                           Lease          Leases

2004                                       45,930         $ 8,203
2005                                                      $ 8,203
2006                                                        2,830
                                          -------         -------
Total                                     $45,930          19,236
                                          =======

Less portion representing interest                          3,053
                                                          -------
Total                                                     $16,183
                                                          =======

The interest rates under the capital leases obligations range from approximately
15% to 19% per annum and are  imputed  based on the  lessor's  implicit  rate of
return at the inception of the lease.


                                       26
<PAGE>

9. SIGNIFICANT CUSTOMERS

In 2003, a national  insurance  brokerage  firm  accounted for $2,433,000 of VSC
sales while another major  customer  accounted for $1,673,000 of 2003 VSC sales.
These two firms  combined  accounted for 77% of all 2003 VSC sales.  The Company
services these accounts under contracts that are subject to renewal annually.

10. COMMITMENTS AND CONTINGENCIES

The Company is subject to claims and lawsuits that arise in the ordinary  course
of  business,   consisting  principally  of  alleged  errors  and  omissions  in
connection with the sale of insurance and personnel matters and of disputes over
outstanding  accounts.  The  Company is  currently  involved  in a dispute,  for
undisclosed damages, with one of its associated insurance companies over alleged
wrongdoing,   an  alleged  breach  of  its  Administrative  Agreement  and  over
reimbursement for claims and cancellations expenditures. The Company maintains a
reserve for claims arising in the ordinary  course of business and believes that
this reserve is  sufficient  to cover the costs of such claims.  On the basis of
information  presently available,  management does not believe the settlement of
any such claims or lawsuits will have a material adverse effect on the financial
position, results of operations or cash flows of the Company.

11. LINE OF CREDIT

The  Company has  available  a $200,000  working  capital  line of credit  which
expires on November 30, 2003.  Borrowings under the line of credit bear interest
at a  variable  rate  per  annum  equal  to the  sum of  the  thirty-day  dealer
commercial  paper rate,  as  published  in The Wall Street  Journal  plus 3.15 %
(4.21% at October 31,  2003).  Borrowings  are  collateralized  by the Company's
investments.  There was $196,897  outstanding at October 31, 2003.  There was no
outstanding  balance at October 31, 2002 or 2001.  The Company  intends to repay
the indebtedness in the near future.


12. QUARTERLY FINANCIAL INFORMATION (UNAUDITED)

<TABLE>
<CAPTION>
                                                     For the year ended October 31, 2003
                                        1st                 2nd                 3rd                 4th
                                        Qtr                 Qtr                 Qtr                 Qtr
                                   -----------         -----------         -----------         -----------
<S>                                <C>                 <C>                 <C>                 <C>
Net revenues                       $ 1,440,774         $ 1,421,496         $ 1,400,657         $ 1,365,482
Gross profit                           174,338             169,619             172,801              82,466
Net (loss) income                     (212,543)           (329,358)           (375,010)           (868,549)
Net (loss) income per share              (0.11)              (0.17)              (0.18)              (0.44)
<CAPTION>

                                                    For the year ended October 31, 2002
                                        1st                 2nd                 3rd                 4th
                                        Qtr                 Qtr                 Qtr                 Qtr
                                   -----------         -----------         -----------         -----------
<S>                                <C>                 <C>                 <C>                 <C>
Net revenues                       $ 1,867,748         $ 2,349,498         $10,813,767          $1,173,703
Gross profit                           310,307             402,172             848,066             293,939
Net (loss) income                     (157,906)            (99,361)            173,436            (251,111)
Net (loss) income per share              (0.08)              (0.05)               0.09               (0.13)
</TABLE>


                                       27
<PAGE>

Item 9. Changes in and  Disagreements  with Auditors on Accounting and Financial
Disclosure.

The Company has not had disagreements  with its auditors on any matter regarding
accounting principles or financial statement disclosures.

