U.S. SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                    FORM 10-K
                                AMENDMENT NO. 1

[X]  ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
     ACT OF 1934 For the fiscal year ended October 31, 2001

                                       OR

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


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


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


                         9419 E. San Salvador, Suite 105
                            Scottsdale, AZ 85258-5510
                                 (480)-860-2288
      (Address of principal executive offices, including telephone number)

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

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

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

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

The issuer's revenues for its most recent fiscal year ended October 31, 2001
were $16,468,434. The aggregate market value of the voting stock held by
non-affiliates of the issuer, based on the average high and low prices of such
stock on October 31, 2001, as reported on NASDAQ, was $555,501. As of October
31, 2001, there were 2,011,787 shares of the issuer's common stock issued and
1,980,187 outstanding.

                       DOCUMENTS INCORPORATED BY REFERENCE

The following documents, in whole or in part, are specifically incorporated by
reference in the indicated part of this Annual Report on Form 10-K: None
<PAGE>
                            EXPLANATION OF AMENDMENT

This amendment is being filed in order to correct an error which occurred in the
electronic formatting of the financial statements. Other assets of $46,170 were
incorrectly included in the 2001 column instead of in the 2000 column. The
totals originally shown remain unchanged.
<PAGE>
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

FINANCIAL STATEMENTS
Index to Consolidated Financial Statements for the years ended October 31, 2001,
2000, and 1999:
Independent Auditors' Report
Consolidated Balance Sheets
Consolidated Statements of Income and Comprehensive Income
Consolidated Statements of Stockholders' Equity
Consolidated Statements of Cash Flows
Notes to Consolidated Financial Statements

                                       3
<PAGE>
INDEPENDENT AUDITORS' REPORT
Board of Directors and Stockholders
M.B.A. Holdings, Inc.
Scottsdale, Arizona

We have audited the accompanying consolidated balance sheets of M.B.A. Holdings,
Inc. and subsidiary (the "Company") as of October 31, 2001 and 2000, and the
related consolidated statements of operations and comprehensive (loss) income,
stockholders' equity, and cash flows for each of the three years in the period
ended October 31, 2001. 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 auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.

In our opinion, such consolidated financial statements present fairly, in all
material respects, the financial position of the Company as of October 31, 2001
and 2000, and the results of its operations and its cash flows for each of the
three years in the period ended October 31, 2001 in conformity with accounting
principles generally accepted in the United States of America.


/s/ DELOITTE & TOUCHE LLP

Phoenix, Arizona
January 10, 2002

                                        4
<PAGE>
M.B.A. HOLDINGS, INC. AND SUBSIDIARY

CONSOLIDATED BALANCE SHEETS
OCTOBER 31, 2001 AND 2000
--------------------------------------------------------------------------------

<TABLE>
<CAPTION>
ASSETS                                                              2001            2000
                                                                ------------    ------------
<S>                                                             <C>             <C>
CURRENT ASSETS:
  Cash and cash equivalents                                     $  1,083,024    $  1,235,496
  Restricted cash                                                    160,402         487,015
  Investments (Note 4)                                               160,853         335,063
  Accounts receivable, net of allowance for doubtful accounts
    of $0 and $19,025 (2001 and 2000)                                146,310         404,370
  Prepaid expenses and other assets (Note 3)                          80,350         115,074
  Deferred direct costs                                            3,441,998       5,048,367
  Income tax receivable (Note 5)                                     395,487         155,437
  Deferred income tax asset (Note 5)                                 257,839         387,787
                                                                ------------    ------------
           Total current assets                                    5,726,263       8,168,609
                                                                ------------    ------------
PROPERTY AND EQUIPMENT:
  Computer equipment                                                 268,517         253,736
  Office equipment and furniture                                     140,043         165,919
  Vehicle                                                             16,400          16,400
  Leasehold improvements                                              80,182          79,596
                                                                ------------    ------------
           Total property and equipment                              505,142         515,651
  Accumulated depreciation and amortization                         (288,199)       (229,020)
                                                                ------------    ------------
           Property and equipment - net                              216,943         286,631

OTHER ASSETS                                                                          46,170
DEFERRED DIRECT COSTS                                              3,196,954       7,650,100
DEFERRED INCOME TAX ASSET (Note 5)                                   282,870         496,039
                                                                ------------    ------------

TOTAL ASSETS                                                    $  9,423,030    $ 16,647,549
                                                                ============    ============
</TABLE>

See notes to consolidated financial statements.

