UNITED
      STATES


SECURITIES
      AND EXCHANGE COMMISSION


Washington,
      D.C. 20549





________________________





**FORM
      10-QSB**





Quarterly
      Report Pursuant to Section 13 or 15(d)


of
      the
      Securities Exchange Act of 1934




For
                the Quarter Period Ended
              June
                30, 2007
            Commission
                File No. 00029462





**American
      Basketball Association, Inc**


(Exact
      name of Registrant as specified in its Charter)





Utah
            
            87-0376691(State
                or jurisdiction of incorporation or organization)
            
            (IRS
                Employer Identification No.)





9421
                Holliday Road Indianapolis, IN
            
            46201(Address
                of Principal Executive Office)
            
            (Zip
                Code)Registrant’s
                telephone number, including area code:
            
            (317)
                844-7502Former
                name, former address and former fiscal
                year, if changed since last report:




Indicate
      by check mark whether the registrant (1) has filed all reports required to
      be
      filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
      the
      preceding 12 months (or for a 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.





YesoNox





The
      number of shares issued and outstanding of the Registrant’s Common Stock, no par
      value, as of July 31, 2007 was **** 26,597,017 .




















**PART
      I - FINANCIAL INFORMATION**





**Item
                1: **Financial
                Statements (Unaudited)****Condensed
                Consolidated Balance Sheet
            F-1Condensed
                Consolidated Statements of Operations Six Months
            F-2Condensed
                Consolidated Statements of Operations Three Months
            F-3Condensed
                Consolidated Statements of Cash Flows
            F-4Notes
                to the Condensed Consolidated Financial Statements
            F5-F20












AMERICAN
                  BASKETBALL ASSOCIATION, INC. AND SUBSIDIARYCONDENSED
                  CONSOLIDATED BALANCE SHEET(UNAUDITED)June
                  30, 2007
  ASSETSCURRENT
                  ASSETSCash
              
              $
              98,401Prepaid
                  expenses and other current assets
              
              
              156,274Total
                  Current Assets
              
              
              254,675PROPERTY
                  AND EQUIPMENT,Net
              
              
              5,115TOTAL
                  ASSETS
              
              $
              259,790LIABILITIES
                  AND STOCKHOLDERS' DEFICIENCYCURRENT
                  LIABILITIESAccounts
                  payable and accrued expenses
              
              
              541,124TOTAL
                  CURRENT LIABILITIES
              
              
              541,124CLAIMS
                  AND CONTINGECIES
              
              
              1,045,331STOCKHOLDERS'
                  DEFICIENCYCommon
                  stock - no par value; 50,000,000 sharesauthorized;
                  26,546,330 shares issued and outstanding
              
              
              1,000Additional
                  paid in capital
              
              
              19,641,466Unearned
                  consulting fees
              
              
              (326,671
              )Accumulated
                  deficit
              
              
              (20,642,460
              )TOTAL
                  STOCKHOLDERS' DEFICIENCY
              
              
              (1,326,665
              )TOTAL
                  LIABILITIES ANDSTOCKHOLDERS'
                  DEFICIENCY
              
              $
              259,790




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






**F-1**




AMERICAN
                    BASKETBALL ASSOCIATION, INC.(UNAUDITED)CONDENSED
                    CONSOLIDATED STATEMENTS OF OPERATIONS
 For
                  the Six Months EndedJune
                  30,2007
              
              2006REVENUE
              
              $
              180,628
              
              $
              177,674COSTS
                  AND EXPENSESCost
                  of revenue
              
              
              33,897
              
              
              —Compensatory
                  element of stock transactions
              
              
              288,329
              
              
              —Depreciation
                  and amortization
              
              
              779
              
              
              779Selling
                  and administrative expenses
              
              
              1,083,291
              
              
              384,574TOTAL
                  COSTS AND EXPENSES
              
              
              1,406,296
              
              
              385,353OPERATING
                  LOSS
              
              
              (1,225,668
              )
              
              (207,679
              )OTHER
                  INCOMEOther
                  income
              
              
              7,893
              
              
              3,400TOTAL
                  OTHER INCOME
              
              
              7,893
              
              
              3,400NET
                  LOSS
              
              $
              (1,217,775
              )
              $
              (204,279
              )Basic
                  and Diluted Net Loss Per Share
              
              $
              (0.05
              )
              $
              (0.01
              )Weighted
                  Average Number of CommonShares
                  Outstanding - Basic and Diluted
              
              
              26,546,330
              
              
              14,862,703




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




**F-2**




AMERICAN
                    BASKETBALL ASSOCIATION, INC.(UNAUDITED)CONDENSED
                    CONSOLIDATED STATEMENTS OF OPERATIONS
 For
                  the Three Months EndedJune
                  30,2007
              
              2006REVENUE
              
              $
              124,483
              
              $
              61,122COSTS
                  AND EXPENSESCost
                  of revenue
              