The data required by Item 304 of Regulation S-K is set forth below:

Part III

Item 10. Directors and Executive Officers of the Registrant

The Company's  Board of Directors  consists of four people.  All Directors  hold
offices  until the next annual  meeting at which time there is an  election  for
their successors.


                                         Position with

              Name       Age                Company
--------------------------------------------------------------------------------
Gaylen M. Brotherson      64    President, CEO, Chairman of the Board, Director
Judy K. Brotherson        56    Vice-President, Secretary, Director
Edward E. Wilczewski      63    Director
Michael Brady             62    Director

Gaylen and Judy  Brotherson  are husband and wife. No other family  relationship
exists between the Directors or the executive officers.

THE BUSINESS EXPERIENCE OF EACH OF THE COMPANY'S DIRECTORS IS AS FOLLOWS:

Gaylen  Brotherson,  64,  became  President,  CEO,  Chairman  of the Board,  and
Director  of the  Company in November  1995.  He was the  founder of  Mechanical
Breakdown Administrators,  Inc. Mr. Brotherson served in the United States Navy.
In 1960,  he  received  his life,  health and  accident  licenses as well as his
property and casualty license.  Presently,  he is licensed as an insurance agent
in 27 states.  He has been in the vehicle service contract  business since 1974.
Since  1984  he has  been  actively  involved  in  marketing  and  administering
mechanical  breakdown  insurance  policies and VSCs under  Mechanical  Breakdown
Administrators,  Inc. Also, Mr.  Brotherson  serves on the Board of Directors of
Bank USA, in Phoenix, AZ.

Judy  Brotherson,  56, has been  Vice-President,  Secretary  and Director of the
Company  since  November  1995.  Mrs.  Brotherson  is a  graduate  of  Creighton
University. Since 1975, she has worked primarily in family owned businesses. She
holds insurance  licenses in approximately  32 states.  She was one of the chief
designers  of the M.B.A.  software  management  system.  She has been working at
M.B.A.  since 1989  primarily  involved in overseeing the finance and data-entry
departments.

Edward  Wilczewski,  63, has been a Director of the Company since June 1998. Mr.
Wilczewski served in the Navy for six years. Mr. Wilczewski is a graduate of the
University of Omaha.  Primarily for the past thirty years  including the present
time,  he has owned and  operated  The Charter  Group of Arizona,  a real estate
development  company.  His company has  developed  various real estate  projects
ranging from single-family homes to apartment complexes.

Michael  Brady,  62, has been a Director of the Company since December 2000. Mr.
Brady is a graduate of Creighton University.  For the last 35 years, he has been
a  lawyer  and  business  person  operating  domestically  and  internationally.
Specifically,  for the last  several  years,  he has been  the  Chairman  of the
European Trade Link Company,  which is an  international  distribution  company.
Also, he is the President of Vandermaal/Brady


                                       28
<PAGE>

International Inc., which is a US based international  consulting company.  From
July 1998 to December  1999,  he served as the  Chairman  of  American  Bantrust
Mortgage Services Corp., which is a US based mortgage-banking company. From 1997
to  August  1999,  he  served  on the  Board  of  Directors  of  Modis  Training
Technologies  Inc., which was a US based  semiconductor  training company.  From
1990 to 1996,  he  started  as the Chief  Legal  Counsel  and  became  the Chief
Executive  Officer of Metrol Security  Services Inc.,  which was a US based full
service burglar, fire alarm installation and monitoring company.

OTHER EXECUTIVE OFFICERS AND KEY EMPLOYEES

Dennis M. O'Connor, 64, is the Chief Financial Officer. He joined the Company in
November of 2001 as a consultant and entered the full time employ of the Company
in June 2002.  Prior to joining the Company,  Mr.  O'Connor worked for more than
forty years in various financial leadership positions. Mr. O'Connor was educated
at Canisius College,  Buffalo, NY where he received a Bachelor of Science degree
and Master of Business Administration degree. Mr. O'Connor is a Certified Public
Accountant.

