On
January 29, 2007, Jewett,
Schwartz, Wolfe & Associates, f/k/a Jewett, Schwartz & Associates
(“JSW”),
was appointed
as the independent auditors for M.B.A. Holdings, Inc. (the “Company”)
commencing with the year ending October 31, 2006, and Epstein, Weber
&
Conover, PLC (“Epstein, Weber”) was dismissed as the independent auditors for
the Company as of January 29, 2007. The decision to change auditors
was approved
by the audit committee of the Company's Board of Directors on January
29, 2007.
Semple
&
Cooper,
LLP (“S&C”) had served as
the Company's independent auditors for the fiscal years ending October
31, 2005
and 2004. S&C resigned on April 10, 2006, and Epstein, Weber
was appointed as independent auditor on June 4, 2006. Form 8-Ks
describing the changes in auditors were filed with the SEC on April
13, 2006,
May 10, 2006 and June 8, 2006.
For
the
fiscal years ending October 31, 2005 and 2004, and subsequent interim
period, S&C had qualified their opinion to the financial statements of the
Company due to a going concern scope limitation. The auditor’s report on the
same financial statements contained no adverse opinion, or disclaimer
of
opinion, nor was it modified as to accounting principles.
S&C
had noted in the 2005 fiscal year that a material weakness existed in the
internal controls over newly acquired assets. It was noted that
the Company had
experienced difficulties in establishing an acceptable level of
control over the
motorcycle rental operations. In addition, during the 2005 fiscal year, a
weakness in internal controls has been attributed to staffing needs.
The filling
of vacancies, especially at the CFO position, was recommended to
acquire needed
knowledge, experience, and skills.
S&C
had on each occasion of citing material weakness in internal controls
in the
2005 and 2004 fiscal years and interim period, discussed the matter
with the
Audit Committee of the Company. The Company has recognized these
weaknesses and
has established a group to evaluate internal controls and to recommend
changes
to these controls to the Board of Directors.
During
the Company's two
most
recent interim quarters,
there
were no disagreements with Epstein, Weber on any matter of accounting
principles
or practices, financial statement disclosure, or auditing scope or
procedure,
which disagreement, if not resolved to the satisfaction of Epstein,
Weber, would
have caused it to make reference to the subject matter of the disagreements
in
connection with its report with respect to the financial statements
of the
Company.
The
Company, herewith, authorizes full disclosure by S&C and Epstein, Weber
to the yet-to-be-named successor of all records for which the authorization
of
the Company is required. Similarly, authorization will be given
to the successor
to make unrestricted inquiry of the former auditors.
During
the Company's two
most
recent interim quarters,
there
were no “reportable events” as such term is described in Item 304(a)(1)(v) of
Regulation S-B under the Securities Exchange Act of 1934, as amended
(the
“Exchange Act”), with respect to the Company.
During
the Company's two
most
recent interim quarters,
the
Company did not consult with JSW with respect to the Company regarding
(i) the
application of accounting principles to a specified transaction,
either
completed or proposed, or the type of audit opinion that might be
rendered on
the Company’s
financial statements, (ii) any matter that was either the subject
of a
disagreement (as defined in Item 304(a)(1)(iv) of Regulation S-B
under the
Exchange Act and the related instructions to Item 304 of Regulation
S-B) or a
“reportable event” (as such term is described in Item 304(a)(1)(v) of Regulation
S-B), or (iii) any of the matters or events set forth in Item 304(a)(2)(i)
and
(ii) of Regulation S-B.
The
Company has furnished a copy of this Report to Epstein, Weber and
requested them
to furnish the Company with a letter addressed to the Securities
and Exchange
Commission stating whether it agrees with the statements made by
the Company
herein in response to Item 304(a) of Regulation S-K and, if not,
stating the
respects in which it does not agree. The letter from Epstein, Weber
will be
submitted when received.