**UNITED
      STATES SECURITIES AND EXCHANGE COMMISSION**


**WASHINGTON,
      D. C. 20549**





**FORM
      10-QSB**





**(x)**
            **QUARTERLY
                REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
                ACT OF
                1934**





**FOR
      THE QUARTERLY PERIOD ENDED MARCH 31, 2007**





**Commission
      File Number 0-29057**





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





For
      the
      transition period from **__________________TO
      __________________**





**AMERICAN
      RACING CAPITAL, INC.**


(Exact
      name of registrant as specified in charter)





**NEVADA**
            **87-0631750**(State
                or other jurisdiction of incorporation or organization)
            (I.R.S.
                Employer I.D. No.)**P.O.
                Box 22002****San
                Diego, California**
            **92192**(Address
                of principal executive offices)
            (Zip)Issuer’s
                telephone number, including area code
            **(800)
                914-3177**





Check
      whether the issuer (1) filed all reports required to be filed by Section 13
      or
      15 (d) of the Securities Exchange Act of 1934 during the past twelve months
      (or
      for such shorter period that the registrant was required to file such reports),
      and (2) has been subject to such filing requirements for the past 90
      days.     Yes
o  No 
      x




Indicate
      by check mark whether the registrant is a shell company (as defined in Rule
      12b-2 of the Exchange Act).




Yes
oNo 
      x




APPLICABLE
      ONLY TO ISSUERS INVOLVED IN BANKRUPTCY


PROCEEDINGS
      DURING THE PRECEDING FIVE YEARS





Check
      whether the registrant filed all documents and reports required to be filed
      by
      Sections 12, 13 or 15(d)of the Exchange Act subsequent to the distribution
      of
      securities under a plan confirmed by a court.  o Yes   o No





APPLICABLE
      ONLY TO CORPORATE ISSUERS:





Indicate
      the number of shares outstanding of each of the issuer’s classes of common
      stock, as of the latest practicable date: **AS
      OF MAY 10, 2007 - 31,165,398**  **SHARES
      OF THE ISSUER’S COMMON STOCK, $0.001 PAR VALUE PER SHARE WERE ISSUED AND
      OUTSTANDING.**


________________





Transitional
      Small Business Disclosure Format: Yes
oNo 
      x
























**PART
      I**


**FINANCIAL
      INFORMATION**






**INTRODUCTORY
      NOTE**






**FORWARD-LOOKING
      STATEMENTS**




This
      Form
      10-QSB contains “forward-looking statements” relating to American Racing
      Capital, Inc. (“ ARC ”),
      which
      represent ARC’s current expectations or beliefs including, but not limited to,
      statements concerning ARC’s operations, performance, financial condition and
      growth. For this purpose, any statements contained in this Form 10-QSB that
      are
      not statements of historical fact are forward-looking statements. Without
      limiting the generality of the foregoing, words such as “may”, “anticipation”,
“intend”, “could”, “estimate”, or “continue” or the negative or other comparable
      terminology are intended to identify forward-looking statements. These
      statements by their nature involve substantial risks and uncertainties, such
      as
      losses, dependence on management, variability of quarterly results, and the
      ability of ARC to continue its growth strategy, certain of which are beyond
      ARC’s control. Should one or more of these risks or uncertainties materialize or
      should the underlying assumptions prove incorrect, actual outcomes and results
      could differ materially from those indicated in the forward-looking
      statements.




Any
      forward-looking statement speaks only as of the date on which such statement
      is
      made, and the Company undertakes no obligation to update any forward-looking
      statement or statements to reflect events or circumstances after the date on
      which such statement is made or to reflect the occurrence of unanticipated
      events. New factors emerge from time to time and it is not possible for
      management to predict all of such factors, nor can it assess the impact of
      each
      such factor on the business or the extent to which any factor, or combination
      of
      factors, may cause actual results to differ materially from those contained
      in
      any forward-looking statements.







1







**ITEM
      1. FINANCIAL STATEMENTS**




**AMERICAN
      RACING CAPITAL, INC. AND SUBSIDIARIES**


**CONSOLIDATED
      BALANCE SHEET**


**MARCH
      31, 2007**


(Unaudited)





**ASSETS**CURRENT
                ASSETSCash
            
            $
            1,635Total
                Current Assets
            
            
            1,635OTHER
                ASSETSEquity
                investment
            
            
            442,612TOTAL
                ASSETS
            
            $
            444,247**LIABILITIES
                AND STOCKHOLDERS’ EQUITY (DEFICIT)**CURRENT
                LIABILITIESAccounts
                payable and accrued expenses
            
            $
            303,192Convertible
                debt payable, net
            
            
            236,111Interest
                payable on convertible debt
            
            
            42,500Total
                Current Liabilities
            
            
            581,803TOTAL
                LIABILITIES
            
            
            581,803STOCKHOLDERS’
                EQUITY (DEFICIT)Preferred
                stock 10,000,000 shares authorized at $0.001 par value;
              1,000,000
                shares issued and outstanding
            
            
            1,000Common
                stock 500,000,000 shares authorized at $0.001 par value;
              27,791,398shares
                issued and outstanding
            
            
            27,991Additional
                paid in capital
            
            
            5,744,021Accumulated
                deficit
            
            
            (5,910,568
            )Total
                Stockholders’ Equity (Deficit)
            
            
            (137,556
            )TOTAL
                LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)
            
            $
            444,247


**The
      accompanying notes are an integral part of these financial
      statements.**








2








**AMERICAN
      RACING CAPITAL, INC. AND SUBSIDIARIES**


**CONSOLIDATED
      STATEMENTS OF OPERATIONS**


**FOR
      THE THREE MONTHS ENDED MARCH 31, 2007 AND 2006**


(Unaudited)





**March
                31,**
            
            **March
                31,****2007**
            
            **2006**SALES
            
            $
            -
            
            $
            -COST
                OF SALES
            
            
            -
            
            
            -Gross
                Profit
            
            
            -
            
            
            -EXPENSESConsulting
                and professional fees
            
            
            378,636
            
            
            -Administrative
            
            
            70,689
            
            
            -TOTAL
                EXPENSES
            
            
            449,325
            
            
            -Loss
                from operations
            
            
            (449,325
            )
            