                                        5
<PAGE>
M.B.A. HOLDINGS, INC. AND SUBSIDIARY

CONSOLIDATED BALANCE SHEETS
OCTOBER 31, 2001 AND 2000
--------------------------------------------------------------------------------

<TABLE>
<CAPTION>
LIABILITIES AND STOCKHOLDERS' EQUITY                                 2001            2000
                                                                 ------------    ------------
<S>                                                              <C>             <C>
CURRENT LIABILITIES:
  Net premiums payable to insurance companies                    $    385,113    $    437,214
  Accounts payable and accrued expenses                               489,208         617,268
  Capital lease obligation - current portion (Note 7)                  10,888           9,333
  Deferred revenues                                                 3,979,793       5,878,696
                                                                 ------------    ------------
           Total current liabilities                                4,865,002       6,942,511
Capital Lease Obligation - net of current portion  (Note 7)             8,077          18,840
Other Liabilities                                                     225,410         136,534
Deferred Rent                                                          42,256          41,539
Deferred Revenues                                                   3,963,543       8,961,473
                                                                 ------------    ------------
           Total liabilities                                        9,104,288      16,100,897
                                                                 ------------    ------------
COMMITMENTS AND CONTINGENCIES (Notes 6, 7 and 8)
STOCKHOLDERS' EQUITY (Note 6):
  Preferred stock, $.001 par value; 20,000,000 shares
    authorized; none issued and outstanding
  Common stock, $.001 par value; 80,000,000 shares
    authorized; 2,011,787 shares issued; 1,980,187 outstanding          2,012           2,012
  Additional paid-in-capital                                          200,851         200,851
  Accumulated other comprehensive (loss) income, net of tax            (3,149)         12,215
  Retained earnings                                                   174,528         387,074
  Less: 31,600 shares of common stock in treasury, at cost            (55,500)        (55,500)
                                                                 ------------    ------------
        Total stockholders' equity                                    318,742         546,652
                                                                 ------------    ------------

TOTAL                                                            $  9,423,030    $ 16,647,549
                                                                 ============    ============
</TABLE>

See notes to consolidated financial statements.

                                        6
<PAGE>
M.B.A. HOLDINGS, INC. AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE (LOSS) INCOME
YEARS ENDED OCTOBER 31, 2001, 2000 AND 1999
--------------------------------------------------------------------------------

<TABLE>
<CAPTION>
                                                                    2001            2000            1999
                                                                ------------    ------------    ------------
<S>                                                             <C>             <C>             <C>
NET REVENUES:
  Vehicle service contract gross income                         $ 15,136,581    $  5,453,390    $  2,729,999
  Net mechanical breakdown insurance income                          598,055       2,221,320       2,322,217
  MBI administrative service revenue                                 733,798         649,166         545,308
                                                                ------------    ------------    ------------
Total net revenues                                                16,468,434       8,323,876       5,597,524
                                                                ------------    ------------    ------------
OPERATING EXPENSES:
  Direct acquisition costs of vehicle service contracts           14,402,029       5,189,065       2,604,436
  Salaries and employee benefits                                   1,399,267       1,825,772       1,544,793
  Mailings and postage                                               121,416         261,602         441,332
  Rent and lease expense                                             282,508         326,327         286,785
  Professional fees                                                   91,357         158,844         159,105
  Telephone                                                           96,896         142,709         149,282
  Depreciation and amortization                                       78,833          74,753          57,873
  Merchant and bank charges                                           20,783          24,831          18,111
  Insurance                                                           32,959          37,052          29,029
  Supplies                                                            28,709          41,023          46,353
  License and fees                                                    24,104          13,618          12,756
  Other operating expenses                                           146,958         146,676         156,082
                                                                ------------    ------------    ------------
           Total operating expenses                               16,725,819       8,242,272       5,505,937
                                                                ------------    ------------    ------------
OPERATING (LOSS) INCOME                                             (257,385)         81,604          91,587
                                                                ------------    ------------    ------------
OTHER INCOME (EXPENSE):
  Finance fee income                                                  20,120          51,820          50,567
  Interest income                                                     51,288         146,559         122,829
  Interest expense                                                   (10,775)        (12,993)         (5,996)
  Other expense                                                         (293)           (763)           (531)
  Realized gains (losses) on investments                              15,629          (3,362)
                                                                ------------    ------------    ------------
        Other income - net                                            75,969         181,261         166,869
                                                                ------------    ------------    ------------
(LOSS) INCOME BEFORE INCOME TAXES                                   (181,416)        262,865         258,456
INCOME TAXES (Note 5)                                                 31,130          85,716         110,440
                                                                ------------    ------------    ------------
NET (LOSS) INCOME                                               $   (212,546)   $    177,149    $    148,016
                                                                ============    ============    ============

