UNITED STATESSECURITIES AND EXCHANGE
COMMISSION




Washington,
D.C. 20549






FORM
10-Q






(Mark
One)




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






For the quarterly period ended March
31, 2008






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






For the
transition period from ________ to ________






COMMISSION FILE NUMBER 000-52529




MEZEY
HOWARTH RACING STABLES, INC.


(Exact
name of registrant as specified in its charter)




NEVADA
            20-8623320(State
      or other jurisdiction of incorporation or organization)
            (I.R.S.
      Employer Identification No.)1001
      Ave Pico, Ste C-629San Clemente, CA
            92673(Address
      of principal executive offices)
            (Zip
      Code)




949.429.4001


(Registrant's
telephone number, including area code)






Not
Applicable


(Former 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 such shorter period
that the registrant was






required
to file such reports), and (2) has been subject to such filing requirements for
the past 90 days. Yes [X]No [ ]






Indicate
by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer,






or a
smaller reporting company. See the definitions of “large accelerated filer,”
“accelerated filer” and “smaller reporting






company”
in Rule 12b-2 of the Exchange Act.




Large
      accelerated filer [ ]
            Accelerated
      filer [ ]Non-accelerated
      filer [ ] (Do not check if a smaller reporting company)
            Smaller
      reporting company [X]




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






Yes [ ]
No [X]






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 15, 2008, the registrant had 34,163,223 shares of common
stockoutstanding.




1




PART
I - FINANCIAL INFORMATION






ITEM
1. FINANCIAL STATEMENTS.






The
accompanying unaudited consolidated financial statements have been prepared in
accordance with the instructions to Form 10-Q and Rule 8-03 of Regulation S-X,
and, therefore, do not include all information and footnotes necessary for a
complete presentation of financial position, results of operations, cash flows,
and stockholders' equity in conformity with generally accepted accounting
principles. In the opinion of management, all adjustments considered necessary
for a fair presentation of the results of operations and financial position have
been included and all such adjustments are of a normal recurring nature.
Operating results for the three months ended March 31, 2008 are not necessarily
indicative of the results that can be expected for the year ending December 31,
2008.






As used
in this Quarterly Report, the terms “we,” “us,” “our,” “Mezey Howarth,” and the
“Company” mean Mezey Howarth Racing Stables, Inc. and its subsidiaries, unless
otherwise indicated. All dollar amounts in this Quarterly Report are expressed
in U.S. dollars, unless otherwise indicated.




2


MEZEY
      HOWARTH RACING STABLES, INC.CONDENSED
      CONSOLIDATED BALANCE SHEETSAssets
      (Note 4)March
      31, 2008
            
            December
      31, 2007(Unaudited)Current
      assets:Cash or cash equivalents
            $
            1,045
            $
            19,318Investments
      in limited liability entities (see Note 2)
            
            27,198
            
            19,925Total current assets
            
            28,243
            
            39,243Fixed
      assets:Livestock
            
            87,083
            
            89,722Real estate
            
            1,585,000
            
            1,585,000Total assets
            $
            1,700,326
            $
            1,713,965Liabilities
      and Stockholders' Equity (Deficit)Current
      liabilities:Accrued
      liabilities
            $
            34,813
            $
            254,814Note payable
            
            77,000
            
            77,000Loans payable to related party
            
            129,137
            
            79,739Note payable to related party, net of unamortized discount of $36,364 at
      December 31, 2007
            
            -
            
            463,636Total current liabilities (Note 5)
            
            240,950
            
            875,189Long-term
      liabilitiesMortgages payable (Note 5)
            
            1,374,850
            
            1,374,850Total liabilities
            
            1,615,800
            
            2,250,039Stockholder's
      equity (deficit) (Note 4):Series A convertible preferred stock, 20,000,000 authorized; 7,525,855 and
      2,525,855 issued and outstanding, respectively
            
            752,585
            
            252,585Common
      stock, par value $.001, 180,000,000 authorized; 28,207,223 and
      7,675,000 issued and outstanding, respectively
            
            28,207
            
            7,675Additional paid-in capital
            
            3,515,637
            
            126,569Accumulated deficit
            
            (4,211,903)
            
            (922,903)Total
      stockholders' equity (deficit)
            
            84,526
            
            (536,074)Total
      liabilities and stockholders' equity (deficit)
            $
            1,700,326
            $
            1,713,965




The
accompanying notes are an integral part of the consolidated financial
statements.