            -OTHER
                INCOME (EXPENSE)Interest
                expense
            
            
            (98,333
            )
            
            -Equity
                loss
            
            
            (913
            )
            
            -TOTAL
                OTHER (EXPENSE)
            
            
            (99,246
            )
            
            -Loss
                - before discontinued operations
            
            
            (548,571
            )
            
            -Discontinued
                operations
            
            
            -
            
            
            (25,120
            )Net
                loss
            
            $
            (548,571
            )
            $
            (25,120
            )NET
                LOSS PER COMMON SHAREBasic
                and diluted
            
            $
            (0.02
            )
            $
            (0.01
            )WEIGHTED
                AVERAGE OUTSTANDING SHARESBasic
                and diluted
            
            
            26,444,731
            
            
            4,991,398





**The
      accompanying notes are an integral part of these financial
      statements.**







3










**AMERICAN
      RACING CAPITAL, INC. AND SUBSIDIARIES**


**CONSOLIDATED
      STATEMENTS OF CASH FLOWS**


**FOR
      THE THREE MONTHS ENDED MARCH 31, 2007 AND 2006**


(Unaudited)





**March
                31,**
            
            **March
                31,****2007**
            
            **2006**CASH
                FLOWS FROM OPERATING ACTIVITIESNet
                loss
            
            $
            (548,571
            )
            $
            (25,120
            )Adjustments
                to reconcile net loss to net cash provided by operating
                activitiesDepreciation
            
            
            -
            
            
            758Amortization
                of discount on convertible debt
            
            
            83,333
            
            
            -Common
                stock and warrants issued for services
            
            
            366,000
            
            
            -Equity
                loss
            
            
            913
            
            
            -Changes
                in operating assets and liabilities
            
            
            -
            
            
            -Prepaid
                expenses
            
            
            755
            
            
            -Accounts
                payable
            
            
            75,842
            
            
            22,500Net
                cash used in operating activities
            
            
            (21,728
            )
            
            (1,862
            )CASH
                FLOWS FROM INVESTING ACTIVITIES
            
            
            -
            
            
            -CASH
                FLOWS FROM FINANCING ACTIVITIESPayments
                on notes payable
            
            
            -
            
            
            -Proceeds
                from notes payable-related parties
            
            
            -
            
            
            750Proceeds
                from notes payable
            
            
            -
            
            
            1,000Payments
                on notes payable
            
            
            -
            
            
            -Net
                cash provided by financing activities
            
            
            -
            
            
            1,750Net
                Increase (Decrease) in Cash
            
            
            (21,728
            )
            
            (112
            )Cash
                at Beginning of Period
            
            
            23,363
            
            
            379Cash
                at End of Period
            
            $
            1,635
            
            $
            267Supplemental
                disclosure of cash flow informationCommon
                stock issued for services
            
            $
            366,000
            
            $
            -Cash
                paid for interest
            
            $
            -
            
            $
            -Cash
                paid for income taxes
            
            $
            -
            
            $
            -





**The
      accompanying notes are an integral part of these financial
      statements.**








4





**AMERICAN
      RACING CAPITAL, INC. AND SUBSIDIARY**


**NOTES
      TO FINANCIAL STATEMENTS**


**MARCH
      31, 2007**


(Unaudited)







**1.**  **BASIS
      OF PRESENTATION**




The
      accompanying unaudited condensed consolidated financial statements have been
      prepared in accordance with Securities and Exchange Commission requirements
      for
      interim financial statements. Therefore, they do not include all of the
      information and footnotes required by accounting principles generally accepted
      in the United States for complete financial statements. The financial statements
      should be read in conjunction with the Form 10-KSB for the year ended December
      31, 2006 of American Racing Capital, Inc. and subsidiaries (the “ Company ”
or
      “ ARC ”).




The
      interim financial statements present the condensed balance sheet, statements
      of
      operations and cash flows of the Company. The financial statements have been
      prepared in accordance with accounting principles generally accepted in the
      United States.




The
      interim financial information is unaudited. In the opinion of management, all
      adjustments necessary to present fairly the financial position of the Company
      as
      of March 31, 2007 and the results of operations and cash flows presented herein
      have been included in the financial statements. Interim results are not
      necessarily indicative of results of operations for the full year.




The
      preparation of financial statements in conformity with accounting principles
      generally accepted in the United States 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.




**2.**  **GOING
      CONCERN**





The
      Company’s financial statements are 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. The
      Company has generated significant losses from operations.





In
      order
      to continue as a going concern and achieve a profitable level of operations,
      the
      Company will need, among other things, to raise additional capital resources
      and
      to develop a consistent source of revenues. Management’s plans include raising
      additional operating funds from private placements of shares of its common
      stock.





The
      ability of the Company to continue as a going concern is dependent upon its
      ability to successfully accomplish the plan described in the preceding paragraph
      and eventually attain profitable operations. The accompanying financial
      statements do not include any adjustments that might be necessary if the Company
      is unable to continue as a going concern.




**3.**  **SUMMARY
      OF SIGNIFICANT ACCOUNTING POLICIES**




Employee
      stock based compensation - In December 2004, the Financial Accounting Standards
      Board issued Statement of Financial Accounting Standards (“SFAS” No. 153”),
“Accounting for Stock-Based Compensation”. SFAS No. 153 amends the transition
      and disclosure provisions of SFAS No. 123. This statement supersedes APB Opinion
      No. 25, Accounting for Stock Issued to Employees, and its related implementation
      guidance. This statement establishes standards for the accounting for
      transactions in which an entity exchanges its equity instruments for goods
      or
      services. This statement requires a public entity to measure the cost of
      employee services received in exchange for an award of equity instruments based
      on the grant-date fair value of the award (with limited exceptions). That cost
      will be recognized over the period during which an employee is required to
      provide service in exchange for the award—the requisite service period (usually
      the vesting period). For stock options and warrants issued to non-employees,
      the
      Company applies SFAS No. 153, which requires the recognition of compensation
      cost based upon the fair value of stock options at the grant date using the
      Black-Scholes Option Pricing Model.