              
              29,097
              
              
              —Compensatory
                  element of stock transactions
              
              
              153,329
              
              
              —Depreciation
                  and amortization
              
              
              390
              
              
              390Selling
                  and administrative expenses
              
              
              574,541
              
              
              129,466TOTAL
                  COSTS AND EXPENSES
              
              
              757,357
              
              
              129,856OPERATING
                  LOSS
              
              
              (632,874
              )
              
              (68,734
              )OTHER
                  INCOMEOther
                  income
              
              
              7,829
              
              
              3,082TOTAL
                  OTHER INCOME
              
              
              7,829
              
              
              3,082NET
                  LOSS
              
              $
              (625,045
              )
              $
              (65,652
              )Basic
                  and Diluted Net Loss Per Share
              
              $
              (0.02
              )
              $
              (0.00
              )Weighted
                  Average Number of CommonShares
                  Outstanding - Basic and Diluted
              
              
              26,596,017
              
              
              14,862,703




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




**F-3**




AMERICAN
                BASKETBALL ASSOCIATION, INC.CONDENSED
                CONSOLIDATED STATEMENTS OF CASH FLOWS
  For
                  the Period EndedJune
                  302007
              
              2006CASH
                  FLOWS FROM OPERATING ACTIVITIESNet
                  loss
              
              $(1,217,775)
              
              $(204,279)Adjustments
                  to reconcile net loss to netcash
                  used in operating activities:Depreciation
                  and amortization
              
              
              779
              
              
              779Compensatory
                  element of stock transactions
              
              
              288,329
              
              
              —Changes
                  in operating assets and liabilities:Accrued
                  expenses and other current liabilities
              
              
              (171,499
              )
              
              164,612TOTAL
                  ADJUSTMENTS
              
              
              117,609
              
              
              165,391NET
                  CASH USED IN OPERATINGACTIVITIES
              
              
              (1,100,167
              )
              
              (38,888
              )CASH
                  FLOWS FROM INVESTING ACTIVITIESCapital
                  expenditures
              
              
              —
              
              
              —NET
                  CASH USED ININVESTING
                  ACTIVITIES
              
              
              —
              
              
              —CASH
                  FLOWS FROM FINANCING ACTIVITIESProceeds
                  from Bridge Loan
              
              
              —
              
              
              25,000NET
                  CASH PROVIDED BYFINANCING
                  ACTIVITIES
              
              $
              —
              
              $
              25,000NET
                  (DECREASE) INCREASE IN CASH
              
              $
              (1,100,167
              )
              $
              (13,888
              )CASH
                  -Beginning
              
              
              1,198,567
              
              
              21,159CASH
                  -Ending
              
              $
              98,400
              
              $
              7,271
  SUPPLEMENTAL
                  DISCLOSURES OF CASH FLOW
                  INFORMATION


The
          Accompanying Notes Are An Integral Part Of These Condensed Consolidated
          Financial Statements ****
  
 **F-4**


**AMERICAN
      BASKETBALL ASSOCIATION, INC AND SUBSIDIARY**




**(formerly
      Souvall-Page Inc.)**




**NOTES
      TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**







**N** **ote
      1 - Nature of Operations and Summary of Significant Accounting
      Policies:**





**Organization
      and Nature of Operations**





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





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





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




**F-5**




**AMERICAN
      BASKETBALL ASSOCIATION, INC AND SUBSIDIARY**




**(formerly
      Souvall-Page Inc.)**




**NOTES
      TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**







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




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





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





**Financial
      Statements**





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





The
      accompanying financial statements have been prepared using generally accepted
      accounting principles applicable to a going concern which contemplates the
      realization of assets and liquidation of liabilities in the normal course of
      business. As reported in the financial statements, the Company has incurred
      losses of approximately $20,642,460 from inception of the Company through June
      30, 2007, and has negative cash flows from operations. The Company's
      stockholders' deficiency at June 30, 2007 was $1,326,666 and its current
      liabilities and claims and contingencies exceeded its current assets by
      $1,331,780. These factors combined, raise substantial doubt about the Company's
      ability to continue as a going concern. Management's plans to address and
      alleviate these concerns are as follows:





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





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




**F-6**





**AMERICAN
      BASKETBALL ASSOCIATION, INC AND SUBSIDIARY**




**(formerly
      Souvall-Page Inc.)**




**NOTES
      TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**







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





**Use
      of Estimates and Assumptions**





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





**Cash
      and Cash Equivalents**





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





**Accounts
      Receivable**





The
      Company carries its accounts receivable at invoiced amounts less an allowance
      for doubtful accounts. On a periodic basis, the Company evaluates its accounts
      receivable and establishes an allowance for doubtful accounts, based on history
      of past write-offs and collections and current credit conditions. The Company’s
      policy is not to accrue interest on past due trade receivables. Management
      has
      established an allowance for doubtful accounts of $151,125 as of June 30, 2007
      which reduced the net accounts receivable balance to $156,274 as of June 30,
      2007. The Company carried $0 of accounts receivable at June 30, 2006 net of
      an
      allowance for doubtful accounts.





