UNITED STATES


SECURITIES AND EXCHANGE
COMMISSION


Washington, D.C.
20549




FORM 10-K/A





(Mark
One)




x
            ANNUAL REPORT UNDER SECTION 13
      OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934For the fiscal year ended
      December 31, 2007




o
            TRANSITION REPORT UNDER SECTION
      13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
  1934For the transition period from
      ___________ to ___________




Commission file number




NORTHEAST AUTOMOTIVE HOLDINGS,
INC.


(Exact
name of registrant as specified in its charter)




Nevada
            65-0637308(State
      or other jurisdiction of incorporation or organization)
            (I.R.S.
      Employer Identification No.)2174 Hewlett Avenue,
              Merrick, New
      York
            11566(Address
      of principal executive offices)
            (Zip
      Code)





Registrant’s
      telephone number, including area code:(516)
      377-6311




Securities
      registered under Section 12(b) of the Exchange Act:Title
      of each class
            Name
      of each exchange on which registeredNone
            NoneSecurities
      registered under Section 12(g) of the Exchange Act:Class A Common Stock, par value
      $.0001(Title
      of class)




Indicate
by check mark if the registrant is a well-known seasoned issuer, as defined in
Rule 405 of the Securities Act.   Yes   ̈    No  x
 
 Indicate
by check mark if the registrant is not required to file reports pursuant to
Section 13 or Section 15(d) of the
Act.  Yes   ̈    No  x
 
 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 if disclosure of delinquent filers pursuant to Item 405 of
Regulation S-K is not contained herein, and will not be contained, to the best
of registrant’s knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this Form
10-K.   ̈
 
 Indicate
by checkmark whether the registrant is a shell company (as defined in Rule 126.2
of the Exchange Act).  Yes   ̈    No  x
 
 The
aggregate market value of common stock held by non-affiliates of the Registrant
on March 28, 2008 based on the closing price on that date of $0.06 on the Over
the Counter Bulletin Board was $577,115. For the purposes of calculating this
amount only, all directors, executive officers and shareholders owning in excess
of ten percent (10%) of the Registrant’s outstanding common stock have been
treated as affiliates.
 
 Indicate
by checkmark whether the registrant is a large accelerated filer, an accelerated
filer, or a non-accelerated filer. See definition of “accelerated filer and
large accelerated filer” in Rule 12b-2 of the Exchange Act. (Check
one):
 
 Large
accelerated filer   ̈            Accelerated
filer   ̈            Non-accelerated
filer  x
 
 The
number of shares of common stock outstanding as of March 28, 2008 was
26,618,586.
  EPLANATORY
NOTE: This amended Form 10-K contains an amended Management’s Discussion and
Analysis of Financial Condition and Results of
Operations








TABLE OF
CONTENTS


PgPart IItem
      1.
              Description
      of Business.
              3Item
      1A.
              Risk
      Factors.
              6Item
      2.
              Properties.
              8Item
      3.
              Legal
      Proceedings.
              8Item
      4.
              Submission of Matters to a Vote of Security Holders.
              8Part IIItem
      5.
              Market
      for Registrant’s Common Equity, Related Stockholder Matters and Issuer
      Purchases of Equity Securities..
              9Item
      6.
              Selected
      Financial Data.
              9Item
      7.
              Management’s
      Discussion and Analysis of Financial Condition and Results of
      Operations..
              10Item
      7A.
              Quantitative
      and Qualitative Disclosures About Market Risk..
              18Item
      8.
              Financial
      Statements and Supplementary Data.
              19Item
      9.
              Changes
      in and Disagreements With Accountants on Accounting and Financial
      Disclosure
              20Item
      9A.
              Controls
      and Procedures.
              20Item
      9B.
              Other
      Information.
              20Part IIIItem
      10.
              Directors,
      Executive Officers, Promoters and Control Persons.
              21Item
      11.
              Executive
      Compensation.
              23Item
      12.
              Security
      Ownership of Certain Beneficial Owners and Management and Related
      Stockholder Matters.
              24Item
      13.
              Certain
      Relationships and Related Transactions.
              24Item
      14.
              Principal
      Accountant Fees and Services.
              24Item
      15.
              Exhibits.
              25Signatures
              
              26




2


Except as otherwise required by the
context, all references in this prospectus to "we", "us”, "our", or "Company"
refer to the operations of Northeast Automotive Holdings, Inc., a Nevada
corporation.




"NAAC" and “NEAA” are trademarks and
service marks of Northeast Automotive Holdings, Inc. (Formerly Northeast Auto
Acceptance Corp.). All other trademarks, service marks or trade names referred
to in this Registration Statement on Form 10 ("Registration Statement") are the
property of their respective owners. Except as otherwise required by the
context, all references in this Registration Statement to (a) "we," "us," "our,"
the “Company” or "NEA" refer to the consolidated operations of Northeast Auto
Acceptance Corp., a Florida corporation, and its wholly-owned subsidiary,
Northeast Auto Acceptance Corp., a New York corporation and (b) "you" refers to
prospective investors in our common stock and other readers of this Registration
Statement.





PART
I




Item 1.
            Description of
      Business.





BACKGROUND





Northeast
Automotive Holdings, Inc., (the “Company”), was incorporated on October 12, 2007
in the State of Nevada. Pursuant to an Agreement and Plan of Merger with
Northeast Auto Acceptance Corp., a Florida Corporation (“NEAA-FL”) in November
2007, we acquired title to all property owned by NEAA-FL including its wholly
owned subsidiary Northeast Auto Acceptance Corp., a New York Corporation
(“NEAA-NY”). All of our operating business is currently conducted through our
subsidiary,NEAA-NY, and our principal executive offices are located at 2174
Hewlett Avenue, Suite 206, Merrick, New York 11566. Our telephone number at this
address is (516) 377-6311.





OUR BUSINESS





The
Company currently seeks to exploit its 12 years of experience in the wholesale
automobile industry and the inefficiencies and geographic differences in the
used vehicle market by purchasing high quality, late model used vehicle from
dealers and institutional sellers in Northeastern states and transporting the
vehicles for resale in the Pacific Northwest . We are
involved only in the wholesale purchase and sale of vehicles acting as a
middleman between various dealer and institutional sellers and dealer
purchasers. We generally sell our vehicles only through established third-party
auctions which act as a marketplace for used vehicles. We thus help align
institutional used vehicle sellers and wholesale buyers over a wide geographic
area.





During
our last audited year, which ended December 31, 2007, we had total revenue of
$73,704,029 and a net (loss) of ($177,689).





We
typically purchase vehicles from two types of sellers: institutional sellers and
dealers. Institutional sellers include vehicle manufacturers and their captive
finance arms, banks, vehicle finance companies, credit unions, other financial
institutions, vehicle rental companies, commercial fleets and fleet
management/licensing companies. Selling dealers include licensed franchised,
independent and wholesale vehicle dealers. We deal only with wholesale sellers
and buyers and do not buy from or sell to individuals. In addition, we do not
purchase or sell scrap vehicles.





As a
principal in each transaction, we take title to, and ownership of, the vehicles
we purchase. We generally earn revenue from reselling the used vehicles to
dealers in other geographic regions at a higher price than we paid to purchase
the vehicles.





Our
vehicles are purchased from institutional sellers and dealers located within a
limited geographic area, specifically, the Northeastern United States. We
currently resell all of these vehicles at wholesale vehicle auctions in the
Pacific Northwest. On a weekly basis, we hire various third party automobile
transporters to ship our vehicles from the East coast where they are purchased
to wholesale auctions in the Pacific Northwest.





Generally
speaking, we do not own a vehicle for more than an average of 14 days since our
goal is to transport and then quickly sell, at a profit, the vehicles we
purchase from sellers.





Although
our business is not seasonal in nature, we do attempt to take advantage of how
seasonal tastes affect the buying habits of consumers. For example, prior to the
spring months we attempt to purchase a greater number of sport vehicles since
consumer demand for sports models increases in the spring and summer months.
Likewise, prior to the winter months, we attempt to purchase more SUVs to meet
the greater consumer demand in the winter months. In addition, the prices of
certain kinds of used vehicles fluctuate with the season. For example, the
prices of SUVs rise prior to the winter months and drop after the winter
ends.





INDUSTRY OVERVIEW





With
calendar year 2004 sales of approximately $367 billion, used vehicles make up
nearly half of the U.S. auto retail market, the largest retail segment of the
economy. In calendar 2004, there were an estimated 42.5 million used vehicles
sold compared with 16.9 million new vehicles, of these vehicles approximately
9,666,000 were sold at auction, according to the National Auto Auction
Association. Our primary focus, late-model vehicles that are one to six years
old, is estimated at approximately $265 billion in annual sales and 20 million
units per year.





3


The
demand for used vehicles purchased at auction is driven by the retail demand for
used vehicles. Dealers in the United States sold approximately 29.5 million used
vehicles in 2002, which accounts for approximately 69% of the total used vehicle
sales in the United States. The demand for used vehicles has grown due to the
increase in the number of households that have more than one vehicle,
improvements by manufacturers to the quality of vehicles that have extended
vehicle lifespan and made used vehicles a more attractive option for retail
vehicle buyers and the affordability of used vehicles relative to new vehicles.





To
satisfy this large demand for used vehicles, car dealers that sell used vehicles
utilize various sources of supply to stock their inventory, including trade-ins
from customers on new and used vehicle purchases, purchases from other dealers,
wholesalers, individuals or other entities. It has been our experience that used
vehicle dealers are increasingly relying upon wholesale used vehicle auctions,
such as the auctions where we primarily sell our vehicles, as a way to purchase
high quality used vehicles and this has resulted in an increase in the number of
used vehicles sold annually at auctions and an increase in the attendance at
auctions by used vehicle dealers.





OUR SALES AND DISTRIBUTION
METHODS





We
attempt to have a sales cycle of as little as ten days starting with our
purchase of a vehicle, transporting it to auction, reselling it at a profit and
our receipt of full payment from the buyer. On a continual basis, we purchase
used vehicles in the Northeast and transport and sell them in the Pacific
Northwest. In doing so, we seek to exploit a continual inefficiency in the used
vehicle market. That is, the supply of high quality, late model used cars is
more limited in the Pacific Northwest as compared to the Northeast, resulting in
substantially higher wholesale prices. This anomaly in the used vehicle market
is largely a factor of the Northeast’s larger population which results in a
greater number of cars being bought, sold and leased in the Northeast. The
increased number of used vehicles sold in the wholesale market in the Northeast
tends to create lower wholesale prices than would be paid for the same used
vehicle in the Pacific Northwest.





We
purchase used vehicles from one of two broad categories of wholesale sellers:
institutions and dealers. We do not purchase vehicles directly from private
sellers. The majority of the vehicles we buy are purchased from institutional
sellers and dealers located within a limited geographic area, specifically, the
Northeastern United States. When we purchase vehicles from institutional
sellers, the purchases are most commonly made utilizing a wholesale vehicle
auction as a middleman, although, at times, we do purchase directly from
institutional sellers.





Institutional
sellers include vehicle manufacturers and their captive finance arms, banks,
vehicle finance companies, credit unions, other financial institutions, vehicle
rental companies, commercial fleets and fleet management/licensing companies.
The vehicles we purchase from these sellers include vehicles that have come off
lease, repossessed vehicles, rental and other program fleet vehicles that have
reached a predetermined age or mileage at which time they are automatically
repurchased by manufacturers and vehicles purchased by dealers as trade-ins from
consumers. Our most important sellers are the captive finance arms of automobile
manufacturers such as GMAC and Ford Motor Credit.





We also
purchase cars from selling dealers which include licensed franchised,
independent and wholesale vehicle dealers. Most of the vehicles we purchase from
selling dealers were acquired by the dealers as trade-ins towards the purchase
of a new vehicle since many new car dealers find it more efficient to sell
trade-in vehicles to wholesale dealers like us than to offer the vehicles in
their own used car departments.





Although
our business is not seasonal in nature, we do attempt to take advantage of how
seasonal tastes affect the buying habits of consumers. For example, prior to the
spring months we attempt to purchase a greater number of sport vehicles since
consumer demand for sports models increases in the spring and summer months.
Likewise, prior to the winter months, we attempt to purchase more SUVs to meet
the greater consumer demand in the winter months. In addition, the prices of
certain kinds of used vehicles fluctuate with the season. For example, the
prices of SUVs rise prior to the winter months and drop after the winter
ends.