The
      Company issued no stock and granted no warrants or options to employees for
      compensation for the three month period ended March 31, 2007.






**4.**  **SIGNIFICANT
      EVENTS**




On
      July
      25, 2006, the Company entered into a Securities Purchase Agreement (the
“Securities Purchase Agreement”) with New Millennium Capital Partners II,
      LLC, AJW Qualified Partners, LLC, AJW Offshore, Ltd. and AJW Partners, LLC
      (collectively, the “ Investors ”).
      Under
      the terms of the Securities Purchase Agreement, the Investors purchased an
      aggregate of (i) $2,000,000 in callable convertible secured notes (the
“ Notes ”)
      and
      (ii) seven year warrants to purchase 10,000,000 shares of the company’s common
      stock at an exercise price of $0.30 (the “ Warrants ”).
      The
      Notes carry an interest rate of 6% per annum and a maturity date of July 25,
      2009. Pursuant to the Securities Purchase Agreement, the Company must file
      a
      registration statement with the U.S. Securities and Exchange Commission within
      forty-five (45) days of the execution of the Securities Purchase Agreement.
      The notes are convertible into the Company’s common stock at the Applicable
      Percentage of the average of the lowest three (3) trading prices for the
      Company’s shares of Common Stock during the twenty (20) trading day period
      prior to conversion. The “ Applicable
      Percentage ”
means
      50%; provided, however, that the Applicable Percentage shall be increased to
      (i)
      55% in the event that a registration statement is filed within thirty days
      of
      the closing and (ii) 60% in the event that the registration statement becomes
      effective within one hundred and twenty days from the Closing. In addition,
      the
      Company has granted the investors a security interest in substantially all
      of
      its assets, as well as intellectual property and registration rights. The
      Company recorded an expense of $72,571 for the issuance of the warrants. The
      beneficial conversion feature attached to the convertible debt results in a
      discount of $1,000,000 which is being amortized over the 36 month term of the
      debt. The Company recorded amortization expense of $83,333 during the three
      months ended March 31, 2007. A summary of the convertible debt as of March
      31,
      2007 is as follows:





Convertible
      Debt Payable    $  1,000,000





Discount       (763,889 )





Net       $  236,111





On
      November 21, 2006, the Company entered into a Shareholders’ Agreement whereby it
      acquired 51% of the outstanding shares of Motorsports & Entertainment of
      Tennessee, Inc., a Nevada corporation (“MET”). MET holds a 40% interest in
      LJ&J Enterprises of Tennessee, Inc., a Tennessee corporation (“LJ&J”).
      The Company has the right to acquire up to 80% of LJJ upon payment of $700,000
      of which $450,000 has been paid as of March 31, 2007. The investment is recorded
      using the equity method of accounting. The Company recorded a loss of $913
      for
      the three months ended March 31, 2007 for the investment.






5





Item
      2.
      Management’s Discussion and Analysis Or Plan Of Operation




***Forward-Looking
      Statements and Associated Risks*** *.* ****** *This
      Report contains forward-looking statements. Such forward-looking statements
      include statements regarding, among other things, (a)) our growth strategies,
      (b) anticipated trends in our industry, (c) our future financing plans, (d)
      our anticipated needs for working capital, (e) our lack of operational
      experience, and (f) the benefits related to ownership of our common stock.
      Forward-looking statements, which involve assumptions and describe our future
      plans, strategies, and expectations, are generally identifiable by use of the
      words “may,” “should,” “expect,” “anticipate,” “estimate,” “believe,” “intend,”
or “project” or the negative of these words or other variations on these words
      or comparable terminology. These forward-looking statements are based largely
      on
      the Company’s expectations and are subject to a number of risks and
      uncertainties, including those described in “Business Risk Factors” of the
      Company’s Form 10-KSB for the year ended December  31, 2006. Actual results
      could differ materially from these forward-looking statements as a result of
      changes in trends in the economy and the industry, demand for the Company’s
      services,, competition, reductions in the availability of financing and
      availability of raw materials, and other factors. In light of these risks and
      uncertainties, there can be no assurance that the forward-looking statements
      contained in this Report will in fact occur as projected.* ****** *Any
      forward-looking statement speaks only as of the date on which such statement
      is
      made, and the Company undertakes no obligation to update any forward-looking
      statement or statements to reflect events or circumstances after the date on
      which such statement is made or to reflect the occurrence of unanticipated
      events. New factors emerge from time to time and it is not possible for
      management to predict all of such factors, nor can it assess the impact of
      each
      such factor on the business or the extent to which any factor, or combination
      of
      factors, may cause actual results to differ materially from those contained
      in
      any forward-looking statements.*




**Overview**




American
      Racing Capital, Inc. (the “ Company ”)
      was
      incorporated under the laws of the State of Nevada on September 8, 1998 as
      Mega
      Health Corporation. On June 23, 1999, the name of the Company was changed to
      Altrimega Health Corporation. On July 25, 2002, the Company entered into a
      non-binding letter of intent with Creative Holdings, Inc., a South Carolina
      corporation (“Creative Holdings”). Pursuant to that Letter of Intent and upon
      the consummation of a definitive agreement, the Company was to acquire Creative
      Holdings. A Merger Agreement was executed on August 15, 2002, between the
      Company, Altrimega Acquisition Company, a Nevada corporation, Creative Holdings,
      and the shareholders of Creative Holdings. On September 2, 2002, the Company,
      Creative Holdings and the shareholders of Creative Holdings amended the Merger
      Agreement and restructured the merger into a stock exchange transaction, whereby
      Creative Holdings would become a wholly-owned subsidiary of the Company. The
      share exchange was completed on October 17, 2002, at which time, Creative
      Holdings became a wholly owned subsidiary of the Company.




Pursuant
      to the Share Exchange Agreement (effective retroactively as of August 15, 2002),
      by and among the Company, Creative Holdings and the shareholders of Creative
      Holdings, the shareholders exchanged with and delivered to the Company 100%
      of
      the issued and outstanding capital stock of Creative Holdings in exchange for
      20,000,000 shares of common stock of the Company and 1,000,000 shares of Series
      A Convertible Preferred Stock of the Company. Each share of Series A Convertible
      Preferred Stock was convertible into 300 shares of common stock of the Company.
      Between December 21, 2004 and January 5, 2005, the Company entered into releases
      with each holder of the Company’s 1,000,000 shares of Series A Preferred Stock,
      which resulted in the cancellation of all of the Company’s outstanding shares of
      Series A Preferred Stock.