BASIC NET (LOSS) INCOME PER SHARE                               $      (0.11)   $       0.09    $       0.07
                                                                ============    ============    ============
DILUTED NET (LOSS) INCOME PER SHARE                             $      (0.11)   $       0.08    $       0.07
                                                                ============    ============    ============

AVERAGE NUMBER OF COMMON SHARES
  OUTSTANDING - BASIC                                              1,980,187       2,002,064       2,005,158
                                                                ============    ============    ============
AVERAGE NUMBER OF COMMON AND
  DILUTIVE SHARES OUTSTANDING                                      1,980,187       2,111,426       2,086,505
                                                                ============    ============    ============

Net (loss) income                                               $   (212,546)   $    177,149    $    148,016
Other comprehensive income net of tax:
  Net unrealized (loss) gain on available-for-sale securities        (15,364)         12,215
                                                                ------------    ------------    ------------
Comprehensive (loss) income                                     $   (227,910)   $    189,364    $    148,016
                                                                ============    ============    ============
</TABLE>

See notes to consolidated financial statements.

                                        7
<PAGE>
M.B.A. HOLDINGS, INC. AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
YEARS ENDED OCTOBER 31, 2001, 2000 AND 1999
--------------------------------------------------------------------------------

<TABLE>
<CAPTION>
                                                                           ACCUMULATED
                                      COMMON STOCK            ADDITIONAL      OTHER                                       TOTAL
                               --------------------------        PAID     COMPREHENSIVE     RETAINED     TREASURY     STOCKHOLDERS'
                                  SHARES       AMOUNT         IN-CAPITAL     INCOME         EARNINGS      STOCK          EQUITY
                               -----------    -----------    -----------   -----------    -----------   -----------    -----------
<S>                            <C>            <C>           <C>            <C>            <C>           <C>            <C>
BALANCE, NOVEMBER 1, 1998        2,005,121    $     2,005    $   180,857                  $    61,909                  $   244,771

  Stock compensation expense         6,666              7         19,994                                                    20,001

  Net income                                                                                  148,016                      148,016
                               -----------    -----------    -----------                  -----------                  -----------

BALANCE, OCTOBER 31, 1999        2,011,787          2,012        200,851                      209,925                      412,788

  Unrealized gain on
    available-for-sale
    securities                                                             $    12,215                                      12,215

  Treasury stock                                                                                        $   (55,500)       (55,500)

  Net income                                                                                  177,149                      177,149
                               -----------    -----------    -----------   -----------    -----------   -----------    -----------

BALANCE, OCTOBER 31, 2000        2,011,787          2,012        200,851        12,215        387,074       (55,500)       546,652

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

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

BALANCE, OCTOBER 31, 2001        2,011,787    $     2,012    $   200,851   $    (3,149)   $   174,528   $   (55,500)   $   318,742
                               ===========    ===========    ===========   ===========    ===========   ===========    ===========
</TABLE>

See notes to consolidated financial statements.

                                       8
<PAGE>
M.B.A. HOLDINGS, INC. AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF CASH FLOWS
YEARS ENDED OCTOBER 31, 2001, 2000 AND 1999
--------------------------------------------------------------------------------