Our
management has extensive experience in selecting used vehicles for purchase.
Prior to purchase, we learn about the availability of our used vehicles being
sold by institutional sellers, directly from the sellers, either via their Web
sites or from lists they provide to us. We use a combination of industry
guidebooks and management’s experience in determining what the proper price to
bid for and purchase a used vehicle. Once we successfully bid on a vehicle, we
use third party contractors to inspect the vehicles for substantial defects and
we reserve the right to reject the purchase of any vehicle showing substantial
defects.





Currently,
we purchase vehicles, on a monthly basis, through six (6) auction houses, which
each comprise over ten percent (10%) of our purchases, namely, Skyline Auto
Exchange, Southern Auto Auction , ADESA
Boston Auto Auction , NADE
(National Auto Dealers Exchange) , ADESA New
Jersey Auto Auction and  Manheim
Auto Auction. It should be noted that we are not dependant upon any one auction
house for our purchases, since in the event that any particular auction house
should go out of business, the sellers utilizing such auction house would shift
to other auctions. We currently utilize a revolving line of credit of up to
$975,000  provided
by Manheim Automotive Financial Services, Inc., an affiliate of Manheim Auto
Auction, Inc. (“Manheim”). Pursuant to such line of credit, which is designed
specifically for the purchase of vehicles from Manheim, we are obligated to
repay each advance against the line of credit in no more than 21 days after it
is advanced to the Company. The Manheim line of credit also contains several
other material terms, specifically, the loan is secured against vehicles
purchase with the funds, we have agreed to maintain reasonable amount of
adequate cash necessary to operate our business and we have agreed not to make
any material changes in our business or material change in our capital
structure.


4


The
current focus of our sales activity is the sale of our vehicles at wholesale
auctions located in the Pacific Northwest. On a weekly basis, we hire various
non-union, third party automobile shippers to transport our vehicles to
wholesale auctions in the Pacific Northwest. We utilize the services of
established third party vehicle shippers that take our vehicles from the New
York metropolitan area and ship them to the Pacific Northwest on our behalf. We
have non-exclusive arrangements with these shipping companies and we regularly
contract with several different transporters.





The
average time it takes to ship a vehicle is five days. Our shipping costs are
partially dependant on the price of fuel and may rise or fall depending upon the
then-current fuel costs at any point in time and as of December 31, 2007, our
average cost to ship a vehicle is $1,033 per vehicle. Once our vehicles are
shipped to the third party auction locations, they are cleaned and minor
repairs, if necessary, are made by third party contractors who are provided by
the auction houses as add-on services available to all of its
sellers.





We
utilize third party wholesale used vehicle auctions for almost all of our sales
and they are a key element in our business. Auctions serve as a real-time
independent marketplace for the industry and efficiently transfer ownership and
title, administer the flow of funds between sellers and buyers of vehicles and
facilitate the storing, transporting, reconditioning and selling of vehicles.





By
selling at wholesale auctions, we help assure that we receive the highest
possible prices for our vehicles in an efficient marketplace and we help assure
that we can quickly sell the vehicles we purchase. Equally important, auctions
assure payment from buyers by escrowing title until payment is received, so that
the Company’s credit risk on vehicle sales is substantially
reduced.





We
believe that auctions are the best means of transferring ownership of used
vehicles based on the short time-to-cash cycle auctions offer, the low cost of
utilizing auctions as a percent of the gross market value of the vehicles placed
at auction and the relative transparency of the auction process. As a result,
auctions offer a large and liquid market resulting in true real time market
prices for each vehicle sold.





Growth
Strategy





We are
pursuing strategic initiatives that are designed to capitalize on our underlying
business strengths, grow our business and improve our profitability. Key
elements of our growth strategy include:





Growing vehicle sales
volume . We
expect to grow our business by capitalizing on the increasing volume of used
vehicles purchase and sold annually. We intend to increase vehicle volume from
existing institutional customers and to add new accounts by increased marketing
efforts and through the acquisition of smaller competitors.





Identifying new
markets . We
expect to expand our resale efforts from the Pacific Northwest to other
geographic markets within the United States where we can identify similar market
inefficiencies and where the supply of high quality, late model used vehicles is
limited.





Acquisitions of Smaller
Competitors . We have
a large number of smaller competitors whose sales volume is less than ours, but
who have established relationships with dealers with whom we do not currently do
business. We plan on either acquiring one or more of these smaller competitors
or entering into other relationships with such companies which allows us to take
advantage of their existing relationship.





Optimizing profit per vehicle
sold . In
2007, we had a net (loss) per car sold of $36.96.  We plan
to increase our average profit per car by up to $200 by negotiating better terms
from sellers and by reducing transportation costs through greater volume
commitments to shippers and through the possible utilization of railroad
shipping for vehicles which are now available to us due to the larger number of
vehicles that we now ship.




COMPETITIVE
STRENGTHS





We
believe that the following key competitive strengths are critical to our
continuing success:





Experienced management
team . The
members of our senior management team have an average of 18 years of experience
in the auto industry and have successfully grown our company to become a leader
in the wholesale used vehicle market. Our management team has accomplished this
by implementing a disciplined strategy of selective vehicle purchases and
increasing sales. Over the past several years, our management team has
demonstrated its ability to efficiently and successfully integrate both large
and small acquisitions of used vehicles and has increased the number of vehicles
bought and sold annually.





Established relationships with
diversified customer base. Since
the supply of high quality used vehicles is limited, our long standing business
relationships with institutional sellers and our ability to quickly close and
pay for purchases are a strong competitive advantage. We have established strong
business relationships with selling dealers and institutional customers, such as
vehicle manufacturers, financial institutions, rental agencies and fleet
companies. Our customer base is primarily comprised of repeat customers, which
allows us to reduce the amount of time required to close a purchase or sale and
allows us access to dealer and institutional vehicles for sale which would not
be available to less established competitors. Due to the diversity of our
customer base, we do not have a major concentration of business with any one
customer on either the buy or sale side of a transaction. In fact, none of
sellers from which we purchase vehicles, accounts for more than 10% of our
purchasing volume and no one purchaser of our vehicles accounts for 10% or more
of our selling. This diversity also allows us to better withstand changes in the
economy and market conditions. Our sales and marketing team seeks to foster and
maintain strong relationships with our customers through frequent contact and
customer service. These open lines of communication allow us to be more
responsive and timely in meeting our customers' needs and goals, regardless of
the size of their portfolio of vehicles.


5


Experienced Administrative
Staff . We have
developed streamlined administrative services which handle title processing and
administrative paperwork resulting in lower administrative costs, greater
efficiency and reduced turnaround times for vehicles we purchase and
sell.





COMPETITION





All
aspects of the automotive industry are highly competitive. We regularly compete
for the purchase of used vehicles with small and large dealers and other
wholesalers. At our auctions, we compete with numerous other sellers of used
vehicles including the same types of sellers from whom we purchase vehicles.





INTELLECTUAL PROPERTY
PROTECTION





We regard
the protection of our service marks, trademarks and trade secrets as critical to
our future success and rely on a combination of trademark, service mark and
trade secret laws and contractual restrictions to establish and protect our
proprietary rights in our services. Although we do not believe that we infringe
the proprietary rights of third parties, there can be no assurance that third
parties will not claim infringement by us with respect to past, current or
future services.





GOVERNMENTAL
REGULATION





In
addition to the laws and regulations which apply to all businesses, our
operations are subject to regulation, supervision and licensing under various
state and local statutes and regulations applicable to wholesale used vehicle
dealers. We are licensed by the New York State Department of Motor Vehicles as a
wholesale motor vehicles dealer and by the New Jersey Department of Motor
Vehicles as an automobile leasing company. The cost of compliance with all such
regulations is minimal.





Since we
sell automobiles and are not engaged in manufacturing, we did not spend any
material amounts on compliance with environmental laws.





EMPLOYEES





As of
December 31, 2007, we had seven full and part time employees, including two in
Sales and Support and five in Administration. In addition, we have on-going
relationships with six contactors who work as sales representatives for the
Company. Although talented and qualified employees are difficult to find in the
current tight job market, we have experienced relative success in attracting and
retaining highly motivated and talented employees.





We
believe that the future success of the Company will depend in part on our
continued ability to attract, integrate, retain and motivate highly qualified
sales and managerial personnel, and upon the continued service of our senior
management. The competition for qualified personnel in our industry and
geographical location is intense, and there can be no assurance that we will be
successful in attracting, integrating, retaining and motivating a sufficient
number of qualified personnel to conduct our business in the future. From time
to time, we also employ independent contractors to support our marketing and
sales organization. We have never had a work stoppage, and no employees are
represented under collective bargaining agreements. We consider our relations
with our employees to be good.





SUBSIDIARIES





We have
one subsidiary, Northeast Auto Acceptance Corp., a New York corporation, which
was incorporation in 1996 and is a wholly-owned subsidiary of Northeast
Automotive Holdings, Inc. (Formerly Northeast Auto Acceptance Corp.), a Nevada
corporation. All of our operating business is handled by our New York subsidiary
and information contained herein regarding the business of the Company reflects
the operating business of our New York subsidiary.





ITEM 1A. RISK
FACTORS





The
Company is subject to various risks, including the risks described below. The
Company’s business, operating results, and financial condition could be
materially and adversely affected by any of these risks. Additional risks not
presently known to the company or that the Company currently deems immaterial
may also impair the business and its operations.





Economic Conditions and Gasoline
Prices May Affect Sales . In the
normal course of business, the Company is subject to changes in general or
regional U.S. economic conditions, including, but not limited to, consumer
credit availability, consumer credit delinquency and default rates, interest
rates, gasoline prices, inflation, personal discretionary spending levels, and
consumer sentiment about the economy in general. Any significant changes in
economic conditions could adversely affect consumer demand and/or increase our costs
resulting in lower profitability for the Company. In addition, our
transportation costs are partially tied to the cost of gasoline and any
additional increases to the cost of gasoline may increase our costs and may
result in lower profitability.


6


Our Business is Highly
Competitive . The
reselling of late model used vehicles is a highly competitive business. The
Company’s competition includes publicly and privately owned franchised new car
dealers and independent dealers, as well as millions of private individuals. The
company’s competitors may sell the same or similar makes of vehicles that the
Company offers in the same or similar markets at competitive prices. Further,
new entrants to the market could result in increased wholesale costs for used
vehicles and lower-than-expected vehicle sales and margins. Additionally,
competition on vehicle sales is increasing as these products are now being
marketed and sold over the Internet. Customers are using the Internet to compare
pricing for cars and related financing, which may further reduce the Company’s
profitability.





Retail and Wholesale Prices May Vary
Depending Upon Factors Beyond the Company’s Control. Any
significant changes in retail or wholesale prices for used and new vehicles
could result in lower sales and margins for the Company. If any of the Company’s
competitors seek to gain or retain market share by reducing prices for used
vehicles, the Company would likely reduce its prices in order to remain
competitive, which may result in a decrease in its sales and profitability and
require a change in its operating strategies.





There are Risks Associated with
Purchasing Inventory. A
reduction in the availability or access to sources of inventory would adversely
affect the Company’s business. A failure to adjust the price that the Company
offers to purchase vehicles from sellers to stay in line with market trends, or
a failure to recognize those trends, could negatively impact the Company’s
ability to acquire inventory.





We are Highly Dependant Upon Our
Management and Workforce. The
Company’s success depends upon the continued contribution of its corporate
management team. Consequently, the loss of the services of key employees could
have a material adverse effect on the Company’s results of operations. In
addition, in order to expand the Company’s business, the Company will need to
hire additional personnel. The market for qualified employees in the industry
and in the regions in which the Company operates is highly competitive and may
subject the company to increased labor costs during periods of low
unemployment.





We are Dependant Upon Our Information
Systems. The
Company’s business is dependent upon the efficient operation of its information
systems. In particular, the Company relies on its information systems to
effectively manage its sales, inventory and customer information. The failure of
the Company’s information systems to perform as designed or the failure to
maintain and continually enhance or protect the integrity of these systems could
disrupt the Company’s business, impact sales and profitability, or expose the
Company to customer or third-party claims.





Our Availability to Capital May Vary. Changes
in the availability or cost of capital and working capital financing, including
the availability of long-term financing to support development of the Company,
could adversely affect the company’s growth and operating strategies. Further,
the Company’s current credit facilities contains certain financial covenants and
the Company’s future credit facilities may contain covenants and/or performance
triggers. Any failure by the Company to comply with these covenants and/or
performance triggers could have a material adverse effect on the Company’s
business.