**Property
      and Equipment**





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




**F-7**




**AMERICAN
      BASKETBALL ASSOCIATION, INC AND SUBSIDIARY**




**(formerly
      Souvall-Page Inc.)**




**NOTES
      TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**







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





**New
      Accounting Pronouncements**





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





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





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




In
      May
      2005, the FASB issued Statement SFAS No. 154 “Accounting Changes and Error
      Corrections” (SFAS 154) which supersedes APB Opinion No. 20, Accounting Changes”
and SFAS No. 3, “Reporting Accounting Changes in Interim Financial Statements”.
      SFAS 154 provides guidance on the accounting for and reporting of accounting
      changes and error corrections. It establishes, unless impractical, retrospective
      application as the required method for reporting a change in accounting
      principle in the absence of explicit transition requirements specific to the
      newly adopted accounting principle. The correction of an error in previously
      issued financial statements is not an accounting change. However, the reporting
      of an error correction involves adjustments to previously issued financial
      statements similar to those generally applicable to reporting an accounting
      change retroactively. Therefore, the reporting of a






**F-8**




**AMERICAN
      BASKETBALL ASSOCIATION, INC AND SUBSIDIARY**




**(formerly
      Souvall-Page Inc.)**




**NOTES
      TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**







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





correction
      of an error by restating previously issued financial statements is also
      addressed by this Statement. SFAS 154 is effective for accounting changes and
      corrections of errors made in fiscal years beginning after December 15, 2005.
      The Company does not believe this standard has a material impact on its
      financial statements.





In
      December 2004, the FASB issued Statement No. 123R (SFAS 123R), “Share-Based
      Payment”. This statement is a revision of SFAS 123, “Accounting for Stock-Based
      Compensation” (SFAS 123), and supersedes Accounting Principles Board Opinion No.
      25, “Accounting for Stock Issued to Employees” (APB 25). SFAS 123R focuses
      primarily on accounting for transactions in which an entity obtains employee
      services in share-based payment transactions. The Statement required entities
      to
      recognize


compensation
      expense for awards of equity instruments to employees based on the grant-date
      fair value of those awards (with limited exceptions). SFAS 123R also requires
      the benefits of tax deductions in excess of recognized compensation expense
      to
      be reported as a financing cash flow, rather than as an operating cash flow
      as
      prescribed under the prior accounting rules. On December 31, 2006, the Company
      adopted the provisions of SFAS 123R using the modified prospective method,
      the
      results of which did not have a material impact on its financial position,
      results of operations or cash flows.





**Revenue
      Recognition**





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





**Advertising**





The
      Company charges advertising costs to expense as incurred. Advertising expenses
      amounted to $0 for the period ended June 30, 2007, and $0 for the period ended
      June 30, 2006.




**F-9**


**AMERICAN
      BASKETBALL ASSOCIATION, INC AND SUBSIDIARY**




**(formerly
      Souvall-Page Inc.)**




**NOTES
      TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**







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




**Income
      Taxes** ****




Deferred
      tax assets are recognized for taxable temporary differences, tax credit and
      net
      operating loss carryforwards. These assets are reduced by a valuation allowance,
      which is established when it is more likely than not that some portion or all
      of
      the deferred tax assets will not be realized. In 2007, based on this evaluation,
      the Company recorded a 100% valuation allowance on the consolidated balance
      sheet for its deferred tax assets.  In addition, management is required to
      estimate taxable income for future years by taxing jurisdictions and to consider
      this when making its judgment to determine whether or not to record a valuation
      allowance for part or all of a deferred tax asset. A one percent change in
      the
      Company’s overall statutory tax rate for 2007 would not have a material effect
      in the carrying value of the net deferred tax assets or
      liabilities.




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




**Earnings
      per Share**





Basic
      earnings (loss) per share is computed by dividing income (loss) available to
      common stockholders by the weighted average number of common shares available.
      Diluted earnings (loss) per share is computed similar to basic earnings (loss)
      per share except that the denominator is increased to include the number of
      additional common shares that would have been outstanding if the potential
      common shares had been issued and if the additional common shares were dilutive.
      At June 30, 2007 and 2006, all common stock equivalents were
      anti-dilutive.




**F-10**




**AMERICAN
      BASKETBALL ASSOCIATION, INC AND SUBSIDIARY**




**(formerly
      Souvall-Page Inc.)**




**NOTES
      TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**





**Note
      2 - Property and Equipment:**





Property
      and equipment consist of the following as of June 30, 2007 and
      2006:




**2007**
              
              **2006**Computer
                  equipment
              
              $
              7,786
              
              $
              7,786Less
                  accumulated depreciation
              
              
              2,671
              
              
              724$
              5,115
              
              $
              7,062


The
      company recorded depreciation expenses of $779 for the period ending June 30,
      2007 and 2006.





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





The
      Company has recorded accrued compensation of $262,499 as of June 30, 2007 and
      $125,000 as of June 30, 2006, respectively.