Item 11. Executive Compensation

The  following  table  provides the annual and other  compensation  of the Chief
Executive  Officer and any other  employee who qualifies  under  Regulation  S-K
section 229.402 for the years ended October 31, 2001, 2002 and 2003.
<TABLE>
<CAPTION>
                                                                                                                LONG-TERM
                                                                     ANNUAL COMPENSATION                      COMPENSATION
                                                          ----------------------------------------- --------------------------------
                                                                                                      Restricted       Stock
                                                                                                        Stock          Option
                                                                                                       (shares)       (shares)
Name of Principal      Position                    Year        Salary          Bonus   Other (1)        awards         awards
-----------------      --------                    ----        ------          -----   ---------        ------         ------
<S>                    <C>                         <C>         <C>                     <C>
Gaylen M. Brotherson   Chairman of Board           2001        50,000                  21,894
                       President and               2002        50,000                  14,173
                       Chief Executive Officer     2003        50,000                   8,184

Judy K. Brotherson     Vice-President, Secretary   2001        50,000
                                                   2002        50,000
                                                   2003        50,000
</TABLE>

(1)  Included  in Other  Annual  Compensation  are an auto lease paid for Gaylen
Brotherson in fiscal  2001and  2002,  auto  insurance  for Gaylen  Brotherson in
fiscal 2001 and 2002 and life insurance  premiums for Gaylen Brotherson in years
2001, 2002 and 2003

Option Grants In Last Fiscal Year
None


                                       29
<PAGE>

Other Incentives and Compensation

The Company does not have a formal stock option plan.  Currently,  stock options
are granted by the Board of Directors.  At October 31, 2003, there were only two
employees,  Gaylen  Brotherson and Judy Brotherson,  who had stock options.  All
options are exercisable. Below is a summary of existing options.



                                     Number of       Strike      Expiration
            Name                      Shares         Price          Date
---------------------------------------------------------------------------
Gaylen Brotherson                      33,334        $2.25         2/15/06
                                       25,000         1.20        10/31/08
                                        1,667         1.20        10/31/08

Judy Brotherson                       100,000         0.94          6/1/08
                                       20,000         1.05         9/30/08
                                        5,000         1.05        10/31/08


In addition,  per the Board of Directors'  resolution  dated  February 15, 1996,
Gaylen  Brotherson  receives  an option to purchase  1,667  shares at 80% of the
stock's  fair  market  value  for  each  $5,000,000   increase  in  sales  after
$25,000,000 on the date the sales goals are reached. Per the Board of Directors'
resolution  dated June 1, 1998, Judy  Brotherson  receives an option to purchase
5,000  shares  at 70% of the  stock's  fair  market  value  for each  $5,000,000
increase in sales  after  $25,000,000  on the date the sales goals are  reached.
These options will expire ten years from the grant date.

Item 12. Security Ownership of Certain Beneficial Owners and Management.

The following  table sets forth  information  as of October 31, 2003  concerning
shares of  Common  Stock  with  $.001  par  value,  the  Company's  only  voting
securities.  This table includes all  beneficial  owners who own more than 5% of
the  outstanding  voting  securities,  each of the  Company's  directors by each
person  who is known by the  Company  to own  beneficially  more  than 5% of the
outstanding  voting  securities of the Company,  and by the Company's  executive
officers and directors as a group.
<TABLE>
<CAPTION>

                         Name And Address           Amount and Nature
Title of Class         of Beneficial Owner        of Beneficial Owner        Percent of Class
------------------------------------------------------------------------------------------------
<S>              <C>                                 <C>                           <C>
Common Stock     Gaylen Brotherson                   902,615 shares (1)            44.5%
                 9419 E. San Salvador
                 Suite 105
                 Scottsdale, AZ 85258

Common Stock     Judy Brotherson                     825,301 shares (1)            40.7%
                 9419 E. San Salvador
                 Suite 105
                 Scottsdale, AZ 85258

Common Stock     CEDE & Co                           219,928                       10.8%
                 Box 220
                 Bowling Green Station
                 New York, NY 10274

Common Stock     All Directors and Executive       1,727,916 shares                85.1%
                 Officers as a Group (five people)
</TABLE>


                                       30
<PAGE>

(1) This amount  represents  shares  owned and  excludes  the 60,001  options to
purchase common stock for Gaylen  Brotherson and the 125,000 options to purchase
common stock for Judy  Brotherson.  If these  options  were  exercised by Gaylen
Brotherson and Judy Brotherson,  then their percentage of ownership would change
to 43.5% and 42.9%, respectively (see Item 6. Executive Compensation).