On
      October 17, 2005, the Company entered into a Share Exchange Agreement, by and
      among the Company, American Racing Capital, Inc., a Nevada company
      (“ ARCI ”)
      and
      the shareholders of ARCI, pursuant to which, the shareholders of ARCI exchanged
      with, and delivered to the Company all of the issued and outstanding common
      stock of ARCI in exchange for 150,000,000 shares of the Company’s common stock
      and 1,000,000 shares of Series A Preferred Stock, which can be converted at
      any
      time into three hundred (300) fully paid, nonassessable shares of the Company’s
      common stock. As a result of the Share Exchange Agreement, on October 19, 2005,
      ARCI became a wholly-owned subsidiary of the Company and the shareholders of
      Fast One Inc., Davy Jones Motorsports, Inc. and ARCI became the controlling
      shareholders of the Company.




On
      October 18, 2005, the Company entered into a Share Exchange Agreement, by and
      among the Company, ARC Development Corporation, a Nevada corporation
      (“ ARCD ”)
      and
      the shareholders of ARCD. Pursuant to the Share Exchange Agreement, the
      shareholders of ARCD exchanged with, and delivered to, ARC all of the issued
      and
      outstanding common stock of ARCD in exchange for 235,000,000 shares of the
      Company’s Common Stock, and 1,000,000 shares of Series A Preferred Stock, which
      can be converted at any time into three hundred (300) fully paid, nonassessable
      shares of the Company’s Common Stock. As a result of the Share Exchange
      Agreement, on October 19, 2005, ARCD became a wholly-owned subsidiary of the
      Company.




As
      a
      result of the share exchange transactions, in October 2005, the Company adopted
      a new strategy which seeks to integrate race track design and development
      operations with a professional racing team and a national driving school network
      to leverage the popularity and growth of the motor sports industry.




On
      March
      20, 2006, the Board of Directors of the Company, in lieu of a special meeting
      and pursuant to unanimous written consent, approved a one for one hundred
      (1-for-100) reverse stock split (the “ Reverse
      Stock Split ”)
      of the
      Company’s issued and outstanding, which became effective on March 30, 2006 (the
“ Effective
      Date ”).
      On
      the Effective Date, the Company’s issued and outstanding common stock was
      reduced based on the 1-for-100 ratio and the new trading symbol for the Company
      was changed to ‘ANRC’.




On
      October 27, 2006, the Company entered in a Settlement Agreement and General
      Release with D. Davy Jones whereby it returned the shares of FastOne, Inc.
      and
      Davy Jones Motorsports, Inc. to Mr. Jones for 1,500,000 shares of its common
      stock and 1,000,000 shares of its preferred stock. As additional consideration
      for termination of his employment contract, the Company agreed to pay Mr. Jones
      $240,000 over 24 months.




6




**Critical
      Accounting Policies And Estimates**




Management’s
      discussion and analysis of the Company’s financial condition and results of
      operations are based upon the Company’s consolidated financial statements, which
      have been prepared in accordance with accounting principles generally accepted
      in the United States of America. The preparation of these financial statements
      requires that we make estimates and judgments that affect the reported amounts
      of assets, liabilities, revenues and expenses. At each balance sheet date,
      management evaluates its estimates. The Company based its estimates on
      historical experience and on various other assumptions that are believed to
      be
      reasonable under the circumstances. Actual results may differ from these
      estimates under different assumptions or conditions. The estimates and critical
      accounting policies that are most important in fully understanding and
      evaluating our financial condition and results of operations include those
      listed below.






**Revenue
      Recognition**




The
      Company recognizes revenue when services have been provided and collection
      is
      reasonably assured.






**Principles
      Of Consolidation**




On
      October 17, 2005, the Company entered into a Share Exchange Agreement, by and
      among the Company, ARCI and the shareholders of ARCI, pursuant to which, the
      shareholders of ARCI exchanged with, and delivered to the Company all of the
      issued and outstanding common stock of ARCI in exchange for 150,000,000 shares
      of the Company’s common stock and 1,000,000 shares of Series A Preferred Stock,
      which can be converted at any time into three hundred (300) fully paid,
      nonassessable shares of the Company’s common stock. As a result of the Share
      Exchange Agreement, on October 19, 2005, ARCI became a wholly-owned subsidiary
      of the Company. The shareholders of Fast One, Inc., DJ Motorsports, Inc. and
      ARCI became the controlling shareholders of the Company. Accordingly, the
      financial statements of Fast One, Inc., DJ Motorsports, Inc. and ARCI are
      presented as the historical financial statements of the Company. The
      consolidated financial statements shown in this report include the historical
      operating information of the Fast One, Inc., Davy Jones Motorsports, Inc. and
      ARCI.




All
      intercompany transactions have been eliminated.






**Results
      Of Operations**






**For
      The Three Months Ended March 31, 2007 Compared To The Three Months Period Ended
      March 31, 2006**






**Revenues**




Revenue
      from continuing operations for the three months ended March 31, 2007, was $-0-
      compared to $-0- in revenue for the three month period ended March 31, 2006.
      The
      Company discontinued its operations on October 1, 2006 when it disposed of
      its
      ownership of Davy Jones Motorsports, Inc. The Company accounts for its
      investment in LJ&J under the equity method of accounting accordingly no
      revenues are recognized in the financial statements.




7




***Operating
      expenses.*** Operating
      expenses from continuing operations for the three months ended March 31, 2007
      were $449,325, as compared to $-0-, for the three months ended March 31, 2006,
      because the Company disposed of its ownership of Davy Jones Motorsports, Inc.
      Operating expenses in 2007 consisted of $378,626 in consulting and professional
      fees paid in connection with acquisitions being considered and $70,689 in
      general and administrative expenses.