**Note
      4 - Stockholders' Equity:**





The
      following summarizes the Company's shares of common stock as of June 30, 2007
      and 2006:




**2007**
              
              **2006**Authorized
              
              
              *
              
              
              50,000,000
              
              
              30,000,000Issued
              
              
              *
              
              
              26,597,017
              
              
              14,862,703Outstanding
              
              
              *
              
              
              26,597,017
              
              
              14,862,703




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





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





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




**F-11**




**AMERICAN
      BASKETBALL ASSOCIATION, INC AND SUBSIDIARY**




**(formerly
      Souvall-Page Inc.)**




**NOTES
      TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**







**Note
      4 - Stockholders' Equity - continued**





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





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





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





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





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





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





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




**F-12**




**AMERICAN
      BASKETBALL ASSOCIATION, INC AND SUBSIDIARY**




**(formerly
      Souvall-Page Inc.)**




**NOTES
      TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**





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





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





**Note
      6 - Licensing Agreement:**





The
      commercial use of the trademarks “ABA” and “American Basketball Association” by
      the Company, alone or in combination with other words, phrases and design,
      is
      governed by a license agreement with NBA Properties, Inc. (NBA).  The scope
      of the license covers services and products as well as manufacturing,
      distributing and selling practices.  The license contains product quality
      language. Under trademark law, if a trademark owner issues a license without
      retaining the right to control product quality, it risks losing its ownership
      rights to the trademark.  Quality Approval provisions require the licensee
      to cause licensed Services and licensed





Products
      to meet and conform to high standards of style, quality and appearance. 
Licensee’s use of the Licensed Marks are deemed approved.  Notwithstanding,
      NBA has discretion, using good faith, to revoke its approval of particular
      uses
      of the Licensed Mark that relate to gambling, adult content, or any other
      subject matter that would damage or reflect unfavorably upon the NBA, any of
      its
      member teams, or the Original ABA; violate provisions of the License; or misuse,
      mutilate, dilute or otherwise tarnish the Licensed Mark. The right to use of
      the
      marks under the license discontinues on expiration or termination of the
      agreement except for sell off of inventory.  The agreement can end if the
      league ceases operations, is no longer owned or operated by a licensee, or
      if
      product quality concerns are not corrected after notice.  Management
      believes the Company has complied with the requirements and conditions of the
      license, intends to meet its requirements and conditions and has received no
      notice otherwise.  All royalties due under the license have been
      satisfied.







**F-13**




**AMERICAN
      BASKETBALL ASSOCIATION, INC AND SUBSIDIARY**




**(formerly
      Souvall-Page Inc.)**




**NOTES
      TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**







**Note
      7 - Other Significant Agreements:**





The
      Company entered into a sponsorship agreement with a manufacturer of basketballs
      (“Manufacturer”) whereby the Company would receive minimum royalties of $10,000
      as well as other royalties based on sales of basketballs. In addition,
      Manufacturer is to provide a set number of basketballs to the teams and league.
      In exchange, the Manufacturer receives certain marketing and promotional
      opportunities as well as tickets to basketball games for teams included in
      the
      league.





Management
      represents that other agreements exist and were executed for the period ended
      June 30, 2007 and 2006. However, management believes the financial effects
      from
      the agreements are immaterial to the financial statements as a whole.





**Note
      8 - Commitments and Contingencies:**





Various
      entities have been created by current and predecessor members of management
      since the year 2000. These entities include ABA, LLC, ABA Bounce, ABA Founders
      & Properties, LLC, ABA League, LLC, and ABA Operations, LLC. The Company’s
      independent legal counsel and management represent such entities either cease
      to
      exist, or are administratively dissolved at December 31, 2005. No material
      commitments or contingencies exist from these entities, not already accrued
      that
      would effect the financial position, operations, and cash flows of the Company
      for the period ended June 30, 2007 and for the period ended June 30,
      2006.





The
      Company is involved with a variety of lawsuits for the periods ended June 30,
      2007. Independent legal counsel has provided the Company with a summary of
      estimated claims and contingencies and believe certain cases will result in
      an
      unfavorable outcome. As a result the Company has included $1,045,331 of
      estimated accrued contingencies in its consolidated balance sheet at June 30,
      2007





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





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




**F-14**




**AMERICAN
      BASKETBALL ASSOCIATION, INC AND SUBSIDIARY**




**(formerly
      Souvall-Page Inc.)**




**NOTES
      TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**







**Note
      8 - Commitments and Contingencies: continued**





·
            An
                initial payment of $12,500,





·
            A
                retainer of $2,500 per month,





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





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





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




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


**Note
      9 - Legal proceedings:**




In
      a case
      titled *Troy
      Fisher and 3 Ball Management, LLC. vs. American Basketball Association, RAG,
      LLC, Richardson Consulting Group, Ricardo Richardson, Reginald Jones, Robert
      Blackwell, and  Indiana Alley Cats* pending
      in the Marion County Superior Court, Indiana under Cause No. 
49D120511CT043427, the Plaintiffs seek to recover alleged damages from the
      Company after their team was suspended from the League for failure to follow
      the
      ABA Team Operations Manual. The
      Company intends to defend this litigation aggressively, expects that the courts
      will concur with the Company’s views that these actions and claims are without
      merit and


currently
      believes that the outcome, other than costs of suit, will not be materially
      adverse to the ABA. Nevertheless, an adverse judgment on these actions could
      materially harm the business of


the
      Company. No assurance can be given that the Company’s position will be upheld or
      will prove to be correct over the course of litigation.