<TABLE>
<CAPTION>
                                                                                    OCTOBER 31,
                                                                     -----------------------------------------
                                                                         2001           2000           1999
                                                                     -----------    -----------    -----------
<S>                                                                  <C>            <C>            <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
  Net (loss) income                                                  $  (212,546)   $   177,149    $   148,016
  Adjustments to reconcile net (loss) income to net cash (used in)
    provided by operating activities:
      Depreciation and amortization                                       78,833         74,753         57,873
      Loss (gain) on sale of equipment                                    22,237                        (4,342)
      Unrealized loss (gain) on available-for-sale securities             15,364        (12,215)
      Deferred income taxes                                              343,117        (97,198)      (281,673)
      Stock-based compensation                                                                          20,001
      Changes in assets and liabilities:
        Restricted cash                                                  326,613        437,683       (473,710)
        Accounts receivable                                              258,060        (17,565)       (90,632)
        Prepaid expenses and other assets                                 80,894        (51,356)        26,864
        Deferred direct costs                                          6,059,515     (3,868,518)    (5,706,526)
        Income tax receivable                                           (240,050)      (249,596)        18,630
        Net premiums payable to insurance companies                      (52,101)    (2,456,377)     1,385,054
        Accounts payable and accrued expenses                           (128,060)        19,824        150,665
        Accounts payable to affiliated entities, net                                                    (3,517)
        Other liabilities                                                 88,876        136,534
        Deferred rent                                                        717          9,435         32,104
        Deferred revenues                                             (6,896,833)     4,134,977      6,296,294
                                                                     -----------    -----------    -----------
           Net cash (used in) provided by operating activities          (255,364)    (1,762,470)     1,575,101
                                                                     -----------    -----------    -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
  Purchase of property and equipment                                     (55,382)       (58,008)       (71,168)
  Proceeds from sale of equipment                                         24,000                         7,000
  Purchase of investments                                               (144,845)      (439,007)
  Proceeds from sales and maturities of investments                      288,327        128,374
                                                                     -----------    -----------    -----------
          Net cash provided by (used in) investing activities            112,100       (368,641)       (64,168)
                                                                     -----------    -----------    -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
  Purchase of treasury stock                                                            (55,500)
  Payments on capital lease obligation                                    (9,208)        (2,827)
                                                                     -----------    -----------    -----------
          Net cash used in financing activities                           (9,208)       (58,327)
                                                                     -----------    -----------    -----------
NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS                    (152,472)    (2,189,438)     1,510,933
CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR                           1,235,496      3,424,934      1,914,001
                                                                     -----------    -----------    -----------
CASH AND CASH EQUIVALENTS, END OF YEAR                               $ 1,083,024    $ 1,235,496    $ 3,424,934
                                                                     ===========    ===========    ===========
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
  Cash paid for interest                                             $    10,660    $    13,820    $     1,911
                                                                     ===========    ===========    ===========
  Cash paid for income taxes                                                        $   334,157    $   373,483
                                                                                    ===========    ===========
SUPPLEMENTAL SCHEDULE OF NONCASH INVESTING ACTIVITIY:
  Purchase of equipment through capital lease obligation                            $    31,000
                                                                                    ===========
</TABLE>

See notes to consolidated financial statements.

                                       9
<PAGE>
M.B.A. HOLDINGS, INC. AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED OCTOBER 31, 2001, 2000 AND 1999
--------------------------------------------------------------------------------

1. DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

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

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

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

     b.   RESTRICTED CASH represents claims payment advances provided by the
          insurance companies to enable the Company to make claims payments on
          behalf of the insurance companies.

     c.   INVESTMENTS, which are primarily marketable debt and equity
          securities, are classified as available-for-sale and are stated at
          estimated fair value as of October 31, 2001 and 2000. Fair value is
          estimated based on quoted market prices.

     d.   PROPERTY AND EQUIPMENT - The historical cost of computer equipment,
          office equipment and furniture is depreciated by accelerated and
          straight-line methods over their estimated useful lives, which range
          from three to seven years. The accelerated depreciation method used
          for computer equipment and office equipment is a double declining
          balance method. The double declining balance method depreciates the
          assets more quickly during the earlier years of their useful lives,
          whereas the straight-line method depreciates the assets evenly over
          their lives. Leasehold improvements are amortized over the shorter of
          the life of the asset or the related lease term.

          The Company reviews its long-lived assets for possible impairment in
          accordance with Statement of Financial Accounting Standards ("SFAS")
          No. 121 whenever events or changes in circumstances indicate that the
          carrying amount of assets may not be recoverable, and has concluded
          that no impairment charge is necessary during 2001, 2000 or 1999.

          Under guidelines established by the American Institute of Certified
          Public Accountants in Statement of Position 98-1, ACCOUNTING FOR THE
          COSTS OF COMPUTER SOFTWARE DEVELOPED OR OBTAINED FOR INTERNAL USE
          ("SOP 98-1"), the Company has capitalized $26,959 of such costs in the
          accompanying consolidated balance sheet at October 31, 2000, which are
          included in computer equipment. The project was terminated and
          therefore these costs were written off during 2001.

     e.   OTHER ASSETS include amounts recoverable from insurance companies for
          claims fees relating to one of the underwriters for which the
          administration of policies was transferred to a third party during
          2001. These fees were recovered in conjunction with the transfer.

     f.   BENEFIT PLAN - The Company has a profit-sharing plan covering
          substantially all employees who have attained the age of 21 and have
          completed one year of service. Participation commences on the earliest

                                       10
<PAGE>
          plan entry date after an employee meets eligibility requirements. The
          only contributions made to the plan are discretionary employer
          contributions. No discretionary contributions were made during the
          years ended October 31, 2001, 2000 and 1999.

