**Table
            of Contents**
 Index
            to Financial
            Statements








**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
                ACTOF
                1934


For
                the fiscal year ended **October 31,
                2005**





OR





o
            TRANSITION
                REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGEACT
                OF 1934


For
                  the transition period from _______________ to
                  _______________


Commission
      file number:  **000-28221**





**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.
                Employerincorporation
                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, $.0001 stated value**


(Title
      of
      class)




Indicate
      by check mark if the registrant is a well-known seasoned issuer, as defined
      by
      Rule 405 of the Securities Act. Yes 
      oNo x




Indicate
        by check mark if the registrant is not required to file reports pursuant
        to
        Section 13 or 15(d) of the Act. Yes 
        oNo x
  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 xNo o





Indicate
      by check mark if disclosure of delinquent filers pursuant to Item 405 of
      Regulation S-K (§229.405 of 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. o


**Table
            of Contents**
 Index
            to Financial
            Statements


Indicate
      by check mark whether the registrant is a large accelerated filer, an
      accelerated filer, or a non-accelerated filer.  See definition of 
“accelerated
      filer and large accelerated filer” in Rule 12b-2 of the Exchange Act. 
(Check one)


Large accelerated filer o
              Accelerated filer o
              Non-accelerated filer x


Indicate
      by check mark if the registrant is a shell
      company (as defined in Rule 12b-2 of the Act).  Yes 
      oNo x




State
      the
      aggregate market value of the voting and non-voting common equity held by
      non-affiliates computed by reference to the price at which the common equity
      was
      last sold, or the average bid and asked prices of such common equity, as of
      the
      last business day of the registrant’s most recently completed second fiscal
      quarter. As of April 30, 2005, the aggregate market value of shares held by
      non-affiliates of the registrant as reported on NASDAQ, was $10,737,690.





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, 2005, there were
      209,871,980 shares of the issuer’s common stock issued and 209,555,980
      outstanding.




**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








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              Statements





FORM
          10-K FOR THE FISCAL YEAR ENDED OCTOBER
          31, 2005
 
 **TABLE
          OF CONTENTS**
  PagePart
                        IItem
                        1.
                    Business
                    4Item
                        1A.
                    Factors
                        Affecting Future Performance
                    8Item
                        2.
                    Properties
                    9Item
                        3.
                    Legal
                        Proceedings
                    9Item
                        4.
                    Submission
                        of Matters to a Vote of Security
                        Holders
                    9Part
                        IIItem
                        5.
                    Market
                        for Common Equity and Related Stockholder
                        Matters
                    10Item
                        6.
                    Selected
                      Financial Data
                    11Item
                        7.
                    Management’s
                        Discussion
                        and Analysis of Financial Condition and Results of
                        Operations
                    11Item
                        7A.
                    Qualitative
                        Information About Market
                        Risk
                    18Item
                        8.
                    Financial
                      Statements and Supplementary Data
                    19Item
                        9.
                    Changes
                        in and Disagreements with Accountants on Accounting
                        and Financial Disclosure
                    45Item
                        9A.
                    Controls
                        and Procedures
                    45Part
                        IIIItem
                        10.
                    Directors
                        and Executive Officers of the
                        Registrant
                    47Item
                        11.
                    Executive
                        Compensation
                    48Item
                        12.
                    Security
                        Ownership of Certain Beneficial Owners and
                        Management
                    49Item
                        13.
                    Certain
                        Relationships and Related
                        Transactions
                    50Item
                        14.
                    Principal
                        Accountant Fees and Services
                    51Part
                        IVItem
                        15.
                    Exhibits,
                      Financial Statement Schedules and Reports on
                      Form 8-K
                    52Signatures
                    53


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**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. In certain states, the insurance regulations prohibit
      the
      Company from directly selling either MBI policies or VSC contracts. In those
      states, the Company, through its principal shareholders, services its customers
      by acting solely as an insurance broker in the sale of MBI policies. The claims
      administrative responsibilities associated with those policies are assumed
      by
      the issuing insurance company. The Company is compensated for its services
      through the payment of a commission.





Through
      its subsidiary National Motorcycle Dealers Association, LLC (“NMDA”), the
      Company sells memberships in NMDA and extended warranties for new and used
      motorcycles, ATV’s and trailers. NMDA also provides Gap Coverage , Credit
      Life/Accident insurance, Health insurance and Family Hospitalization insurance
      for Dealership owners, employees and their families. As an additional benefit
      of
      membership, NMDA offers rental insurance and software for Dealer Motorcycle
      Rental Programs, a Garage Keepers insurance program, Liability and Collision
      Insurance for the dealer and their customers, an Association Credit Card, a
      401(k) Retirement Program, a Roadside Assistance Program and many other benefits
      including member discounts on advertising and trade show exhibits.





During
      2005 the Company continued its expansion into the motorcycle arena by purchasing
      an initial fifty percent (50%) equity interest in Blue Sky Motorcycle Rentals,
      Inc. (“BSMR”) in December 2004. This was followed by the purchase of the
      remaining fifty percent equity interest in April 2005. BSMR is a Colorado
      corporation that serves the motorcycle rental industry through the rental of
      its
      motorcycles and through its internet web sites that offer a reservation system
      to those desiring to rent motorcycles throughout the southwest. BSMR has
      licensed its name and business plan to motorcycle rental stores located within
      the southwestern United States and plans to continue that expansion throughout
      the country in the years to come. As discussed under the heading “Motorcycle
      Rental
      Locations,”
      the Company has experienced difficulties in integrating the BSMR Denver,
      Colorado location into the corporate entity and has decided to close this
      location.  Also during fiscal 2005, the Company purchased the assets of
      Street Eagle, Inc., Rent2Ride Nationwide, Inc. and Rent2Ride Arizona, Inc.
      (“R2R”). The R2R companies are engaged in the motorcycle rental business in
      Hawaii and are the owners of computer software that is specifically designed
      to
      be used in a motorcycle rental location. The R2R purchase gave the Company
      access to this series of specialty programs that it intends to incorporate
      into its own and its licensed locations. In July 2005, the Company completed
      the
      2005 acquisition plan with the purchase of two additional motorcycle rental
      locations, Escape Eagles, Inc. in Las Vegas, Nevada and Worldwide Motorcycle
      Rentals, LLC in Tempe, Arizona.





**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 certain of the 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 Old
      Republic Auto Services Insurance Company, Warranty America, LLC. and Capital
      Assurance Risk Retention Group Incorporated.




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.


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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, 2005, 2004, and 2003, the net revenues related to sales,
      including sales acting only as a broker, and servicing of MBI policies
      represented approximately 84%, 40% and 50%, respectively, of the Company’s MBI
      and VSC 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., Old Republic Insurance Company and Warranty America, LLC.





For
      the
      years ended October 31, 2005, 2004, and 2003, the net VSC revenues less direct
      acquisition costs related to sales and servicing of VSCs represented
      approximately 16%, 60% and 50%, respectively, of the Company’s MBI and
      VSC net revenues less direct acquisition costs of vehicle service
      contracts. The relative change in VSC revenues as a percent of total business
      written is the result of changes in state laws that allow the sale of VSC
      contracts and a change in the business pattern of sales involving commission
      only contracts that are sold without administrative and claims services.





**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.




**National
        Motorcycle Dealers Association, LLC**
 
 NMDA
        was
        formed to assist Motorcycle Dealer Members in being professional, successful,
        and profitable businesses through special services, products and programs.
        NMDA
        will also take a very active roll in education and legislation to help our
        members achieve their business and personal goals.


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This
      Association is open to the tens of thousands of Motorcycle Dealers in the United
      States and Canada. There is an annual membership fee. The Association offers
      products and training to its members and brings many benefits and programs
      to
      aid the Motorcycle Dealer. NMDA brings the purchasing power and the voice of
      its
      many members to aid the individual privately-owned Motorcycle Dealership. MBA
      Holdings provides management and administration of the Association.





The
      Association also offers an affiliate membership program open to manufacturers
      of
      motorcycles, motorcycle component manufactures, suppliers, distributors, finance
      institutions, insurance agencies, insurance companies, industry associations,
      trade press, publications and motorcycle software vendors. The affiliate program
      will also have a membership fee each year.





**Motorcycle
      Rental Locations**





BSMR
      and
      its affiliates Rent2Ride, LLC (“R2R”), Escape Eagles, Inc. (“EE”) and WorldWide
      Rentals, LLC (“WW”) currently operate Company owned and consult with BSMR
      licensed motorcycle rental locations in California, Arizona, Nevada, New
      Mexico, Hawaii and Utah.  The Company has experienced difficulties
      integrating the Denver, Colorado store operations into the corporate entity
      and
      has decided to close that location because of this and because it has
      experienced operating losses. The Company is seeking a qualified licensee to
      assume responsibility for the operation of a Denver, Colorado location. The
      current location will remain closed until such time as a suitable licensee
      can
      be brought into that area. The Company has elected to write off and/or relocate
      the Denver, Colorado assets in recognition of this decision. The other Company
      owned locations in Las Vegas, NV and Tempe, AZ have been successfully brought
      into the corporate environment and profitable operations are expected in Fiscal
      2006.





The
      motorcycle rental business is seasonal in nature in that sales increase in
      times
      of favorable weather and decline when weather conditions are more adverse.
      To
      offset this seasonality, the Company expects to move its rental assets with
      the
      seasons change to its owned and/or licensed locations where the weather factors
      are more appropriate for motorcycle riding.




**Significant
      Customers**





The
      Company had no single significant customers during 2005. In 2004 a major
      manufacturer accounted for $1,750,893 of VSC revenues or 33% of the
      2004 VSC sales. During 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.
        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.
  National
          Motorcycle Dealers Association, LLC has no direct competitors in its market
          area
          and provides a bundle of services that are not generally offered from a
          single
          source. The products do compete individually with a wide range of offerings
          from
          other firms.
 
 The
          motorcycle rental locations face local competition in most areas but benefit
          considerably from the use of customized internet sites for both reservations
          and
          accounting.
  **Sales**
 
 The
            number of MBI and VSC policies and contracts sold annually during the
            last three
            fiscal years are:


6
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              Statements





**Number
                of******
            ****
            **Policies
                and****Time
              Period**
            ****
            **Contracts**For the twelve months
              ended
              October 31, 2005
            
            2,084For the twelve months
              ended
              October 31, 2004
            
            3,957For the twelve months
              ended
              October 31, 2003
            
            4,858





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 and to the loss of a single
      major customer in the fiscal year 2004. The loss by the credit unions is 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. The customer loss was the result of increased
      price competition in the marketplace.





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, the further
      expansion of its VPN system to more directly reach the ultimate consumer with
      its product information and from its efforts to expand the economic presence
      of
      the National Motorcycle Dealers Association, LLC and the motorcycle rental
      locations.




**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 each 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 directly or by working through others.
 
 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 subsidiaries employed 21 individuals at October 31, 2005
            and 13
            at October 31, 2004. There are no external sales persons but the Company
            engages
            approximately 15 direct commission agents. The Company has assigned three
            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.


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              Statements




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





**Item
              1A.**
            **Factors
                Affecting Future
                Performance**




In
      connection with the Private Securities Litigation Reform Act of 1995 (the
“Litigation Reform Act”), we are hereby disclosing certain cautionary
      information to be used in connection with written materials (including this Annual
      Report on Form 10-K) and oral statements made by or on behalf of our employees
      and representatives that may contain “forward-looking statements” within the
      meaning of the Litigation Reform Act. Such statements consist of any statement
      other than a recitation of historical fact and can be identified by the use
      of
      forward-looking terminology such as “may,” “expect,” “anticipate,” “estimate” or
“continue” or the negative thereof or other variations thereon or comparable
      terminology. You are cautioned that all forward-looking statements are
      necessarily speculative and there are numerous risks and uncertainties that
      could cause consequences that differ materially from that referred to in such
      forward-looking statements. These forward-looking statements are subject to
      business and economic risk and reflect management’s current expectations and are
      inherently uncertain and difficult to predict. The discussion below highlights
      some of the more important risks identified by management, but should not be
      assumed to be the only factors that could affect future performance. You are
      cautioned that we do not have a policy of updating or revising forward-looking
      statements, and thus you should not assume that silence by management over
      time
      means that actual events are bearing out as estimated in such forward-looking
      statements.





The
      Company incurred significant losses during the current fiscal year and has
      experienced additional losses in prior years. The Company has obtained funds
      and
      covered negative operating cash flow through the exercise of stock options,
      from
      the use of common stock to pay for consultant and other services and from a
      related party who 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. There is no assurance that additional funds will be
      available when additional working capital is required. 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 2005 and expects such losses to continue into 2006. The
      Company is attempting to reverse this downward trend with its motorcycle rental
      operations, with increased marketing contacts with other Internet vendors and
      with further expansion into the motorcycle market through its subsidiary,
      National Motorcycle Dealers Association, LLC and its Street Eagle licensed
      dealerships.




The
      Company has experienced material weaknesses in its systems of internal control
      and has established a committee of the Board to evaluate and recommend changes
      to those controls.  See Item 9A.




The
      public stock markets experience extreme price and trading volume volatility,
      particularly in the lower priced securities sectors of the market. This
      volatility has significantly affected the market prices of securities of many
      companies for reasons often unrelated to the operating performance of the
      specific companies. These broad market fluctuations may adversely affect the
      market price of our common stock.





Our
      business and our products are subject to increasing regulation in key
      territories of content, consumer privacy and online delivery. If we do not
      successfully respond to these regulations, our business may suffer.





We
      focus
      on creation of shareholder value over time, and we intend to make decisions
      that
      will be consistent with this long-term view. As a result, some of our decisions,
      such as whether to make or discontinue operating investments, manage our balance
      sheet and capital structure, or pursue or discontinue strategic initiatives,
      may
      be in conflict with the objectives of short-term traders. Further, this could
      adversely affect our quarterly or other short-term
      results of operations.





We
      have
      not paid any cash dividends on our common stock nor do we anticipate paying
      cash
      dividends in the near future.