***Net
      ( loss).*** The
      Company had a net loss of $548,571 for the three months ended March 31, 2007,
      as
      compared to a net loss of $25,120 for the three months ended March 31, 2006.
      The
      increased loss of $523,451 or 2,084% was mostly attributable to the value of
      the
      shares of common stock and warrants issued to consultants valued at $366,000.




Liquidity
      And Capital Resources




Our
      financial statements have been prepared on a going concern basis that
      contemplates the realization of assets and the settlement of liabilities and
      commitments in the normal course of business. We have incurred losses since
      inception. We incurred a net loss of $548,571 for the three months ended March
      31, 2006, and have an accumulated deficit of $5,910,568 at March 31, 2007.
      As of
      March 31, 2007, we had current assets of $1,635 and current liabilities of
      $581,803 resulting in a working capital deficit of $580,168. Through its
      subsidiary MET, the Company holds a 40% interest in LJ&J and currently has a
      commitment to acquire up to 80% of LJ&J upon final payment of $250,000.




For
      the
      three months ended March 31, 2007, the Company used net cash in its operations
      of $21,728, no cash was used in investing activities and no cash was provided
      by
      financing activities.




Included
      in our liabilities, is $1,000,000 in convertible debt net of the discount for
      the beneficial conversion feature of $763,889. Notes payable to related parties
      of $56,664 are also included in our liabilities. In the third quarter of 2006,
      the Company secured funding through the issuance of notes and warrants. On
      July 25, 2006, the Company entered into a Securities Purchase Agreement
      (the “Securities Purchase Agreement”) with New Millennium Capital Partners II,
      LLC, AJW Qualified Partners, LLC, AJW Offshore, Ltd. and AJW Partners, LLC
      (collectively, the “ Investors ”).
      Under
      the terms of the Securities Purchase Agreement, the Investors purchased an
      aggregate of (i) $2,000,000 in callable convertible secured notes (the
“ Notes ”)
      and
      (ii) seven year warrants to purchase 10,000,0000 shares of the Company’s common
      stock at an exercise price of $0.30 (the “ Warrants ”).
      The
      Notes carry an interest rate of 6% per annum and a maturity date of July 25,
      2009. The notes are convertible into the Company’s common shares at fifty
      percent (50%) (the “ Applicable
      Percentage ”)
      of the
      average of the lowest three (3) trading prices for our shares of common stock
      during the twenty (20) trading day period prior to conversion. However, the
      Applicable Percentage shall be increased to (i) 55% in the event that a
      registration statement is filed within thirty days of the closing and (ii)
      60%
      in the event that the registration statement becomes effective within one
      hundred and twenty days from the Closing. In addition, the Company has granted
      the investors a security interest in substantially all of its assets and
      intellectual property as well as registration rights.






**Plan
      Of Operation**




The
      Company’s plan of operations seeks to integrate race track design and
      development operations with a professional racing team and a national driving
      school network to leverage the popularity and growth of the motor sports
      industry.




For
      the
      next 12 months, the Company anticipates that it will need $2,500,000 for general
      working capital purposes, including funds for event and administrative
      operations, in addition to funding necessary to acquire and develop race track
      projects. The Company will seek debt financing to launch any new race track
      projects and will seek equity funding or a combination of debt/equity financing
      for operations.




**RISK
      FACTORS**






**Risks
      Related To Our Business**




***We
      are subject to various risks that may materially harm our business, financial
      condition and results of operations. You should carefully consider the risks
      and
      uncertainties described below and the other information in this filing before
      deciding to purchase our common stock. If any of these risks or uncertainties
      actually occurs, our business, financial condition or operating results could
      be
      materially harmed. In that case, the trading price of our common stock could
      decline.***




8




**We
      Have Historically Lost Money And Losses May Continue In The Future, And This
      May
      Adversely Impact Our Business.**




Since
      our
      inception, through March 31, 2006 we have not been profitable and have lost
      money on both a cash and non-cash basis. For the three months ended March 31,
      2007, we incurred a net loss of $548,571. As of March 31, 2007, our accumulated
      deficit was $5,910,568. Future losses are likely to occur, as we are dependent
      on spending money to evaluate and pursue motor sports development projects.
      No
      assurances can be given that we will be successful in maintaining operations
      or
      reaching profitable operations. Accordingly, we may continue to experience
      liquidity and cash flow problems.




**Our
      Limited Operating History Makes It Difficult Or Impossible To Evaluate Our
      Performance And Make Predictions About Our Future**




Due
      to
      our limited operating history, it is difficult to make an evaluation of our
      future performance can be made. You should be aware of the difficulties normally
      encountered by motorsports companies similarly situated to us and the high
      rate
      of failure of such enterprises. If we do not successfully address the risks
      facing us, then our future business prospects will be significantly limited
      and,
      as a result, the trading price of our common stock would likely decline
      significantly. You should consider the likelihood of our future success in
      view
      of our limited operating history, as well as the complications frequently
      encountered by other companies in the early stages of development. If we
      encounter problems, additional costs, difficulties, complications or delays
      in
      connection with our motorsports activities, it will have a material adverse
      effect on its business, results of operations and financial condition, and
      as a
      result, we could be forces to cease our business operations.




**We
      Will Need To Raise Additional Capital Or Debt Funding To Sustain Operations,
      And
      Our Inability To Obtain Adequate Financing May Result In Us Curtailing or
      Ceasing Our Business Operations**




Unless
      we
      can become profitable, we will require additional capital to commence and
      sustain operations and will need access to additional capital or additional
      debt
      financing to grow. In addition, to the extent that we have a working capital
      deficit and we will need to raise capital to repay the deficit and provide
      more
      working capital to permit growth in revenues. We cannot assure you that
      financing whether from external sources or related parties will be available
      if
      needed or on favorable terms. Our inability to obtain adequate financing will
      result in the need to reduce the pace of implementing our business objectives.
      Any of these events could be materially harmful to our business, which would
      force us to curtail or cease our business operations, thus resulting in a lower
      stock price.