3


MEZEY
      HOWARTH RACING STABLES, INC.CONDENSED
      CONSOLIDATED STATEMENTS OF
  OPERATIONS(Unaudited)For the three months ended
      March 31, 2008
            
            Period
      from Inception to March 31, 2007Revenue:Horse
      Sales
            
            $                                          -
            
            $                                       -Purse
      Winnings
            
            -
            
            -Other
            
            
            -
            
            -Total
      revenue
            
            -
            
            -Cost
      of Sales
            
            12,214
            
            -Gross
      profit
            
            (12,214)
            
            -Operating
      expensesGeneral
      and administrative
            1,489,681
            
            1,980Operating
      ross
            
            (1,489,681)
            
            (1,980)Other
      income (expense):Rental
      Income
            
            3,465
            
            -Break
      Up Fee for Termination of Acquistion
            
            (1,750,000)
            
            -Interest
      Expense
            
            (40,570)
            
            -Net
      Loss
            
            $  
                             (3,289,000)
            
            $                           (1,980)Weighted
      average number of common shares outstandingBasic
      and Diluted
            21,010,568
            
            150,000Net
      loss per common shareBasic
      and Diluted
            $                                 (0.16)
            
            $   
                                      *






The accompanying notes
are an integral part of the consolidated financial statements.


4
  MEZEY
      HOWARTH RACING STABLESCONDENSED
      CONSOLIDATED STATEMENT OF CHANGESIN
      STOCKHOLDERS' EQUITYFor
      the three month period ended March 31, 2008(Unaudited)Series A Preferred
      Stock
                
                
                
                Common
    Stock
                
                
                
                Additional
      Paid-in Capital
                
                Accumulated Deficit
      During Development StageShares
                
                Amount
                
                Shares
                
                Amount
                
                
                
                Total Stockholders’
      EquityBalances
      at December 31, 2007
                
                2,525,855
                $
                252,585
                
                7,675,000
                $
                7,675
                $
                126,569
                $
                (922,903)
                $
                (536,074)-Issuance
      of common stock to officers at $0.15 per share for
services
                -
                
                -
                
                2,000,000
                
                2,000
                
                298,000
                
                -
                
                300,000Issuance
      of common stock to consultants at $.15 per share for
    services
                -
                
                -
                
                2,000,000
                
                2,000
                
                298,000
                
                -
                
                300,000Conversion
      of related party note payable into preferred stock
                5,000,000
                
                500,000
                
                -
                
                -
                
                -
                
                -
                
                500,000Issuance
      of common stock to consultants at $.16 per share for
    services
                -
                
                -
                
                3,810,000
                
                3,810
                
                605,790
                
                -
                
                609,600Issuance
      of common stock to ABTTC shareholders as a break up fee
                -
                
                -
                
                9,722,223
                
                9,722
                
                1,740,278
                
                -
                
                1,750,000Issuance
      of common stock to officers for services
                -
                
                -
                
                3,000,000
                
                3,000
                
                447,000
                
                -
                
                450,000Net
      loss
                
                -
                
                -
                
                -
                
                -
                
                -
                
                (3,289,000)
                
                (3,289,000)Balances
      at March 31, 2008
                
                7,525,855
                $
                752,585
                
                28,207,223
                $
                28,207
                $
                3,515,637
                $
                (4,211,903)
                $
                84,526













MEZEY
      HOWARTH RACING STABLES, INC.CONDENSED
      CONSOLIDATED STATEMENTS OF CASH FLOWS(Unaudited)For
      the three months ended March 31, 2008
            
            Period from
      inception to March
      31, 2007Cash
      flows from operating activities:Net
      loss
            $
            (3,289,000)
            $
            (1,980)Stock
      issued to employees for services
            
            600,000
            
            -Stock
      issued to consultants for services
            
            1,059,600
            
            -Break
      up fee for termination of acquisition
            
            1,750,000
            
            -Accretion
      of discount on note payable
            
            36,364
            
            -Depreciation
      expense
            
            2,639
            
            -Adjustments
      to reconcile net loss to net cash providedby
      operating activities:Accrued
      liabilities
            
            (220,001)
            
            -Net
      cash used in operating activities
            
            (60,398)
            
            (1,980)-Cash
      flows from investing activities:Investments
      in limited liability entities
            
            (8,119)
            
            -Return
      on investment in limited liability entites
            
            846
            
            -Net
      cash used in investing activities
            
            (7,273)
            
            -Cash
      flows from financing activities:Proceeds
      from related party note payable
            
            49,398
            
            -Proceeds
      from issuance of common stock
            
            -
            
            2,180Net
      cash provided by financing activities
            
            49,398
            
            2,180Net
      increase (decrease) in cash for the period
            
            (18,273)
            
            200Beginning
      cash at inception
            
            19,318
            
            -Cash
      at the end of the period
            $
            1,045
            $
            200








The accompanying notes are an integral part of the
consolidated financial statements.