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              Statements




**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
      15,000 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 had 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 $24,000 per month to be reduced by a credit for the approximately
      4,000 square feet that were sublet to a new tenant in January 2006). (See Item
      14 - Certain Relationships and Related Transactions).





The
      Company leases store and garage spaces in Tempe, AZ and Las Vegas, NV from
      unrelated lessors at competitive market rates. (See Note 9 to the financial
      statements.)




**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 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.





The
      Company has been notified by its legal counsel that the 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 has been resolved with the execution of a Settlement Agreement.
      The
      Company had no further expense in connection with the settlement.





The
      Company has been named as a party to a lawsuit involving the plaintiff and
      the
      former owner of BSMR. The complaint alleges that the Company and the former
      owner of BSMR improperly utilized certain assets of the plaintiff as security
      for its borrowings. As of the date of this report, the Company's legal counsel
      is in discovery and is not able to offer an opinion as to the likely
      outcome.  The Company has responded to the complaint by denying the
      allegations and intends to vigorously pursue all defenses available.





The
      Company has received a letter from an attorney representing the former owner
      of
      BSMR that alleges wrong doing, including securities violations, on the part
      of
      the Company and contends that certain of the representations and warranties
      made
      at the time of the purchase of BSMR were incorrect. The Company denies the
      allegations and contends that the former owner of BSMR misrepresented the
      ownership and location of BSMR’s assets and misled the Company concerning the
      amount of BSMR’s liabilities. The former owner has refused to transfer ownership
      of all of BSMR’s assets to the Company. The Company has unilaterally terminated
      its eight-year consulting contract with the former owner of BSMR and believes
      that it has no further obligations thereunder. At the direction of the Board
      of
      Directors of the Company, a subcommittee has been formed to vigorously pursue
      the location and title to the BSMR assets and to use all defenses available
      to
      answer any formal complaint received. To this end, the subcommittee has retained
      a legal firm to represent it in this matter and to pursue all possible claims
      against the former owner. At the time of filing of this document, no formal
      complaint has been received relating to this matter.




Based
        on
        the 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.
 
 **Item
                4.**
              **Submission
                  of Matters to a Vote of Security
                  Holders**
 
 No
        matters voted on during the fourth quarter.


9
 **Table
              of Contents**
 Index
              to Financial
              Statements




**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 “MBAH”. As of October 31, 2005, there
      were 209,871,980 common shares issued and 209,555,980 outstanding. On that
      date,
      the closing bid price for the Company’s common stock, as reported by NASDAQ was
      $0.0507. The following is a summary of the price range of the Company’s common
      stock during its 2005 and 2004 fiscal years:





**Common
                Stock**
            ****
            **Bid******
            ****
            **High**
            ****
            **Low**Quarter
                of Fiscal 2005First
            
            0.376
            
            0.119Second
            
            0.188
            
            0.062Third
            
            0.082
            
            0.032Fourth
            
            0.068
            
            0.024Quarter
                of Fiscal 2004First
            
            0.158
            
            0.149Second
            
            0.277
            
            0.040Third
            
            0.086
            
            0.005Fourth
            
            0.117
            
            0.003





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.





**Equity
                Compensation Plan Information****Number
                of Securities******
            ****
            ****
            ****
            ****
            ****
            **remaining
                available******
            ****
            **Number
                of Securities**
            ****
            ****
            ****
            **for
                future issuance******
            ****
            **to
                be issued upon**
            ****
            **Weighted-average**
            ****
            **under
                equity******
            ****
            **exercise
                of**
            ****
            **exercise
                price of**
            ****
            **compensation
                plans******
            ****
            **outstanding
                options**
            ****
            **outstanding
                options**
            ****
            **(excluding
                securities****Plan
                Category**
            ****
            **warrants
                and rights**
            ****
            **warrants
                and rights**
            ****
            **reflected
                in column (a))******
            **(a)**
            ****
            **(b)**
            ****
            **(c)**Equity
                compensationplans
                approved bysecurity
                holders
            
            6,150,010
            
            $0.05
            
            14,525,000Equity
                compensationplans
                not approved bysecurity
                holders
            
            None
            
            None
            
            None





During
      the fiscal year ended 2005, the Company issued 42,328,716 registered and
      46,275,000 unregistered common shares.


10
 **Table
              of Contents**
 Index
              to Financial
              Statements




**Item
              6.**
            **Selected
                Financial Data**


**Fiscal
                  Year ended October 31,**
              ****
              **2005**
              ****
              **2004**
              ****
              **2003**
              ****
              **2002**
              ****
              **2001**Net
                  revenues
              
              $
              4,886,542
              
              $
              5,743,547
              
              $
              5,628,408
              
              $
              5,935,478
              
              $
              16,468,434Net
                  (loss) income
              
              
              (7,855,486
              )
              
              (1,209,455
              )
              
              (1,785,460
              )
              
              (847,797
              )
              
              (212,546
              )Net
                  (loss) income per common share (basic)
              
              
              (.04
              )
              
              (.02
              )
              
              (.08
              )
              
              (.04
              )
              
              (.01
              )Total
                  assets
              
              
              6,841,954
              
              
              8,650,262
              
              
              9,747,162
              
              
              11,212,975
              
              
              9,423,030Long-term
                  obligations
              
              
              491,691
              
              
              3,116
              
              
              8,301
              
              
              –
              
              
              8,077Cash
                  dividends declared per common share
              
              
              –
              
              
              –
              
              
              –
              
              
              –
              
              
              –





**Item7.**
            **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, the
      carrying value of goodwill and the collectability of 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.


11
 **Table
              of Contents**
 Index
              to Financial
              Statements




The
      Company receives a commission from the sale of each MBI policy. That commission
      is payment for marketing the policy and, in some instances, for providing
      administrative, claims and cancellation services. The Company has adopted
      Emerging Issues Task Force Issue No. 00-21, “Revenue Arrangements with Multiple
      Deliverables.” It recognizes
      the
      revenue earned from each MBI policy on which it is obligated to provide
      administrative, claims and cancellation services 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 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) 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.




Revenues
      from motorcycle rentals that are in progress at the end of an accounting period
      are recognized pro rata based upon the number of days of the rental that occur
      in each accounting period.




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.




The
      Company evaluates the carrying value of goodwill and other intangible assets
      at
      the end of each reporting period and reduces the carrying values as appropriate.
      The collectability of accounts receivable is evaluated monthly and amounts
      determined to be uncollectible are charged to expense at that time.




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








**Results
      of Operations**





**Comparison
      of Fiscal Year 2005 and Fiscal Year 2004**





**Net
      Revenues**





Net
      revenues for the year ended October 31, 2005 declined $857,000 from the
      $5,744,000 earned in fiscal 2004. The decline represents a continuation of
      the
      trend that the Company has experienced in the last several years as the major
      vehicle manufacturers become increasingly larger factors in the vehicle finance
      marketplace. Further, the growth that the Company expected from its NMDA and
      motorcycle rental locations did not materialize in fiscal 2005.


12
 **Table
              of Contents**
 Index
              to Financial
              Statements





The
      Company has also experienced changes in its marketplace as various states have
      legislated against Vehicle Service Contracts in their entirety. The best
      information available to the Company is that state insurance departments have
      been systematically tightening the regulation of the warranty industry in an
      effort to provide further protections to their citizens. While these efforts
      are
      commendable on their face, they have seriously impacted the Company’s ability to
      do business in certain markets by forcing it to offer the more expensive, and
      thus less competitive, insured product to its customers.





The
      Company has recognized this trend and has begun moving outside of its
      traditional warranty markets in an effort to maintain the revenue streams.
      Unfortunately, such directional changes are very expensive and time
      consuming.





The
      motorcycle rental operations have been in the start up stage during the fiscal
      year ended October 31, 2005. This is especially true of the Company owned
      operations in Tempe, Arizona and Las Vegas, Nevada where the heat of the summer
      season has constrained the growth of those revenues to $442,000 for fiscal
      2005,
      their initial year.





**Operating
      Expenses**





The
      Company’s operating expenses in fiscal 2005 totaled $12,664,000, up $5,719,000
      from the $6,945,000 incurred in fiscal 2004. These costs included among other
      items, a charge that recognized the market value of the issuance of shares
      of
      the Class B Non-Convertible Preferred Stock (the “Class B
      preferred”) ($4,300,000),
      the Blue Sky Motorcycle Rentals, Inc. closure of the Denver, Colorado operations
      and the write off of the goodwill associated with that closure ($1,316,000)
      and
      the increased costs of computer consultants hired to complete the motorcycle
      related projects ($210,000). These increases were offset, in part by the
      Company’s continuing effort to reduce cost wherever possible.





As
      reported within this document, the Company Chief Executive, in response to
      concerns expressed by a number of shareholders, elected to exercise a portion
      of
      the conversion options that were included with his purchase of shares of the
      Class A Convertible Preferred Stock (the “Class A
      preferred”) and to
      donate the remainder of those shares back to the Company. He also purchased
      2,000,000 shares of the Class B preferred that are non-convertible but carry
      preferred voting rights. The Company recorded a charge equal to the current
      market value of that transaction and has included the cost within the
      Professional Fees category in this report.





The
      Company has experienced difficulties integrating the Denver, Colorado store
      operations into the corporate entity and has decided to close that location
      because it has experienced operating losses and the former owner has refused
      to
      transfer ownership of all of BSMR’s assets
      to the
      Company (see Item 3 - Legal Proceedings). The Company is seeking a
      qualified licensee to assume responsibility for the operation of a Denver,
      Colorado location. The current location will remain closed until such time
      as a
      suitable licensee can be brought into that area. The Company has elected to
      write off and/or relocate the Denver, Colorado assets in recognition of this
      decision. The Company also entered into a Recission Agreement with the owners
      of
      First Eagle Group, LLC that called for the return of shares issued as a part
      of
      the purchase in return for certain concessions for services during the
      acquisition period. These costs are included in the current period operating
      expenses.





The
      decline in the numbers of policies sold in fiscal 2005 has resulted in a decline
      in several cost categories as the Company has adjusted its staffing and its
      consumption to meet these decreased levels. However, advertising costs have
      increased approximately $85,000 as the Company incurred costs in communicating
      the changes in the business with its shareholders and motorcycle rental related
      costs have increased accordingly.





**Other
      Income (Expense)**





Interest
      expense decreased to $30,000, down $16,000 from the $46,000 experienced in
      2004
      as the Company no longer has its line of credit available. Other miscellaneous
      income (expense) decreased $75,000 as certain contractual override payments
      were
      no longer available to it and other minor charges were recognized.


13
 **Table
              of Contents**
 Index
              to Financial
              Statements





**Comparison
      of Fiscal Year 2004 and Fiscal Year 2003**





**Net
      Revenues**





Net
      revenues for the year ended October 31, 2004 totaled $5,744,000, an increase
      of
      $116,000 from the year ended October 31, 2003 net revenues of $5,628,000. The
      slight increase in net revenues is the result of the Company's efforts to
      maintain its market share through increased emphasis on internet sales and
      through continued service to its customers.  The Company is facing
      continued difficulties in maintaining its market share and is seeking further
      expansion into the motorcycle market through its subsidiary, National Motorcycle
      Dealers Association, LLC to provide future growth opportunities.





**Operating
      Expenses**





Operating
      expenses increased $30,000 to $6,945,000 in the year ended October 31, 2004
      compared to the similar period ended October 31, 2003. Excluding VSC direct
      acquisition costs, operating expenses increased $203,000. The decrease in Direct
      Acquisition costs is primarily the result of the loss of a single customer
      who
      provided significant business at very low margins. The increase in all other
      operating cost occurred primarily in salaries and employee benefits and
      professional fees as the Company worked to develop the various programs and
      materials that are included within the mantel of the National Motorcycle Dealers
      Association, LLC. In addition, compensation expense was also incurred in 2004
      from the issuance and exercise of stock options under the terms of the M.B.A.
      Holdings, Inc. Employee Stock Incentive Plan for the Year 2004 and the M.B.A.
      Holdings, Inc. Employee Stock Incentive Plan for the Year 2004-B.





Licenses
      and fees increased $40,000 in 2004 over the $21,000 expended in 2003 and
      Telephone expense decreased $77,000 from the $147,000 expended in 2003, as
      the
      Company was able to settle two disputes arising over software licensing and
      negotiated long distance billing rates. In both instances, the Company was
      able
      to achieve reasonable settlement terms to resolve the disputes.




**Other
      Income (Expense)**





Other
      income decreased $81,000 to $144, primarily as a result of the Company incurring
      interest expense on the line of credit borrowings and because the Company is
      no
      longer eligible to receive further contractual overrides from one of the
      insurance companies.





**Income
      Taxes**





Provisions
      for income taxes in the period ended October 31, 2004 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 2003
      from the carry back of those prior year losses. The differences in the effective
      tax rates in fiscal 2004 compared to fiscal 2003 and 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.


14
 **Table
              of Contents**
 Index
              to Financial
              Statements




**Significant
      Events**





The
      Company has been a significant force in forming the National Motorcycle Dealers
      Association, LLC (NMDA) and provides management and administration of the
      Association. NMDA will provide products and services for the Association members
      including Extended Motorcycle Warranties for New and Used Motorcycles, ATV’s and
      Trailers, New Motorcycle Manufacture’s Factory Warranties, Motorcycle leasing
      and financing, Gap Coverage, Credit Life/Accident Health Insurance, Family
      Hospitalization Insurance for Dealerships and their Families, Rental Insurance
      for Dealer Motorcycle Rental Programs and Software, Garage keepers Insurance
      Program, Liability and Collision Insurance for Motorcycle and Autos for the
      dealer and their customers, an Association Credit Card, Dealership Credit Card
      Processing, 401(k) Retirement Programs, Roadside Assistance Programs, Tire
      and
      Wheel Protection, Business Forms, Communication Services and a Prepaid Legal
      Program. Membership will be required to participate in these programs and the
      Company will be compensated through management fees and product sales
      commissions. The NMDA’s aggregation of many programs represents a rare
      opportunity for the Company and its partners to achieve business synergies
      and a
      market edge not previously available to them.