Our Purchases and Sales are
Geographically Concentrated. The
Company’s performance is subject to local economic, competitive, and other
conditions prevailing in geographic areas where the Company operates. Since
currently, all of our vehicles are purchased in the Northeast and are sold in
the Pacific Northwest, the Company’s current results of operations depend
substantially on general economic conditions and consumer spending habits in
these markets. In the event that any of the geographic areas in which the
Company does business experiences a downturn in economic conditions, it may
adversely affect the Company’s business. Furthermore, in the event that the
regional price discrepancies of vehicles that the Company exploits should
decrease or disappear, it may adversely affect the Company’s
business.





We Currently Have Just One
Director . Our
Board of Directors is currently comprised of just one member, our Chief
Executive Officer William Solko. Thus, without any independent directors,
conflicts of interest between the Company and our Chief Executive Officer may
occur regarding issues such as executive compensation. We intend to increase the
size of the Board of Directors in 2008.





Control of the Company by Our
Majority Stockholder . Our
Chief Executive Officer, Error! Reference source not
found. , is the
majority stockholder of the Company and owns 56.4% of the shares issued and
outstanding. Accordingly, the present majority stockholder of the Company is in
a position to elect all of the directors of the Company and control its
policies.





Our Costs Are Partially Dependant
Upon Fuel Costs. Because
all of the vehicles we purchase must be shipped from the Northeast to the
Pacific Northwest, we are dependant upon variations in the cost of fuel. Any
significant rise in the cost of fuel will increase our transportation costs and
we may not be able to pass these increased costs along to our customers,
resulting in lower net profits on each vehicle we sell.





We will
be subject to substantial and growing competition in all aspects of our
business. Barriers to entry to the asset management business are relatively low,
and our management anticipates that we will face a growing number of
competitors. Although no one company dominates the asset management industry,
many companies are larger, better known and have greater resources than we
do.


7


We will
compete against an ever-increasing number of investment dealers, banks,
insurance companies, trust companies and others that offer investment advice and
trust services. In short, the competitive landscape in which we will operate is
both intense and dynamic and there can be no assurance that we will be able to
compete effectively in the future.




Patent and
Trademarks




We
currently do not own any patents, trademarks or licenses of any kind and
therefore we have no protected rights with respect to our services.




Governmental
Regulations





We have
not yet received regulatory approval to provide our services. However, we will
seek the necessary approvals from any governmental agencies required to conduct
our business prior to commencing operations.





We will
operate in a highly regulated environment and be subject to extensive
supervision and examination. As a chartered trust company, we would be subject
to state rules and regulations and supervision by the State Department of
Banking in which we will operate.  These laws are intended primarily for
the protection of clients and creditors, rather than for the benefit of
investors and generally provide for and regulate a variety of matters, such as
minimum capital maintenance requirements; restrictions on dividends;
restrictions on investments of restricted capital; lending and borrowing
limitations; prohibitions against engaging in certain activities; periodic
examinations by the office of the Department of Banking Commissioner; furnishing
periodic financial statements to the Department of Banking Commissioner;
fiduciary record-keeping requirements; and sometimes prior regulatory approval
for certain corporate events (such as mergers, sale/purchase of all or
substantially all of the assets and transactions transferring control of a trust
company).





We may
also be subject to the Employee Retirement Income Security Act of 1974, as
amended (“ERISA”), and to the related regulations, insofar as we are a
“fiduciary” under ERISA with respect to some of our clients. ERISA and
applicable provisions of the Code impose certain duties on persons who are
fiduciaries under ERISA or who provide services to ERISA plan clients and
prohibit certain transactions involving ERISA plan clients.





We may
also be subject to other regulatory agencies including the Securities and
Exchange Commission.  Our failure to comply with any of these
regulatory requirements could have a material adverse effect on us.




Item 2.
            Description of
      Property.




Our
executive offices are located at 2174 Hewlett Avenue, Suite 206, Merrick, New
York 11566. The Company rents office space on a month-to-month basis. Rent
expense was approximately $7,200 for 2007. At December 31, 2007, future minimum
lease payments were $2,800 for 2008. We
believe that these spaces are sufficient and adequate to operate our current
business.





Item 3.
            Legal
      Proceedings.




The
Company is not a party to any pending or threatened legal
proceedings.




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





None.


8


PART
II





Item 5.
            Market for Common Equity and
      Related Stockholder Matters.




Market
Information





Our
common stock is currently quoted on the Over the Counter Bulletin Board (“OTC
BB”) under the symbol NEAH. There is a limited trading market for our common
stock. On March 17, 2008, the current bid price of our common stock was $0.031,
and the current offer price was $0.06.


Price Range of Common
Stock
 
 Our
common stock is quoted by Over the Counter Bulletin Board under the symbol
“NEAH”. The following table sets forth the high and low bid prices for our
common stock for the periods indicated, as reported by Over the Counter Bulletin
Board. Such quotations reflect inter-dealer prices, without retail mark-up,
mark-down, or commissions, and may not necessarily represent actual
transactions.
  BidHigh
              
              LowYear
      Ended December 31, 2007:First
      Quarter
              
              $
              0.045
              
              $
              0.022Second
      Quarter
              
              $
              0.045
              
              $
              0.033Third
      Quarter
              
              $
              0.03
              
              $
              0.03Fourth
      Quarter
              
              $
              0.09
              
              $
              0.028Year
      Ended December 31, 2006:Second
      Quarter
              
              $
              0.18
              
              $
              0.06Third
      Quarter
              
              $
              0.08
              
              $
              0.06Fourth
      Quarter
              
              $
              0.06
              
              $
              0.015
 
 On
March 28, 2008, the last sales price of our common stock was $0.06.
 
 Dividends
 
 Holders
of our common stock are entitled to receive dividends if, as and when declared
by the Board of Directors out of funds legally available therefore. We have
never declared or paid any dividends on our common stock. We intend to retain
any future earnings for use in the operation and expansion of our business.
Consequently, we do not anticipate paying any cash dividends on our common stock
to our stockholders for the foreseeable future.




Recent Sales of Unregistered
Securities




None.




Item 6.
              Selected Financial
      Data.
  The
Statement of Operations, Per Share, and Balance Sheet data for the periods ended
December 31, 2007 and 2006 is derived from our consolidated financial statements
that have been audited by Kempisty
and Company ,
Certified Public Accountants, PC, our independent registered public accounting
firm. The information set forth below is not necessarily indicative of results
of future operations, and should be read in conjunction with Item 7,
“Management’s Discussion and Analysis of Financial Condition and Results of
Operations” and the consolidated financial statements and notes thereto included
in Item 8, “Financial Statements and Supplementary Data” of this Form 10-K,
which are incorporated herein by reference, in order to further understand the
factors that may affect the comparability of the financial data presented
below.




9





Item 7.
            Management’s Discussion and
      Analysis or Plan of
Operations.





MANAGEMENT'S DISCUSSION AND
ANALYSIS


The
following discussion and analysis addresses material changes in the results of
operations and financial condition of Northeast Automotive Holdings, Inc. and
Subsidiaries (the "Company" or "we") for the
periods presented. This discussion and analysis should be read in conjunction
with theConsolidated
Financial Statements, the related Notes toConsolidated
Financial Statements and Management's Discussion and Analysis of Results of
Operations and Financial Condition included in the Company's Form 10-K for the
fiscal year ended December 31, 2007, the unaudited interim Condensed
Consolidated Financial Statements and related Notes included in Item
I of this Report on Form 10-Q ("Form 10-Q") and the Company’s other SEC
filings and public disclosures.
  ThisForm
10-K maycontain
"forward-looking statements". These statements are made pursuant to the safe
harbor provisions of the Private Securities Litigation Reform Act of 1995. Such
forward-looking statements may include, without limitation, statements about the
Company’smarket
opportunities, strategies, competition and expected activities and expenditures,
and at times may be identified by the use of words such as "may", "will",
"could", "should", "would", "project","believe",
"anticipate", "expect", "plan", "estimate", "forecast",
"potential", "intend", "continue" and
variations of these words or comparable words. Forward-looking statements
inherently involve risks and uncertainties. Accordingly, actual results may
differ materially from those expressed or implied by these forward-looking
statements. Factors that could cause or contribute to
such differences include, but arenot
limited to, the risks described below under "Risk
Factors" inPart I,
Item 1B.,
The Company undertakes no obligation to update any forward-looking statements
for revisions or changes after the date of this Form
10-K.
  10


Overview
  We are a
wholesale automobile sales company which seeks to exploit the inefficiencies and
geographic differences in the used vehicle market by purchasing high quality,
late model used vehicles from dealers and institutional sellers in Northeastern
states and transporting the vehicles for resale in the Pacific Northwest. We are
involved only in the wholesale purchase and sale of vehicles acting as a
middleman between various dealer and institutional sellers and dealer
purchasers. We generally sell our vehicles only through established third-party
auctions which act as a marketplace for used vehicles. We thus help align
institutional used vehicle sellers and wholesale buyers over a wide geographic
area.
  Recent
Accounting Pronouncements
  In
December 2003, the Securities and Exchange Commission released Staff Accounting
Bulletin No. 104, "Revenue Recognition" ("SAB 104"). SAB 104 clarifies existing
guidance regarding revenue recognition. Neither the Company's adoption of SAB
104 nor its adoption of proposed Standards will have an impact on its
consolidated results of operations, financial position or cash
flows.
  No other
issued accounting standards adopted by the Company during 2007, 2006 and 2005
nor any proposed standards will have a material impact on its consolidated
results of operations, financial position or cash flows.




Forthe Year
Ended December 31,2007,
2006, and 2005
  The
following table sets forth certain data derived from the consolidated statements
of operations, expressed as a percentage of net revenues foreach of
the year ended December 31,2007,
2006, and 2005.
  ANNUAL
      RESULTS OF OPERATIONS
                        
                        Years
      Ended December 312007
                        
                        
                        2006
                        
                        
                        2005(In
      thousands)
                        
                        
                        Amount
                        
                        %
                        
                        
                        Amount
                        
                        %
                        
                        
                        Amount
                        
                        %Net
      Revenues
                        
                        $
                        73,704
                        
                        100.00%
                        
                        $
                        71,318
                        
                        100.00%
                        
                        $
                        60,994
                        
                        100.00%Cost
      of Revenues
                        
                        
                        72,124
                        
                        97.86%
                        
                        
                        69,398
                        
                        97.31%
                        
                        
                        59,125
                        
                        96.94%Gross
      Profit
                        
                        
                        1,580
                        
                        2.14%
                        
                        
                        1,920
                        
                        2.69%
                        
                        
                        1,869
                        
                        3.06%Sales,
      general and administrative expenses
                        
                        
                        825
                        
                        1.12%
                        
                        
                        818
                        
                        1.15%
                        
                        
                        1,033
                        
                        1.69%Other
      operating expenses
                        
                        
                        946
                        
                        1.28%
                        
                        
                        1,067
                        
                        1.50%
                        
                        
                        1,973
                        
                        3.24%Total
      operating expenses
                        
                        
                        1,771
                        
                        2.40%
                        
                        
                        1,885
                        
                        2.64%
                        
                        
                        3,006
                        
                        4.93%Profit
      (loss) from operations
                        
                        $
                        (191)
                        
                        (0.26%)
                        
                        $
                        35
                        
                        0.05%
                        
                        $
                        (1,138)
                        