5





MEZEY
HOWARTH RACING STABLES, INC.
 NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 (UNAUDITED)
   NOTE
1 – HISTORY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
  History
  Mezey
Howarth Racing Stables, Inc. (the "Company"), formerly MH 1, Inc., was
organized under the laws of the State of Nevada on February 27, 2007. On June
12, 2007, the Company changed its name to Mezey Howarth Racing Stables,
Inc.  The Company's business is the buying, selling and racing
thoroughbred race horses of every age from broodmares, weanlings, and yearlings
to racing age horses. The Company operates in four different areas in the horse
racing industry.  The four areas include: (1) Claiming, (2) Racing
allowance and stake level horses, and (3) breeding of thoroughbreds. 
Initially we are focusing on the claiming aspect of the business model while we
develop a barn of stake level horses and yearlings. The Company's California
Horse Racing Board license number is 293137.
  Basis
of Presentation
  The
unaudited condensed consolidated financial statements of Mezey Howarth Racing
Stables Inc. and subsidiaries (the “Company”) have been prepared in accordance
with U.S. generally accepted accounting principles for interim financial
information and pursuant to the requirements for reporting on Form 10-Q.
Accordingly, they do not include all the information and footnotes required by
accounting principles generally accepted in the United States of America for
annual financial statements. However, the information included in these interim
financial statements reflects all adjustments (consisting solely of normal
recurring adjustments) which are, in the opinion of the management, necessary
for the fair presentation of the consolidated financial position and the
consolidated results of operation. Results shown for interim periods are not
necessarily indicative of the results to be obtained for a full year. The
condensed consolidated balance sheet information as of December 31, 2007 was
derived from the audited consolidated financial statements included in the
Company’s Annual Report on Form 10-KSB. These interim financial statements
should be read in conjunction with that report. All material inter-company
accounts and transactions have been eliminated in consolidation.
  Going
Concern and Plan of Operation
  The
Company's financial statements have been presented on the basis that it is a
going concern, which contemplates the realization of assets and the satisfaction
of liabilities in the normal course of business. The Company just exited the
development stage, has not earned any significant revenues from operations as of
March 31, 2008, and requires additional financing.   These conditions
raise substantial doubt about its ability to continue as a going concern. 
It is the Company’s plan to become profitable through the acquisition of at
least 50 horses and to earn revenues from racing these horses.  To finance
these planned acquisitions, the Company has plans to raise $1,000,000 in capital
through either debt or equity offerings.  There are no assurances that
management will be able to raise these funds, to obtain 50 horses or generate
sufficient revenues from racing these horses to achieve
profitability.
  Per
Share Information
  Basic per
share information is computed based upon the weighted average number of common
shares outstanding during the period. Diluted per share information consists of
the weighted average number of common shares outstanding, plus the dilutive
effects of options and warrants calculated using the treasury stock method. In
loss periods, dilutive common equivalent shares are excluded as the effect would
be anti-dilutive. There are no options and warrants outstanding. The Series A
Convertible Preferred Stock converts into 75,258,550 shares of Common Stock and
have been excluded from the diluted net loss per share for the period from
ending March 31, 2008, as the effects would have been
anti-dilutive.
  Use
of Estimates in the Preparation of Financial
Statements
  The
preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities, the disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting periods.
Actual results could differ from those estimates and
assumptions.
  NOTE 2
- INVESTMENTS
  As of
March 31, 2008, the Company's investments in the Horses are done
through the acquisition of interest in LLP or LLC that own the horse. 
Each LLP or LLC owns a single horse and its sole business plan is the business
of that horse.  Upon the death or sale of the horse, the LLP or LLC will be
dissolved and the proceeds will be distributed to the members.  All
investments at March 31, 2008, were accounted for under the cost method due to
the Company not have significant influence over any of the entities. The Company
currently has invested the following amounts and percentages of the LLP or
LLC:
  The
      Emerald King
              $
              6,000
              25%Mahalo
      Maggie
              
              8,119
              50%Valondra
      (Partnership 56, LLP)
              
              11,375
              35%Three
      Across (Partnership 52, LLP):
              
              1,425
              5%Angela's
      Rainbow & Ops Overload:
              
              54
              10%Roar
      in Solana (Partnership 57, LLP):
              