In
      October 2004, NMDA entered into an agreement with Wildside Motorcycles, Inc.
      (Wildside) whereby NMDA exchanged a 20% membership interest for a 20% stock
      ownership of Wildside’s common stock. The parties have agreed to jointly market
      the software package that Wildside has developed for accounting for motorcycle
      rentals that enables individual motorcycle dealers to establish, account for
      and
      invoice their rental operations. Subsequent differences of opinion concerning
      operation and integration have caused the parties to rescind the
      agreement.





In
      December 2004, the Company acquired a 50% interest in Blue Sky Motorcycle
      Rentals, Inc. (Blue Sky) that operates a motorcycle rental business in Colorado
      and has licensed its business model to similar operations in Arizona,
      California, New Mexico, Nevada and Florida. In April 2005, the Company purchased
      the remaining 50%.  Its business plan envisions significant expansion into
      other vacation markets as well as motorcycle exchange programs among the
      participants to maximize the usage of the rental motorcycles.





**Pending
      Accounting Standards**





In
      December 2004, the FASB published FASB Statement No. 123 (R), *Share-Based
      Payment* ,
      (“FAS
      123 (R)”) which will provide investors and other users of financial statements
      with more complete and neutral financial information by requiring that the
      compensation cost relating to share-based payment transactions be recognized
      in
      financial statements. That cost will be measured based on the fair value of
      the
      equity or liability instruments issued. The Company will apply FAS 123 (R)
      at
      November 1, 2005.  Adoption is expected to have no effect.





In
      December 2004, the FASB issued Statement No. 153, *Exchanges
      of Nonmonetary Assets, an amendment of APB Opinion No. 29, Accounting for
      Nonmonetary Transactions* (“FAS
      153”). The amendments made by FAS 153 are based on the principle that exchanges
      of nonmonetary assets should be measured based on the fair value of the assets
      exchanged. The Company has adopted FAS 153 at October 31, 2004, with no material
      operating effect.





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 has
      determined that FIN 46 does not require the consolidation of Cactus Family
      Investments, LLC, an entity owned by the majority shareholders of the
      Company.


15
 **Table
              of Contents**
 Index
              to Financial
              Statements




In
      May
      2005, the FASB issued FAS 154 ***,***  *Accounting
      Changes and Error Corrections—a replacement of APB Opinion No. 20 and FASB
      Statement No. 3.* This
      Statement requires retrospective application to prior periods’ financial
      statements of changes in accounting principle, unless it is impracticable to
      determine either the period-specific effects or the cumulative effect of the
      change. It shall be effective for accounting changes and corrections of errors
      made in fiscal years beginning after December 15, 2005. The Company will adopt
      this Statement in fiscal year 2006.




**Liquidity
      and Capital Resources**





**Comparison
      of October 31, 2005 and October 31, 2004**





The
      Company continues to incur significant losses as costs are incurred relating
      to
      the start up of the motorcycle operations and as continued efforts are expended
      to expand the warranty business. The Company has been relying on a related
      party
      to advance funds and to continue the deferral of rent payments. 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 2005 and expects such losses to
      continue into the early months of 2006. The Company is pursuing the development
      of NMDA, its motorcycle rental operations and of other warranty products in
      its
      ongoing efforts to stem the losses.





Working
      capital at October 31, 2005 consisted of current assets of $3,383,000 and
      current liabilities of $4,733,000, or a current ratio of 0.71:1.  At
      October 31, 2004, the current ratio was 0.85:1 with current assets of $4,277,000
      and current liabilities of $5,017,000.





As
      discussed elsewhere in this report, the Company has depended upon the proceeds
      from the exercise of stock options, the use of its common stock to pay its
      consultants and others and upon contributions of capital and the deferral of
      rents by its Chief Executive Officer and principal shareholder to provide funds
      to meet its obligations. That need for funds will continue into
      2006.




Net
        cash
        used in operating activities was $1,197,000 in fiscal 2005 compared to the
        $1,586,000 used in fiscal 2004. The difference is primarily the result of
        differences in net deferred revenues and expenses. This occurred because
        the
        policy sales subject to deferral in fiscal 2005 were significantly less than
        in
        fiscal 2004. As a result, the amount reversing into income in fiscal 2005
        became
        proportionately more significant. In addition, fiscal 2004 included a use
        of
        funds of $406,000 from the change in net premiums payable to insurance
        companies.
 
 $578,000
        of cash was used in investing activities in fiscal 2005 primarily for the
        purchase of the new motorcycle rental subsidiaries, while fiscal 2004 provided
        cash from the release of restricted cash of $273,000 and the proceeds from
        sale
        of investments of $117,000.
 
 Cash
        provided by financing activities in fiscal 2005 decreased $16,000 from the
        $1,552,000 provided in 2004. The change was the result of less cash being
        provided by the exercise of stock options of $1,639,000 in 2005 versus
        $1,719,000 in 2004.  In addition, the Company received $148,000 on a note
        payable - officer.  These were offset by payments on notes and capital
        leases of $250,000 and $203,000 in 2005 and 2004, respectively.
  **Comparison
          of October 31, 2004 and October 31, 2003**
 
 The
          Company incurred significant losses during the 2004 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. During 2004,
          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 2004 and expects such losses to continue into the
          early
          months of 2005. The Company is pursuing the development of NMDA and of
          other
          warranty products in its ongoing efforts to stem the
          losses.


16
 **Table
              of Contents**
 Index
              to Financial
              Statements





Working
        capital at October 31, 2004 consisted of current assets of $4,277,000 and
        current liabilities of $5,017,000, or a current ratio of 0.85: 1. At October
        31,
        2003, the current ratio was 0.75:1 with current assets of $4,825,000 and
        current
        liabilities of $6,412,000.
  As
          of
          October 31, 2004, the Company’s cash position increased to $783,000 from
          $448,000 at October 31, 2003. The increase is the result of the Company's
          accumulation of cash derived from the exercise of stock options, as well
          as cash
          retained because consultant costs were paid with common stock.


Deferred
      direct costs, including both the current and non-current portions, decreased
      $1,175,000 to $7,360,000 at October 31, 2004 from $8,535,000 at October 31,
      2003. 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 declining sales levels.





The
      Company collects funds throughout the year and remits a portion of the funds
      to
      the insurance companies. As of October 31, 2004, the amount owed to the
      insurance companies decreased by $405,000 to $331,000 from $736,000 at October
      31, 2003. The change is due to the timing of payments remitted to and
      reimbursements received from the insurance companies as well as the continuing
      decline in the numbers of contracts sold.





Deferred
      revenues, including both the current and non-current portions, decreased
      $1,379,000 to $8,501,000 at October 31, 2004 from $9,880,000 at October 31,
      2003. 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 2004.





The
      Company was operating with a working capital line of credit from Merrill Lynch
      that expired November 30, 2003. The Company has repaid this indebtedness in
      February 2004. The Company also received advances from related parties that
      are
      secured by a pledge of the unencumbered assets of the Company. As of October
      31,
      2004, the related party indebtedness decreased $100,000 to $416,000 from
      $516,000 at October 31, 2003. 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, as well as
      other sources of working capital. There is no assurance that such
      advances will be made.





**Contractual
      Obligations**





**Table
                of Contractual Obligations****Payments
                Due By Period****Less
                than**
            
            **1-3**
            
            **3-5**
            
            **More
                than****Contractual
                obligations**
            
            **Total**
            
            **1
                year**
            
            **years**
            
            **years**
            
            **5
                years**Lease
                Obligations - 2005
            
            $
            101,757
            
            $
            59,581
            
            $
            42,176
            
            $
            –
            
            $
            –2004
            
            $
            11,213
            
            $
            8,203
            
            $
            3,010
            
            $
            –
            
            $
            –


17
 **Table
              of Contents**
 Index
              to Financial
              Statements




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. Its notes payable consist
      predominately of either notes issued for the purchase of motorcycles at fixed
      rates or notes issued in connection with the acquisition of the subsidiaries
      that bear no interest. For these reasons, the Company has very little credit
      rate risk. The only debt instrument that carries a variable rate is the floor
      plan line of credit with First National
      Bank - Arapahoe Branch. The principal balance of that debt is $137,047. The
      interest rate of that debt is currently 14%. A change of 1% in the interest
      rate
      would change the annual interest expense by $1,370. Therefore, it too is not
      subject to significant interest rate risk.





The
      Company has a net loss of $7,855,486 for the twelve months ended October 31,
      2005. This net loss is due to the Company recognizing the market value of its
      newly issued Class B Preferred stock as a current period expense, recognizing
      the cost of the write down of Blue Sky Motorcycle Rentals, Inc.’s Denver,
      Colorado operations and having a substantial decline in market share from
      increased competition. The future effect of this increased competition may
      have
      an adverse effect on future earnings.


18
 **Table
              of Contents**
 Index
              to Financial
              Statements


**Item
              8.**
            **Financial
                Statements and Supplementary
                Data**





**FINANCIAL
      STATEMENTS**




**Index
      to Consolidated Financial Statements**


**for
      the years ended October 31, 2005, 2004, and 2003:**




**Page**Report
                  of Independent Registered Public Accounting
                  Firm
              20Consolidated
                  Balance Sheets
              21Consolidated
                  Statements of Operations and Comprehensive
                  Loss
              23Consolidated
                  Statements of Stockholders’
                  Deficit
              25Consolidated
                  Statements of Cash
                  Flows
              26Notes
                  to Consolidated Financial
                  Statements
              28




19
 **Table
              of Contents**
 Index
              to Financial
              Statements


**REPORT
      OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING
      FIRM**






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 subsidiaries (the “Company”) as of October 31, 2005 and 2004 and the related
      consolidated statements of operations and comprehensive loss, stockholders’
deficit, and cash flows for the years ended October 31, 2005, 2004 and 2003.
      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.





We
      conducted our audits in accordance with the standards of the Public Company
      Accounting Oversight Board (United States). Those standards require that we
      plan
      and perform the audit to obtain reasonable assurance about whether the financial
      statements are free of material misstatement. The Company is not required to
      have, nor were we engaged to perform, an audit of internal control over
      financial reporting. Our audits consider internal control over financial
      reporting as a basis for designing audit procedures that are appropriate in
      the
      circumstances, but not for the purpose of expressing an opinion on the
      effectiveness of the Company’s internal control over financial reporting.
      Accordingly, we express no such opinion. An audit also includes examining,
      on a
      test basis, evidence supporting the amounts and disclosures in the financial
      statements. 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, 2005,and 2004 and the results of its operations and comprehensive loss
      and
      its cash flows for the years ended October 31, 2005, 2004 and 2003 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, 2005 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
      20, 2006


20
 **Table
              of Contents**
 Index
              to Financial
              Statements




**M.B.A.
                  HOLDINGS, INC. AND
                  SUBSIDIARIES****CONSOLIDATED
                  BALANCE SHEETS****OCTOBER
                  31, 2005 AND 2004****ASSETS**
              
              **2005**
              
              **2004**CURRENT
                  ASSETS:Cash
                  and cash equivalents
              
              $
              545,184
              
              $
              782,848Restricted
                  cash
              
              
              25,653
              
              
              18,578Accounts
                  receivable
              
              
              284,502
              
              
              377,739Prepaid
                  expenses and other current assets
              
              
              31,481
              
              
              1,706Deferred
                  direct costs
              
              
              2,496,606
              
              
              3,096,094Total
                  current assets
              
              
              3,383,426
              
              
              4,276,965PROPERTY
                  AND EQUIPMENT:Computer
                  equipment
              
              
              332,523
              
              
              330,605Office
                  equipment and furniture
              
              
              208,523
              
              
              140,259Vehicles
                  and shop equipment
              
              
              410,318
              
              
              15,000Leasehold
                  improvements
              
              
              80,182
              
              
              80,182Total
                  property and equipment
              
              
              1,031,546
              
              
              566,046Accumulated
                  depreciation and amortization
              
              
              (498,274
              )
              
              (456,650
              )Property
                  and equipment - net
              
              
              533,272
              
              
              109,396Deferred
                  direct costs
              
              
              2,925,256
              
              
              4,263,901TOTAL
                  ASSETS
              
              $
              6,841,954
              
              $
              8,650,262See
                  notes to consolidated financial statements.


21
 **Table
              of Contents**
 Index
              to Financial
              Statements




**M.B.A.
                  HOLDINGS, INC. AND SUBSIDIARIES****CONSOLIDATED
                  BALANCE SHEETS****OCTOBER
                  31, 2005 AND 2004****LIABILITIES
                  AND STOCKHOLDERS’ DEFICIT**
              
              **2005**
              
              **2004**CURRENT
                  LIABILITIES:Net
                  premiums payable to insurance companies
              
              $
              349,000
              
              $
              330,651Notes
                  payable - short term
              
              
              458,695
              
              
              –Notes
                  payable-officer
              
              
              147,500
              
              
              –Accounts
                  payable and accrued expenses
              
              
              721,884
              
              
              656,927Accounts
                  payable - officer
              
              
              175,006
              
              
              416,566Capital
                  lease obligations
              
              
              9,828
              
              
              7,059Deferred
                  revenues
              
              
              2,871,093
              
              
              3,606,028Total
                  current liabilities
              
              
              4,733,006
              
              
              5,017,231Capital
                  lease obligation - net of current portion
              
              
              14,067
              
              
              3,116Notes
                  payable less current portion
              
              
              477,624
              
              
              –Deferred
                  income taxes
              
              
              12,802
              
              
              12,802Deferred
                  revenues - net of current portion
              
              
              3,356,602
              
              
              4,895,266Total
                  liabilities
              
              
              8,594,101
              
              
              9,928,415COMMITMENTS
                  AND CONTINGENCIES
              
              
              –
              
              
              –Minority
                  interest in consolidated subsidiary
              
              
              –
              
              
              –STOCKHOLDERS’
                  DEFICIT:Preferred
                    stock, no par value; $.0001 stated value 100,000,000 shares authorized
                    in
                    2005 and 2004 ; 2,000,000 Class B non-convertible preferred issued
                    and
                    outstanding in 2005, 2,000,000 Class A convertible preferred
                    issued and
                    outstanding in 2004
              
              
              200
              
              
              200Common
                  stock, no par value, $.0001 stated value, 350,000,000 shares authorized
                  (post split) in 2005 and 800,000,000 authorized (post split) in
                  2004,
                  209,871,980
                  shares issued (post split) in 2005 and 121,268,264 shares issued
(post
                  split) in 2004 , 209,555,980 shares (post split) in 2005 and 120,952,264
                  shares (post
                  split) outstanding in 2004
              
              
              20,987
              
              
              12,126Additional
                  paid-in-capital
              
              
              9,805,836
              
              
              2,433,205Accumulated
                  deficit
              
              
              (11,523,670
              )
              
              (3,668,184
              )Less:
                    316,000 (post split) shares of common stock in treasury,at cost
              
              
              (55,500
              )
              
              (55,500
              )Total
                    Stockholders’ Deficit
              
              
              (1,752,147
              )
              
              (1,278,153
              )TOTAL
                  LIABILITIES AND STOCKHOLDERS’ DEFICIT
              
              $
              6,841,954
              
              $
              8,650,262See
                  notes to consolidated financial statements.