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




**F-15**




**AMERICAN
      BASKETBALL ASSOCIATION, INC AND SUBSIDIARY**




**(formerly
      Souvall-Page Inc.)**




**NOTES
      TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**







**Note
      9 - Legal proceedings - continued**





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




*Steven
      Jaloza and Salvatore Fradella vs. ABA Founders & Properties, LLC, ABA Sports
      and Entertainment, Inc., a/k/a ABA Enterprises, Inc., ABA International, Inc.,
      ABA League, LLC, ABA Operations, LLC, ABA Properties, LLC, ABA Rental, Inc.
      and
      ABA Services, Inc* .
      In the
      Marion Superior Court, Room No 5, Indiana. Cause No. 49D010608PL033078. Steven
      Jaloza (“Jaloza”) and Salvatore Fradella (“Fradella”) seek damages from ABA
      Founders & Properties, LLC, ABA Sports and Entertainment, Inc., a/k/a ABA
      Enterprises, Inc., ABA International, Inc., ABA League, LLC, ABA Operations,
      LLC, ABA Properties, LLC, ABA Rental, Inc., and ABA Services, Inc. for alleged
      breach of fiduciary duties allegedly arising under the Operating agreement
      of
      ABA Founders & Properties, LLC. The suit was filed in August, 2006. A
      hearing for prejudgment attachment and to appoint a receiver over ABA Indiana
      was held on October 30, 2006. Prejudgment attachment was not granted and a
      receiver was not appointed. Neither ABA Utah nor ABA Indiana is a party to
      the
      action. The Plaintiffs have not pursued the action in this court since the
      date
      of the receivership hearing. This matter is covered by the Indemnification
      Agreement. The ABA intends to contest the case vigorously. The potential for
      an
      unfavorable outcome is not significant. The plaintiffs did not appeal the denial
      of the request for prejudgment attachment or the decision not to appoint a
      receiver. Jaloza and Fradella disassociated from ABA Founders & Properties,
      LLC in June, 2001. The Operating Agreement of ABA Founders & Properties, LLC
      allowed Newman and Tinkham to engage in or possess interests in other business
      ventures of every kind and description for their own account.




**F-16**




**AMERICAN
      BASKETBALL ASSOCIATION, INC AND SUBSIDIARY**




**(formerly
      Souvall-Page Inc.)**


**NOTES
      TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**







**Note
      9 - Legal proceedings - continued**





*Credentials
      Plus, LLC v. Calderson* ,
      230 F.
      Supp.2d (N.D. Ind 2002) holds that fiduciary duties of members of an Indiana
      LLC
      are governed by I.C. 23-18-4-2(b) and can be eliminated by provisions in the
      Operating Agreement. The action should be disposed by summary judgment but
      has
      been held open in view of the matter pending in the Marion County Circuit Court
      under Cause No.:49C010611PL0046089.





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




*Jeff
      Noordgaard, Michael Hart, Daimon Bethea, Coleco Buie, Deron Hayes, Michael
      Robinson and Tremaine Wingfield vs. Joe Newman, ABA Operations, LLC and ABA
      League, LLC* .
      In the
      Marion Superior Court, Indiana. Cause No. 49D11-0207-CC-001122. Ryan Hoover,
      Jeff Nordgaard, Michael Hart, Daimon Bethea, Coleco Buie, Deron Hayes, Michael
      Robinson and Tremaine Wingfield (the “Players”) seek damages under the legal
      theory of breach of contract and under the statutory theory of the Wage Payment
      Statute for alleged non-payment of wages. Progress of Claim - The lawsuit was
      filed in 2003. Summary Judgment was entered against ABA Operations, LLC
      (“Operations”) and ABA League, LLC (“League”) on January 5, 2007 in the amount
      of $762,331.43. An appeal of this decision was filed with the Indiana Court
      of
      Appeals on March 8, 2007. This matter is covered by the Indemnification
      Agreement. Prior to December 19, 2006, funds of ABA Indiana were held in a
      bank
      account titled in the name of ABA League, LLC as trustee. Since December 19,
      2006, all funds of ABA Utah and ABA Indiana have been held in bank accounts
      titled in the name of ABA Indiana. The Players have vigorously attempted to
      collect this judgment from ABA Utah and ABA Indiana. The ABA intends to contest
      the case vigorously. Undersigned counsel has hired Indianapolis attorney, Paul
      Ludwig, to represent the interests of ABA Utah and ABA Indiana in this matter.
      ABA Utah or ABA Indiana has been named as a Garnishee Defendant. Neither ABA
      Utah nor ABA Indiana has funds or contract owed to ABA League, LLC. The bank
      account that Players seek to garnish has $32,000 in it.