              225
              1%Total
      Invested
              $
              27,198
  NOTE 3
- COMMITTMENTS
  On January
28, 2008, the Company entered into an Investment Agreement with
Dutchess also referred to as an Equity Line of Credit. Pursuant to Sections
2(a) and 2(b) of that agreement, following notice to Dutchess, we may put to
Dutchess up to $10 million in shares of our common stock for a purchase price
equal to 93% of the lowest closing bid price of our common stock during the five
day period following that notice. Each put will be equal to either (a) 200% of
the average daily volume of our common stock for the three trading days prior to
the put notice date, multiplied by the average of the three daily closing best
bid prices immediately preceding the Put or (b) $250,000. To date no proceeds
from the agreement have been received.
  NOTE 4
- STOCKHOLDERS' EQUITY (DEFICIT)
  Common
Stock
  On
January 11, 2008, the Company issued 1,000,000 shares of common stock to J. Wade
Mezey in satisfaction of $150,000 in accrued compensation. The common stock was
valued at $0.15 on the date of the conversion based on the deemed fair market
value of the Company’s common stock.
  On
January 11, 2008, the Company issued 1,000,000 shares of common stock to Paul
Howarth in satisfaction of $150,000 in accrued compensation. The common stock
was valued at $0.15 per share on the date of the conversion based on the deemed
fair market value of the Company’s common stock.
  On
January 11, 2008, the Company issued 2,000,000 shares of common stock to
Renegade Farms valued at $300,000. The common stock was issued in connection
with a consulting agreement, whereby Renegade Farms will be assisting the
company in searching for horses throughout the world and collecting samples of
blood and tissue from various horses for genetic testing and DNA
profiling.  The common stock was valued at $0.15 per share based on
the deemed fair market value of the Company’s common stock on the date of the
transaction. Under the agreement Renegade Farms does not have any future
performance conditions related to the common stock and thus, the Company
expensed the value of the common stock on the date of the
transaction.
  On
January 15, 2008, the Company issued 3,810,000 shares of common stock to a
consultant for services related to the promotion of the Company’s horses. The
Company valued the common stock at $0.16 per share, totaling $609,600 based on
the fair market value of the Company’s common stock on the date of the
transaction. Under the agreement the consultant does not have any future
performance conditions related to the common stock and thus, the Company
expensed the value of the common stock on the date of the
transaction.
  On
February 4, 2008, the Company entered into a letter of intent to acquire ABTTC,
Inc. for $7,750,000.  ABTTC, Inc. provides drug and alcohol rehabilitation
services. It was intended that upon closing of the transaction, ABTTC, Inc. will
become a wholly owned subsidiary of Mezey Howarth Racing Stables, Inc. 
Paul Howarth is a shareholder of ABTTC, Inc. and has abstained from all
negotiations related to the transactions and did not vote on the
transaction.  In addition, the Company issued 9,722,223 shares of
common stock valued at $1,750,000, or $0.18 per share, to ABTTC, Inc. as the
initial payment for the acquisition.  Paul Howarth received 30% of the
shares of common stock.  The fair value of the Company’s common stock was
determined by using the closing market price of the Company’s common stock on
the date of issuance. The remaining amount under the proposed acquisition is
will be paid over the next 18 months from the date of close. On March 31, 2008,
the Company terminated the pending transaction due to the desire to focus on the
horse racing operations before expanding into other business segments. The
initial payment of 9,722,223 shares of Company are non-recoverable and
served as a break up fee in the event the Company did not close on the
transaction without cause. The break up fee was based on ABTTC having received
previous cash offers to be acquired and in exchange for ABTTC acting exclusively
with the Company. In connection, with the termination the Company forfeited the
common stock issued and recorded an expense of $1,750,000.
  See Note
6 for discussion of subsequent events.
  Preferred
Stock
  The
Company's Board of Directors approved the issuance of its Series A Convertible
Preferred Stock.  The Series A Convertible Preferred Stock provides for
voting rights of twenty to one and conversion rights of ten to one.  As of
March 31, 2008, there have been 7,525,855 shares of Series A Convertible
Preferred Stock authorized, issued, and outstanding. See Note 5 for discussion
of the issuance.  The Series A Convertible Preferred Stock has preferences
in liquidation but not with regard to dividends.
 
 NOTE 5
- RELATED PARTY TRANSACTIONS
  Purchase
of Series A Convertible Preferred Stock
  In July
2007, the Company’s majority shareholders, J. Wade Mezey and Paul Howarth,
deeded three real estate parcels to the Company.  As a result of these
transactions the Company received $1,585,000 in assets and $1,374,850 in
liabilities.  These transactions where accounted for on the carry over
basis; the original cost of the acquired assets by these
related parties.  The mortgage underlying the liabilities currently
have interest rates ranging from 6.5% - 11.5% and are interest only notes until
July 1, 2008, June 1, 2010, and August 1, 2011. The mortgages are
secured by the underlying properties and are not crossed secured by the
non-underlying properties.  The mortgages have been personally secured by
the officers of the Company.  On April 1, 2008, the Company and
shareholders rescinded the contribution. In connection with the rescission the
shareholders returned 2,101,500 shares of Series A Convertible Preferred stock
and the Company transferred back the real estate and related mortgages to the
shareholders. No gain will be recognized through this transaction. The Series A
Convertible Preferred was valued at approximately $2,521,800 at the rescission
date, where the real estate had a net carrying value of $210,150.  The
following is a summary of the real estate contributed and mortgages
assumed:
  Real
      Estate
              
              MortgageLa
      Quinta
              $
              650,000
              $
              594,850Temecula
              
              615,000
              
              492,000Willow
      Springs
              
              320,000
              
              288,000$
              1,585,000
              $
              1,374,850
 The
following is a pro-forma balance sheet as of the date of the recession
date.
  Total
      assets
                  $
                  115,326Total
      liabilities
                  