                        (1.86%)
 11
 
  Revenues
  Revenue
forthe year
ended December 31, 2007 were $73,704,029, an
increase of $2,386,137 or 3.3% over
revenues for the year endedDecember
31, 2006of
$71,317,892.
The increasein
revenue was a result of an increase in
the number of vehicles we sold in the year2007
over 2006.
Specifically, in the year ended December 31, 2007 we sold 4,871 vehicles at an
average sales price of $15,131 as compared to 4,707 vehicles at an average sales
price of $15,151 during the comparable period in 2006. We view this change as
immaterial, and we do not see any significant business factors or market trends
that might lead us to believe that our revenues will continue increase in
the coming year.
  Revenue
for the year ended December 31, 2006 were $71,317,892, an increase of
$10,324,357 or 16.93% over revenues for the year ended December 31, 2005 of
$60,993,535. Specifically, in the year ended December 31, 2006 we sold
4,707 vehicles at an average sales price of $15,151 as compared to 4,259
vehicles at an average sales price of $14,321 during the comparable period in
2005. We attribute this increase in revenues to an increase in demand for our
core product, late model light trucks and sport utility vehicles. The increase
in the average sales price was due primarily to an increase in sales of higher
priced luxury models.
  Cost
of Revenues and Gross Profit Margin
  The
Company's cost of revenues is composed primarily of the cost of purchasing
vehicles for resale. Cost of revenues was $72,124,063 or 97.9% of net revenues
during the year ended December 31, 2007, an increase of $2,726,366, as compared
to $69,397,697 or 97.3% for the comparable period in 2006. Thus, our gross
margin was 2.14% for the year ended December 31, 2007 as compared to 2.69 % for
the comparable period in 2006. The increase in our cost of revenue is
attributable to an increase in the number of the vehicles sold during the year
ended December 31, 2007 as compared to the comparable period in
2006.The
increase in the number of units sold was the result of an increase in demand for
our core product, light trucks and sport utility vehicles. We noticed a
significant increase in competition in 2007 with regard to purchasing inventory.
The increased competition led to a higher cost of revenues, and thus a lower
gross margin, as we were unable to obtain higher prices for our products in a
market that seemed to be trending
downward.
  The
Company's cost of revenues is composed primarily of the cost of purchasing
vehicles for resale. Cost of revenues was $69,397,697 or 97.3% of net revenues
during the yearended
December 31, 2006, an increase of $10,272,923, as compared to $59,124,774 or
96.94% for the comparable period in 2005. Thus, our gross margin was 2.69% for
the year ended December 31, 2006 as compared to 3.06 % for the comparable period
in 2005. The increase in our cost of revenue is attributable to an
increase in the number of the vehicles sold during the year ended December 31,
2006 as compared to the comparable period in 2005. In 2006, we saw a sharp
increase in demand for our products. We attribute this to the increase in the
cost of new vehicles, which led to increased demand for late model, high quality
pre owned vehicles.
  12
 Operating
Expenses
  Our
operating expenses are comprised primarily of salaries, consulting fees and
sales, general and administrative expenses.
  Sale,
General and Administrative
  Sale,
general and administrative ("SGA") expenses are composed principally of
commission, salaries of administrative personnel, fees for professional services
and facilities expenses.
 
 The SGA
expenses were $825,454 for the year ended December 31, 2007 or 1.12% of net
revenue as compared to $817,601 or 1.14 % of net revenue for the comparable
period in 2006, an increase in such expenses of $7,853 or 0.96%. The increase in
the ratio of SGA expenses to net revenue was primarily due to an increase in
operating expenses. Net revenues had increased 3.35% compared to SGA expenses
increasing 0.96%. We view this change as immaterial.
  The SGA
expenses were $817,601 for the year ended December 31, 2006 or 1.14% of net
revenue as compared to $1,032,799 or 1.69% of net revenue for the comparable
period in 2005, a decrease in such expenses of $215,198 or (20.84%). We
attribute the decrease in SGA expenses to our continued efforts to lower our
expenses and increase our profitability.
  Other
Expenses
  Our
combined expenses for officerssalaries, consulting
fees and interest was $945,649 for the year ended December 31, 2007 or 1.28% of
net revenue compared to the comparable period in 2006 when such expenses were
$1,067,211 or 1.50% of net revenue. The decrease in such expenses is
attributable to decreased officers’ salaries and consulting fees while interest
expense increased.
  Our
combined expenses for officerssalaries, consulting
fees and interest was $1,067,211 for the year ended December 31, 2006 or 1.50%
of net revenue compared to the comparable period in 2005 when such expenses were
$1,973,485 or 3.24% of net revenue. The decrease in other expenses from 2005 to
2006 was due primarily to the absence of stock based consulting fees in 2006. In
2005, our stock based consulting fees totaled $756,794.
 13
 
  The
following table shows the changes in the components these expenses during the
comparable periods.
  ANNUAL
      OPERATING EXPENSES
                                                
                                                Year
      Ended
                                                
                                                
                                                Year
      Ended
                                                
                                                
                                                VarianceDecember
      31, 2007
                                                
                                                
                                                December
      31, 2006
                                                
                                                
                                                Amount
                                                
                                                
                                                %Sale,
      General and Administrative Expenses
                                                
                                                $
                                                825,454
                                                
                                                
                                                
                                                817,601
                                                
                                                
                                                $
                                                7,853
                                                
                                                
                                                
                                                0.96
                                                %Officers
      Salaries
                                                
                                                
                                                612,090
                                                
                                                
                                                
                                                634,022
                                                
                                                
                                                
                                                (21,932
                                                )
                                                
                                                
                                                (3.46
                                                %)Consulting
      Fees
                                                
                                                
                                                -
                                                
                                                
                                                
                                                148,556
                                                
                                                
                                                
                                                (148,556
                                                )
                                                
                                                
                                                -Stock
      based consulting fees
                                                
                                                
                                                -
                                                
                                                
                                                
                                                -
                                                
                                                
                                                
                                                -
                                                
                                                
                                                
                                                -Interest
      Expense
                                                
                                                
                                                333,559
                                                
                                                
                                                
                                                284,633
                                                
                                                
                                                
                                                48,926
                                                
                                                
                                                
                                                17.18
                                                %Total
      Operating Expenses
                                                
                                                $
                                                1,771,103
                                                
                                                
                                                
                                                1,884,812
                                                
                                                
                                                $
                                                (113,709
                                                )
                                                
                                                
                                                (6.03
                                                %)Year
      Ended
                                                
                                                
                                                Year
      Ended
                                                
                                                
                                                VarianceDecember
      31, 2006
                                                
                                                
                                                December
      31, 2005
                                                
                                                
                                                Amount
                                                
                                                
                                                %Sale,
      General and Administrative Expenses
                                                
                                                $
                                                817,601
                                                
                                                
                                                
                                                1,032,799
                                                
                                                
                                                $
                                                (215,198
                                                )
                                                
                                                
                                                (20.84
                                                %)Officers
      Salaries
                                                
                                                
                                                634,022
                                                
                                                
                                                
                                                524,738
                                                
                                                
                                                
                                                109,284
                                                
                                                
                                                
                                                20.83
                                                %Consulting
      Fees
                                                
                                                
                                                148,556
                                                
                                                
                                                
                                                48,971
                                                
                                                
                                                
                                                99,585
                                                
                                                
                                                
                                                203.36
                                                %Stock
      based consulting fees
                                                
                                                
                                                -
                                                
                                                
                                                
                                                756,794
                                                
                                                
                                                
                                                (756,794
                                                )
                                                
                                                
                                                (100.00
                                                %)Interest
      Expenses
                                                
                                                
                                                284,633
                                                
                                                
                                                
                                                642,982
                                                
                                                
                                                
                                                (358,349
                                                )
                                                
                                                
                                                (55.73
                                                %)Total
      Operating Expenses
                                                
                                                $
                                                1,884,812
                                                
                                                
                                                
                                                3,006,284
                                                
                                                
                                                $
                                                (1,121,472
                                                )
                                                
                                                
                                                (37.30
                                                %)
  Operating
Gain (Loss)
  Operating
profit (loss) from operations is calculated as our revenues less all of our
operating expenses. Our operating profit (loss) for the year ended December 31,
2007 was ($177,689) or (0.02%) of net revenue as compared to an operating profit
of $35,383 or 0.05% of net revenue for comparable period in
2006. The decrease in operating profit was due primarily to a
decrease in our gross profit. This decrease was due to a significant increase in
competition in 2007 with regard to purchasing inventory. Although our net sales
increased in 2007, increased competition led to a higher cost of sales, and thus
a lower gross profit. We were unable to obtain higher prices for our
products due to unfavorable market conditions.
  Our
operating profit (loss) for the year ended December 31, 2006 was 35,383 or 0.05%
of net revenue as compared to an operating loss of ($1,137,705) or (1.86%) of
net revenue for comparable period in 2005. This decrease in our
operating loss was due to a significant decrease in expenses in 2006. Most
significant, the absence of $756,794 in stock based consulting fees in 2006 as
compared to 2005. In addition, we had substantial decreases in interest expense
as well as SGA expenses in 2006.
 14
 
  For
the Three Months EndedDecember 31, 2008 and December 31, 2007
 The
following table sets forth certain data derived from the unaudited consolidated
statements of operations, expressed as a percentage of net revenues for each of
the three month periods ended December 31, 2007 and December 31,
2006.
  QUARTERLY
      RESULTS OF OPERATIONS
                                  
                                  Three
      Months ended December 312007
                                  
                                  
                                  2006
                                  
                                  
                                  Variance(In
      thousands)
                                  
                                  Amount
                                  
                                  
                                  %
                                  
                                  
                                  Amount
                                  
                                  
                                  %
                                  
                                  
                                  Amount
                                  
                                  
                                  %Net
      Revenues
                                  
                                  $
                                  15,422
                                  
                                  
                                  
                                  100.00
                                  %
                                  
                                  $
                                  13,798
                                  
                                  
                                  
                                  100.00
                                  %
                                  
                                  $
                                  1,624
                                  
                                  
                                  
                                  11.77
                                  %Cost
      of Revenues
                                  
                                  
                                  15,346
                                  
                                  
                                  
                                  99.50
                                  %
                                  
                                  
                                  13,813
                                  
                                  
                                  
                                  100.10
                                  %
                                  
                                  
                                  1,533
                                  
                                  
                                  
                                  11.10
                                  %Gross
      Profit
                                  
                                  
                                  77
                                  
                                  
                                  
                                  0.50
                                  %
                                  
                                  
                                  (14
                                  )
                                  
                                  
                                  (0.10
                                  %)
                                  
                                  
                                  91
                                  
                                  
                                  
                                  -Sales,
      general and administrative expenses
                                  
                                  
                                  219
                                  
                                  
                                  
                                  1.42
                                  %
                                  
                                  
                                  206
                                  
                                  
                                  
                                  1.49
                                  %
                                  
                                  
                                  12
                                  
                                  
                                  
                                  6.06
                                  %Other
      operating expenses
                                  
                                  
                                  269
                                  
                                  
                                  
                                  1.75
                                  %
                                  
                                  
                                  224
                                  
                                  
                                  
                                  1.63
                                  %
                                  
                                  
                                  45
                                  
                                  
                                  
                                  19.98
                                  %Total
      operating expenses
                                  
                                  
                                  488
                                  
                                  
                                  
                                  3.16
                                  %
                                  
                                  
                                  430
                                  
                                  
                                  
                                  3.12
                                  %
                                  
                                  
                                  57
                                  
                                  
                                  
                                  13.32
                                  %Profit
      (loss) from operations
                                  
                                  $
                                  (411
                                  )
                                  
                                  
                                  (2.67
                                  %)
                                  
                                  $
                                  (445
                                  )
                                  
                                  
                                  (3.22
                                  %)
                                  
                                  $
                                  34
                                  
                                  
                                  
                                  (7.58
                                  %)
  Revenues
  Revenue
for thethree
month period ended December 31, 2007 were $15,422,278 an
increase of $1,624,008 or 11.77 % as compared to revenues for the three month
period ended December 31, 2006 of $13,798,270. This increase in
revenue was due to slightly more favorable market conditions in the third
quarter of 2007 as compared to 2006. However, we do not view this increase as
significant.
  Cost of Sales and Gross
Profit Margin
  The
Company's cost of sales is composed primarily of the cost of purchasing vehicles
for resale. Cost of revenues was $15,345,628 or 95.5% of net revenues
during the
three month period endedDecember
31, 2007 as compared to $13,812,667 or 100.1% for the comparable period in 2006,
an increase of $1,532,961 or 11.1%. Thus, our gross margin was 0.5% for the
three month period ended December 31, 2007 as comparedto (0.1%)
for the comparable period in 2006. This increase in cost of sales
was due to slightly more favorable market conditions in the third quarter of
2007 as compared to 2006. However, we do not view this increase as
significant.
  15
 