22
 **Table
              of Contents**
 Index
              to Financial
              Statements




**M.B.A.
                  HOLDINGS, INC. AND
                  SUBSIDIARIES****CONSOLIDATED
                  STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS****YEARS
                  ENDED OCTOBER 31, 2005, 2004 AND 2003****2005**
              
              **2004**
              
              **2003**NET
                  REVENUES:Vehicle
                  service contract gross income
              
              $
              3,825,867
              
              $
              5,384,993
              
              $
              5,328,915Net
                  mechanical breakdown insurance income
              
              
              334,036
              
              
              55,827
              
              
              1,931Brokerage
                  and administrative service income
              
              
              238,469
              
              
              302,727
              
              
              297,562Motorcycle
                  rental and related revenues
              
              
              441,598
              
              
              –
              
              
              –Licensing
                  and association fees
              
              
              46,572
              
              
              –
              
              
              –Total
                  net revenues
              
              
              4,886,542
              
              
              5,743,547
              
              
              5,628,408OPERATING
                  EXPENSES:Direct
                  acquisition costs of vehicle service contracts
              
              
              3,717,995
              
              
              4,856,281
              
              
              5,029,185Motorcycle
                  rental and insurance premium expense
              
              
              210,060
              
              
              –
              
              
              –Salaries
                  and employee benefits
              
              
              1,169,003
              
              
              1,259,624
              
              
              1,036,242Mailings
                  and postage
              
              
              40,221
              
              
              14,683
              
              
              17,932Related
                  party rent expense
              
              
              264,156
              
              
              291,755
              
              
              311,912Lease
                  expense
              
              
              74,125
              
              
              9,574
              
              
              13,842Professional
                  fees
              
              
              5,324,159
              
              
              171,099
              
              
              132,232Telephone
              
              
              19,645
              
              
              69,946
              
              
              147,346Depreciation
                  and amortization
              
              
              99,302
              
              
              29,989
              
              
              59,996Merchant
                  and bank charges
              
              
              34,367
              
              
              12,891
              
              
              6,475Insurance
              
              
              40,636
              
              
              14,947
              
              
              21,587Supplies
              
              
              16,700
              
              
              9,143
              
              
              11,990License
                  and fees
              
              
              9,290
              
              
              60,941
              
              
              21,493Other
                  operating expenses
              
              
              328,449
              
              
              144,164
              
              
              104,578Impairment
                  of goodwill and other assets
              
              
              1,315,731
              
              
              –
              
              
              –Total
                  operating expenses
              
              
              12,663,839
              
              
              6,945,037
              
              
              6,914,810OPERATING
                  LOSS
              
              
              (7,777,297
              )
              
              (1,201,490
              )
              
              (1,286,402
              )OTHER
                  INCOME (EXPENSE):Finance
                  fee income
              
              
              4,164
              
              
              15,519
              
              
              21,476Interest
                  income
              
              
              397
              
              
              4,962
              
              
              7,414Interest
                  expense
              
              
              (29,936
              )
              
              (46,128
              )
              
              (13,924
              )Other
                  income (expense)
              
              
              (52,814
              )
              
              22,427
              
              
              63,906Realized
                  gains on investments
              
              
              –
              
              
              3,364
              
              
              2,914Other
                  income (expense) - net
              
              
              (78,189
              )
              
              144
              
              
              81,786**(Continued)**See
                  notes to consolidated financial statements.


23
 **Table
              of Contents**
 Index
              to Financial
              Statements


**M.B.A.
                    HOLDINGS, INC. AND SUBSIDIARIES****CONSOLIDATED
                    STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS****YEARS
                    ENDED OCTOBER 31, 2005, 2004 AND 2003 (Continued)****2005**
                
                **2004**
                
                **2003**LOSS
                    BEFORE INCOME TAXES
                
                
                (7,855,486
                )
                
                (1,201,346
                )
                
                (1,204,616
                )INCOME
                    TAXES (Note 6)
                
                
                –
                
                
                8,109
                
                
                580,844NET
                    LOSS
                
                $
                (7,855,486
                )
                $
                (1,209,455
                )
                $
                (1,785,460
                )BASIC
                    NET LOSS PER SHARE
                
                $
                (0.04
                )
                $
                (0.02
                )
                $
                (0.08
                )DILUTED
                    NET LOSS PER SHARE
                
                $
                (0.04
                )
                $
                (0.02
                )
                $
                (0.08
                )WEIGHTED
                      AVERAGE NUMBER OF COMMON SHARES OUTSTANDING – BASIC
                
                
                192,660,233
                
                
                69,951,024
                
                
                21,851,924WEIGHTED
                      AVERAGE NUMBER OF COMMON AND DILUTIVE SHARES
                      OUTSTANDING
                
                
                192,660,233
                
                
                69,951,024
                
                
                21,851,924Net
                    loss
                
                $
                (7,855,486
                )
                $
                (1,209,455
                )
                $
                (1,785,460
                )Other
                    comprehensive income net of tax:Net
                    unrealized gain (loss) on available-for-sale securities
                
                
                –
                
                
                –
                
                
                5,537Comprehensive
                    loss
                
                $
                (7,855,486
                )
                $
                (1,209,455
                )
                $
                (1,779,923
                )See
                    notes to consolidated financial statements.
 24
 **Table
                of Contents**
 Index
                to Financial
                Statements


**M.B.A.
                  HOLDINGS, INC. AND
                  SUBSIDIARIES****CONSOLIDATED
                  STATEMENTS OF STOCKHOLDERS’ DEFICIT****YEARS
                  ENDED OCTOBER 31, 2005, 2004 AND 2003****Accumulated**
              
              
              
              
              
              **Total****Additional**
              
              **Other**
              
              **Retained**
              
              
              
              **Stockholders’****Preferred
                  Stock**
              
              **Common
                  Stock**
              
              **Paid-In**
              
              **Comprehensive**
              
              **Earnings**
              
              **Treasury**
              
              **(Deficit)****Shares**
              
              **Amount**
              
              **Shares**
              
              **Amount**
              
              **Capital**
              
              **Income**
              
              **(Deficit)**
              
              **Stock**
              
              **Equity**BALANCE,
                  NOVEMBER 1, 2003 (Post Split)
              
              
              
              
              $
              –
              
              
              22,643,264
              
              $
              2,264
              
              $
              280,801
              
              $
              119
              
              $
              (2,458,729
              )
              $
              (55,500
              )
              $
              (2,231,045
              )Realization
                  of gain on available-for-sale securities
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              (119
              )
              
              
              
              
              
              
              
              (119
              )Issuance
                  of common shares and exercise of stock options
              
              
              
              
              
              
              
              
              98,625,000
              
              
              9,862
              
              
              1,952,604
              
              
              
              
              
              
              
              
              
              
              
              1,962,466Issuance
                  of preferred shares
              
              
              2,000,000
              
              
              200
              
              
              
              
              
              
              
              
              199,800
              
              
              
              
              
              
              
              
              
              
              
              200,000Net
                  loss
              
              
              –
              
              
              –
              
              
              –
              
              
              –
              
              
              –
              
              
              –
              
              
              (1,209,455
              )
              
              –
              
              
              (1,209,455
              )BALANCE
                  OCTOBER 31, 2004
              
              
              2,000,000
              
              
              200
              
              
              121,268,264
              
              
              12,126
              
              
              2,433,205
              
              
              –
              
              
              (3,668,184
              )
              
              (55,500
              )
              
              (1,278,153
              )Issuance
                  of common stock and exercise of stock options
              
              
              
              
              
              
              
              
              42,603,716
              
              
              4,261
              
              
              2,777,231
              
              
              
              
              
              
              
              
              
              
              
              2,781,492Conversion
                  of preferred to common shares
              
              
              (460,000
              )
              
              (46
              )
              
              46,000,000
              
              
              4,600
              
              
              4,595,400
              
              
              
              
              
              
              
              
              
              
              
              4,599,954Retirement
                  of Class A preferred shares
              
              
              (1,540,000
              )
              
              (154
              )
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              (154
              )Issuance
                  of preferred shares
              
              
              2,000,000
              
              
              200
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              200Net
                  loss
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              (7,855,486
              )
              
              
              
              
              (7,855,486
              )BALANCE
                  OCTOBER 31, 2005
              
              
              2,000,000
              
              $
              200
              
              
              209,871,980
              
              $
              20,987
              
              $
              9,805,836
              
              $
              –
              
              $
              (11,523,670
              )
              $
              (55,500
              )
              $
              (1,752,147
              )See
                  notes to consolidated financial statements.


25
 **Table
              of Contents**
 Index
              to Financial
              Statements


**M.B.A.
                  HOLDINGS, INC. AND
                  SUBSIDIARIES****CONSOLIDATED
                  STATEMENTS OF CASH FLOWS****YEARS
                  ENDED OCTOBER 31, 2005, 2004 AND 2003****October
                  31,****2005**
              
              **2004**
              
              **2003**INCREASE
                (DECREASE) IN CASH AND CASH EQUIVALENTS:CASH
                  FLOWS FROM OPERATING ACTIVITIES:Net
                  loss
              
              $
              (7,855,486
              )
              $
              (1,209,455
              )
              $
              (1,785,460
              )Adjustments
                    to reconcile net loss to net cash used in operating
                    activities:Depreciation
                  and amortization
              
              
              99,302
              
              
              29,989
              
              
              59,996Related
                  party rent expense accrued but not paid
              
              
              –
              
              
              –
              
              
              311,912Deferred
                  income taxes
              
              
              –
              
              
              8,136
              
              
              572,112Impairment
                  of goodwill and other assets
              
              
              1,315,731
              
              
              –
              
              
              –Operating
                  assets acquired in acquisitions
              
              
              65,702
              
              
              –
              
              
              –Gain
                  on sale of fixed assets
              
              
              (46,848
              )
              
              –
              
              
              –Class
                  B preferred stock issued for services
              
              
              4,282,618
              
              
              –
              
              
              –Class B
                  preferred stock issued for accrued liabilities
              
              
              317,382
              
              
              –
              
              
              –Issuance
                  of stock and options to employees and consultants
              
              
              1,055,372
              
              
              243,601
              
              
              –Changes
                  in assets and liabilities:Accounts
                  receivable
              
              
              93,237
              
              
              (145,555
              )
              
              (49,884
              )Prepaid
                  expenses and other current assets
              
              
              (29,775
              )
              
              3,542
              
              
              5,181Deferred
                  direct costs
              
              
              1,938,132
              
              
              1,174,947
              
              
              270,882Income
                  tax receivable
              
              
              –
              
              
              –
              
              
              436,778Net
                  premiums payable to insurance companies
              
              
              18,349
              
              
              (405,791
              )
              
              (56,947
              )Accounts
                  payable and accrued expenses
              
              
              64,927
              
              
              61,599
              
              
              100,620Accounts
                  payable - officer
              
              
              (241,560
              )
              
              36,764
              
              
              –Other
                  liabilities
              
              
              –
              
              
              –
              
              
              (49,572
              )Deferred
                  rent
              
              
              –
              
              
              (4,809
              )
              
              (26,255
              )Deferred
                  revenues
              
              
              (2,273,599
              )
              
              (1,379,053
              )
              
              (242,638
              )Net
                  cash used in operating activities
              
              
              (1,196,516
              )
              
              (1,586,085
              )
              
              (453,275
              )CASH
                  FLOWS FROM INVESTING ACTIVITIES:Restricted
                  cash
              
              
              (7,075
              )
              
              272,859
              
              
              (6,471
              )Purchase
                  of property and equipment
              
              
              (5,466
              )
              
              (21,477
              )
              
              (3,833
              )Purchase
                  of subsidiaries
              
              
              (565,000
              )
              
              –
              
              
              –Purchase
                  of investments
              
              
              –
              
              
              –
              
              
              (2,612
              )Proceeds
                  from sales and maturities of investments
              
              
              –
              
              
              117,084
              
              
              49,988Net
                  cash (used in) provided by investing activities
              
              
              (577,541
              )
              
              368,466
              
              
              37,072CASH
                  FLOWS FROM FINANCING ACTIVITIES:Drawings
                  on line of credit
              
              
              –
              
              
              –
              
              
              196,897Proceeds
                  from exercise of stock options
              
              
              1,639,418
              
              
              1,719,067
              
              
              –Repayments
                  of line of credit
              
              
              –
              
              
              (196,897
              )
              
              –Proceeds
                  of note payable - officer
              
              
              147,500
              
              
              36,065
              
              
              67,466Repayment
                  of notes payable
              
              
              (243,466
              )
              
              –
              
              
              –Payments
                  on capital lease obligations
              
              
              (7,059
              )
              
              (6,008
              )
              
              (11,440
              )Net
                  cash provided by financing activities
              
              
              1,536,393
              
              
              1,552,227
              
              
              252,923**(Continued)**See
                  notes to consolidated financial statements.