                  240,950Series
      A convertible preferred stock
                  
                  792,435Total
      stockholders' deficit
                  
                  (125,624)Total
      liabilities and stockholders' equity
                  $
                  115,326
 Shareholder
Notes Payable
  In
September 2007, the Company received loans from Wade Mezey in the amount of
$500,000 and from Cindy Howarth in the amount $20,000 to be used for
operations.  These notes are due on December 31, 2008 and incur no
interest. Upon funding, the Company recorded imputed interest of $45,455 at 10%
as a discount to the note and is amortizing until maturity. For the period from
February 27, 2007 (Inception) to December 31, 2007, the Company amortized $9,091
of the discount to interest expense.
  In
October 2007, J. Wade Mezey informed the Company and the Board of Directors
of his decision to convert the $500,000 note payable into 5,000,000 shares
of Series A Convertible Preferred stock. On January 11, 2008, the
Company issued 5,000,000 shares of Series A Convertible Preferred stock in
satisfaction of the $500,000 note payable due to J. Wade Mezey.
  From
January 1, 2008 through March 31, 2008, Wade Mezey has lent the Company
an additional $49,398 for operating expenses. Total amounts due to Wade
Mezey for advances at March 31, 2008 are $109,137.
  NOTE 6
- SUBSEQUENT EVENTS
 
 On April
1, 2008, the Company transferred title of the real estate deeded from the
founders in July 2007 back to the founders.  In exchange, the founders
agreed to exchange the previous compensation given to them upon transferring the
properties in July 2007, see Note 5.
  On April
21, 2008, the Company issued 1,469,000 shares of common stock to a consultant in
satisfaction of $58,760 in accrued compensation. The common stock was valued at
$0.04 per share on the date of the conversion based on the deemed fair market
value of the Company’s common stock. The services provided included website
optimization and increased awareness of the company’s website.
  On April
21, 2008, the Company issued 325,000 shares of common stock to a consultant in
satisfaction of $13,000 in accrued compensation. The common stock was valued at
$0.04 per share on the date of the conversion based on the deemed fair market
value of the Company’s common stock.  The services provided included
consulting services in assisting the Company to redesign and update its
website.
  On May 4,
2008, the Company issued 4,162,000 shares of common stock to a consultant in
satisfaction of $83,244 in accrued compensation. The common stock was valued at
$0.02 per share on the date of the conversion based on the deemed fair market
value of the Company’s common stock.  The services provided related to
the research of thoroughbred genetics and review of contracts.
  On May 8,
2008, the Board of Directors voted to increase the number of authorized common
shares to 500,000,000 and preferred shares to 20,000,000.
  On May
15, 2008, Ops Overload was claimed from the Company for $5,000.  The
Company owns 10% of the partnership that included Ops
Overlord.  Angela’s Rainbow still remains in the partnership that
previously contained both Angela’s Rainbow and Ops Overlord.
 
 ITEM
II. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
   Introduction
Portions of the section include "forward looking statements" within the meaning
of the Private Securities Litigation Reform Act of 1995.
   Forward
Looking Statement
  The
information contained in this Form 10-Q and documents incorporated herein by
reference are intended to update the information contained in the Company's Form
10-KSB for its fiscal year ended December 31, 2007 which includes our audited
financial statements for the year ended December 31, 2007 and such information
presumes that readers have access to, and will have read, the "Management's
Discussion and Analysis of Financial Condition and Results of Operations," "Risk
Factors" and other information contained in such Form 10-KSB and other Company
filings with the Securities and Exchange Commission ("SEC").
  This
Quarterly Report on Form 10-Q contains forward-looking statements within the
meaning of Section 27A of the Securities Act of 1933, as amended (the
"Securities Act"), and Section 21E of the Securities Exchange Act of 1934, as
amended. These forward-looking statements involve risks and uncertainties, and
actual results could be significantly different than those discussed in this
Form 10-Q. Certain statements contained in Management's Discussion and Analysis,
particularly in "Liquidity and Capital Resources," and elsewhere in this Form
10-Q are forward-looking statements. These statements discuss, among other
things, expected growth, future revenues and future performance. Although we
believe the expectations expressed in such forward-looking statements are based
on reasonable assumptions within the bounds of our knowledge of our business, a
number of factors could cause actual results to differ materially from those
expressed in any forward-looking statements, whether oral or written, made by us
or on our behalf. The forward-looking statements are subject to risks and
uncertainties including, without limitation, the following: (a) changes in
levels of competition from current competitors and potential new competition,
(b) possible loss of customers, and (c) the company's ability to attract and
retain key personnel, (d) The Company's ability to manage other risks,
uncertainties and factors inherent in the business and otherwise discussed in
this 10-Q and in the Company's other filings with the SEC. The foregoing should
not be construed as an exhaustive list of all factors that could cause actual
results to differ materially from those expressed in forward-looking statements
made by us. All forward-looking statements included in this document are made as
of the date hereof, based on information available to the Company on the date
thereof, and the Company assumes no obligation to update any forward-looking
statements.
  Critical
Accounting Policies
  In
December 2001, the Securities and Exchange Commission (the “SEC”) issued
disclosure guidance for “critical accounting policies.” The SEC defines
“critical accounting policies” as those that require application of management’s
most difficult, subjective or complex judgments, often as a result of the need
to make estimates about the effect of matters that are inherently uncertain and
may change in subsequent periods.
  The
Company’s significant accounting policies are described in Note 1 in the
Company's Form 10-KSB for its fiscal year ended December 31, 2007. Not all
of these significant accounting policies require management to make difficult,
subjective or complex judgments or estimates. However, the following policies
are deemed to be critical within the SEC definition. The Company’s senior
management has reviewed these critical accounting policies and estimates and the
related Management’s Discussion and Analysis of Financial Condition and Results
of Operations with the Board of Directors.
   Results
for the three months ended March 31, 2008 compared to the period from Inception
February 27, 2007 to March 31, 2007
  Cost
of Sales
  The cost
of sales includes the expenses relating to the upkeep of the company's claimers
and the acquisition cost of horses that have been claimed from the
Company.   Significant costs included in costs of sales for the three
months ended March 31, 2008, were $12,214 for training fees, veterinary fee and
other costs associated to the Company’s thoroughbreds.
  General
and Administrative Expenses
 