Item 13. Certain Relationships and Related Transactions

The Company  leases its office space from Cactus  Family  Investments,  LLC. The
managing  member of Cactus Family  Investments,  LLC is Gaylen  Brotherson,  the
Chief  Executive  Officer.  Rent  expense  for this office  space was  $312,000,
$252,000  and $248,000 for the years ended  October 31,  2003,  2002,  and 2001,
respectively.  The  Company  signed a new lease  with the  affiliated  entity on
January 1, 1999.  This new lease expires on December 31, 2003. In December 2003,
the  Company  extended  the  existing  lease on a  month-to-month  basis  and is
obligated to pay monthly rent equal to the final  monthly rent payment  required
by the expiring lease.

Part IV

Item 14. Exhibits, Financial Statement Schedules, and reports on Form 8-K.

        (a)         Exhibit Index

            Exhibit 31.1  Certification  of Chief Executive  Officer Pursuant to
                          18 U.S.C. Section 1350, as Adopted Pursuant to Section
                          302 of the Sarbanes-Oxley Act of 2002

            Exhibit 31.2  Certification  of Chief Financial  Officer Pursuant to
                          18 U.S.C. Section 1350, as Adopted Pursuant to Section
                          302 of the Sarbanes-Oxley Act of 2002

            Exhibit 32.1  Certification  of Chief Executive  Officer Pursuant to
                          18 U.S.C. Section 1350, as Adopted Pursuant to Section
                          906 of the Sarbanes-Oxley Act of 2002

            Exhibit 32.2  Certification  of Chief Financial  Officer Pursuant to
                          18 U.S.C. Section 1350, as Adopted Pursuant to Section
                          906 of the Sarbanes-Oxley Act of 2002

        (b) Reports on Form 8-K

            Form 8-K Current Report was filed  September 16, 2002.  This Current
            Report contained the sworn statements of Gaylen M. Brotherson, Chief
            Executive Officer and Dennis M. O'Connor, Chief Financial Officer in
            the form specified by the Securities and Exchange Commission.

            Form 8-K  Current  Report was filed  October  23,  2002 and  amended
            October 30, 2002.  This Current  Report  disclosed  that  Deloitte &
            Touche,  LLP had  declined  to stand for  re-election.  The  Current
            Report  stated  that the last two years  reports  did not contain an
            adverse opinion,  that there were no disagreements on any matters of
            accounting  principles or practices,  financial statement disclosure
            or auditing scope of procedure.

            From 8-K Current  Report was filed  November 27, 2002.  This Current
            Report stated that the firm Semple & Cooper, LLP has been engaged as
            the principal accountants of the Company.

The following documents are filed as part of this report under Part II Item 8:

Reference is made to the Index to Financial  Statements and Financial  Statement
Schedules included in Item 9 of Part II hereof, where such documents are listed.


                                       31
<PAGE>

SIGNATURES
Pursuant to the requirements of Section 13 or 15 (d) of the Securities  Exchange
Act of 1934,  the  Registrant  has duly  caused  this report to be signed on its
behalf by the undersigned thereto duly authorized.

MBA Holdings, Inc.

By: /s/ Gaylen M. Brotherson                    Dated: January 29, 2004
------------------------------------
Gaylen Brotherson
Chairman of the Board and Chief Executive Officer


By: /s/ Dennis M. O'Connor                      Dated: January 29, 2004
-----------------------------------
Dennis M. O'Connor,
Chief Financial Officer


                                       32