 Operating
Expenses
  Our
operating expenses are comprised primarily of salaries, consulting fees and
sales, general and administrative expenses.
  Sale,
General and Administrative
  Sale,
general and administrative ("SGA'') expenses are composed principally of
commission, salaries of
administrative personnel, fees for professional services and facilities
expenses. These expenses were $218,509 for the three month period ended December
31, 2007 or 1.42% of net revenue as compared to $206,029 or 1.49% of net revenue
for the comparableperiod in
2006, an increase in such expenses of$12,480
or 6.06%. We do not view this change as
material.
  Other
Expenses
  Our
combined expenses for officers salaries,consulting
fees and interest was $269,308 for the three month period ended December 31,
2007 or
1.75% of net revenue compared to the comparable periodin 2007
when such expenses were $224,462 or 1.63% ofnet
revenue. We do not view this change as
material.
  The
following table shows the changes in the components of these expenses during the
comparable periods.
  QUARTERLY
      OPERATING EXPENSES
                                    
                                    Three
      Months Ended
                                    
                                    
                                    VarianceDecember
      31, 2007
                                    
                                    
                                    December
      31, 2006
                                    
                                    
                                    Amount
                                    
                                    
                                    %Sale,
      General and Administrative Expenses
                                    
                                    $
                                    218,509
                                    
                                    
                                    
                                    206,029
                                    
                                    
                                    $
                                    12,480
                                    
                                    
                                    
                                    6.06
                                    %Officers
      Salaries
                                    
                                    
                                    174,756
                                    
                                    
                                    
                                    151,688
                                    
                                    
                                    
                                    23,068
                                    
                                    
                                    
                                    15.21
                                    %Consulting
      Fees
                                    
                                    
                                    -
                                    
                                    
                                    
                                    1,556
                                    
                                    
                                    
                                    (1,556
                                    )
                                    
                                    
                                    -Interest
      Expense
                                    
                                    
                                    94,552
                                    
                                    
                                    
                                    71,218
                                    
                                    
                                    
                                    23,334
                                    
                                    
                                    
                                    32.76
                                    %Total
      Operating Expenses
                                    
                                    $
                                    487,817
                                    
                                    
                                    
                                    430,491
                                    
                                    
                                    $
                                    57,326
                                    
                                    
                                    
                                    13.32
                                    %
  Operating
Gain (Loss)
  Operating
gain or loss is calculated as our revenues less all of our operating expenses.
Our operating (loss) for the three month period ended December 31, 2007 was
($411,167) or (2.67%) of net revenue as compared to an operating loss of
($444,888) or (3.22%) of net revenue for comparable period in 2006, a decreased
loss of ($33,721). We do not view this change as
material.
 As of
December 31, 2007, we had cash and cash equivalents of $ 328,658 invested in standard bank checking
accounts and highly liquid money market instruments. Such investments are
subject to interest rate and credit risk. Such risks and a change in market
interest rates would not be expected to have a material impact on our financial
condition and/or results of operations. As of December 31, 2007, we had an
outstanding balance of $ 173,299 on our
revolving credit facility with Manheim Auto Financial Services, Inc. Borrowings
under such revolving credit facility would bear interest at a variable rate
equal to prime plus 2.0%. In addition, as of December 31, 2007, we had an
outstanding balance of $100,000 on a bank revolving credit facility which bears
interest at a variable rate equal to prime plus 1.0%.
 16
 Recently
issued accounting pronouncements
 
 In
February 2006, FASB issued SFAS No. 155, “Accounting for Certain Hybrid
Financial Instruments”. SFAS No. 155 amends SFAS No 133, “Accounting for
Derivative Instruments and Hedging Activities”, and SFAF No. 140, “Accounting
for Transfers and Servicing of Financial Assets and Extinguishments of
Liabilities”. SFAS No. 155, permits fair value remeasurement for any hybrid
financial instrument that contains an embedded derivative that otherwise would
require bifurcation, clarifies which interest-only strips and principal-only
strips are not subject to the requirements of SFAS No. 133, establishes a
requirement to evaluate interest in securitized financial assets to identify
interests that are freestanding derivatives or that are hybrid financial
instruments that contain an embedded derivative requiring bifurcation, clarifies
that concentrations of credit risk in the form of subordination are not embedded
derivatives, and amends SFAS No. 140 to eliminate the prohibition on the
qualifying special-purpose entity from holding a derivative financial instrument
that pertains to a beneficial interest other than another derivative financial
instrument. This statement is effective for all financial instruments acquired
or issued after the beginning of the Company’s first fiscal year that begins
after September 15, 2006. The adoption of this statement did not have a material
impact on the Company’s financial position or results of
operations.
 
 In March
2006 FASB issued SFAS 156 “Accounting for Servicing of Financial Assets” this
Statement amends FASB Statement No. 140, Accounting for Transfers and Servicing
of Financial Assets and Extinguishments of Liabilities, with respect to the
accounting for separately recognized servicing assets and servicing liabilities.
This Statement:
 
 ●
                Requires
      an entity to recognize a servicing asset or servicing liability each time
      it undertakes an obligation to service a financial asset by entering into
      a servicing contract.●
                Requires
      all separately recognized servicing assets and servicing liabilities to be
      initially measured at fair value, if
  practicable.
 ●
                Permits
      an entity to choose 'Amortization method' or ‘Fair value measurement
      method’ for each class of separately recognized servicing assets and
      servicing liabilities.●
                At
      its initial adoption, permits a one-time reclassification of
      available-for-sale securities to trading securities by entities with
      recognized servicing rights, without calling into question the treatment
      of other available-for-sale securities under Statement 115, provided that
      the available-for-sale securities are identified in some manner as
      offsetting the entity's exposure to changes in fair value of servicing
      assets or servicing liabilities that a servicer elects to subsequently
      measure at fair value.
 ●
                Requires
      separate presentation of servicing assets and servicing liabilities
      subsequently measured at fair value in the statement of financial position
      and additional disclosures for all separately recognized servicing assets
      and servicing liabilities. An entity should adopt this Statement as of the
      beginning of its first fiscal year that begins after September 15,
      2006.
 
 17
 The
adoption of this statement did not have a material impact on the Company’s
financial position or results of operations.
 
 In June
2006, the Financial Accounting Standards Board (“FASB”) ratified the provisions
of Emerging Issues Task Force (“EITF”) Issue No. 06-3, “How Taxes Collected from
Customers and Remitted to Governmental Authorities Should Be Presented in the
Income Statement (That Is, Gross versus Net Presentation).” EITF Issue No. 06-3
requires that the presentation of taxes within revenue-producing transactions
between a seller and a customer, including but not limited to sales, use, value
added, and some excise taxes, should be on either a gross (included in revenue
and cost) or a net (excluded from revenue) basis. In addition, for any such
taxes that are reported on a gross basis, a company should disclose the amounts
of those taxes in interim and annual financial statements for each period for
which an income statement is presented if those amounts are significant. The
disclosure of those taxes can be done on an aggregate basis. EITF Issue No. 06-3
is effective for fiscal years beginning after December 15, 2006, which will be
the Company’s fiscal 2008. The adoption of EITF Issue No. 06-3 did not have a
material impact on the Company’s consolidated results of operations or financial
position.
 
 In July
2006, the FASB issued FASB Interpretation (“FIN”) No. 48, “Accounting for
Uncertainty in Income Taxes,” which prescribes a comprehensive model for how a
company should recognize, measure, present and disclose in its financial
statements uncertain tax positions that the company has taken or expects to take
on a tax return (including a decision whether to file or not to file a return in
a particular jurisdiction). The accounting provisions of FIN No.48 are effective
for fiscal years beginning after December 15, 2006. The adoption of this
Interpretation had no impact on the Company’s financial position or results of
operations.
 
 In
September 2006, the FASB issued Statement of Financial Accounting Standards
(“SFAS”) No. 157, “Fair Value Measurements”, which establishes a framework for
reporting fair value and expands disclosures about fair value measurements. SFAS
No. 157 is effective for financial statements issued for fiscal years beginning
after November 15, 2007 and interim periods within those fiscal years. The
adoption of this standard will have no impact on the Company’s financial
statements.
 
 In
February 2007, the FASB issued Statement of Financial Accounting Standards
No. 159, “The Fair Value Option for Financial Assets and Financial
Liabilities-Including an amendment of FASB Statement No. 115,
(“SFAS No. 159”). SFAS No. 159 permits entities to choose to
measure many financial instruments and certain other items at fair value. Most
of the provisions of this Statement apply only to entities that elect the fair
value option. However, the amendment to FASB Statement No. 115, “Accounting
for Certain Investments in Debt and Equity Securities,”
(“SFAS No. 115”), applies to all entities with available-for-sale and
trading securities. SFAS No. 159 is effective for the Company’s
consolidated financial statements for the annual reporting period beginning
after November 15, 2007. The Company is currently evaluating the impact of
this new pronouncement on its consolidated financial statements.
 
 On
December 4, 2007, the Financial Accounting Standards Board (FASB) issued SFAS
No. 160, Noncontrolling
interest in Consolidated Financial Statements(SFAS No. 160). SFAS No.
160 requires all entities to report noncontrolling (minority) interests in
subsidiaries as equity in the consolidated financial statements. The statement
establishes a single method of accounting for changes in a parent’s ownership
interest in a subsidiary that do not result in deconsolidation and expands
disclosures in the consolidated financial statements. SFAS No. 160 is effective
for fiscal years beginning after December 15, 2008 and interim periods within
those fiscal years. We have not yet determined the impact of the adoption of
SFAS No. 160 on our consolidated financial statements and footnote
disclosures.
  On
December 4, 2007, the FASB issued SFAS No.141R, Business Combinations (SFAS
No. 141R). SFAS No. 141R requires the acquiring entity in a business combination
to recognize all the assets acquired and liabilities assumed, establishes the
acquisition date fair value as the measurement objective for all assets acquired
and liabilities assumed, and requires the acquirer to expand disclosures about
the nature and financial effect of the business combination. SFAS No. 141R is
effective for business combinations for which the acquisition date is on or
after the beginning of the first annual reporting period beginning on or after
December 15, 2008. We have not yet determined the impact of the adoption of SFAS
No. 141R on our consolidated financial statements and footnote
disclosures.




Item 7A.
              Quantitative and Qualitative
      Disclosures About Market
Risk
 
 The
Company does not currently engage in transactions in derivative financial
instruments or derivative commodity instruments. As of December 31, 2007,
the Company’s financial instruments were not exposed to significant market risk
due to interest rate risk, foreign currency exchange risk, commodity price risk
or other relevant market risks, such as equity price risk.
 
 Interest Rate
Risk
 
 Our
anticipated operations are expected to be leveraged and sensitive to the
difference between the interest rates we pay for borrowed funds and the interest
rates we charge in our lending operations. Our potential exposure to interest
rate risk arises primarily from changes in prime lending rates of commercial
banks, which are in turn impacted by the policies and practices of the United
States Federal Reserve Board, among other things.


18




Item 8.
              Financial Statements and
      Supplementary Data




NORTHEAST AUTOMOTIVE HOLDINGS,
INC.





FINANCIAL
STATEMENTS





DECEMBER 31,
2007


19


NORTHEAST AUTOMOTIVE HOLDINGS,
INC.




INDEX





PAGEREPORT OF INDEPENDENT
      REGISTERED PUBLIC ACCOUNTING FIRM
            F-2CONSOLIDATED BALANCE
      SHEETS
            F-3CONSOLIDATED STATEMENTS OF
      OPERATIONS
            F-4CONSOLIDATED STATEMENTS OF CASH
      FLOWS
            F-5CONSOLIDATED STATEMENTS OF
      CHANGES IN STOCKHOLDERS’ EQUITY (DEFICIT)
            F-6NOTES TO CONSOLIDATED FINANCIAL
      STATEMENTS
            F-7 -
    F-15


F-1


KEMPISTY &
COMPANY


CERTIFIED
PUBLIC ACCOUNTANTS, P.C.





15 MAIDEN
LANE - SUITE 1003 - NEW YORK, NY 10038 - TEL (212) 406-7272 - FAX (212)
513-1930





REPORT OF
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM





Board of
Directors


Northeast
Automotive Holdings, Inc.




We have
audited the accompanying consolidated balance sheets of Northeast Automotive
Holdings, Inc. as of December 31, 2007 and 2006 and the related consolidated
statements of operations, changes in stockholders' equity and cash flows for
each of the years in the three year period ended December 31, 2007. These
financial statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.
  We
conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. The Company is not required at
this time, to have, nor were we engaged to perform, an audit of its internal
control over financial reporting. Our audit included consideration of internal
control over financial reporting as a basis for designing audit procedures that
are appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the Company's internal control over financial
reporting. Accordingly, we express no such opinion. An audit includes examining,
on a test basis, evidence supporting the amounts and disclosures in the
financial statements. An audit also includes assessing the accounting principles
used and significant estimates made by management, as well as evaluating the
overall financial statement presentation. We believe that our audit provides a
reasonable basis for our opinion.
  In our
opinion, the financial statements referred to above present fairly, in all
material respects, the consolidated financial position of Northeast Auto
Acceptance Corp. at December 31, 2007 and 2006 and the results of its operations
and its cash flows for each of the years in the three year period ended December
31, 2007 in conformity with accounting principles generally accepted in the in
the United States of America.