 General
and administrative expenses consist primarily of (a) salaries and related
personnel costs, related to our executive, finance, human resource,
information technology and operations organizations, (b) facilities expenses,
(c) accounting and legal professional fees, and (d) other related overhead. We
expect general and administrative expenses to continue to increase in absolute
dollar terms for the foreseeable future as we invest in infrastructure to
support continued growth and incur additional expenses related to being a public
company, including increased audit and legal professional fees, costs of
compliance with securities and other regulations, investor relations expenses,
and higher insurance premiums. Significant costs included in general and
administrative expenses for the three months ended March 31, 2008, were
$1,489,681 for which includes professional fees, consultation fee, salaries,
and management fees.
 
 Liquidity
and Capital Resources
  Our
principal sources of liquidity consist of cash and cash equivalents, cash
generated from our thoroughbreds, the issuance of equity securities, and amounts
available for borrowing from our officers. At March 31, 2008, our cash and cash
equivalents totaled $1,045.
  From
January 1, 2008 through March 31, 2008, Wade Mezey has lent the Company
an additional $49,398. The proceeds of this loan were for operating
expenses. The total amount lent from Wade Mezey and currently owed is
$109,137.  The note is due on demand and will begin accruing
interest at 5% on April 1, 2008.
  We
believe that our existing sources of liquidity will be sufficient to fund our
operations, anticipated capital expenditures, working capital and other
financing requirements for only the next several weeks. We are currently seeking
additional financing to fund our business or a strategic transaction. We cannot
assure you that such financing or a strategic transaction can be obtained or
completed by us on favorable terms, or at all.
  Operating
Activities
  Cash used
in operating activities was $60,398 for the first three months of fiscal 2008,
compared to cash used of $1,980 for the same period in fiscal 2007. Operating
cash flows for the first three months of fiscal 2008 reflect our net loss of
$3,289,000, offset by changes in working capital and for non-cash expenses
(primarily stock-based compensation).
  Operating
cash flows for the three months of fiscal 2007 reflect our net loss of
$1,980.
  Investing
Activities
  Cash used
by investing activities was $7,273 for the first three months of fiscal 2008
compared to cash provided of $0 for the same period in fiscal
2007.
  Financing
Activities
  Cash
provided by financing activities was $49,398 for the first three months of
fiscal 2008, compared to cash provided of $2,180 for the comparable period of
fiscal 2007.
  Plan
of Operations
  The
general objective of the Company is to acquire Thoroughbred race prospects, race
them and resell them if they are claimers to generate revenue and profit
for the Company. Initially, revenue will be limited to the Company's portion of
any purses won by horses owned by the Company during their racing campaign and
from horses claimed from the Company. While the Company's administrative office
is located in California, it is anticipated that a some of its activities will
take place outside that state. Public sales and premier races of thoroughbreds
are primarily centered in Kentucky, California, New York and
Florida.
  While the
Company's business plan anticipates acquisition of additional yearlings or
two-year olds in training to supplement existing horses, the proceeds from this
offering will largely dictate the number and quality of additional racing
prospects which the Company will obtain during 2007. Receipt of no or nominal
proceeds from this offering will limit or curtail acquisition of additional
prospects by the Company. In that event, Company resources will be devoted to
boarding and training of existing Thoroughbreds and other required expenses. If
the Company receives sufficient proceeds, one or more additional Yearlings may
be acquired at public or private sales.
  Important
factors in predicting racing success of Thoroughbreds are pedigree and
conformation. Pedigree refers to the breeding history of the horse determined by
bloodlines from the Sire and Dam. Conformation is the physical attributes of the
horse as determined by personal observation. Management considers both of these
attributes in selecting all of its Thoroughbreds, and anticipates suitable
investigation for any future prospects acquired by the Company. Management may
retain the services of outside consultants and veterinarians to assist in
evaluation of future Bloodstock. No agreements currently exist with any
consultants, and whether management will continue to utilize the services of the
same consultants is yet to be determined; however, management would not hesitate
to recommend these consultants for service in the future. Given the very large
number of prospects placed into the market in any given year, management does
anticipate that it may be necessary to enlist the aid of bloodstock agents in
locating thoroughbreds suitable to the Company's purpose in the
future.
  In the
event management determines it is in the best interest of the Company to retain
the services of bloodstock consultants, the factors that will be relied upon in
making such choices will include, but not be limited to: the past relationship
between the Company and the consultant, if any; the consultant's reputation
within the industry; the fees charged by the consultant in performing services;
and the geographic area served by the consultant. In the event management
determines it is in the best interest of the Company to retain the services of a
bloodstock consultant, management anticipates the term of the relationship will
be limited to performance of a specified project. Management does not anticipate
that any long term relationships or agreements will be entered into with any
consultant, although it reserves the right to do so should it be determined to
be in the Company's best interest
  The
Company was organized and exists for the purpose of acquiring, owning, managing,
training, racing and ultimately syndicating thoroughbred racing prospects. It is
not the intention of the Company to enter into the business of breeding
thoroughbreds, although management reserves the right to do so should it
ultimately be determined that it is in the best interest of the Company and its
shareholders. Management has set its efforts towards producing revenues and
profit through the placement of Company Thoroughbreds in established races
throughout the United States. Management anticipates that eventually, Company
revenues and profit will depend to a certain extent upon the sale or syndication
of Company owned Thoroughbreds. It is the intention of management to primarily
focus on the acquisition of Yearlings, although horses of racing age may be
acquired from time to time depending upon the then existing circumstances.