     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.   OTHER LIABILITIES include the amounts received from dealers as fees
          for the Company's guarantee that there will be no commission
          charge-backs for cancelled policies. The Company is accumulating loss
          data for this guarantee and will be recognizing income in future years
          from this program as policies expire.

     i.   REVENUE RECOGNITION - Net revenues includes the commissions earned on
          sales of MBIs, fees for providing administrative claims services
          related to the MBIs sold and revenues related to the sales and
          servicing of VSCs.

          The Company receives one fee (commission) related to the sale of MBIs,
          which covers both the revenue earned for selling the policy, and the
          fee for providing administrative claims services. The Company
          apportions the revenue consistent with the values associated with each
          service provided. The revenues for commissions earned on policy sales
          are recorded when the policy information is received and approved by
          the Company. The revenues for the fee related to providing
          administrative claims services are deferred and recognized in income
          on a straight-line basis over the actual life of the related policy.
          Costs directly related to the acquisition of the contract or policy
          that would not have been incurred but for the acquisition of the
          contract or policy (incremental direct acquisition costs) are deferred
          and charged to expense in proportion to the revenue recognized.

          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 is returned to
          the customer less a cancellation fee as described in the contract and
          permitted by state law. The Company, insurance companies, and
          sub-agents (if applicable) repay the remaining balance on the policy
          in the same proportion as received at the time of the initial sale.
          The cancellation fee is retained entirely by the Company. When a
          policy is cancelled, the Company records the Company's portion of the
          cancellation repayment (net of any cancellation fee received and net
          of any related deferred revenue) as a reduction or increase (as
          applicable) in total revenues. The amount of cancellation repayments,
          net of cancellation fees received, historically has not been
          significant.

          All of the MBIs sold represent insurance policies between the
          insurance companies and the purchaser. The insurance company retains
          responsibility for the cost of any claims made in accordance with the
          policies. The Company only acts as a sales agent and claims
          administrator and does not assume the role of obligor at any time
          during the life of the policies.

          VSCs represent contracts between the Company and the purchaser for
          which the Company obtains an insurance policy, which 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 associated with the sales and servicing of these contracts
          are deferred and recognized in income on a straight-line basis over
          the actual life of the contracts.

     j.   INCOME TAXES - Deferred income taxes are recorded based on differences
          between the financial statement and tax basis of assets and
          liabilities based on income tax rates currently in effect.

     k.   NET INCOME PER SHARE - Net income per share is calculated in
          accordance with SFAS No. 128, EARNINGS PER SHARE which requires dual
          presentation of BASIC and DILUTED EPS on the face of the statements of
          income and requires a reconciliation of the numerator and denominator
          of basic and diluted EPS calculations. Basic income per common share
          is computed on the weighted average number of shares of common stock

                                       11
<PAGE>
          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. Below is the reconciliation required by SFAS No. 128.

<TABLE>
<CAPTION>
          NUMBER OF SHARES USED IN COMPUTING INCOME PER SHARE
            YEAR ENDED OCTOBER 31,                               2001        2000        1999
                                                               ---------   ---------   ---------
<S>                                                            <C>         <C>         <C>
          Average number of common shares
          outstanding - Basic                                  1,980,187   2,002,064   2,005,158

          Dilutive shares from common stock options
          calculated using the treasury stock method                         109,362      81,347
                                                               ---------   ---------   ---------
          Average number of common and dilutive
          shares outstanding                                   1,980,187   2,111,426   2,086,505
                                                               =========   =========   =========
</TABLE>

     l.   STOCK-BASED COMPENSATION -The Company adopted SFAS No. 123 during
          1997, which requires expanded disclosures of stock-based compensation
          arrangements with employees and encourages, but does not require,
          compensation costs to be measured based on the fair value of the
          equity instrument awarded. The Company has elected to measure its
          stock-based compensation awards to employees based on the provisions
          of APB Opinion No. 25. APB No. 25 allows recognition of compensation
          cost based on the intrinsic value of the equity instrument awarded
          rather than fair value.

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

     n.   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.

     o.   NEW ACCOUNTING PRONOUNCEMENTS - In June 2001, the Financial Accounting
          Standards Board ("FASB") issued Statement of Financial Accounting
          Standards ("SFAS") No. 141, "Business Combinations," and SFAS No. 142,
          "Goodwill and Other Intangible Assets." SFAS No. 141 prospectively
          prohibits the pooling of interests method of accounting for business
          combinations initiated after June 30, 2001. Under SFAS 142,
          amortization of goodwill and intangibles without a finite life ceases
          when the new standard is adopted. The new rule also requires
          impairment tests on an annual or interim basis if an event occurs or
          circumstances change that would reduce the fair value of a reporting
          unit below its carrying value. SFAS 142 also requires the Company to
          complete a transitional goodwill impairment test six months from the
          date of adoption. The Company will adopt the standard beginning
          November 1, 2002. The Company does not believe the adoption of SFAS
          142 will have a significant impact on its financial position or
          results of operations as the Company currently has no goodwill or
          intangible assets without finite lives.