Signature


Kempisty
& Company


Certified
Public Accountants PC


New York,
New York


April 9,
2008


F-2


NORTHEAST AUTOMOTIVE HOLDINGS,
INC




CONSOLIDATED BALANCE
SHEETS
 December
      31,2007
                
                2006ASSETSCurrent
      AssetsCash
                
                $
                328,658
                
                $
                188,037Inventory
      (Note 4)
                
                
                4,804,127
                
                
                3,656,059Accounts
      receivable (Note 3)
                
                
                829,498
                
                
                695,181Total
      Current Assets
                
                
                5,962,283
                
                
                4,539,277Equipment,
      net (Note 5)
                
                
                23,464
                
                
                -Other
      assets (Note 6)
                
                
                26,153
                
                
                39,491TOTAL
      ASSETS
                
                $
                6,011,900
                
                $
                4,578,768LIABILITIES
      AND STOCKHOLDERS' EQUITYCurrent
      LiabilitiesAccounts
      payable
                
                $
                298,168
                
                $
                263,650Note
      payable to bank (Note 7)
                
                
                100,000
                
                
                100,000Credit
      line
                
                
                849,842
                
                
                160,480Demand
      loans payable (Note 7)
                
                
                1,816,576
                
                
                1,307,331Credit
      card loan payable (Note 7)
                
                
                173,299
                
                
                155,848Due
      to stockholders (Note 7)
                
                
                1,605,707
                
                
                1,201,996Accrued
      expenses (Note 15)
                
                
                361,367
                
                
                375,760Payroll
      taxes withheld and accrued
                
                
                152,645
                
                
                181,718Total
      Current Liabilities
                
                
                5,357,604
                
                
                3,746,783Commitments
      and contingencies (Note 12)
                
                
                -
                
                
                -Stockholders'
      EquityPreferred
      stock, .0001 par value, 10,000,000 shares authorized, none issued
      andoutstanding
                
                
                -
                
                
                -Common
      stock, .0001 par value, 300,000,000 shares authorized, 26,618,586
      sharesissued
      and outstanding as of December 31, 2007 and December 31,
    2006
                
                
                2,662
                
                
                3,457,917Additional
      Paid in Capital
                
                
                3,455,255
                
                
                -Deficit
                
                
                (2,802,445
                )
                
                (2,624,756
                )655,472
                
                
                833,161Less:
      Treasury stock (200,000 common shares)
                
                
                (1,176
                )
                
                (1,176
                )Total
      Stockholders' Equity
                
                
                654,296
                
                
                831,985TOTAL
      LIABILITIES AND STOCKHOLDERS' EQUITY
                
                $
                6,011,900
                
                $
                4,578,768
  See Notes to Financial
Statements.
  F-3
 NORTHEAST AUTOMOTIVE HOLDINGS,
INC
  CONSOLIDATED STATEMENTS OF
OPERATIONS
  Year
      Ended December 31,2007
              
              2006
              
              2005Net
      sales
              
              $
              73,704,029
              
              $
              71,317,892
              
              $
              60,993,353Cost
      of sales
              
              
              72,124,063
              
              
              69,397,697
              
              
              59,124,774Gross
      profit
              
              
              1,579,966
              
              
              1,920,195
              
              
              1,868,579Operating
      expenses:Officers
      salaries
              
              
              612,090
              
              
              634,022
              
              
              524,738Consulting
      fees
              
              
              -
              
              
              148,556
              
              
              48,971Stock
      based consulting fees
              
              
              -
              
              
              -
              
              
              756,794Interest
      expense
              
              
              333,559
              
              
              284,633
              
              
              642,982Selling,
      general and administrative
              
              
              825,454
              
              
              817,601
              
              
              1,032,799Total
      operating expenses
              
              
              1,771,103
              
              
              1,884,812
              
              
              3,006,284Profit
      (Loss) from operations
              
              
              (191,137
              )
              
              35,383
              
              
              (1,137,705
              )Interest
      Income
              
              
              1,848
              
              
              431
              
              
              -Profit
      (Loss) before income taxes
              
              
              (189,289
              )
              
              35,814
              
              
              (1,137,705
              )Income
      taxes (Note 11)
              
              
              (11,600
              )
              
              (1,169
              )
              
              7,414Net
      profit (loss)
              
              $
              (177,689
              )
              $
              36,983
              
              $
              (1,145,119
              )Net
      loss per share basic and diluted
              
              $
              (0.01
              )
              $
              0.00
              
              $
              (0.05
              )Weighted
      average number of shares outstanding
              
              
              26,618,586
              
              
              26,618,586
              
              
              25,402,541
  See Notes to Financial
Statements.
  F-4
 NORTHEAST AUTOMOTIVE HOLDINGS,
INC


CONSOLIDATED STATEMENTS OF CASH
FLOWS
  Year
      Ended December 31,2007
              
              2006
              
              2005CASH
      FLOWS FROM OPERATING ACTIVITIES:Net
      profit (loss)
              
              $
              (177,689
              )
              $
              36,983
              
              $
              (1,145,119
              )Adjustments
      to reconcile net loss to net cash used by operating
      activities:Depreciation
      and amortization
              
              
              426
              
              
              2,309
              
              
              4,189Stock
      issued for consulting fees
              
              
              -
              
              
              -
              
              
              756,794Stock
      issued for interest
              
              
              -
              
              
              -
              
              
              5,411Beneficial
      conversion feature on interest
              
              
              -
              
              
              -
              
              
              440,000Changes
      in operating assets and liabilities:(Increase)
      decrease in accounts receivable
              
              
              (134,317
              )
              
              (100,381
              )
              
              (594,800
              )(Increase)
      decrease in inventory
              
              
              (1,148,068
              )
              
              (1,022,300
              )
              
              309,801(Increase)
      decrease in other assets
              
              
              13,338
              
              
              150,409
              
              
              (79,590
              )Increase
      (decrease) in accounts payable
              
              
              34,518
              
              
              116,003
              
              
              (62,043
              )Increase
      (decrease) in accrued expenses
              
              
              (2,403
              )
              
              (95,742
              )
              
              -Increase
      (decrease) in payroll taxes
              
              
              (41,063
              )
              
              70,702
              
              
              (33,218
              )Total
      adjustments
              
              
              (1,227,569
              )
              
              (879,000
              )
              
              746,544CASH
      USED BY OPERATING ACTIVITIES
              
              
              (1,455,258
              )
              
              (842,017
              )
              
              (398,575
              )CASH
      FLOWS FROM INVESTING ACTIVITIES:Purchase
      of fixed assets
              
              
              (23,890
              )
              
              (2,309
              )
              
              (4,189
              )CASH
      USED BY INVESTING ACTIVITIES
              
              
              (23,890
              )
              
              (2,309
              )
              
              (4,189
              )CASH
      FLOWS FROM FINANCING ACTIVITIES:Proceeds
      of line of credit
              
              
              8,846,708
              
              
              8,767,633
              
              
              -Repayment
      of line of credit
              
              
              (8,157,346
              )
              
              (8,607,153
              )
              
              -Proceeds
      of stockholders loans
              
              
              465,544
              
              
              142,178
              
              
              142,460Repayment
      of stockholders loan
              
              
              (61,833
              )
              
              (118,408
              )
              
              (60,110
              )Proceeds
      of demand loans
              
              
              517,245
              
              
              491,030
              
              
              877,025Repayment
      of demand loans
              
              
              (8,000
              )
              
              (239,469
              )
              
              (5,730
              )Proceeds/(Repayments)
      on credit card loan
              
              
              17,451
              
              
              60,018
              
              
              (89,786
              )CASH
      PROVIDED BY FINANCING ACTIVITIES
              
              
              1,619,769
              
              
              495,829
              
              
              863,859NET
      INCREASE (DECREASE) IN CASH
              
              
              140,621
              
              
              (348,497
              )
              
              461,095CASHBeginning
      of year
              
              
              188,037
              
              
              536,534
              
              
              75,439End
      of year
              
              $
              328,658
              
              $
              188,037
              
              $
              536,534SUPPLEMENTAL
      CASH FLOW INFORMATIONCash
      paid for:Income
      tax payments
              
              $
              -
              
              $
              6,960
              
              $
              50,944Interest
      payments
              
              $
              333,559
              
              $
              284,633
              
              $
              185,107
  See Notes to Financial
Statements.




F-5


NORTHEAST AUTOMOTIVE HOLDINGS,
INC


CONSOLIDATED STATEMENTS OF CHANGES IN
STOCKHOLDERS’ EQUITY (DEFICIT)
  Common
      StockNo
      Par Value
                
                Additional
                
                
                
                TreasuryShares
                
                Amount
                
                Paid
      In Capital
                
                Deficit
                
                Stock
                
                TotalsBalances
      at January 1, 2005
                
                
                23,186,886
                
                $
                1,614,706
                
                $
                -
                
                $
                (1,516,620
                )
                $
                (1,176
                )
                $
                96,910Common
      stock issued for consulting fees
                
                
                2,428,000
                
                
                897,800
                
                
                
                
                
                -
                
                
                -
                
                
                897,800Common
      stock issued for conversion of note
                
                
                1,000,000
                
                
                500,000
                
                
                
                
                
                -
                
                
                -
                
                
                500,000Common
      stock issued for interest payable
                
                
                3,700
                
                
                5,411
                
                
                
                
                
                -
                
                
                -
                
                
                5,411Beneficial
      conversion feature on convertible note
                
                
                -
                
                
                440,000
                
                
                
                
                
                -
                
                
                -
                
                
                440,000Net
      (Loss)
                
                
                -
                
                
                -
                
                
                
                
                
                (1,145,119
                )
                
                -
                
                
                (1,145,119
                )Balances
      at December 31, 2005
                
                
                26,618,586
                
                
                3,457,917
                
                
                -
                
                
                (2,661,739
                )
                
                (1,176
                )
                
                795,002Net
      Profit
                
                
                -
                
                
                -
                
                
                
                
                
                36,983
                
                
                -
                
                
                36,983Balances
      at December 31, 2006
                
                
                26,618,586
                
                
                3,457,917
                
                
                
                
                
                (2,624,756
                )
                
                (1,176
                )
                
                831,985Reincorporation
                
                
                
                
                
                (3,455,255
                )
                
                3,455,255Net
      (Loss)
                
                
                -
                
                
                -
                
                
                
                
                
                (177,689
                )
                
                -
                
                
                (177,689
                )Balances
      at December 31, 2007
                
                
                26,618,586
                
                $
                2,662
                
                $
                3,455,255
                
                $
                (2,802,445
                )
                $
                (1,176
                )
                $
                645,296


See Notes to Financial
Statements.




F-6


NORTHEAST AUTOMOTIVE HOLDINGS,
INC




NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS
  Note 1- ORGANIZATION AND NATURE OF
BUSINESS
 
 Northeast
Automotive Holdings, Inc. (the “Company") (“Northeast”) was incorporated in
Nevada in 2007. Northeast Auto Acceptance Corp-FL (“NE-FL”) was incorporated in
New York in July 1991 under the name of Catadyne Corporation that was
reincorporated in Florida on February 1, 1996. On December 7, 2007 NE-FL merged
into Northeast.
 
 On
January 14, 2004, NE-FL issued 200,000 shares of its common stock to Northeast
Auto Acceptance Corp (a New York corporation) (“NAAC-NY”) when the Company had
181,886 shares outstanding as consideration for the acquisition of NAAC-NY.
NAAC-NY, a New York corporation, formed in 1996. NAAC-NY buys used automobiles
at auctions, then repairs, cleans, transports and resells them wholesale
throughout the Pacific Northwest.
 
 On March
4, 2004, the Company acquired NAAC-NY the accounting acquirer and to change its
name to Northeast Auto Acceptance Corporation. Catadyne Corporation, the legal
acquirer, was a non-operating public shell corporation at the time of the
transaction.
 