**F-17**




**AMERICAN
      BASKETBALL ASSOCIATION, INC AND SUBSIDIARY**




**(formerly
      Souvall-Page Inc.)**




**NOTES
      TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**







**Note
      9 - Legal proceedings - continued**




Collateral
      is required to post a supercedes bond with the trial court pending appeal.
      Severko Hrywnak (“Hrywnak”) has promised to provide the collateral. The strategy
      is to have a portion or the entire judgment amount overturned on appeal. The
      tactic is to settle this matter using non ABA Indiana or ABA Utah assets. ABA
      Management believes that the judgment will be overturned on appeal. The Company
      intends to defend this litigation aggressively, expects that the courts will
      concur with the Company’s views that these actions and claims are without merit
      and currently believes that the outcome, other than costs of suit, will not
      be
      materially adverse to the ABA. Nevertheless, an adverse judgment on these
      actions could materially harm the business of the Company. No assurance can
      be
      given that the Company’s position will be upheld or will prove to be correct
      over the course of litigation .
      On June
      29, 2007 the parties came to a settlement agreement where the ABA will pay
      plaintiffs a total of $150,000, payments are scheduled for the first $75,000
      on
      July 2, 2007, $25,000 on November 30, 2007, $25,000 on February 28, 2008, and
      $25,000 on June 2, 2008. Also, each of the eight players is entitled to 10,000
      shares of Rule 11 ABA-Utah common stock in lieu of their individual
      proportionate cash share of the February 29, 2008 payment. Each player must
      give
      notice no later than the close of business on February 22, 2008. For each player
      not electing to receive stock in lieu of cash, they may then elect the same
      option for the June 2, 2008 payment. Notice must be received no later than
      May
      20, 2008.




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




**F-18**




**AMERICAN
      BASKETBALL ASSOCIATION, INC AND SUBSIDIARY**




**(formerly
      Souvall-Page Inc.)**




**NOTES
      TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**







**Note
      9 - Legal proceedings - continued**




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




*Thaddeus
      A. Wier, Jr. v. American Basketball Association, Inc* .
      In the
      Superior Court of Erie County, New York. Index No. 2007-001971. On December
      5,
      2006, Thaddeus A Weir, Jr. (“Weir”) agreed to fund the ABA Indiana with $200,000
      and raise $4,000,000 (the Alternate Financing Plan”) in the event ABA Indiana
      could not come to terms with Purchasers under a pending Stock Purchase Agreement
      (‘the “SPA”). On December 5, 2006, as part of the Alternate Financing Plan, ABA
      Indiana and Big Apple Consulting USA, Inc. (“Big Apple”) entered a contingent
      agreement (the “Big Apple Agreement”) pursuant to which, Big Apple was to
      provide investor management services to ABA Indiana in the event it did not
      come
      to terms with Purchasers under the SPA. On December 13, 2006, as part of the
      Alternate Financing Plan, Weir and ABA Indiana entered into a contingent
      advisory agreement (the “Weir Agreement”) in the event ABA Indiana did not come
      to terms with Purchasers under the SPA. Weir failed to wire the $200,000 to
      ABA
      Indiana. ABA Indiana notified Weir of the termination of the Big Apple Agreement
      and the Weir Agreement. ABA Indiana entered into the SPA on December 19, 2006.
      On January 9, 2007, Weir asserted that ABA Utah was obligated to perform the
      Big
      Apple Agreement and the Weir Agreement. On January 29, 2007, ABA Indiana and
      ABA
      Utah advised Weir that the Alternate Financing Plan was separate and distinct
      from the SPA and that the Weir Agreement and the Big Apple Agreement had been
      terminated in December, 2006 due to lack of performance. Without service of
      summons, Weir filed the action in the Superior Court of Erie County, New York
      on
      February 20. Without service of summons no response is due. The matter was
      settled on February 20, 2007. However, promises under the settlement agreement
      have not




**F-19**




**AMERICAN
      BASKETBALL ASSOCIATION, INC AND SUBSIDIARY**




**(formerly
      Souvall-Page Inc.)**




**NOTES
      TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**





**Note
      9 - Legal proceedings - continued**




been
      performed. The ABA intends to come to satisfactory terms with Wier. Potential
      for Unfavorable Outcome and amount/range of potential loss - The potential
      amount of loss is significant. However, the likelihood of an unfavorable outcome
      is not significant. The Company intends to defend this litigation aggressively,
      expects that the courts will concur with the Company’s views that these actions
      and claims are without merit and currently believes that the outcome, other
      than
      costs of suit, will not be materially adverse to the ABA. Nevertheless, an
      adverse judgment on these actions could materially harm the business of the
      Company. No assurance can be given that the Company’s position will be upheld or
      will prove to be correct over the course of litigation.