**We
      Have Been The Subject Of A Going Concern Opinion From December 31, 2006 and
      2005. From Our Independent Auditors, Which Means That We May Not Be Able To
      Continue Operations Unless We Can Become Profitable or Obtain Additional
      Funding**




Our
      independent auditors had added an explanatory paragraph to their audit opinions
      issued in connection with our financial statements for the year ended December
      31, 2006, which stated that the financial statements raise substantial doubt
      as
      to our ability to continue as a going concern. Our ability to make operations
      profitable or obtain additional funding will determine our ability to continue
      as a going concern. Our financial statements do not include any adjustments
      that
      might result from the outcome of this uncertainty. We will have to raise
      additional funds to meet our current obligations and to cover operating expenses
      through the year ending December 31, 2007. If we are not successful in raising
      additional capital we may not be able to continue as a going concern.




**We
      Are Subject To A Working Capital Deficit, Which Means That Our Current Assets
      On
      March 31, 2007 Were Not Sufficient To Satisfy Our Current
      Liabilities**




As
      of
      March 31, 2007, we had current assets of $1,635 and current liabilities of
      $581,803 resulting in a working capital deficit of $580,168. Current assets
      are
      assets that are expected to be converted to cash within one year and, therefore,
      may be used to pay current liabilities as they become due. Our working capital
      deficit means that our current assets on March 31, 2006 were not sufficient
      to
      satisfy all of our current liabilities on that date. We will have to raise
      capital or debt to fund the deficit or cease our business
      operations.




**Our
      Common Stock May Be Affected By Limited Trading Volume And May Fluctuate
      Significantly, And This May Adversely Affect Your
      Investment**




There
      has
      been a limited public market for our common stock and there can be no assurance
      that a more active trading market for our common stock will develop. An absence
      of an active trading market could adversely affect our shareholders’ ability to
      sell our common stock in short time periods, or possibly at all. Our common
      stock has experienced in the past, and is likely to experience in the future,
      significant price and volume fluctuations, which could adversely affect the
      market price of our common stock without regard to our operating performance.
      In
      addition, we believe that factors such as changes in the overall economy or
      the
      condition of the financial markets could cause the price of our common stock
      to
      fluctuate substantially. These fluctuations may also cause short sellers to
      enter the market from time to time in the belief that we will have poor results
      in the future. We cannot predict the actions of market participants and,
      therefore, can offer no assurances that the market for our stock will be stable
      or appreciate over time.




9




**Our
      Common Stock Is Deemed To Be “Penny Stock,” Which May Make It More Difficult For
      Investors To Sell Their Shares Due To Suitability
      Requirements**




Our
      common stock is deemed to be “penny stock” as that term is defined in
      Rule 3a51-1 promulgated under the Securities Exchange Act of 1934, as
      amended. These requirements may reduce the potential market for our common
      stock
      by reducing the number of potential investors. This may make it more difficult
      for investors in our common stock to sell shares to third parties or to
      otherwise dispose of them. This could cause our stock price to decline. Penny
      stocks are stock:




·
            With
                a price of less than $5.00 per
                share;




·
            That
                are not traded on a “recognized” national exchange;




·
            Whose
                prices are not quoted on the NASDAQ automated quotation system (NASDAQ
                listed stock must still have a price of not less than $5.00 per share);
                or




·
            In
                issuers with net tangible assets less than $2.0 million (if the issuer
                has
                been in continuous operation for at least three years) or $10.0
                million (if in continuous operation for less than three years), or
                with
                average revenues of less than $6.0 million for the last three
                years.




Broker/dealers
      dealing in penny stocks are required to provide potential investors with a
      document disclosing the risks of penny stocks. Moreover, broker/dealers are
      required to determine whether an investment in a penny stock is a suitable
      investment for a prospective investor.




**Additional
      Financing May Potentially Dilute The Value Of Our Stockholders’
Shares**




We
      will
      need to raise additional capital to fund our anticipated future expansion and
      implement our business plan. Any additional financing may also involve dilution
      to our then-existing stockholders, which could result in a decrease in the
      price
      of our common stock.




**We
      Depend On Key Personnel And Our Failure To Attract Or Retain Key Personnel
      Could
      Harm Our Business**




Our
      success largely depends on the efforts and abilities of our key executive and
      consultants, including A. Robert Koveleski, our President and Chief Executive
      Officer, and consultant, Steve B. Pinson, consultant dba Pinson LLC. The loss
      of
      the services of Messrs. Pinson and Koveleski could materially harm our business
      because of the cost and time necessary to replace and train a replacement.
      Such
      a loss would also divert management attention away from operational issues.




**New
      Business Ventures Or Acquisitions That We May Undertake Would Involve A Number
      Of Inherent Risks, Any Of Which Could Cause Us Not To Realize The Benefits
      Anticipated To Result.**




We
      continually seek to expand our operations through acquisitions of businesses
      and
      assets. These transactions involve various inherent risks, such as:




·
            uncertainties
                in assessing the value, strengths, weaknesses, contingent and other
                liabilities and potential profitability of acquisition or other
                transaction candidates;




·
            the
                potential loss of key personnel of an acquired
                business;




·
            the
                ability to achieve identified operating and financial synergies
                anticipated to result from an acquisition or other
                transaction;




·
            problems
                that could arise from the integration of the acquired or new
                business;




·
            unanticipated
                changes in business, industry or general economic conditions that
                affect
                the assumptions underlying the acquisition or other transaction rationale;
                and




·
            unexpected
                development costs that adversely affect our
                profitability.




Any
      one
      or more of these factors could cause us not to realize the benefits anticipated
      to result from the acquisition of businesses or assets or the commencement
      of a
      new business venture.




10




**We
      Are Subject To New Corporate Governance And Internal Controls Reporting
      Requirements, And Our Costs Related To Compliance With, Or Our Failure To Comply
      With Existing And Future Requirements Could Adversely Affect Our
      Business.**




We
      face
      new corporate governance requirements under the Sarbanes-Oxley Act of 2002,
      as
      well as new rules and regulations subsequently adopted by the SEC. These laws,
      rules and regulations continue to evolve and may become increasingly stringent
      in the future. In particular, we will be required to include management and
      auditor reports on internal controls as part of our annual report for the year
      ended December 31, 2006 pursuant to Section 404 of the Sarbanes-Oxley Act.
      We
      cannot assure you that we will be able to fully comply with these laws, rules
      and regulations that address corporate governance, internal control reporting
      and similar matters. Failure to comply with these laws, rules and regulations
      could materially adversely affect our reputation, financial condition and the
      value of our securities.