 Also on
March 4, 2004, the Company issued its two officer/shareholders 17,000,000 shares
of common stock in exchange for (a_ $100,000 as part of the acquisition of
NAAC-NY by reducing a loan payable to the officers by this amount and (b) the
200 shares of NAAC-NY they owned, which were all of the shares of NAAC-NY issued
and outstanding at the time. Effectively, Mr. William Solko, the new President
and sole Director owns more than 50% of the voting Common Stock and can pass any
item that is subjected to approval of a stockholders vote.
  REINCORPORATION
  Effective
December 17, 2007, the Company reincorporated under the laws of the State of
Nevada as Northeast Automotive Holdings, Inc., Pursuant to a Plan and Agreement
of Merger, Northeast Auto Acceptance Corp. (a Florida corporation) was merged
into Northeast Automotive Holdings, Inc., a Nevada corporation formed for the
purpose of reincorporation. The reincorporation merger was approved by the
Company’s Board of Directors and a majority of the shareholders by written
consent on October 18, 2007. The shareholders also approved an increase in the
authorized capital to 310,000,000 shares, consisting of 300,000,000 shares of
common stock, and 10,000,000 shares of preferred stock, each with a par value of
$0.0001.
  Note 2 - SUMMARY OF SIGNIFICANT
ACCOUNTING POLICIES
 
 Accounting
Estimates
 
 The
preparation of financial statements in conformity with accounting principles
generally accepted in the United States requires management to make estimates
and assumptions that effect 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.
 
 Inventory
 
 Inventory
is stated at the lower of cost or market using the specific identification
basis.
 
 Depreciation
 
 The cost
of equipment is depreciated over the estimated useful lives of the related
assets of five years.
 
 Principles of
Consolidation
 
 These
consolidated financial statements include the accounts of the Company and its
wholly owned subsidiary Northeast Auto Acceptance (New York). All intercompany
accounts and transactions have been eliminated.
 
 These
consolidated financial statements have been prepared by management in accordance
with accounting principles generally accepted in the United States.
 F-7
 NORTHEAST AUTOMOTIVE HOLDINGS,
INC
  NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS
 Note 2 - SUMMARY OF SIGNIFICANT
ACCOUNTING POLICIES (continued)
 
 Revenue
Recognition
 
 The
Company buys used autos and recognizes revenue when it resells them and title is
transferred to the buyer. The costs of the auto, any fees charged, and any
repair costs are included in the costs of sales. The Company is the owner of the
vehicle until the sale is complete and as such has all risks inherent with such
ownership.
 
 Income Taxes
 
 The
Company accounts for income taxes under the asset and liability method as
required by SFAS No. 109, "Accounting for Income Taxes", issued by the Financial
Accounting Standards Board ("FASB"). Under this method, deferred income tax
assets and liabilities are recognized for the future tax consequences
attributable to differences between the financial reporting and tax basis of
assets and liabilities. Deferred tax assets and liabilities are measured using
enacted tax rates expected to apply to taxable income in the years in which
those temporary differences are expected to be recovered or
settled.
 
 Recently Issued Accounting
Standards
 
 In July
2006, the FASB issued FASB Interpretation (“FIN”) No. 48, “ Accounting for Uncertainty in Income
Taxes ”, which
prescribes a comprehensive model for how a company should recognize, measure,
present and disclose in its financial statements uncertain tax positions that
the company has taken or expects to take on a tax return (including a decision
whether to file or not to file a return in a particular jurisdiction). The
accounting provisions of FIN No.48 are effective for fiscal years beginning
after December 15, 2006. The adoption of this Interpretation had no impact on
our financial position or results of operations.
 
 In
September 2006, the FASB issued Statement of Financial Accounting Standards
(“SFAS”) No. 157, “ Fair Value
Measurements ”, which
establishes a framework for reporting fair value and expands disclosures about
fair value measurements. SFAS No. 157 is effective for financial statements
issued for fiscal years beginning after November 15, 2007 and interim periods
within those fiscal years. The adoption of this standard will have no impact on
our financial statements.
 
 In
February 2007, the FASB issued Statement of Financial Accounting Standards
No. 159, “ The Fair Value Option for Financial
Assets and Financial Liabilities ”, which
includes an amendment of FASB Statement No. 115,
(“SFAS No. 159”). SFAS No. 159 permits entities to choose to
measure many financial instruments and certain other items at fair value. Most
of the provisions of this Statement apply only to entities that elect the fair
value option. However, the amendment to FASB Statement No. 115,
“ Accounting for Certain Investments
in Debt and Equity Securities ”,
(“SFAS No. 115”), applies to all entities with available-for-sale and
trading securities. SFAS No. 159 is effective for the Company’s
consolidated financial statements for the annual reporting period beginning
after November 15, 2007. The Company is currently evaluating the impact of
this new pronouncement on its consolidated financial statements.
 
 On
December 4, 2007, the Financial Accounting Standards Board (FASB) issued SFAS
No. 160, Noncontrolling interest in
Consolidated Financial Statements (SFAS No.
160). SFAS No. 160 requires all entities to report noncontrolling (minority)
interests in subsidiaries as equity in the consolidated financial statements.
The statement establishes a single method of accounting for changes in a
parent’s ownership interest in a subsidiary that do not result in
deconsolidation and expands disclosures in the consolidated financial
statements. SFAS No. 160 is effective for fiscal years beginning after December
15, 2008 and interim periods within those fiscal years. We have not yet
determined the impact of the adoption of SFAS No. 160 on our consolidated
financial statements and footnote disclosures.
 
 On
December 4, 2007, the FASB issued SFAS No.141R, Business Combinations
( SFAS No.
141R). SFAS No. 141R requires the acquiring entity in a business combination to
recognize all the assets acquired and liabilities assumed, establishes the
acquisition date fair value as the measurement objective for all assets acquired
and liabilities assumed, and requires the acquirer to expand disclosures about
the nature and financial effect of the business combination. SFAS No. 141R is
effective for business combinations for which the acquisition date is on or
after the beginning of the first annual reporting period beginning on or after
December 15, 2008. We have not yet determined the impact of the adoption of SFAS
No. 141R on our consolidated financial statements and footnote disclosures.
 F-8
 NORTHEAST AUTOMOTIVE HOLDINGS,
INC
  NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS
 Note 3- ACCOUNTS
RECEIVABLE
 
 Accounts
receivable consists of the following:
 
 December
      31,
              
              December
      31,2007
              
              2006Accounts
      receivable-trade
              
              $
              829,498
              
              $
              695,187
 
 The
accounts receivable are due from the sale of used autos. No provision for
doubtful accounts has been recorded since most all receivables are collected
within 14 to 23 days. The Company has not had any unpaid receivables in the past
five years.
 
 Note 4-
INVENTORIES
 
 Inventory
consists of the following:
 
 December
      31,
              
              December
      31,2007
              
              2006Automobiles
      purchased for resale
              
              $
              4,804,127
              
              $
              3,656,059
 
 Inventory
is stated at the lower of cost or market using the specific identification
basis.
 
 The
inventory is valued by comparing the total cost of the vehicle to our net
realizable value at the time of sale or to the “Blue Book” value for unsold
vehicles. The lower of these is used to price the inventory. Our experience has
been that costs are usually equal to or lower than our net realizable value or
the “Blue Book” value. Since our inventory is usually turned over in a short
time, our pricing is not sensitive to wide deviations from the actual results.
The Company has not had to make revisions to it’s pricing of inventory as a
result of deviations from actual results.
 F-9
 NORTHEAST AUTOMOTIVE HOLDINGS,
INC
  NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS
 Note 5-EQUIPMENT
 
 The
following is a summary of equipment:
 
 December
      31,
              
              December31,2007
              
              2006Equipment
              
              $
              4,243
              
              $
              4,243Office
      Equipment
              
              
              4,327
              
              
              4,327Office
      Furniture
              
              
              25,148
              
              
              1,258Leasehold
      Improvements
              
              
              2,700
              
              
              2,700Total
              
              $
              36,418
              
              $
              12.528Less:
      accumulated depreciation
              
              
              (12,954
              )
              
              (12,528
              )$
              23,464
              
              
              -
 
 Note 6 - OTHER
ASSETS
 
 December
      31,
              
              December
      31,2007
              
              2006Other
      assets consists of the following:Prepaid
      federal corporate taxes
              
              $
              -
              
              $
              29,980Prepaid
      state corporate taxes
              
              
              16,011
              
              
              7,711Security
      deposit
              
              
              1,800
              
              
              1,800$
              17,811
              
              
              39,491
 F-10
 NORTHEAST AUTOMOTIVE HOLDINGS,
INC
  NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS
 Note 7- NOTES AND LOANS
PAYABLE
  Notes and
loans payable are as follows:
  December
      31,2007
              
              December
      31,2006Line
      of credit (On October 4, 2004, the Company was approved for a line of
      credit of $975,000, as an inventory financing ("Floor Plan") loan with
      interest set at 2% above the Wall Street Journal Prime rate. The agreement
      requires any advances to be repaid for a vehicle on the earliest of forty
      eight (48) hours from the time of sale or within twenty four (24) hours
      from the time the Company receives payment by or on behalf of the purchase
      of such vehicle or demand. The agreement is personally guaranteed by the
      officers and their respective spouses. The collateral for the loan is any
      vehicle owned by the Company) The agreement does not have any other
      restrictive covenants.$
              849,842
              
              $
              160,480Note
      payable bank (Note payable to bank due February 2007, is an open line of
      credit interest payable monthly at 1% over the prime rate, secured by a
      lien on all of the Company's assets and personally guaranteed by the
      majority stockholders). Interest is paid monthly on
    account)
              
              
              100,000
              
              
              100,0009%
      $250,000 convertible demand note is dated December 19, 2005 The 9%
      $150,000 convertible demand note is dated August 23, 2004. Interest is
      payable when the notes are paid. Each of these notes are convertible at
      $0.25 a share.
              
              
              700,000
              
              
              400,0009%
      unsecured demand notes payable
              
              
              1,116,576
              
              
              907,331Loans
      payable-credit cards payable (Credit cards payable are unsecured, pay
      interest from 8.24% to 12.25% per annum and are payable in monthly
      installments)
              
              
              173,299
              
              
              155,848Due
      to stockholders (The stockholder loans are unsecured, pay interest at 9%
      per annum, are subordinated to the bank loan and have no specific terms of
      repayment)
              
              
              1,605,707
              
              
              1,201,996Total
      notes and loans payable
              
              $
              3,695,582
              
              $
              2,765,175
 F-11
 NORTHEAST AUTOMOTIVE HOLDINGS,
INC
  NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS
 
  Note 7- NOTES AND LOANS PAYABLE
(Continued)
 
 There are
no restrictions on additional borrowings, obligations to maintain minimum
working capital or restrict dividends in our current credit
facilities.
 
 Note 8-COMMON
STOCK
 
 In
January 2005 the Company issued 2,200,000 shares of its common stock to a
consultant valued at $704,000, valued at $0.32 per share. This was charged to
expense in 2005.
 
 In
February 2005, the Company increased its authorized shares from 10,000,000
common shares, no par value, to 100,000,000 common shares, no par value, and
1,000,000 preferred shares, no par value.
 
 In
December, 2004, an investor, who wanted to invest $500,000 to purchase common
stock, could not do so due to the over issuance referred to above.
 
 On
February 17, 2005, the Company received $500,000 from such investor for a
$500,000 face value, 5% convertible note convertible into the Company's no par
value common stock at $0.50 per share, upon the Company amending its articles of
incorporation to increase the authorized common shares to 100,000,000. On March
16, 2005 the Company filed its Amended and Restated Articles of Incorporation
with the State of Florida and converted the note into 1,000,000 shares of its
common stock. The Company recorded $440,000 in interest expense for the
beneficial conversion feature on this convertible note.
 
 In May
2005 the Company issued 1,000,000 shares of its common stock to convert a
$500,000 convertible note, valued at $0.50 per share and issued 3,500 shares of
the common stock for $5,411 in interest expense, valued at $1.55 per share (the
market price of the stock when issued).
 
 In July
and August 2005 the Company issued 228,000 shares of its common stock to two
consultants valued at $193,800, the market value at the date of the contracts,
valued at $0.85 per share. Of this amount $141,006 was prepaid for 2006 and
$52,794 was charged to expense in 2005.
 
 Note 9- RELATED PARTY
TRANSACTION
 
 During
2007, 2006 and 2005, the Company paid $120,000, $150,000 and $150,000,
respectively to William Solko's wife as a salary.
 