          In June 2001, the FASB issued SFAS No. 143, "Accounting for Asset
          Retirement Obligations." This Statement addresses financial accounting
          and reporting for obligations associated with the retirement of
          tangible long-lived assets and the associated asset retirement costs.
          It applies to legal obligations associated with the retirement of
          long-lived assets that result from the acquisition, construction,
          development, and (or) the normal operation of a long-lived asset,
          except for certain obligations of lessees. This Statement requires
          that the fair value of a liability for an asset retirement obligation
          be recognized in the period in which it is incurred if a reasonable
          estimate of fair value can be made. The associated asset retirement
          costs are capitalized as part of the carrying amount of the long-lived
          asset. The Company will adopt the standard beginning November 1, 2002
          and has not yet determined the financial statement impact that may
          result from the adoption of this Statement.

                                       12
<PAGE>
          In August 2001, the FASB issued 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 will adopt the standard beginning November 1, 2002 and has not
          yet determined the financial statement impact that may result from the
          adoption of this Statement.

     p.   RECLASSIFICATIONS - Certain reclassifications have been made to the
          2000 and 1999 amounts to conform to the 2001 presentation.

2. SIGNIFICANT EVENTS

Two of the Company's underwriters transferred the administration of the
contracts and policies sold and administered by M.B.A. to a third party. If the
Company had retained administrative authority over those policies and contracts,
the deferred amounts would be recognized into income over the next six years.
Since M.B.A. is no longer the administrator of the contracts and policies, all
of the revenue and direct acquisition costs associated with them was recognized
except for the revenue and direct acquisition costs relating to future
cancellations, as discussed below. An additional $8,488,000 of deferred VSC
revenue, $8,089,000 of deferred direct acquisition costs and $345,000 of
deferred administrative service fee revenue related to these contracts and
policies was recognized as income and operating expenses in the third quarter of
2001.

The Company continues to perform certain administrative duties relating to the
calculation and administration of policy and contract cancellation. The
remaining balance in deferred revenue and deferred direct acquisition costs
relating to these underwriters to offset against future cancellation
administration equals $1,537,000 of deferred revenue and $1,455,000 of deferred
direct acquisition cost. The Company will recognize this revenue and expense
over the remaining life of the policy or contract. If the policy or contract is
cancelled, then the company will recognize the remaining portion of the unearned
revenue and direct acquisition cost in the month the policy or contract is
cancelled.

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

3. RELATED PARTY TRANSACTIONS

Included in Prepaid expenses and other assets at October 31, 2001 is $24,137
prepaid rent for office space paid to an entity owned by the Company's majority
stockholder. Rent expense for the years ending October 31, 2001, 2000 and 1999
was $248,000, $237,000 and $207,000, respectively. A new lease expiring December
31, 2003 was signed with an affiliate on January 1, 1999. The lease includes
escalating rent amounts that have been recorded as expense on a straight-line
basis over the lease term.

During August 2000, the Company loaned 1st Defense Industries $78,252. The owner
of 1st Defense Industries is Gaylen Brotherson, the Chief Executive Officer. The
loan is for five years and has an interest rate of 5% with interest only
payments for the first five years. During fiscal 2000, 1st Defense paid the
Company $647.31 which was recorded in interest income. In October 2000, Cactus
Partnership purchased the loan from the Company in lieu of rent. At October 31,
2001 and 2000, the loan due from 1st Defense Industries had a zero balance.

                                       13
<PAGE>
4. MARKETABLE SECURITIES

The following table summarizes the Company's available for sale securities as of
October 31, 2001 and October 31, 2000:

<TABLE>
<CAPTION>
OCTOBER 31, 2001                                                  GROSS        GROSS
                                                  AMORTIZED     UNREALIZED   UNREALIZED       FAIR
                                                    COSTS         GAINS        LOSSES         VALUE
                                                  ----------    ----------    ----------    ----------
<S>                                               <C>           <C>           <C>           <C>
Marketable Securities:
  Corporate bonds                                 $   33,642    $    4,508                  $   38,150
  Mutual Funds                                       103,960         1,736                     105,696
  Equities                                            27,786                  $  (10,779)       17,007
                                                  ----------    ----------    ----------    ----------