26
 **Table
                of Contents**
 Index
                to Financial
                Statements
 **M.B.A.
                    HOLDINGS, INC. AND SUBSIDIARIES****CONSOLIDATED
                    STATEMENTS OF CASH FLOWS****YEARS
                    ENDED OCTOBER 31, 2005, 2004 AND 2003 (Continued)****October
                    31,****2005**
                
                **2004**
                
                **2003**NET
                    DECREASE IN CASH AND CASH EQUIVALENTS
                
                
                (237,664
                )
                
                334,608
                
                
                (163,280
                )CASH
                    AND CASH EQUIVALENTS, BEGINNING OF YEAR
                
                
                782,848
                
                
                448,240
                
                
                611,520CASH
                    AND CASH EQUIVALENTS, END OF YEAR
                
                $
                545,184
                
                $
                782,848
                
                $
                448,240SUPPLEMENTAL
                    DISCLOSURES OF CASH FLOW INFORMATION:Cash
                    paid for interest
                
                
                9,365
                
                
                9,365
                
                
                3,644Cash
                    paid for (recovered from) income taxes
                
                
                –
                
                
                –
                
                
                (431,186
                )NON-CASH
                    TRANSACTIONS:Related
                      party notes payable satisfied by issuing preferred shares in
                      2004, common
                      shares and services provided in 2003
                
                
                –
                
                
                200,000
                
                
                80,000Unrealized
                    gains (losses) on available-for-sale securities
                
                
                –
                
                
                –
                
                
                5,537Property
                    and equipment financed with capital lease obligation
                
                
                20,779
                
                
                –
                
                
                19,401Fixed
                    assets purchased in acquisitions
                
                
                816,424
                
                
                –
                
                
                –Fixed
                    assets purchased with debt
                
                
                71,200
                
                
                –
                
                
                –Reduction
                    of debt with sale of fixed assets
                
                
                103,358
                
                
                –
                
                
                –Debt
                    assumed in acquisitions
                
                
                545,802
                
                
                –
                
                
                –Debt
                    issued in acquisitions
                
                
                882,621
                
                
                –
                
                
                –Impairment
                    of goodwill
                
                
                806,446
                
                
                –
                
                
                –Net
                    Blue Sky assets written off
                
                
                509,285
                
                
                –
                
                
                –Preferred
                    stock issued for services and liabilities
                
                
                4,600,000
                
                
                –
                
                
                –Stock
                    issued to employees and consultants for services
                
                
                1,055,372
                
                
                –
                
                
                –Stock
                    issued in acquisitions
                
                
                86,500
                
                
                –
                
                
                –See
                    notes to consolidated financial statements.


27
 **Table
              of Contents**
 Index
              to Financial
              Statements




**M.B.A.
      HOLDINGS, INC. AND SUBSIDIARIES**




**NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS**









**1.**
            **DESCRIPTION
                OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING
                POLICIES**




Description
      of Business - M.B.A. Holdings, Inc. and subsidiaries (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, motorcycles,
      recreational vehicles, and travel trailers, and providing claims administrative
      services for MBI and VSC sold. In addition, the Company is the owner of National
      Motorcycle Dealers Association, LLC and a group of businesses that rent
      motorcycles and license motorcycle rental software and concepts. The
      consolidated financial statements include the accounts of M.B.A. Holdings,
      Inc.
      and all of its wholly owned subsidiaries. The consolidated financial statements
      also include the accounts of iDigital, LLC, a 50% owned joint venture with
      an
      individual, adjusted to reflect the Company’s interest in the operating loss and
      net assets. 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. Fair
                value
                is estimated based on quoted market prices. Realized gains and losses
                are
                calculated using the average cost at the date of disposal. Unrealized
                gains (losses) are excluded from earnings and reported, net of income
                tax,
                as a separate component of shareholders’ deficit. There are no such
                investments at October 31, 2005 and
                2004.




d.
            Accounts
                receivable consist primarily of amounts due from insurance companies
                for
                reimbursement of previously paid claims. The Company follows the
                allowance
                method of recognizing uncollectible accounts receivable. This allowance
                is
                established based upon a review of the individual accounts outstanding
                and
                the Company’s prior history. At October 31, 2005 and 2004, management
                believes that all outstanding balances will be realized and as a
                result no
                allowance for doubtful accounts has been recorded. Accounts receivable
                are
                unsecured and do not include finance
                charges.




e.
            Property
                and Equipment - The historical cost of vehicles and shop equipment,
                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. Amoritization of fixed assets under capital lease
                is
                included in depreciation expense.


28
 **Table
              of Contents**
 Index
              to Financial
              Statements
  **M.B.A.
          HOLDINGS, INC. AND SUBSIDIARIES**
  **NOTES
          TO CONSOLIDATED FINANCIAL STATEMENTS**
 
  **1.**
                  **DESCRIPTION
                      OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
                      (Continued)**
 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 recognized an impairment charge for the goodwill acquired in
        connection with the Blue Sky Motorcycle Rentals, Inc. acquisition that took
        place earlier in 2005 based upon its inability to integrate the Denver, Colorado
        operation into the operations of the balance of the Company. No recognition
        of
        impairment was required at October 31, 2004 or 2003.




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 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, 2005, 2004 or
                2003.




g.
            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.




h.
            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, as well
                as
                motorcycle revenue.




The
                Company receives a commission from the sale of each MBI policy. In
                certain
                instances, that commission is payment for marketing the policy and
                for
                providing administrative claims and cancellation services. The Company
                has
                adopted Emerging Issues Task Force Issue No. 00-21, “Revenue Arrangements
                for Multiple Deliverables.” It recognizes the revenue earned from each MBI
                policy on a straight-line basis over the term of that policy. There
                were
                no sales of MBI policies in fiscal 2005 that were subject to deferral.
                Therefore, this policy had no effect on current year income.




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) as a reduction or increase
      (as
      applicable) in total revenues.


29
 **Table
              of Contents**
 Index
              to Financial
              Statements
 **M.B.A.
            HOLDINGS, INC. AND SUBSIDIARIES**
  **NOTES
            TO CONSOLIDATED FINANCIAL STATEMENTS**
 
  **1.**
                    **DESCRIPTION
                        OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
                        (Continued)**


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.




Revenues
      from motorcycle rentals that are in progress at the end of an accounting period
      are recognized pro rata based upon the number of days of the rental that occur
      in each accounting period.




i.
            Income
                Taxes - All available taxes from prior years have previously been
                recovered and therefore provisions for recoverable 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 as it
      is
      likely that the value of a deferred tax asset will not be realized.





j.
            Net
                Loss Per Share - Net loss 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 operations and requires a reconciliation of the
                numerator and denominator of basic and diluted EPS calculations.
                Basic
                loss 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.


30
 **Table
              of Contents**
 Index
              to Financial
              Statements
 **M.B.A.
          HOLDINGS, INC. AND SUBSIDIARIES**
  **NOTES
          TO CONSOLIDATED FINANCIAL STATEMENTS**
 
   **1.**
                **DESCRIPTION
                    OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
                    (Continued)**


**Number
                of shares used in computing loss per share****Year
                Ended October 31,****2005**
            ****
            **2004**
            ****
            **2003**Average
                number of common shares outstanding - Basic
            
            
            192,660,233
            
            
            69,951,024
            
            
            21,851,924Dilutive
                shares from common stock optionscalculated
                using the treasury stock method
            
            
            –
            
            
            –
            
            
            –Average
                number of common and dilutive shares outstanding
            
            
            192,660,233
            
            
            69,951,024
            
            
            21,851,924




The
      table
      above has been adjusted to give retroactive effect to the 1-for-200 common
      stock
      dividend in November 2005, the 1-for-100 common stock dividend in November
      2004
      and the 10-for-1 common stock split in April 2004, for all periods
      presented.




k.
            Stock-Based
                Compensation - At October 31, 2005, the Company has 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 8. Pro
                Forma
                information regarding the impact of stock-based compensation on net
                loss
                per share is required by SFAS No. 123 (R),*Accounting
                for Stock-Based Compensation*and SFAS No. 148,*Accounting
                for Stock-Based Compensation - Transition and Disclosure*.
                For years ended October 31, 2005, 2004, 2003, 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 value recognition provisions of SFAS No. 123
                (R).




l.
            Comprehensive
                loss consists of net loss and other gains and losses affecting
                stockholders’ equity that, under generally accepted accounting principles
                are excluded from net loss. 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.


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.
 31
 **Table
                of Contents**
 Index
                to Financial
                Statements
 **M.B.A.
            HOLDINGS, INC. AND SUBSIDIARIES**
  **NOTES
            TO CONSOLIDATED FINANCIAL STATEMENTS**
 
   **1.**
                  **DESCRIPTION
                      OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
                      (Continued)**


The
      Company receives a commission from the sale of each MBI policy. That commission
      is payment for marketing the policy and, in some instances, 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 which it is obligated to provide administrative, claims and
      cancellation services 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 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) 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.




Revenues
      from motorcycle rentals that are in progress at the end of an accounting period
      are recognized pro rata based upon the number of days of the rental that occur
      in each accounting period.




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.


The
          Company evaluates the carrying value of goodwill and other intangible assets
          at
          the end of each reporting period and reduces the carrying values as appropriate.
          The collectability of accounts receivable is evaluated monthly and amounts
          determined to be uncollectible are charged to expense at that time.
  n.
                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
                    has determined that FIN 46 does not require the consolidation
                    of Cactus
                    Family Investments, LLC, an entity owned by the majority shareholders
                    of
                    the Company.
 32
 **Table
                of Contents**
 Index
                to Financial
                Statements
 **M.B.A.
            HOLDINGS, INC. AND SUBSIDIARIES**
  **NOTES
            TO CONSOLIDATED FINANCIAL STATEMENTS**
 
   **1.**
                  **DESCRIPTION
                      OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
                      (Continued)**


In
      December 2004, the FASB published FASB Statement No. 123 (R), *Share-Based
      Payment* ,
      (“FAS
      123 (R)”) which will provide investors and other users of financial statements
      with more complete and neutral financial information by requiring that the
      compensation cost relating to share-based payment transactions be recognized
      in
      financial statements. That cost will be measured based on the fair value of
      the
      equity or liability instruments issued. The Company is required to and will
      apply FAS 123 (R) at November 1, 2005. Since the options that are currently
      outstanding are exercisable at prices that are at or above current market
      values, the Company does not expect that implementation will have a material
      effect on its reported results of operations.





In
      December 2004, the FASB issued Statement No. 153, *Exchanges
      of Nonmonetary Assets, an amendment of APB Opinion No. 29, Accounting for
      Nonmonetary Transactions* (“FAS
      153”). The amendments made by FAS 153 are based on the principle that exchanges
      of nonmonetary assets should be measured based on the fair value of the assets
      exchanged. The Company has adopted FAS 153 in these statements.





In
      May
      2005, the FASB issued FAS 154 ***,***  *Accounting
      Changes and Error Corrections—a replacement of APB Opinion No. 20 and FASB
      Statement No. 3.* This
      Statement requires retrospective application to prior periods’ financial
      statements of changes in accounting principle, unless it is impracticable to
      determine either the period-specific effects or the cumulative effect of the
      change. It shall be effective for accounting changes and corrections of errors
      made in fiscal years beginning after December 15, 2005. The Company will adopt
      this Statement in fiscal 2006. The Company does not expect that implementation
      will have a material effect on its reported results of operations.




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, 2005, 2004 and 2003,
                the
                Company had uninsured cash of approximately $500,000, $916,000 and
                $619,000, respectively.


p.
                Advertising
                    costs are expensed as incurred and are included in other operating
                    expenses. Advertising expense totaled approximately $102,000,
                    $17,000 and
                    $19,000 for the years ended October 31, 2005, 2004 and 2003,
                    respectively.
 
 q.
                Reclassifications
                    - Certain reclassifications have been made to the 2004 and 2003
                    amounts to
                    conform to the 2005 presentation.
  r.
                  Minority
                      Interest - The Company has a fifty percent ownership interest
                      in iDigital
                      and has management and financial control over the entity.  As such,
                      the financial statements of iDigital have been consolidated
                      in the
                      financial statements of the Company for the year ended October
                      31,
                      2005.
 s.
                    Fair
                        Value of Financial Instruments - The carrying amounts of
                        financial
                        instruments including cash, restricted cash, current maturities
                        of
                        long-term debt approximate fair value based on their short
                        maturities or
                        their interest rates or imputed interest
                        rates.
 33
 **Table
                of Contents**
 Index
                to Financial
                Statements
 **M.B.A.
            HOLDINGS, INC. AND SUBSIDIARIES**
  **NOTES
            TO CONSOLIDATED FINANCIAL STATEMENTS**





**2.**
            **LIQUIDITY
                AND GOING CONCERN**





The
      Company incurred significant losses during the current fiscal year and has
      experienced additional losses in prior years. The Company has used funds
      obtained from the exercise of stock options by its employees to supplement
      funds
      provided by operations and has used common stock to pay its consultants and
      others. A related party has advanced funds on demand notes and through the
      deferral of rent payments (See Note 4) in order to assist in overcoming working
      capital deficiencies during the year. The Company has granted the related party,
      Cactus Family Investments, LLC, a security interest in all of its unencumbered
      assets. There is no assurance that additional working capital will be available
      when 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 2005 and expects such losses to continue into the early months of
      2006.
      The Company is attempting to reverse this downward trend with its motorcycle
      rental operations, with increased marketing contacts with other Internet vendors
      and with further expansion into the motorcycle market through its subsidiary,
      National Motorcycle Dealers Association, LLC and its Street Eagle licensed
      dealerships.