**Our
      Success Will Depend Partly On Our Ability To Operate Without Infringing On
      Or
      Misappropriating The Proprietary Rights Of Others.**




We
      may be
      sued for infringing on the intellectual property rights or misappropriating
      the
      proprietary rights of others. Intellectual property litigation is costly, and,
      even if we prevail, the cost of such litigation could adversely affect our
      business, financial condition and results of operations. In addition, litigation
      is time consuming and could divert management attention and resources away
      from
      our business. If we do not prevail in any litigation, we could be required
      to
      stop the infringing activity and/or pay substantial damages. Under some
      circumstances in the United States, these damages could be triple the actual
      damages the patent holder incurs. If we have supplied infringing products to
      third parties for marketing or licensed third parties to manufacture, use or
      market infringing products, we may be obligated to indemnify these third parties
      for any damages they may be required to pay to the patent holder and for any
      losses the third parties may sustain themselves as the result of lost sales
      or
      damages paid to the patent holder.




If
      a
      third party holding intellectual property rights successfully asserts an
      infringement claim with respect to any of our products, we may be prevented
      from
      manufacturing or marketing our infringing product in the country or countries
      covered by the patent we infringe, unless we can obtain a license from the
      patent holder. Any required license may not be available to us on acceptable
      terms, or at all. Some licenses may be non-exclusive, and therefore, our
      competitors may have access to the same technology licensed to us. If we fail
      to
      obtain a required license or are unable to design around a patent, we may be
      unable to market some of our anticipated products, which could have a material
      adverse effect on our business, financial condition and results of
      operations.




**Shareholders
      Must Rely On Management For The Operation Of The Company.**




All
      decisions with respect to the operation of ANRC and development, production
      and
      marketing of our products and services, will be made exclusively by management.
      Our success will, to a large extent, depend on the quality of the management
      of
      the Company. In particular, we will depend on the services of our board members
      and officers. Management believes that these individuals have the necessary
      business experience to supervise the management of the company and production
      and commercial exploitation of our products, however, there can be no assurance
      that they will perform adequately or that our operations will be successful.
      Shareholders will have no right or power to take part in the management of
      the
      company, for the most part, except to the extent of voting for the members
      of
      the Board of Directors each year. Accordingly, no person should purchase any
      of
      the stock offered hereby unless such prospective purchaser is willing to entrust
      all aspects of the management of the company to management and has evaluated
      management’s capabilities to perform such functions.




11




**We
      May Issue Additional Preferred Stock In The Future, And The Terms Of The
      Preferred Stock May Reduce The Value Of Your Common Stock.**




We
      are
      authorized to issue up to 10,000,000 shares of preferred stock in one or more
      series. Our Board of Directors will be able to determine the terms of preferred
      stock without further action by our stockholders. We have designated 2,000,000
      shares of preferred stock as Series A Convertible Preferred Stock which is
      convertible into 300 shares of common stock, 1,000,000 of which were issued
      to
      management and are outstanding as of March 13, 2007. To the extent we issue
      preferred stock, it could affect your rights or reduce the value of your common
      stock. In particular, specific rights granted to future holders of preferred
      stock could be used to restrict our ability to merge with or sell our assets
      to
      a third party. These terms may include voting rights, and may include
      preferences as to dividends and liquidation, conversion and redemption rights,
      and sinking fund provisions.




**We
      Have Not, And Currently Do Not Anticipate, Paying Dividends On Our Common Stock.**




We
      have
      never paid any dividend on our common stock and do not plan to pay dividends
      on
      our common stock for the foreseeable future. We currently intend to retain
      future earnings, if any, to finance operations, capital expenditures and to
      expand our business.




**There
      Is A Limited Market For Our Common Stock Which Makes It Difficult For Investors
      To Engage In Transactions In Our Securities.**




Our
      common stock is quoted on the Over the Counter Bulletin Board under the symbol
      “ANRC.”




There
      is
      a limited trading market for our common stock. If public trading of our common
      stock does not increase, a liquid market will not develop for our common stock.
      The potential effects of this include difficulties for the holders of our common
      shares to sell our common stock at prices they find attractive. If liquidity
      in
      the market for our common stock does not increase, investors in our company
      may
      never realize a profit on their investment.




**Our
      Stock Is Thinly Traded, Which Can Lead To Price Volatility And Difficulty
      Liquidating Your Investment.**




The
      trading volume of our stock has been low, which can cause the trading price
      of
      our stock to change substantially in response to relatively small orders. In
      addition, during the last two fiscal years and interim quarters, our common
      stock has traded pre-split as low as $0.11 and as high as $12.00, and post-split
      as low as $0.18 and as high as $0.60. Both volume and price could also be
      subject to wide fluctuations in response to various factors, many of which
      are
      beyond our control, including actual or anticipated variations in quarterly
      and
      annual operating results and general market perception. An absence of an active
      trading market could adversely affect our shareholders’ ability to sell our
      common stock in short time periods, or possibly at all. In addition, we believe
      that factors such as changes in the overall economy or the condition of the
      financial markets could cause the price of our common stock to fluctuate
      substantially. These fluctuations may also cause short sellers to enter the
      market from time to time in the belief that we will have poor results in the
      future. We cannot predict the actions of market participants and, therefore,
      can
      offer no assurances that the market for our stock will be stable or appreciate
      over time.




**A
      Sale Of A Substantial Number Of Shares Of Our Common Stock May Cause The Price
      Of Our Common Stock To Decline.**




If
      our
      shareholders sell substantial amounts of our common stock in the public market,
      including shares issued upon the exercise of outstanding options or warrants,
      the market price of our common stock could fall. These sales also may make
      it
      more difficult for us to sell equity or equity-related securities in the future
      at a time and price that we deem reasonable or appropriate.