Management anticipates that acquisitions of Bloodstock will initially be limited
due to the Company's limited working capital. Results of Operations
Substantially all of the Company's revenues are obtained from purses offered by
races in which its Thoroughbreds participate. As the Company matures, it may
receive revenues from the sale or syndication of its Thoroughbreds during or
following completion of their racing career. The Expenses incurred by the
Company include operating expenses associated with training and racing its
Thoroughbreds, as well as administrative expenses.
  The
Company contracts with trainers for each horse, which is stabled with the
trainer. The trainers used by the Company maintain their stables at the various
racetracks. Accordingly, all of its Thoroughbreds are boarded with independent
third parties. Many factors will influence the Company's determination of
whether and where to race the thoroughbreds acquired by the Company. Pedigree,
past performance, conditioning and purses will be evaluated by the Company in
conjunction with any trainers retained by the Company in plotting the horse's
racing campaign. While no specific venue has been determined as of the date of
this Prospectus, it is anticipated that the Thoroughbreds will be raced at the
race tracks in the United States, as the condition and breeding of its
Bloodstock dictates. Possible venues include Churchill Downs and Keeneland in
Kentucky, Hollywood Park and Santa Anita in Los Angeles, Del Mar in San Diego,
Remington Park in Oklahoma City, Aqueduct and Saratoga in New York, Arlington
Park in Chicago and Garden State in New Jersey. Evaluation of racing venues will
depend primarily on recommendations of trainers retained by the Company and the
condition, training and breeding of Company racing prospects. Shareholders may
be provided specific information as to important races in advance and results
following conclusion of races conducted by thoroughbreds of the
Company.
  Horses
not deemed qualified to be raced by the Company may be "pinhooked" or re-sold by
the Company shortly following acquisition. Pinhooking can be a means of reducing
the Company's risk in any particular prospect by transferring the horse prior to
completion of his development. A ready market for resale of Thoroughbred racing
prospects exists in various parts of the United States, and management is
familiar with various sales in those venues. While pinhooking may be utilized to
reduce the Company's risk in any single fiscal year, it is not anticipated to be
a major source of revenue in the foreseeable future.
  The
Company will have multiple divisions: Claiming, Allowance/Stakes,
Pinhooking, Breeding and Investments.  Currently, the Company is
operating the Claiming, Allowance/Stakes, and
Investments divisions.
  Claiming
Division
  The
Claiming Division entails the acquisition of horses through Claiming Races at
various racetracks.  The Company seeks to acquire horses that may be moved
up in class and resold for a higher amount than that which the company
paid.  The Company will generate revenue from the sell of the horse in
Claiming Races and from the purse money generated as well.  Horses that are
acquired for this division will likely be resold within 120 days since they are
for sell in every race they run in.  For example, the Company acquired
Blushing Bear Cat for $21,550.  The Company ran Blushing Bear Cat in a
$25,000 Claiming Race and Blushing Bear Cat was claimed for $25,000 from the
Company and won $4,691 in purse winnings.
  Stakes/Allowance Division
  The
Stakes/Allowance Division consists of horses that are acquired to run in
allowance and stakes level races.  These horses are not intended to be
resold and the main source of revenue will be from purse winnings.  This
division consists of a higher caliber of horses than the Claiming
Division.  The Company will acquire horses for this division through
private purchase, auctions and high level claiming race.  For example, the
Company acquired Doblado from Argentina to race in allowance and stake
races.  The Company is currently allowing Doblado to adjust to the
artificial dirt tracks in California.
  Investments
  This
division acquires a minority interest in horses that are owned by other
stables.  The purpose of this division is to allow the Company to acquire
horses in other states than California without incurring the cost of setting up
stables in those states.
  The
Company's long term objective is to develop a stable of race horses sufficient
to generate a steady stream of revenue and profit. In order to achieve this
objective, management anticipates the need for substantial additional capital.
Depending upon the success of its initial efforts, on the state of the
thoroughbred industry and other factors beyond the Company's control, management
anticipates conducting a subsequent public offering in the future to obtain such
capital. Syndication or sale of Company Thoroughbreds may also provide a source
of capital.
  Real
Estate Division
  The
Company has been deeded three properties from its founders.  These
properties were intended to be used at vacation rentals for third parties and
shareholders. Subsequent to quarter end the transaction was
rescinded.
  ABTTC,
INC.
  On
February 4, 2008, the Company entered into a letter of intent to acquire ABTTC,
Inc. for $7,750,000.  ABTTC, Inc. provides drug and alcohol rehabilitation
services. It was intended that upon closing of the transaction, ABTTC, Inc.
would become a wholly owned subsidiary of Mezey Howarth Racing Stables,
Inc.  Paul Howarth is a shareholder of ABTTC, Inc. and abstained from all
negotiations related to the transactions and did not vote on the
transaction.  In addition, the Company issued 9,722,223 shares of
common stock valued at $1,750,000, or $0.18 per share, to ABTTC, Inc. as the
initial payment for the acquisition.  The fair value of the Company’s
common stock was determined by using the closing market price of the Company’s
common stock on the date of issuance. The remaining amount under the proposed
acquisition is will be paid over the next 18 months from the date of
close.
  On March
31, 2008, the Company terminated the pending transaction due to the desire to
focus on the horse racing operations before expanding into other business
segments. The initial payment of 9,722,223 shares of Company are
non-recoverable and served as a breakup fee in the event the Company does not
close on the transaction without cause. The breakup fee was based on ABTTC
having received previous cash offers to be acquired and in exchange for ABTTC
acting exclusively with the Company. In connection, with the termination the
Company forfeited the common stock issued and recorded an expense of
$1,750,000.  The Company decided to cancel the ABTTC transaction in order
to devote all the resources and time of the Company on growing its breeding
division and stable of thoroughbreds instead of adding a subsidiary in a
different industry.  Mr. Howarth abstained from all negotiations and
discussions related to the transactions and did not vote on the
transaction.
 
