ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATION.

OVERVIEW

It is anticipated that the Company will continue to rely on financial assistance from affiliates. The Meisenheimer family is fully committed to making the Company a profitable operation and also making the League a viable one. Given the current lack of capital, the Company has not been able to develop any new programs to revitalize the League, nor has it been able to hire additional sales and promotional personnel. As a result, the Company is currently dependent on the efforts of Daniel T. Meisenheimer, III and two other employees for all marketing efforts. Their efforts have not resulted in any substantial increase in the number of franchises. The NBA has established a developmental basketball league known as the National Basketball Developmental League ("NBDL"). The Company believes that the establishment of this league, consisting of eight teams, will have no effect on the Company's season, since the NBDL season as presently constituted runs from November through March. Further, nothing prohibits a NBDL player from playing in the USBL. Accordingly, and as of the present time, the Company does not perceive the NBDL as a competitor. However, with the establishment of the NBDL, it is unlikely that, at least for the present time, the Company can develop any meaningful relationship with the NBA.

THREE MONTHS ENDED NOVEMBER 30, 2008 AS COMPARED TO NOVEMBER 30, 2007

Revenues decreased $16,575 from $16,575 in 2007 to $0 in 2008. In 2007, the Company had $16,500 in rental revenues from the MCREH property.

Operating expenses increased $13,819 from $47,988 in 2007 to $61,807 in 2008 primarily due to an increase in professional fees.

Net loss increased $86,594 from $40,986 in 2007 to $127,580 in 2008, primarily due to $16,575 lower revenues, $13,819 higher operating expenses, and a $56,255 loss from marketable equity securities in 2008.

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NINE MONTHS ENDED NOVEMBER 30, 2008 AS COMPARED TO NOVEMBER 30, 2007

Aggregate franchise fees decreased to $20,000 for the first nine months of 2008 from $85,000 for the first nine months of 2007. This decrease was due to the suspension of the 2008 season. Sponsorship and advertising revenues totaled $0 during the first nine months of 2008 as compared to $45,000 in the first nine months of 2007, all from the Company's affiliate Spectrum Associates. $42,000 and $169,500 of the 2008 and 2007 revenues, respectively, were derived from various related parties.

Operating expenses decreased from $230,920 for the nine months ended November 30, 2007 to $195,740 for the nine months ended November 30, 2008. This decrease was due to the $69,400 decrease in consulting fees and $20,200 decrease in referee fees as a result of the suspension of the 2008 season. Operating expenses for the nine months ended November 30, 2008 and 2007 included consulting fees of $0 and $75,000 respectively, to MCI for management services, including the services provided to the Company by Daniel T. Meisenheimer, III and Richard Meisenheimer.

Net loss increased $149,244 from $74,737 in 2007 to $223,981 in 2008. The decrease was due mainly to the $137,698 decrease in revenues and the $42,964 loss from marketable securities, offset partially by the $35,180 decrease in operating expenses.

LIQUIDITY AND CAPITAL RESOURCES

The Company had cash of $4,698 and a working capital deficit of $1,403,487 at November 30, 2008. The Company's statement of cash flows reflects cash used in operations of $115,743 in 2008, which results primarily from the $223,981 net loss, offset partially by a $73,821 increase in accounts payable and accrued expenses. Net cash provided by financing activities was $102,466 in 2008, primarily due to loans from related parties.

The Company's ability to generate cash flow from franchise royalty fees is dependent on scheduling of a 2009 season and the financial stability of the individual franchises constituting the League. Each franchise is confronted with meeting its own fixed costs and expenses, which are primarily paid from revenues generated from attendance. Experience has shown that USBL is generally the last creditor to be paid by the franchise. If attendance has been poor, USBL has from time to time only received partial payment and, in some cases, no payments at all. The Company estimates that it requires at least $300,000 of working capital to sustain operations over a 12-month period. Accordingly, if the Company is unable to generate additional sales of franchises and schedule a 2009 season within the next 12 months, it will again have to rely on affiliates for loans and revenues to assist it in meeting its current obligations. With respect to long term needs, the Company recognizes that in order from the League and USBL to be successful, USBL has to develop a meaningful sales and promotional program. This will require an investment of additional capital. Given the Company's current financial condition, the ability of the Company to raise additional capital other than from affiliates is questionable. At the current time the Company has no definitive plan as to how to raise additional capital.