**3.**
            **ACQUISITIONS
                AND SIGNIFICANT EVENTS**





In
      December 2004, the Company acquired a 50% interest in Blue Sky Motorcycle
      Rentals, Inc. (BSMR) that operates a motorcycle rental business in Colorado
      and
      has sold its business model to similar operations in Arizona, California, New
      Mexico, Nevada and Florida for the sum of $350,000 in cash. The former owner
      of
      BSMR entered into a consulting contract with the Company to provide a continuity
      of services. The Company purchased the remaining fifty percent equity interest
      in April 2005 by forgiving $75,000 of indebtedness owed to it by the former
      owner of BSMR and by issuing a note in the amount of $200,000 payable in
      installments over the next twelve months. The Company amended and extended
      the
      consulting contract with the former owner of BSMR to acquire his services for
      a
      period of eight (8) years.  The Company has unilaterally terminated this
      consulting contract, which provided for the payment of 100,000 shares of common
      stock on each anniversary date. BSMR is a Colorado corporation that serves
      the
      motorcycle rental industry through the rental of its motorcycles and through
      its
      internet web sites that offer a reservation system to those desiring to rent
      motorcycles throughout the western United States. BSMR has licensed its name
      and
      business plan to motorcycle rental stores located within the southwestern United
      States.


In
        May 2005, the Company purchased the assets of
        Street Eagle, Inc., Rent2Ride Nationwide, Inc. and Rent2Ride Arizona, Inc.
        (“R2R”) for the sum of $200,000 payable in monthly installments over an eleven
        (11) month period. The R2R companies are engaged in the motorcycle rental
        business in Hawaii and are the owners of computer software that is specifically
        designed to be used in a motorcycle rental location. The R2R purchase gave
        the
        Company access to this series of specialty programs that it intends to
        incorporate into its own and its licensed locations.
  In
          July
          2005, the Company acquired the assets of Liberty Motorcycle Rentals, LLC
          (“Liberty”), an Arizona Limited Liability Company located in Tempe, AZ for the
          sum of $20,000 in cash, the issuance of 500,000 unregistered shares of
          M.B.A.
          Holdings, Inc. common stock valued at $18,500 which was based on the
          stock’s trading price at the time of issue, the issuance of its note in the
          amount of $105,180 and the assumption of $54,820 of indebtedness relating
          to the
          assets acquired. The Company now operates a motorcycle rental location
          in the
          Liberty leased facility under the name WorldWide Rentals, LLC (“WorldWide”).
          One
          of the former owners of Liberty has accepted a three-year employment contract
          with WorldWide. The other former owner of Liberty has accepted a consulting
          contract with Mechanical Breakdown Administrators, Inc. and WorldWide covering
          a
          one year period.
 34
 **Table
                of Contents**
 Index
                to Financial
                Statements
 **M.B.A.
            HOLDINGS, INC. AND SUBSIDIARIES**
  **NOTES
            TO CONSOLIDATED FINANCIAL STATEMENTS**
 
 **3.**
                    **ACQUISITIONS
                        AND SIGNIFICANT EVENTS
                        (Continued)**
  In
              July
              2005 in two concurrent transactions, the Company also acquired certain
              assets of
              Escape Eagles, Inc. for the sum of $200,000 and 200,000 unregistered
              shares of
              M.B.A Holdings, Inc. common stock valued at $8,000 which was based
              on the
              stock’s trading price at the time of issue. The purchase price was paid with
              the
              payment of $100,000 in cash and the issue of its notes in the amount
              of
              $100,000. The notes are payable in equal monthly installments over
              a one year
              period. The Company acquired all of the outstanding equity of Escape
              Eagles,
              Inc. with the issuance of its note in the amount of $300,000. The note
              is
              payable in equal monthly installments over a three year period beginning
              on the
              first anniversary of the closing of the transactions. Escape Eagles,
              Inc.
              operates a motorcycle rental facility in Las Vegas,
              NV.





The
      following table summarizes the estimated fair values of the allocation of the
      purchase price and direct acquisition costs to the assets and liabilities
      acquired at the date of purchase:





**Blue
                Sky**
            
            **Liberty**
            
            ********
            
            **Motorcycle**
            
            **Motorcycle**
            
            **Escape**
            
            **Street******
            
            **Rentals,
                Inc.**
            
            **Rentals,
                LLC**
            
            **Eagles,
                Inc.**
            
            **Eagles,
                Inc.**Cash
              and cash equivalents
            
            $
            –
            
            $
            –
            
            $
            4,502
            
            $
            –Accounts
              receivable, net of allowance
            
            
            1,176
            
            
            –
            
            
            –
            
            
            –Deposits
              and other assets
            
            
            3,020
            
            
            1,200
            
            
            –
            
            
            –Property
              and equipment, net
            
            
            195,191
            
            
            155,005
            
            
            192,505
            
            
            –Goodwill
              and intangibles
            
            
            380,057
            
            
            40,608
            
            
            307,099
            
            
            200,000Accounts
              payable and accrued expenses
            
            
            79,487
            
            
            3,005
            
            
            1,444
            
            
            –Debt
            
            
            148,000
            
            
            158,312
            
            
            433,767
            
            
            –


The
        Company has experienced difficulties integrating
        the Denver, Colorado store operations into the corporate entity and has decided
        to close that location because of this and because it has experienced
        operating losses and due to the former owner refusing to transfer ownership
        of
        all of BSMR’s
        assets. The Company is seeking a qualified licensee to assume responsibility
        for
        the operation of a Denver, Colorado location. The current location will remain
        closed until such time as a suitable licensee can be brought into that area.
        The
        Company has elected to write off and/or relocate the Denver, Colorado assets
        in
        recognition of this decision. The other Company owned locations in Las Vegas,
        NV
        and Tempe, AZ have been successfully brought into the corporate
        environment.
  As
        discussed above, subsequent to the acquisition of BSMR, the Company has decided
        to substantially write off all amounts relating to the BSMR acquisition except
        $10,000 of motorcycle assets that are being liquidated to provide funds to
        repay
        the debt due a bank. The Company continues to be liable for the indebtedness
        to
        the bank of $58,000 and for indebtedness of $78,200 to an individual that
        is
        secured by a pledge by the former owner of BSMR of certain shares of BSMR.
 35
 **Table
                of Contents**
 Index
                to Financial
                Statements
 **M.B.A.
            HOLDINGS, INC. AND SUBSIDIARIES**
  **NOTES
            TO CONSOLIDATED FINANCIAL STATEMENTS**
 
 **3.**
                    **ACQUISITIONS
                        AND SIGNIFICANT EVENTS
                        (Continued)**
 During
                2004 the Company was and continues to be a significant force in forming
                the
                National Motorcycle Dealers Association, LLC (NMDA) and provides
                management and
                administration of the Association. NMDA will provide products and
                services for
                the Association members including Extended Motorcycle Warranties
                for New and
                Used Motorcycles, ATV’s and Trailers, New Motorcycle Manufacture’s Factory
                Warranties, Gap Coverage, Motorcycle leasing and financing, Credit
                Life/Accident
                Health Insurance, Family Hospitalization Insurance for Dealerships
                and their
                Families, Rental Insurance for Dealer Motorcycle Rental Programs
                and Software,
                Garage keepers Insurance Program, Liability and Collision Insurance
                for
                Motorcycle and Autos for the dealer and their customers, an Association
                Credit
                Card, Dealership Credit Card Processing, 401(k) Retirement Programs,
                Roadside
                Assistance Programs, Tire and Wheel Protection, Business Forms, Communication
                Services and a Prepaid Legal Program. Membership will be required
                to participate
                in these programs and the Company will be compensated through management
                fees
                and product sales commissions. The NMDA’s aggregation of many programs
                represents a rare opportunity for the Company and its partners to
                achieve
                business synergies and a market edge not previously available to
                them.
 In
              October, 2004, NMDA entered into an agreement with Wildside Motorcycles,
              Inc.
              (“Wildside”)
              whereby NMDA
              exchanged a 20% membership interest for a 20% stock ownership of Wildside’s
              common stock. The parties have agreed to jointly market the software
              package
              that Wildside has developed for accounting program for motorcycle rentals
              that
              enables individual motorcycle dealers to establish, account for and
              invoice
              their rental operations. Subsequent differences of opinion concerning
              operational integration have caused the parties to rescind the original
              agreement.





**4.**
            **RELATED
                PARTY TRANSACTIONS**




Included
      in accounts payable - officer at October 31, 2005 and 2004 is $175,000 and
      $417,000 of accrued rent for office space payable to Cactus Family Investments,
      LLC, an entity owned by the Company’s majority stockholders and accrued interest
      due to the majority shareholder. The accrued interest amounts to $54,000 and
      $39,000 at October 31, 2005 and 2004, respectively. Rent expense for the years
      ending October 31, 2005, 2004 and 2003 was $264,000, $292,000 and $312,000,
      respectively. The lease expired December 31, 2003.  A month-to-month lease
      extension at the December 2003 rate (approximately $24,000 per month) was signed
      in December 2003. The expired 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
      balance was repaid through the issuance of convertible Class A preferred stock
      during the fiscal year ended October 31, 2004. The loans mature annually on
      October 31st and bear interest at a rate of 6%. During fiscal 2004, 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. At
      October 31, 2005 there was $147,500 outstanding.





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.




In
      March 2005, the Company issued 2,000,000 shares of
      non-convertible Class B preferred stock to its chief executive officer in
      conjunction with his conversion of 460,000 shares of convertible Class A
      preferred stock into 46,000,000 shares of common stock and the surrender of
      1,540,000 shares of convertible Class A preferred stock.  This transaction
      was valued at $4,600,000.  The Class B preferred stock has 100-for-1
      equivalent voting rights to common stock and has liquidation
      preference.


36
 **Table
                of Contents**
 Index
                to Financial
                Statements
 **M.B.A.
            HOLDINGS, INC. AND SUBSIDIARIES**
  **NOTES
            TO CONSOLIDATED FINANCIAL STATEMENTS**
 
 **5.**
                        **LONG-TERM
                            DEBT**
 
 All
                  of
                  the Company’s long-term debt was incurred in Fiscal 2005 and consists of notes
                  payable issued in connection with the acquisition of its motorcycle
                  rental
                  subsidiaries and vehicle financing debt incurred to purchase motorcycle
                  assets
                  that are used in that business. The components of the long-term
                  debt are as
                  follows:


Note
                payable to the former owner of Blue Sky MotorcycleRentals,
                Inc. that bears no interest (*) and is payable in twelve monthlyinstallments
                of $16,667 with a final payment of $16,663 due April 15,
                2006
            
            $
            83,330Note
                payable to the former owner of Escape Eagles, Inc. that bearsno
                interest (*) and is payable in forty six monthly installments of
                $8,333
                and afinal
                installment of $8,345 due July 19, 2009
            
            
            366,668Note
                payable to the former owner of Street Eagle, Inc. and Rent2Ride
                Nationwide, Inc.that
                bears no interest (*) and is payable in eleven monthly installments
                of
                $16,364 beginningin
                June 2005
            
            
            98,182Note
                payable to an individual that bears interest at 8% per annum payable
                in
                monthlyinstallments
                of $2,028 until March 25, 2009 at which time the then unpaid balance
                shallbecome
                due and payable
            
            
            61,475Note
              payable to an individual that bears interest
              at 8% per annum payable in monthlyinstallments
              of $500 until December 6, 2008 at which time the then unpaid balance
              shallbecome
              due and payable
            
            
            16,725Note
                payable to a bank bearing interest at 7% above the index rate of
                7% due
                October31,
                2005 and guaranteed by the former owner of Blue Sky Motorcycle Rentals,
                Inc. andthe
                Chief Executive Officer of the Company
            
            
            58,855Note
                payable to the former owners of Liberty Motorcycle Rentals, LLC that
                bears
                interestat
                7% per annum and is payable only from 15% of the Gross Rentalsderived
                fromowned
                motorcycles plus the entity’s share of non-owned motorcycle split
                revenues
            
            
            98,080Notes
                payable to banks and financing institutions for the purchase of individual
                motorcycles
                bearing interest at varying rates from 7% to 14.99% and payable over
                termsfrom
                48 months to 72 months
            
            
            153,004936,319Less
                current portion
            
            
            (458,695
            )Total
              Long-term debt
            
            
            $477,624


*
              Imputed
                  interest was deemed immaterial.


The
      14%
      note payable to a bank is currently in default. The Company is working with
      the
      bank in its attempts to locate the assets that are pledged as security for
      the
      loan. The value of these assets, except for certain assets that are within
      the
      control of the Company have been written off in the current period in
      recognition of the closure of the Denver, Colorado location. A current estimate
      of the market value of the assets securing this note is $50,000. The debt issued
      in the business acquisitions is unsecured.





The
      notes
      payable to banks and financial institutions for the purchase of individual
      motorcycles are secured by liens on those assets.


37
 **Table
                  of Contents**
 Index
                  to Financial
                  Statements
 **M.B.A.
              HOLDINGS, INC. AND SUBSIDIARIES**
  **NOTES
              TO CONSOLIDATED FINANCIAL STATEMENTS**
 
 **5.**
                            **LONG-TERM
                                DEBT (Continued)**
 
 Future
                      minimum payments on the long term debt are as follows:
 2006
                          
                          $
                          458,6952007
                          
                          
                          244,3122008
                          
                          
                          145,5522009
                          
                          
                          87,760


**6.**
            **BUSINESS
                SEGMENTS**





During
      the fiscal year ended October 31, 2005, the Company operated in two business
      segments: Extended Warranty Sales and Servicing and Motorcycle Rentals. The
      Company’s reportable segments are strategic business units that offer different
      products and services. They are managed separately based on the fundamental
      differences in their operations. The Motorcycle segment became a reportable
      segment during 2005.





The
      Extended Warranty Sales and Servicing segment consists of Mechanical Breakdown
      Administrators, Inc. that 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.





The
      Motorcycle segment offers motorcycles and off road vehicles for rental both
      through Company owned and operated locations and through licensees. The segment
      also provides assistance to Motorcycle Dealer Members in being professional,
      successful, and profitable businesses through special services, products and
      programs through the National Motorcycle Dealers Association.