 Inflation
  We
believe that inflation has not has a material effect on our
operations.
  Off
Balance Sheet Arrangements
  We do not
maintain off-balance sheet arrangements.
  Recent Accounting
Pronouncements
  SFAS
No. 141R, Business Combinations
  In
December 2007, the FASB issued Statement of Financial Accounting Standards No.
141(R), Business
Combinations (SFAS No. 141R). SFAS 141R will significantly change the
accounting for and reporting of business combination transactions in
consolidated financial statements. SFAS 141R retains the fundamental
requirements in Statement 141, Business
Combinations while providing additional definitions, such as the
definition of the acquirer in a purchase and improvements in the application of
how the acquisition method is applied. This Statement becomes effective January
1, 2009. Early adoption is not permitted. We are currently evaluating the impact
this guidance will have on our financial statements.
  ITEM
4. CONTROLS AND PROCEDURES
   (a)
Evaluation of disclosure controls and procedures
   Our   Chief  Executive  Officer  and  Chief  Financial  Officer  evaluated  our
"disclosure  controls  and  procedures"  (as  defined
in Rule 13a-14 (c) of the Securities Exchange Act of 1934 (the
"Exchange  Act")  as  of  a date within
90 days  before the filing date of this report and has concluded
that  as  of  the evaluation date, our disclosure
controls and procedures are effective to ensure that information  we
are required to disclose in reports that we file or submit under the
Exchange  Act  is recorded, processed, summarized and
reported within the time periods
specified  in  the  Securities and Exchange
Commission's rules and forms.
   (b)
Changes in internal controls
   Subsequent
to the date of their evaluation, there were no significant changes in our
internal controls over financial reporting or in other factors that
could   significantly   affect   these
controls.  There were no significant deficiencies or material
weaknesses in our internal controls so no corrective actions were
taken.






SIGNATURES
   In
accorance with the requirements of the Exchange Act, the registrant has caused
this report to be signed on its behalf by the undersigned thereunto duly
authorized.
  MEZEY
      HOWARTH RACING STABLES, INC.
    By: /s/
      Wade MezeyMay
      21, 2008
              Wade
      MezeyChief
      Executive Officer


EXHIBIT
LIST
   31.1
Certification of Chief Executive Officer Pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002
   31.2
Certification of Chief Financial Officer Pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002
   32.1
Certification of CEO and CFO Pursuant to 18 U.S.C. Section 1350, As Adopted
Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (furnished pursuant to
Rule 13a - 14(b))