**F-20**




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





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








BUSINESS
      PLAN OVERVIEW





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





**Background**





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





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





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









**CRITICAL
      ACCOUNTING POLICIES AND ESTIMATES**




The
      preparation of our condensed consolidated financial statements requires us
      to
      make estimates and judgments that affect the reported amounts of assets,
      liabilities, revenues and expenses and the related disclosures. A summary of
      those accounting policies can be found in the footnotes to the consolidated
      financial statements included elsewhere in this report. Certain of our
      accounting policies are considered critical as they are both important to the
      portrayal of our financial condition and results of operations and require
      judgments on the part of management about matters that are uncertain. We have
      identified the following accounting policies that are important to the
      presentation of our financial condition and results of operations.




**REVENUE
      RECOGNITION**





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





RESULTS
      OF OPERATIONS





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





COMPARISON
      OF THE THREE MONTHS ENDING JUNE 30, 2007 AND 2006





Net
      revenues increased from $61,122 for the three months ended June 30, 2006 to
      $124,483 for the period ending June 30, 2007. Such revenues represent revenues
      from market reservation fees. As a result, the increase in revenues was a result
      of an increase in market reservation fees.





Cost
      of
      revenues as a percentage of net revenues increased from 0.0% of net revenues
      for
      the three months ending June 30, 2006 to 23.37% of net revenues for the three
      months ending June 30, 2007. The increase is in direct relation to an increase
      in the sale of ABA merchandise as a percentage of revenue.




Compensatory
      element of stock transactions decreased from $0 for the three months ending
      June
      30, 2006 to $153,329, for the same period ending June 30, 2007. The increase
      was
      a result of signing new consulting agreements.





Selling,
      general and administrative expenses increased from $129,466 for the three months
      ending June 30, 2006, to $574,541 for the three months ending June 30, 2007.
      The
      increase is due the addition of personnel as well as increased accounting,
      legal
      and other professional services related to the various legal and accounting
      issues since the reverse merger.





COMPARISON
      OF SIX MONTHS ENDING JUNE 30, 2007 AND 2006





Net
      revenues increased from $177,674 for the six months ended June 30, 2006 to
      $180,628 for the period ending June 30, 2007. Such revenues represent revenues
      from market reservation fees and merchandise. As a result, the increase in
      revenues was a result of an increase in market reservation fees.





Cost
      of
      revenues as a percentage of net revenues increased from 0.0% of net revenues
      for
      the six months ending June 30, 2006 to 18.77% of net revenues for the six months
      ending June 30, 2007. The increase is in direct relation to the increase in
      the
      sale of ABA merchandise as a component of net revenues.








Compensatory
      element of stock transactions increased from $0 for the six months ending June
      30, 2006 to $288,329 for the same period ending June 30, 2007. The increase
      was
      a result of signing new consulting agreements.





Selling,
      general and administrative expenses increased from $384,512 for the six months
      ending June 30, 2006, to $1,083,291 for the six months ending June 30, 2007.
      The
      increase is due the addition of personnel as well as increased accounting,
      legal
      and other professional services related to the various legal and accounting
      issues since the reverse merger.





LIQUIDITY
      AND CAPITAL RESOURCES





At
      June
      30, 2007, our cash totaled $98,401.





Net
      cash
      used in operating activities was $1,100,166 for the six months ending June
      30,
      2007 compared to cash used in operating activities was $38,888 for the six
      months ending June 30, 2006. The increase in cash used relates to the hiring
      of
      additional administrative staff required to implement the Company's business
      plan as well as additional accounting, legal and professionals needed since
      the
      reverse merger.





Net
      cash
      used in investing activities was $0 for the six months ending June 30, 2007
      compared to net cash used in investing activities of $0 for the six months
      ending June 30, 2006.





Net
      cash
      provided from financing activities was $0 for the six months ending June 30,
      2007 as compared to net cash provided from financing activities of $25,000
      for
      the six months ending June 30, 2006.





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





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




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




**FORWARD-LOOKING
      STATEMENTS: MARKET DATA**




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







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




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




**RECENT
      ACCOUNTING PRONOUNCEMENTS**




In
      December 2004, the FASB issued SFAS No. 153, "Exchange of Non-monetary Assets."
      SFAS No. 153 amends APB Opinion No. 29, "Accounting for Non-monetary
      Transactions," to eliminate the exception for non-monetary exchanges of similar
      productive assets. The Company will be required to apply this statement to
      non-monetary exchanges after December 31, 2005. The adoption of this standard
      is
      not expected to have a material effect on the Company's financial position
      or
      results of operations.