Information
      by industry segment is set forth below for the year ended October 31,
      2005:


Net
              revenues:Extended
              Warranty Sales and Servicing
            
            $
            4,398,372Motorcycles
            
            
            488,1704,886,542Loss
                from operations:Extended
              Warranty Sales and Servicing
            
            
            6,474,810Motorcycles
            
            
            1,302,4877,777,297Identifiable
                assets:Extended
              Warranty Sales and Servicing
            
            
            1,042,301Motorcycles
            
            
            377,7911,420,092Deferred
              policy acquisition costs:Extended
              Warranty Sales and Servicing
            
            
            5,421,862Motorcycles
            
            
            None


38
 **Table
                of Contents**
 Index
                to Financial
                Statements
 **M.B.A.
            HOLDINGS, INC. AND SUBSIDIARIES**
  **NOTES
            TO CONSOLIDATED FINANCIAL STATEMENTS**


**7.**
            **INCOME
                TAXES**




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


**2005**
                ****
                **2004**
                ****
                **2003**Current
                
                $
                –
                
                $
                –
                
                $
                –Deferred
                
                
                –
                
                
                8,109
                
                
                580,844Total
                  income tax expense
                
                $
                –
                
                $
                8,109
                
                $
                580,844





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




**2005**
              
              **2004**
              
              **2003**Federal
                statutory
                income tax rate
              34%
              
              34%
              
              34%State
                  taxes
              6
              
              6
              
              6Valuation
                  Allowance
              –
              
              (40)
              
              (40)Deferred
                  and miscellaneous
              (17)
              
              1
              
              8Permanent
                  differences
              (20)
              
              –
              
              40Effective
                  income tax rate
              –
              
              1%
              
              48%


At
      October 31, 2005, the Company has state net operating loss carry forward
      deductions available of $3,603,000, $973,000 of which expires in 2006,
      $1,237,000, which expires in 2007 and $1,393,000 which expires in 2008. The
      Company has an available federal tax loss carry forward from 2004 of
      approximately $1,393,000. It will also carry forward the current year taxable
      loss of approximately $111,000 for both federal and state income tax purposes.
      Federal tax loss carryforwards expire through 2025.




The
      deferred tax liabilities at October 31, 2005 and 2004 are composed of the tax
      effects of:




2005
            
            2004Excess
              of net book basis of fixed assets over tax
              basis
            
            $
            12,802
            
            $
            12,802





The
      deferred tax asset and its related valuation allowance are $1,047,000
      and ($1,047,000), respectively, at October 31, 2005. At October 31,
      2004, the balances in these accounts were $1,119,000 and ($1,119,000),
      respectively. The deferred tax asset arises from deferred revenues ($447,000
      and
      $569,000 in 2005 and 2004, respectively) and net operating loss carryforwards
      ($600,000 and $550,000 in 2005 and 2004, respectively).


39
 **Table
                of Contents**
 Index
                to Financial
                Statements
 **M.B.A.
            HOLDINGS, INC. AND SUBSIDIARIES**
  **NOTES
            TO CONSOLIDATED FINANCIAL STATEMENTS**


**8.**
            **STOCK
                OPTIONS AND STOCK AWARDS**




The
      Company adopted the M.B.A. Holdings, Inc. Employee Stock Incentive Plan for
      the
      Year 2004 and the M.B.A. Holdings, Inc. Non-Employee Directors and Consultants
      Retainer Stock Plan for the Year 2004 on April 16, 2004 and adopted the M.B.A.
      Holdings, Inc. Employee Stock Incentive Plan for the Year 2004-B and the M.B.A.
      Holdings, Inc. Non-Employee Directors and Consultants Retainer Stock Plan for
      the Year 2004-B on July 7, 2004. Pursuant to the terms of those plans, the
      Company has issued options to employees for 31,875,000 shares and to Directors
      and Consultants options for 10,762,000. Under this plan, options for 4,300,000
      at an exercise price of $0.02 remain unexercised at October 31, 2005. All
      options issued in fiscal 2004 have been exercised.





In
      addition, 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.





The
      Company recognized $289,415 and $409,195 of compensation expense to employees
      and $765,957 and $183,601 of compensation expense to Directors and Consultants
      during the fiscal years ended October 31, 2005 and 2004, respectively. During
      the year ended October 31 2003, no similar compensation expense was required
      to
      be recognized.





A
      summary
      of the Company’s outstanding exercisable options as of October 31, 2005 is
      presented below:




**Weighted
                  Average****Exercise**
              
              **Expiration**
              
              **Contractual
                  Life****Options**
              
              **Price**
              
              **Date**
              
              **(In
                  Years)**333,340
              
              $
                  0.23
              
              February
                  15, 2006
              
              0.29250,000
              
              0.12
              
              September
                  30, 2008
              
              2.8816,670
              
              0.12
              
              October
                  31, 2008
              
              2.961,000,000
              
              0.09
              
              June
                  1, 2008
              
              2.55200,000
              
              0.11
              
              September
                  30, 2008
              
              2.8850,000
              
              0.11
              
              October
                  31, 2008
              
              2.964,300,000
              
              0.02
              
              July
                  1, 2009
              
              3.626,150,010
              
              
              
              
              
              2.59
  A
      summary
      of the activity regarding the Company’s outstanding options for the years ended
      October 31 is presented below:


40
 **Table
                of Contents**
 Index
                to Financial
                Statements
 **M.B.A.
            HOLDINGS, INC. AND SUBSIDIARIES**
  **NOTES
            TO CONSOLIDATED FINANCIAL STATEMENTS**
 
 **8.**
                        **STOCK
                            OPTIONS AND STOCK AWARDS
                            (Continued)**


**2005**
              
              **2004**
              
              **2003****Weighted**
              
              
              
              **Weighted**
              
              
              
              **Weighted****Average**
              
              
              
              **Average**
              
              
              
              **Average****Exercise**
              
              
              
              **Exercise**
              
              
              
              **Exercise****Shares**
              
              **Price**
              
              **Shares**
              
              **Price**
              
              **Shares**
              
              **Price**Options
                  outstanding at beginning of year
              
              
              1,850,010
              
              $
              0.12
              
              
              1,850,010
              
              $
              0.12
              
              
              1,850,010
              
              $
              0.12Options
                  granted
              
              
              42,637,000
              
              $
              0.08
              
              
              95,625,000
              
              $
              0.02
              
              
              –
              
              
              –Options
                  exercised
              
              
              (38,337,000
              )
              $
              0.08
              
              
              (95,625,000
              )
              $
              0.02
              
              
              –
              
              
              –Options
                  cancelled
              
              
              –
              
              
              –
              
              
              –
              
              
              –
              
              
              –
              
              
              –Options
                  outstanding at end of year
              
              
              6,150,010
              
              $
              0.05
              
              
              1,850,010
              
              $
              0.12
              
              
              1,850,010
              
              $
              0.12




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.





**9.**
            **OPERATING
                AND CAPITAL LEASES**




The
      Company has operating leases for office space and capital leases for equipment
      that expire on various dates through the year ending October 31, 2008. The
      equipment under capital lease is included in property and equipment at October
      31, 2005 and 2004 with values of $31,130 and $20,965 respectively, net of
      accumulated amortization of $8,304 and $5,093 respectively. Total rental expense
      was approximately, $309,000, $291,000 and $312,000 for the years ended October
      31, 2005, 2004 and 2003, respectively.


Future
      minimum lease payments under non-cancelable lease agreements at October 31,
      2005
      are as follows:


41
 **Table
                of Contents**
 Index
                to Financial
                Statements
 **M.B.A.
            HOLDINGS, INC. AND SUBSIDIARIES**
  **NOTES
            TO CONSOLIDATED FINANCIAL STATEMENTS**
 
 **9.**
                        **OPERATING
                            AND CAPITAL LEASES
                            (Continued)**


**Capital**
              
              **Operating****Leases**
              
              **Leases**2006
              
              $
              11,149
              
              $
              48,4322007
              
              
              5,964
              
              
              17,5982008
              
              
              5,964
              
              
              11,8322009
              
              
              3,479Total
              
              
              26,556
              
              
              77,862Less
                  portion representing interest
              
              
              (2,661
              )Total
              
              $
              23,895
              
              $
              77,862




The
      interest rates under the capital leases obligations range from approximately
      7%
      to 15% per annum and are imputed based on the lessor’s implicit rate of return
      at the inception of the lease.




**10.**
            **SIGNIFICANT
                CUSTOMERS**




There
      are
      no significant customers in 2005. In 2004 a major manufacturer accounted for
      $1,750,893 of VSC revenues or 33% of the 2004 VSC Sales. During 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.





**11.**
            **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.


42
 **Table
                of Contents**
 Index
                to Financial
                Statements
 **M.B.A.
            HOLDINGS, INC. AND SUBSIDIARIES**
  **NOTES
            TO CONSOLIDATED FINANCIAL STATEMENTS**
 
 **11.**
                          **COMMITMENTS
                              AND CONTINGENCIES
                              (Continued)**


The
      Company has been notified by its legal counsel that the 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 has been resolved with the execution of a Settlement Agreement.
      The
      Company had no further expense in connection with the settlement.





The
      Company has been named as a party to a lawsuit involving the plaintiff and
      the
      former owner of BSMR. The complaint alleges that the Company and the former
      owner of BSMR improperly utilized certain assets of the plaintiff as security
      for its borrowings. As of the date of this report, the Company's legal counsel
      is in discovery and is not able to offer an opinion as to the likely
      outcome.  The Company has responded to the complaint by denying the
      allegations and intends to vigorously pursue all defenses available.





The
      Company has received a letter from an attorney representing the former owner
      of
      BSMR that alleges wrong doing, including securities violations, on the part
      of the Company and contends that certain of the representations and warranties
      made at the time of the purchase of BSMR were incorrect. The Company denies
      the
      allegations and contends that the former owner of BSMR misrepresented the
      ownership and location of BSMR’s assets and misled the Company concerning the
      amount of BSMR’s liabilities. The former owner has refused to transfer ownership
      of all of BSMR’s assets to the Company. The Company has unilaterally terminated
      its eight-year consulting contract with the former owner of BSMR and believes
      that it has no further obligations thereunder. At the direction of the Board
      of
      Directors of the Company, a subcommittee has been formed to vigorously pursue
      the location and title to the BSMR assets and to use all defenses available
      to
      answer any formal complaint received. To this end, the subcommittee has retained
      a legal firm to represent it in this matter and to pursue all possible claims
      against the former owner. At the time of filing of this document, no formal
      complaint has been received relating to this matter.





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.





Pursuant
      to the terms of employment agreements entered into with the former owner of
      Escape Eagles, Inc. and the 50% owner of iDigital, LLC, the Company is obligated
      to award each of them 200,000 common shares of M.B.A. Holdings, Inc. as
      additional compensation for each year of service that they complete with the
      Company.


43
 **Table
                of Contents**
 Index
                to Financial
                Statements
 **M.B.A.
            HOLDINGS, INC. AND SUBSIDIARIES**
  **NOTES
            TO CONSOLIDATED FINANCIAL STATEMENTS**


**12.**
            **QUARTERLY
                FINANCIAL INFORMATION
                (UNAUDITED)**




**For
                the year ended October 31, 2005**
            ********
            ****
            **1st**
            ****
            **2nd**
            ****
            **3rd**
            ****
            **4th**
            ********
            ****
            **Qtr**
            ****
            **Qtr**
            ****
            **Qtr**
            ****
            **Qtr**Net
                revenues
            
            $
            1,029,766
            
            $
            990,248
            
            $
            1,528,647
            
            $
            1,337,881Gross
                profit
            
            
            172,371
            
            
            93,122
            
            
            264,690
            
            
            (80,981
            )Net
                (loss) income
            
            
            (380,193
            )
            
            (616,173
            )
            
            (811,857
            )
            
            (6,047,263
            )Net
                (loss) income per share
            
            
            (0.01
            )
            
            (0.01
            )
            
            (0.01
            )
            
            (0.03
            )**For
                the year ended October 31, 2004**
            ********
            ****
            **1st**
            ****
            ****
            **2nd**
            ****
            ****
            **3rd**
            ****
            ****
            **4th**
            ********
            ****
            **Qtr**
            ****
            ****
            **Qtr**
            ****
            ****
            **Qtr**
            ****
            ****
            **Qtr**Net
                revenues
            
            $
            1,334,120
            
            $
            1,325,540
            
            $
            1,303,371
            
            $
            1,780,516Gross
                profit
            
            
            182,262
            
            
            170,530
            
            
            190,090
            
            
            160,369Net
                loss
            
            
            (179,186
            )
            
            (238,897
            )
            
            (318,248
            )
            
            (473,124
            )Net
                loss per share
            
            
            (0.01
            )
            
            (0.01
            )
            
            (0.01
            )
            
            (0.00
            )


44
 **Table
                of Contents**
 Index
                to Financial
                Statements
 **M.B.A.
              HOLDINGS, INC. AND SUBSIDIARIES**
  **NOTES
              TO CONSOLIDATED FINANCIAL STATEMENTS**
 
 **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.


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





We
      have
      evaluated, with the participation of our Chief Executive Officer and Chief
      Financial Officer, the effectiveness of our disclosure controls and procedures
      as of the end of the period covered by this report. Based on that evaluation,
      the Chief Executive Officer and Chief Financial Officer have concluded that
      our
      disclosure controls and procedures were not effective as of the end of the
      period covered by this report.





It
      has
      been noted that a material weakness exists in the internal controls over the
      newly acquired assets. It was noted that the recent experiences with the
      acquisition of BSMR clearly indicated that these controls needed to be
      reinforced in order to create an acceptable level of control over those assets.
      In addition, it has been noted that a material weakness exists in the financial
      internal control of the Company based upon the significance of the year end
      adjustments and the transition status of the Company's chief financial
      officer.  The Company has recognized these weaknesses and has established a
      group to evaluate those controls and to recommend changes to those internal
      controls at the next meeting of the Board of Directors.