Total Marketable Securities at October 31, 2001   $  165,388    $    6,244    $  (10,779)   $  160,853
                                                  ==========    ==========    ==========    ==========

OCTOBER 31, 2000                                                  GROSS         GROSS
                                                  AMORTIZED     UNREALIZED    UNREALIZED      FAIR
                                                    COSTS         GAINS         LOSSES        VALUE
                                                  ----------    ----------    ----------    ----------
Marketable Securities:
  Corporate bonds                                 $  195,065    $   15,566                  $  210,631
  Mutual Funds                                        99,997                  $     (368)       99,629
  Equities                                            27,786                      (2,983)       24,803
                                                  ----------    ----------    ----------    ----------

Total Marketable Securities at October 31, 2000   $  322,848    $   15,566    $   (3,351)   $  335,063
                                                  ==========    ==========    ==========    ==========
</TABLE>

The corporate bonds have maturities in excess of ten years.

5. INCOME TAXES

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

                                        2001            2000            1999
                                      ---------       ---------       ---------
Current                               $(311,987)      $ 182,914       $ 392,113
Deferred                                343,117         (97,198)       (281,673)
                                      ---------       ---------       ---------

Total income tax expense              $  31,130       $  85,716       $ 110,440
                                      =========       =========       =========

At October 31, 2001, the Company's income tax receivable includes approximately
$83,000 that was applied to the current year estimated taxes from prior year
overpayments.

The tax effects of temporary differences that give rise to significant portions
of deferred income tax assets at October 31 were as follows:

                                       14
<PAGE>
                                                        2001            2000
                                                      ---------       ---------
Deferred tax assets:
  Deferred revenue                                    $ 527,057       $ 878,098
  State net operating loss carryforward                  89,094
  Allowance for doubtful accounts                                         7,800
  Accrued compensation                                   39,318          39,552
  Other                                                                   5,008
Deferred tax liability:
  Depreciation                                          (25,666)        (46,632)
                                                      ---------       ---------
Total                                                 $ 629,803       $ 883,826
Less Valuation Allowance                                (89,094)
                                                      ---------       ---------
Net deferred income tax assets                        $ 540,709       $ 883,826
                                                      =========       =========

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

                                                      2001      2000      1999
                                                      -----     -----     -----
Federal statutory income tax rate                        34%       34%       34%
State taxes                                               6         6         6
Valuation Allowance                                     (49)
Other                                                    (8)       (7)        3
                                                      -----     -----     -----

Effective income tax rate                               (17)%      33%       43%
                                                      =====     =====     =====

At October 31, 2001, the Company had a state net operating loss carryforward of
$990,000, which expires in 2006.

6. STOCK OPTIONS AND STOCK AWARDS

During the year ended October 31, 1998, the Company issued stock options to
certain employees. The Company applies APB Opinion No. 25 and related
interpretations in measuring compensation expense for its stock options. During
the years ended October 31, 2001, 2000 and 1999, no compensation expense was
recognized. Had compensation cost for the Company's stock options been
determined based on the fair value of the options at the date of grant
consistent with SFAS No. 123, the Company's net income and net income per share
would have been adjusted as presented below. Using the Black-Scholes model for
common stock option valuation, the Company estimated volatility of 84.7%, risk
free interest rate at 6%, and a dividend yield of 0%. All stock options are
vested and exercisable when granted.

A summary of the Company's outstanding options as of October 31, 2001 is
presented below along with pro-forma income statement information consistent
with SFAS No. 123.

                                       15
<PAGE>
                                 EXERCISE                EXPIRATION
            OPTIONS               PRICE                     DATE
            -------               ------                    ----
             33,334               $ 2.25              February 15, 2006
             25,000                 1.20              September 30, 2008
              1,667                 1.20               October 31, 2008
            100,000                 0.94                 June 1, 2008
             20,000                 1.05              September 30, 2008
              5,000                 1.05               October 31, 2008
            -------
            185,001
            =======

<TABLE>
<CAPTION>
                                                         2001          2000         1999
                                                       ---------     ---------    ---------
<S>                                    <C>             <C>           <C>          <C>
Net (loss) income                      As reported     $(212,546)    $ 177,149    $ 148,016
                                       Pro forma       $(212,546)    $ 177,149    $ 148,016

Basic net (loss) income per share      As reported     $   (0.11)    $    0.09    $    0.07
Diluted net (loss) income per share                    $   (0.11)    $    0.08    $    0.07

Basic net (loss) income per share      Pro forma       $   (0.11)    $    0.09    $    0.07
Diluted net (loss) income per share                    $   (0.11)    $    0.08    $    0.07
</TABLE>