12




**Item
      3.**  **Controls
      And Procedures**




**(A)**  **Evaluation
      Of Disclosure Controls And Procedures**




As
      of the
      end of the period covered by this report, the Company carried out an evaluation,
      under the supervision and with the participation of the Company’s Principal
      Executive Officer, / Principal Accounting Officer of the effectiveness of the
      design and operation of the Company’s disclosure controls and procedures. The
      Company’s disclosure controls and procedures are designed to provide a
      reasonable level of assurance of achieving the Company’s disclosure control
      objectives. The Company’s Principal Executive Officer / Principal Accounting
      Officer has concluded that the Company’s disclosure controls and procedures are,
      in fact, adequate and effective to ensure that material information relating
      to
      the Company that is required to be disclosed by the Company in reports that
      it
      files or submits under the Securities Exchange Act of 1934, as amended, is
      recorded, processed, summarized and reported within the time periods specified
      in Commission rules and accumulated and communicated to the Company’s
      management, including its Principal Executive Officer / Principal Accounting
      Officer, to allow timely decisions regarding required disclosure




**(B)**  **Changes
      In Internal Controls Over Financial Reporting**




In
      connection with the evaluation of the Company’s internal controls during the
      Company’s fiscal quarter ended March 31, 2007, the Company’s Principal
      Executive Officer and Interim Principal Accounting Officer have determined
      that
      there are no changes to the Company’s internal controls over financial reporting
      that has materially affected, or is reasonably likely to materially effect,
      the
      Company’s internal controls over financial reporting.






**PART
      II**






**OTHER
      INFORMATION**






**Item
      1.**  **Legal
      Proceedings**






On
      March
      29, 2007, D.Davy Jones ("Jones") filed a complaint against the Company in the
      Ninth Judicial District of the State of Nevada in Douglas County (the
      "Complaint").  In the Complaint, Jones' alleges that the Company has failed
      to fulfill its payment obligations under that certain Settlement Agreement
      and
      General Release, dated October 27, 2006, between Jones and the Company. 
Jones' claims for relief include breach of contract, breach of implied covenant
      of good faith, quantum merit, and attorney's fees and Jones seeks damages in
      excess of $10,000. To date, the Company has not filed a response. The
      Company intends to pursue settlement discussions with Davy Jones.






**Item
      2.**  **Changes
      In Securities**




None.






**Item
      3.**  **Defaults
      Upon Senior Securities**




None.






**Item
      4.**  **Submission
      Of Matters To Be A Vote Of Security Holders**




None.






**Item
      5.**  **Other
      Information**




None.






**Item
      6.**  **Exhibits
      And Reports On Form 8-K**




**(a)**  **Exhibits:**




**Exhibit
                Number**
            **Title
                of Document**
            **Location**3.2
            Certificate
                of Designation of the Series A Convertible Preferred Stock of American
                Racing Capital, Inc.
            Incorporated
                by reference as Exhibit 3.2 to Form 8-K filed on December 5,
                200510.1
            Share
                Exchange Agreement, dated October 17, 2005, by and among the Company,
                American Racing Capital, Inc., and the shareholders of American Racing
                Capital, Inc.
            Incorporated
                by reference as Exhibit 99.1 to Form 8-K filed on October 17, 200510.2
            Share
                Exchange Agreement, dated October 18, 2005, by and among the Company,
                ARC
                Development Corporation, and the shareholders of ARC Development
                Corporation
            Incorporated
                by reference as Exhibit 99.1 to Form 8-K filed on October 19,
                200510.3
            Securities
                Purchase Agreement dated July 25, 2006, by and among the Company
                and New
                Millennium Capital Partners II, LLC, AJW Qualified Partners, LLC,
                AJW
                Offshore, Ltd. and AJW Partners, LLC
            Incorporated
                by reference as Exhibit 4.1 to Form 8-K filed on August 4,
                200610.4
            Form
                of Callable Convertible Secured Note by and among New Millennium
                Capital
                Partners II, LLC, AJW Qualified Partners, LLC, AJW Offshore, Ltd.
                and AJW
                Partners, LLC
            Incorporated
                by reference as Exhibit 4.2 to Form 8-K filed on August 4,
                200610.5
            Form
                of Stock Purchase Warrant issued to New Millennium Capital Partners
                II,
                LLC, AJW Qualified Partners, LLC, AJW Offshore, Ltd. and AJW Partners,
                LLC
            Incorporated
                by reference as Exhibit 4.3 to Form 8-K filed on August 4,
                200610.6
            Registration
                Rights Agreement dated July 25, 2006 by and among New Millennium
                Capital
                Partners II, LLC, AJW Qualified Partners, LLC, AJW Offshore, Ltd.
                and AJW
                Partners, LLC
            Incorporated
                by reference as Exhibit 4.4 to Form 8-K filed on August 4,
                200610.7
            Security
                Agreement dated July 25, 2006 by and among the Company and New Millennium
                Capital Partners II, LLC, AJW Qualified Partners, LLC, AJW Offshore,
                Ltd.
                and AJW Partners, LLC
            Incorporated
                by reference as Exhibit 4.5 to Form 8-K filed on August 4,
                200610.8
            Intellectual
                Property Security Agreement dated July 25, 2006 by and among the
                Company
                and New Millennium Capital Partners II, LLC, AJW Qualified Partners,
                LLC,
                AJW Offshore, Ltd. and AJW Partners, LLC
            Incorporated
                by reference as Exhibit 4.6 to Form 8-K filed on August 4,
                200631.1
            Certification
                by Chief Executive Officer pursuant to 15 U.S.C. Section 7241, as
                adopted
                pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
            Provided
                herewith31.2
            Certification
                by Interim Principal Accounting Officer pursuant to 15 U.S.C. Section
                7241, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act
                of
                2002
            Provided
                herewith32.1
            Certification
                by Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as
                adopted
                pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
            Provided
                herewith32.2
            Certification
                by Interim Principal Accounting Officer pursuant to 18 U.S.C. Section
                1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act
                of
                2002
            Provided
                herewith




13




**(b)**  **Reports
      on Form 8-K:**




None.




**SIGNATURES**




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




**AMERICAN
                RACING CAPITAL, INC.**Date: May
              ___, 2007
            By:
            /s/ *A.
              Robert Koveleski*A.
              Robert KoveleskiPresident,
                Chief Executive Officer, Principal
              Accounting
                  Officer, Secretary, and Director