It
      should
      be noted that any system of controls, however well designed and operated, can
      provide only reasonable, not absolute, assurance that the objectives of the
      system are met. In addition, the design of any control system is
      based
      in part upon certain assumptions about the likelihood of future events. Because
      of these and other inherent limitations of control systems, there can be no
      assurance that any design will succeed in achieving its stated goals
      under all potential future conditions, regardless of how remote.


45
 **Table
              of Contents**
 Index
              to Financial
              Statements


**REPORT
        OF MANAGEMENT**
  Board
        of
        Directors and Stockholders
 M.B.A.
        Holdings, Inc.
 Scottsdale,
        Arizona
 January
        30, 2006
 
 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 judgments 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.
 
 It
        has
        been noted that a material weakness exists in the internal controls over
        the
        newly acquired assets. It was noted that the recent experiences with the
        acquisition of BSMR clearly indicated that these controls needed to be
        reinforced in order to create an acceptable level of control over those assets.
        In addition, it has been noted that a material weakness exists in the financial
        internal control of the Company based upon the significance of the year end
        adjustments and the transition status of the Company's chief financial
        officer.  The Company has recognized these weaknesses and has established a
        group to evaluate those controls and to recommend changes to those internal
        controls at the next meeting of the Board of Directors.
 
 It
        should
        be noted that any system of controls, however well designed and operated,
        can
        provide only reasonable, not absolute, assurance that the objectives of the
        system are met. In addition, the design of any control system is
        based
        in part upon certain assumptions about the likelihood of future events. Because
        of these and other inherent limitations of control systems, there can be
        no
        assurance that any design will succeed in achieving its stated goals
        under all potential future conditions, regardless of how remote.
 
 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,
        Chief Executive Officer and Chief Financial Officer
 46
 **Table
                of Contents**
 Index
                to Financial
                Statements




**PART
      III**





**Item10.**
            **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
            
            66
            
            President,
                CEO, Chairman of the Board, DirectorJudy
                K. Brotherson
            
            58
            
            Vice-President,
                Secretary, DirectorEdward
                E. Wilczewski
            
            65
            
            DirectorShelly
                Beesley
            
            43
            
            DirectorDonald
                A. Gay
            
            37
            
            DirectorRobert
                F. Murphy
            
            70
            
            Director





Gaylen
      and Judy Brotherson are husband and wife and Donald A. Gay is a Son-in-Law.
      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, 66, 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.





Judy
      Brotherson, 58, 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, 65, 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.





Shelly
      Beesley, 43, became a Director and a member of the Audit Committee in March
      2004. Ms. Beesley worked with the Company as an Administrative Specialist for
      more than ten years and is familiar with all aspects of its operations. She
      was
      educated at Red River Community College and brings her extensive background
      to
      the Board of Directors.


47
 **Table
              of Contents**
 Index
              to Financial
              Statements




Donald
      A.
      Gay, 37, became a Director in March 2004. Mr. Gay holds a degree from DeVry
      University and specializes in electronic communications and networking where
      he
      has more than fifteen years of varied experience.





Robert
      F.
      Murphy, 70, became a Director and a member of the Audit Committee in October
      2004. Mr. Murphy holds a Bachelor of Science - Business degree from William
      Cerry College and an MBA from Webster College. Mr. Murphy served as an officer
      in U.S. Army Aviation for more than twenty years in increasingly responsible
      positions in operations and logistics. He retired as a Lieutenant Colonel and
      currently manages his own consulting practice.





**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.


**Annual
                Compensation**
            ****
            **Long-Term
                Compensation****Name
                of Principal**
            
            **Position**
            
            **Year**
            
            **Salary**
            
            **Bonus**
            
            **Other
                (1)**
            ****
            **Restricted
                Stock (shares) awards**
            
            **Stock
                Option (shares) awards**Gaylen
                M. Brotherson
            
            Chairman
                of Board
            
            2003
            
            50,000
            
            
            
            14,173President
                and
            
            2004
            
            50,000
            
            
            
            8,184Chief
                Executive Officer
            
            2005
            
            0
            
            
            
            8,381Judy
                K. Brotherson
            
            Vice-President,
                Secretary
            
            2003
            
            50,0002004
            
            50,0002005
            
            50,000





(1)
            Included
                in Other Annual Compensation are life insurance premiums for Gaylen
                Brotherson in years 2003, 2004 and
                2005





**Option
      Grants In Last Fiscal Year**





The
      Company has issued options to employees for 31,875,000 shares and to Directors
      and Consultants options for 10,762,000. Options for 4,300,000 remain unexercised
      at October 31, 2005.


48
 **Table
              of Contents**
 Index
              to Financial
              Statements




**Other
      Incentives and Compensation**





The
      Company has a formal stock option plan. Currently, stock options are granted
      by
      the Compensation Committee of the Board of Directors. At October 31, 2005,
      there
      were eight employees, who had unexercised stock options. All options are
      exercisable. Below is a summary of existing options.




**Number
                of**
            ****
            **Strike**
            ****
            **Expiration**
            ******Name**
            ****
            **Shares**
            ****
            **Price**
            ****
            **Date**Gaylen
                Brotherson
            
            
            333,340
            
            $
            0.225
            
            
            2/15/06250,000
            
            
            0.120
            
            
            10/31/0816,670
            
            
            0.120
            
            
            10/31/08Judy
                Brotherson
            
            
            1,000,000
            
            
            0.094
            
            
            6/1/08200,000
            
            
            0.105
            
            
            9/30/0850,000
            
            
            0.105
            
            
            10/31/08All
                Other Employees as
                a
                group
            
            
            4,300,000
            
            
            0.017
            
            
            10/31/10


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, 2004 concerning shares
      of Common Stock with no par value, stated value $.0001 and Class B
      Non-Convertible Preferred Stock, 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.


49
 **Table
              of Contents**
 Index
              to Financial
              Statements


****
            **Name
                and Address**
            ****
            **Amount
                and Nature**
            ****
            ******Title
                of Class**
            ****
            **of
                Beneficial Owner**
            ****
            **of
                Beneficial Owner**
            ****
            **Percent
                of Class**Common
                Stock
            
            Gaylen
                Brotherson
              9419
                E. San Salvador, Suite 105
              Scottsdale,
                AZ 85258
            
            32,038,080
                shares (1)
            
            15.3%Common
                Stock
            
            Judy
                Brotherson
              9419
                E. San Salvador, Suite 105
              Scottsdale,
                AZ 85258
            
            32,038,080
                shares (1)
            
            15.3%Common
                Stock
            
            CEDE
                & Co
              Box
                220 ,Bowling
                Green Station
              New
                York, NY 10274
            
            140,434,048
                shares
            
            66.9%Common
                Stock
            
            All
                Directors and Executive Officers as a Group
              (seven
                people)
            
            64,098,160
                shares
            
            30.5%Preferred
              Stock
            
            Gaylen Brotherson
              9419 E. San Salvador, Suite
                105
              Scottsdale,
                AZ 85258
            
            2,000,000
                shares
            
            100.0%




(1)
            This
                amount represents common shares owned and excludes the 600,010 options
                to
                purchase common stock for Gaylen Brotherson and the 1,250,000 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 15.6% and 15.9%, respectively (see Item
                6 -
                Executive Compensation).  This also excludes the 2,000,000 shares
                of Class B preferred stock with 100-for-1 voting
                rights.








**Item
              13.**
            **Certain
                Relationships and Related
                Transactions**





Included
        in accounts payable - officer at October 31, 2005 and 2004 is $175,000 and
        $417,000 of accrued rent for office space payable to Cactus Family Investments,
        LLC, an entity owned by the Company’s majority stockholders and accrued interest
        due to the majority shareholder. The accrued interest amounts to $54,000
        and
        $39,000 at October 31, 2005 and 2004, respectively. Rent expense for the
        years
        ending October 31, 2005, 2004 and 2003 was $264,000, $292,000 and $312,000,
        respectively. The lease expired December 31, 2003.  A month-to-month lease
        extension at the December 2003 rate (approximately $24,000 per month) was
        signed
        in December 2003. The expired 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
        balance was repaid through the issuance of convertible Class A preferred
        stock
        during the fiscal year ended October 31, 2004. The loans mature annually
        on
        October 31st and bear interest at a rate of 6%. During fiscal 2004, 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.
        At
        October 31, 2005 there was $147,500 outstanding.
 
 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.
 50
 **Table
                  of Contents**
 Index
                  to Financial
                  Statements
 In
        March 2005, the Company issued 2,000,000 shares of
        non-convertible Class B preferred stock to its chief executive officer in
        conjunction with his conversion of 460,000 shares of convertible Class A
        preferred stock into 46,000,000 shares of common stock and the surrender
        of
        1,540,000 shares of convertible Class A preferred stock.  This transaction
        was valued at $4,600,000.  The Class B preferred stock has 100-for-1
        equivalent voting rights to common stock and has liquidation
        preference.


**Item
                    14.**
                  **Principal
                      Accounting Fees and
                      Services**
 The
              Company retained the firm of Semple & Cooper LLP as the Independent Registered
              Public Accounting Firm of the Company for the fiscal year ending October 31,
              2005.
  **Audit
              Fees**
  Fees
              for
              audit services by Semple & Cooper, LLP totaled $137,000 and $74,000
              for the fiscal years ended October 31, 2005 and 2004, respectively, including
              fees associated with the annual audits of our financial statements, review
              of
              the financial statements included in our quarterly reports on Form 10-Q,
              consents, assistance with the review of documents filed with the SEC,
              and accounting
              consultations.




51
 **Table
              of Contents**
 Index
              to Financial
              Statements




**PART
      IV**





**Item
              15.**
            **Exhibits,
                Financial Statement Schedules, and Reports on Form
                8-K**





**(a)**
            **Exhibit
                Index**




Exhibit
              31
            Certification
                Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section
                302 of
                the Sarbanes-Oxley Act of 2002


Exhibit
              32
            Certification
                Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section
                906 of
                the Sarbanes-Oxley Act of 2002




**(b)**
                **Financial
                    Statements**
 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.


**(c)**
            **Reports
                on Form 8-K**





From
      8-K
      Current Report was filed April 15, 2005. This Current Report stated that Company
      had acquired the remaining 50% of the common stock of Blue Sky Motorcycle
      Rentals, Inc. and that a Class B Non-Convertible Preferred Stock of 3,000,000
      shares was created and approved by the State of Nevada April 15, 2005. The
      Class
      B preferred stock has been assigned the voting power of one hundred (100) voting
      shares for each preferred stock share. The Company issued 2,000,000 of such
      shares to Cactus Family Investments, LLC (“Cactus”), a Limited Liability Company
      owned and controlled by Gaylen M. Brotherson, the Company’s CEO, in return for
      $317,382.50 of past due rents that were due to Cactus.





In
      a
      related transaction, Cactus converted 460,000 shares of Class A preferred
      stock into 46,000,000 shares of common stock and returned the remaining
      1,540,000 Class A preferred stock to the Company as a contribution to capital.
      The Board of Directors directed that the shares so received shall be
      cancelled.





From
      8-K
      Current Report was filed May 16, 2005. This Current Report stated that Company
      had acquired all of the assets of Street Eagle, Inc. and Rent2Ride, Inc. Both
      companies are specialty motorcycle rental operations that rent Harley-Davidson,
      Metric and Custom motorcycles. Rent2Ride currently has two licensed rental
      locations, one in Scottsdale, AZ and one in Albuquerque, NM.





The
      Company also acquired a 50% equity interest in iDigital, LLC, a provide of
      specialty marketing products designed to be given to customers as a personal
      memento of their experiences with the Company’s rental products.





From
      8-K
      Current Report was filed August 4, 2005. This Current Report stated that The
      Company, through its subsidiary company WorldWide Rentals, LLC has completed
      the
      acquisition of all of the assets of Liberty Motorcycle Rentals, LLC, a
      motorcycle rental operation that rents Harley-Davidson motorcycles from its
      Tempe, Arizona location. Liberty Motorcycle Rentals, LLC was a licensed rental
      location of Blue Sky Motorcycle Rentals, Inc.





The
      Company, through its subsidiary company Rent2Ride Nationwide, LLC, also acquired
      certain motorcycle assets and 100% of the common stock of Escape Eagles, Inc.,
      a
      Las Vegas, Nevada motorcycle dealer and rental operation that sells and rents
      motorcycles from its facility.


52
 **Table
              of Contents**
 Index
              to Financial
              Statements


**SIGNATURES**
  In
        accordance
        with Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant
        caused this report to be signed on its behalf by the undersigned, thereunto
        duly
        authorized.
 **M.B.A.
                  Holdings, Inc.**Date:  February
                13, 2006
              By:
              /s/ Gaylen M. BrothersonGaylen
                  M. Brotherson
                Chairman of the Board,
                  Chief
                  Executive Officer and
                Chief Financial
                  Officer
  In
        accordance
        with the Securities Exchange Act of 1934, this report has been signed by
        the
        following persons on behalf of the Company and in the capacities and on the
        dates indicated:
  **Signature**
                
                
                **Date**/s/ Gaylen M. Brotherson
                
                
                February
                    13, 2006Gaylen
                      M. Brotherson
                    Chairman
                      of the Board, Chief Executive Officer,
                    Chief
                      Financial Officer and Director
                  (Principal
                    Executive Officer)
 /s/ Judy K. Brotherson
                
                
                February
                    13, 2006Judy
                      K. Brotherson
                    Vice-President,
                      Secretaryand Director
 /s/ Edward E. Wilczewski
                  
                  
                  February
                      13, 2006Edward
                        E. Wilczewski
                      Director
 /s/ Shelly Beesley
                      
                      
                      February
                          13, 2006Shelly
                              Beesley
                          Director
 /s/ Robert F. Murphy
                              
                              
                              February
                                  13, 2006Robert
                                      F. Murphy
                                  Director/s/ Donald A. Gay
                              
                              
                              February
                                  13, 2006Donald
                                      A. Gay
                                  Director
 53