In
      May
      2005, the FASB issued SFAS No. 154, "Accounting Changes and Error Corrections-A
      Replacement of APB Opinion No. 20 and FASB Statement No. 3." SFAS No. 154
      changes the requirements for the accounting for and reporting of a change in
      accounting principle. The Company will be required to apply this statement
      for
      accounting changes and corrections of errors made in fiscal years beginning
      after December 15, 2005. The adoption of this standard is not expected to have
      a
      material effect on the Company's financial position or results of
      operations.





In
      February 2006, the FASB issued SFAS No. 155, “Accounting for Certain Hybrid
      Financial Instruments -- an amendment of FASB Statements No. 133 and 140.” SFAS
      155 amends SFAS No. 133, “Accounting for Derivative Instruments and Hedging
      Activities” and SFAS No. 140, “Accounting for Transfers and Servicing of
      Financial Assets and Extinguishments of Liabilities” and related
      interpretations. SFAS 155 permits fair value re-measurement for any hybrid
      financial instrument that contains an embedded derivative that otherwise would
      require bifurcation and clarifies which interest-only strips and principal-only
      strips are not subject to recognition as liabilities. SFAS 155 eliminates the
      prohibition on a qualifying special-purpose entity from holding a derivative
      financial instrument that pertains to a beneficial interest other than another
      derivative financial instrument. SFAS 155 is effective for the Company for
      all
      financial instruments acquired or issued beginning January 1, 2007. The adoption
      of this standard is not expected to have a material effect on the Company's
      financial position or results of operations.





In
      March
      2006, the FASB issued SFAS No. 156, “Accounting for Servicing of Financial
      Assets - an amendment of FASB Statement No. 140.” SFAS 156 requires an entity to
      recognize a servicing asset or servicing liability each time it undertakes
      an
      obligation to service a financial asset. It also requires all separately
      recognized servicing assets and servicing liabilities to be initially measured
      at fair value, if practicable. SFAS 156 permits an entity to use either the
      amortization method or the fair value measurement method for each class of
      separately recognized servicing assets and servicing liabilities. SFAS 156
      is
      effective for the Company as of January 1, 2007. The adoption of this standard
      is not expected to have a material effect on the Company's financial position
      or
      results of operations.


**Item
      3:**  **Controls
      and Procedures**





We
      maintain a set of disclosure controls and procedures designed to ensure that
      information required to be disclosed by us in the reports filed under the
      Securities Exchange Act, is recorded, processed, summarized and reported within
      the time periods specified by the SEC’s rules and forms. Disclosure controls are
      also designed with the objective of ensuring that this information is
      accumulated and communicated to our management, including our chief executive
      officer and chief financial officer, as appropriate to allow timely decisions
      regarding required disclosure.








Based
      upon their evaluation as of the end of the period covered by this report, our
      chief executive officer and chief financial officer concluded that, our
      disclosure controls and procedures are effective to ensure that information
      required to be included in our periodic SEC filings is recorded, processed,
      summarized, and reported within the time periods specified in the SEC rules
      and
      forms.





Limitations
      of Disclosure Controls and Procedures





Our
      management, including our chief executive officer and chief financial officer
      does not expect that our disclosure controls or internal control over financial
      reporting will prevent all errors or all instances of fraud. A control system,
      no matter how well designed and operated, can provide only reasonable, not
      absolute, assurance that the control system’s objectives will be met. Further,
      the design of a control system must reflect the fact that there are resource
      constraints, and the benefits of controls must be considered relative to their
      costs. Because of the inherent limitations in all control systems, no evaluation
      of controls can provide absolute assurance that all control issues and instances
      of fraud, if any, within our Company have been detected. These inherent
      limitations include the realities that judgments in decision-making can be
      faulty, and that breakdowns can occur because of simple error or mistake.
      Controls can also be circumvented by the individual acts of some persons, by
      collusion of two or more people, or by management override of the controls.
      The
      design of any system of controls is based in part upon certain assumptions
      about
      the likelihood of future events, and any design may not succeed in achieving
      its
      stated goals under all potential future conditions. Over time, controls may
      become inadequate because of changes in conditions or deterioration in the
      degree of compliance with policies or procedures. Because of the inherent
      limitation of a cost-effective control system, misstatements due to error or
      fraud may occur and not be detected.









**PART
      II - OTHER INFORMATION**





**Item
              1:**
            **Legal
                Proceedings**




None





**Item
                2:**
              **Changes
                  in Securities**




(a)
            None


(b)
                None
 (c)
                  None
 (d)
                    Not
                        Applicable.


**Item
                3.:**
              **Defaults
                  upon Senior Securities**
 None


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




None


**IteItem
                    5.:**
                  **Other
                      Information**




None
 **Item
                      4.:**
                    **Exhibits**


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


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


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


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


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










**SIGNATURES**





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




Dated:
              August 14, 2007
            AMERICAN
              BASKETBALL ASSOCIATION, INC.By:
            /s/ Joseph
              F.
              NewmanJoseph
              F. Newman, Chief Executive
              Officer


By:
              /s/ Darren
                CioffiDarren
                Cioffi, Chief Financial Officer