A summary of the activity regarding the Company's outstanding options for the
years ended October 31 is presented below:

<TABLE>
<CAPTION>
                                                  2001                  2000                 1999
                                           ------------------    ------------------    ------------------
                                                     WEIGHTED              WEIGHTED              WEIGHTED
                                                      AVERAGE               AVERAGE               AVERAGE
                                                     EXERCISE              EXERCISE              EXERCISE
                                           SHARES      PRICE     SHARES      PRICE     SHARES      PRICE
                                           -------    -------    -------    -------    -------    -------
<S>                                        <C>        <C>        <C>        <C>        <C>        <C>
Options outstanding at beginning of year   185,001    $  1.23    185,001    $  1.23    185,001    $  1.23
Options granted                                 --         --         --         --         --         --
Options exercised                               --         --         --         --         --         --
Options cancelled                               --         --         --         --         --         --
                                           -------    -------    -------    -------    -------    -------

Options outstanding at end of year         185,001    $  1.23    185,001    $  1.23    185,001    $  1.23
                                           =======    =======    =======    =======    =======    =======
</TABLE>

During 1999, the Company accrued for the issuance of 6,666 shares of common
stock to an employee. In connection therewith, the Company recorded $20,001 of
compensation expense.

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.

                                       16
<PAGE>
7. OPERATING AND CAPITAL LEASES

The Company has operating leases for office space and equipment and a capital
lease for equipment that expire on various dates through the year ending October
31, 2004. The equipment under capital lease is included in property and
equipment at October 31, 2001 with a value of $22,683, net of accumulated
amortization of $12,821. Total rental expense was approximately $283,000,
$326,000, and $287,000 for the years ended October 31, 2001, 2000 and 1999,
respectively. Future minimum lease payments under noncancelable lease agreements
at October 31, 2001 are as follows:

                                       OPERATING           CAPITAL
                                         LEASES             LEASE
                                       ---------           --------
2002                                   $ 272,318           $ 12,776
2003                                     274,378              8,517
2004                                      45,930
                                       ---------           --------

Total                                  $ 592,626             21,293
                                       =========

Less portion representing interest                            2,328
                                                           --------
Total                                                        18,965
Less current portion                                         10,888
                                                           --------
Long-term portion - net                                    $  8,077
                                                           ========

8. 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. 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.

The Company has available a $300,000 working capital line of credit which
expires on February 28, 2002. Borrowings under the line of credit bear interest
at a variable rate per annum equal to the sum of 3.15 % plus the thirty-day
dealer commercial paper rate, as published in THE WALL STREET JOURNAL and are
collateralized by the Company's investments. There were no borrowings
outstanding at October 31, 2001.

                                       17
<PAGE>
9. QUARTERLY FINANCIAL INFORMATION (UNAUDITED)

<TABLE>
<CAPTION>
                                       FOR THE YEAR ENDED OCTOBER 31, 2001
                              -------------------------------------------------------
                                  1ST            2ND            3RD           4TH
                                  QTR            QTR            QTR           QTR
                              -----------    -----------    -----------   -----------
<S>                           <C>            <C>            <C>           <C>
Net revenues                  $ 2,131,466    $ 2,349,498    $10,813,767   $ 1,173,703
Gross profit                      522,228        402,172        848,066       293,939
Net (loss) income                 (35,510)       (99,361)       173,436      (251,111)
Net (loss) income per share         (0.02)         (0.05)          0.09         (0.13)

                                       FOR THE YEAR ENDED OCTOBER 31, 2000
                              -------------------------------------------------------
                                  1ST            2ND            3RD           4TH
                                  QTR            QTR            QTR           QTR
                              -----------    -----------    -----------   -----------
Net revenues                  $ 1,911,844    $ 2,015,081    $ 2,245,294   $ 2,151,657
Gross profit                      796,532        829,746        775,776       732,757
Net income (loss)                 111,631         51,937         75,444       (61,863)
Net income (loss) per share          0.06           0.03           0.04         (0.04)
</TABLE>

                                       18
<PAGE>
SIGNATURES

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


                                        M.B.A. Holdings, Inc.


Dated: February 19, 2002                By: /s/ Gaylen Brotherson
                                            ------------------------------------
                                            Gaylen Brotherson
                                            Chairman of the Board and Chief
                                            Executive Officer


Dated: February 19, 2002                By: /s/ Michael Zimmerman
                                            ------------------------------------
                                            Michael Zimmerman, Acting Chief
                                            Financial Officer

                                       19