 Note 10- PROFIT OR LOSS PER COMMON
SHARE
 
 Profit or
loss per common share is calculated as the profit or loss for the period divided
by the weighted average number of shares of the Company's common
stock.
 F-12
 NORTHEAST AUTOMOTIVE HOLDINGS,
INC
  NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS
 NOTE 11 - INCOME
TAXES
 
 Due to
the Company’s net loss, there was no provision for income taxes. The Company has
net operating loss carry forwards for income tax purposes of approximately
$576,000 at December 31, 2007, $398,000 at December 31, 2006, and $434,000 at
December 31, 2005.. These carry forward losses are available to offset future
taxable income, if any, and expire starting in the year 2023. The Company’s
utilization of this carry forward against future taxable income may become
subject to an annual limitation due to a cumulative change in ownership of the
Company of more than 50 percent.
  The
components of the Company’s tax provision were as follows:


2007
              
              2006
              
              2005Current
      income tax (benefit) expense
              
              $
              (68,000
              )
              $
              13,000
              
              $
              13,000Deferred
      income tax expense (benefit)
              
              
              68,000
              
              
              (13,000
              )
              
              (13,000
              )$
              -
              
              $
              -
              
              $
              -
  The
reconciliation of the income tax computed at the U.S. Federal statutory rate to
income tax expense for the periods ended December 31, 2007 and
2006:


2007
                
                2006
                
                2005Tax
      expense (benefit) at Federal rate (34%)
                
                $
                (57,000
                )
                $
                11,000
                
                $
                11,000State
      and local income tax, net of Federal benefit
                
                
                (1!,000
                )
                
                2,000
                
                
                2,000Effect
      of timing difference
                
                
                -
                
                
                -
                
                
                -Change
      in valuation allowance
                
                
                68,000
                
                
                (13,000
                )
                
                (13,000
                )Net
      income tax (benefit) allowance
                
                $
                -
                
                $
                -
                
                $
                -
 F-13
 NORTHEAST AUTOMOTIVE HOLDINGS,
INC
  NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS
 NOTE 12 - INCOME TAXES (Continued)
 
 Deferred
income taxes reflect the net income tax effect of temporary differences between
the carrying amounts of the assets and liabilities for financial reporting
purposes and amounts used for income taxes. The Company’s deferred income tax
assets and liabilities consist of the following:
  Deferred
tax asset:
  December
      31,
                
                December
      31,
                
                December
      31,2007
                
                2006
                
                2005Deferred
      tax asset from loss carry forward
                
                $
                218,000
                
                $
                150,000
                
                $
                163,000Valuation
      allowance
                
                
                (218,000
                )
                
                (150,000
                )
                
                (163,000
                )Net
      deferred tax assets
                
                $
                0
                
                $
                0
                
                $
                0
 The
Company recognized no income tax benefit for the loss generated for the periods
through December 31, 2007.
 
 SFAS No.
109 requires that a valuation allowance be provided if it is more likely than
not that some portion or all of a deferred tax asset will not be realized. The
Company's ability to realize the benefit of its deferred tax asset will depend
on the generation of future taxable income. Because the Company has yet to
recognize significant revenue from the sale of its products, it believes that
the full valuation allowance should be provided.
 
 Note 12- COMMITMENTS AND
CONTINGENCIES
 
 The
Company rents office space on a month-to-month basis at two locations. Rent
expense was approximately $ 7,547 for 2007, $7,500 for 2006, and $11,700 for
2005.
 
 Note 13-SUPPLEMENTAL DISCLOSURE FOR
CASH FLOW INFORMATION
 
 The
Company issued common stock as follows:
 
 For the
year ended December 31, 2005:
 
 ·
              On
      January 3, 2005, 2,200,000 shares of the Company’s common stock were
      issued for $704,000 of consulting services performed by an unrelated
      party. The value of the transaction was determined by the closing market
      price of the stock on the date of
issue.
 
 ·
              On
      February 17, 2005 1,000,000 shares of the Company’s stock was issued for
      $500,000 of a convertible note. As part of this conversion the Company
      also recognized $440,000 of interest expense related to the beneficial
      conversion feature on the convertible note. The value of the transaction
      was determined by the closing market price of the stock on the date of
      issue.
 
 ·
              On
      February 17, 2005, 3,700 shares of the Company’s common stock were issued
      to pay $5,411 of interest. The value of the transaction was determined by
      the closing market price of the stock on the date of
  issue.
 
 ·
              On
      July 1, 2005, 200,000 shares of the Company’s common stock were issued for
      $170,000 of consulting services performed by an unrelated party. The value
      of the transaction was determined by the closing market price of the stock
      on the date of issue.
 
 ·
              On
      August 1, 2005, 28,000 shares of the Company’s common stock were issued
      for $23,800 of consulting services performed by an unrelated party. The
      value of the transaction was determined by the closing market price of the
      stock on the date of issue.
 F-14
 NORTHEAST AUTOMOTIVE HOLDINGS,
INC
  NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS
 
 Note 14- OFF BALANCE SHEET
RISK
 
 Included
in the accompanying balance sheet is inventory of used automobiles at a carrying
value of $3,656,059 at December 31, 2006, $2,633,759 at December 31, 2005,
$2,943,560 at December 31, 2004, which represents management's estimate of its
net realizable value which approximate market. Such value is based on forecasts
for sales of used automobiles in the ensuing year. The used automobile industry
is characterized by rapid price changes. Should demand for used automobiles
prove to be significantly less than anticipated, the ultimate realizable value
of such products could be substantially less than the amount shown in the
balance sheet. This risk is increased by the Company's need to move inventory
due to the lack of working capital.
 
 The
Company has not experienced any significant write-downs or write-offs of
inventory over the last three years.
 
 The
realizability of the inventory at the end of each reporting period is determined
by management based upon the sales prices received for the auto sold in the
ensuing 30-day period from the end of the reporting period.
 
 Note 15- ACCRUED
EXPENSES
 
 Accrued
expenses consist of the following:
 
 December
      31,
              
              December
      31,2007
              
              2006Interest
              
              
              89,921
              
              
              67,437Auto
      Conditioning and Repair
              
              
              79,436
              
              
              -Transportation
              
              
              122,147
              
              
              186,755Commissions
              
              
              10,236
              
              
              8,036Professional
      fees
              
              
              45,000
              
              
              44,000Other
      expenses
              
              
              14,627
              
              
              69,532$
              361,367
              
              $
              375,760
 
 Note 16- FAIR VALUE OF FINANCIAL
INSTRUMENTS
 
 The
carrying value of financial instruments including cash and cash equivalents,
receivables, accounts payable, accrued expenses and loans payable approximates
their fair value at December 31, 2007 due to the relatively short-term nature of
these instruments.
 
 F-15


Item 9.
            Changes In and Disagreements
      With Accountants on Accounting and Financial
      Disclosure.





None.




Item 9A.
            Controls and
      Procedures.





Evaluation of Disclosure
Controls and Procedures





Pursuant
to Rule 13a-15(b) under the Securities Exchange Act of 1934 (“Exchange Act”),
the Company carried out an evaluation, with the participation of the Company’s
management, including the Company’s Chief Executive Officer (“CEO”) and Chief
Financial (“CFO”) (the Company’s principal financial and accounting officer), of
the effectiveness of the Company’s disclosure controls and procedures (as
defined under Rule 13a-15(e) under the Exchange Act) as of the end of the period
covered by this report. Based upon that evaluation, the Company’s CEO and CFO
concluded that the Company’s disclosure controls and procedures are effective to
ensure that information required to be disclosed by the Company in the reports
that the Company files or submits under the Exchange Act, is recorded,
processed, summarized and reported, within the time periods specified in the
SEC’s rules and forms, and that such information is accumulated and communicated
to the Company’s management, including the Company’s CEO and CFO, as
appropriate, to allow timely decisions regarding required
disclosure.




Management’s Report on
Internal Controls over Financial Reporting





Under the
supervision and with the participation of our management, including our
principal executive officer and principal financial officer, we conducted an
evaluation of our disclosure controls and procedures, as such term is defined
under Rule 13a-15(e) and Rule 15d-15(e) promulgated under the Securities
Exchange Act of 1934, as amended (Exchange Act), as of December 31, 2007. Based
on this evaluation, our principal executive officer and principal financial
officers have concluded that our disclosure controls and procedures are
effective to ensure that information required to be disclosed by us in the
reports 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 and that our disclosure and controls are
designed to ensure that information required to be disclosed by us in the
reports that we file or submit under the Exchange Act is accumulated and
communicated to our management, including our principal executive and principal
financial officers, or persons performing similar functions, as appropriate to
allow timely decisions regarding required disclosure.




Item 9B.
            Other
      Information.




None.


20


PART
III




Item 10.
            Directors, Executive Officers,
      Promoters and Control Persons; Compliance with Section 16(a) of the
      Exchange Act.




The
following table sets forth the name and age of our sole executive officer and
director.





Name
            
            Age
            
            Position
            
            Date of
      AppointmentWilliam
      Solko
            
            38
            
            President,
      Chief Executive Officer, Chairman
            
            December
      2004Michael
      Shaw
            
            38
            
            Vice
      President
            
            December
      2004Marsha
      Solko
            
            38
            
            Director
      of Administration
            
            December
      2004





Set forth
below is a brief description of the background and business experience of our
sole executive officer and director for the past five years.





William Solko





President,
Chief Executive Officer and Director. Mr. Solko has served as President, Chief
Executive Officer and Director of the Company since the acquisition of our
Northeast Auto Acceptance (NY) subsidiary. He founded our Northeast Auto
Acceptance (NY) subsidiary in 1995. Mr. Solko has over 21 years of experience in
the automobile industry including over 18 years of experience in commercial
automobile buying. Prior to forming the Company, from 1993 to 1995, Mr. Solko
was employed as a buyer for two public automobile auction companies in the
Chicago area. Mr. Solko attended The State University of New York at New
Paltz.





Michael Shaw





Vice
President. Mr. Shaw has more than 11 years of experience in automotive sales.
Prior to joining our Northeast Auto Acceptance (NY) subsidiary in 1995, Mr. Shaw
operated his own used vehicle sales operation.





Marsha Solko





Director
of Administration. Ms. Solko has held this position since the formation of the
Company’s Northeast Auto Acceptance subsidiary in 1994. Her primary
responsibility is to oversee the day to day operations of the company. In her
supervisory role, she is responsible for the monitoring of accounts payables and
receivables, daily cash flows, as well as handling vehicle title issues. Ms.
Solko has over 19 years experience in the automobile industry, having held the
position of bookkeeper and office manager for several vehicle dealerships during
that time.





BOARD OF
DIRECTORS





Our Board
of Directors currently has only one member, William Solko, our President and
Chief Executive Officer. Pursuant to our By-Laws, our Board may be expanded,
from time to time, to include up to seven directors. All directors hold office
until the next annual meeting of shareholders following their election or until
their successors have been elected and qualified. Executive officers are
appointed by and serve at the pleasure of the Board of Directors. We may adopt
provisions in our By-laws and/or Articles of Incorporation to divide the board
of directors into more than one class and to elect each class for a certain
term. These provisions may have the effect of discouraging takeover attempts or
delaying or preventing a change of control of the Company.





BOARD COMMITTEES





The Board
of Directors does not have any committees.





DIRECTORS’
COMPENSATION





Directors
who are also employees of the Company receive no compensation for serving on the
Board of Directors. We do not have any directors who are not
employees.


21


Term of
Office




Our
directors are appointed for a one-year term to hold office until the next annual
general meeting of our shareholders or until removed from office in accordance
with our bylaws. Our officers are appointed by our board of directors and hold
office until removed by the board.





Significant
Employees





None.





Family
Relationships





William
Solko and Marsha Solko are husband and wife. No other family relationships exist
among our directors or executive officers.





Involvement in Certain Legal
Proceedings




To our
knowledge, during the past five years, none of our directors, executive
officers, promoters, control persons, or nominees has been:





•
            the
      subject of any bankruptcy petition filed by or against any business of
      which such person was a general partner or executive officer either at the
      time of the bankruptcy or within two years prior to that
    time;•
            convicted
      in a criminal proceeding or is subject to a pending criminal proceeding
      (excluding traffic violations and other minor
offenses);•
            subject
      to any order, judgment, or decree, not subsequently reversed, suspended or
      vacated, of any court of competent jurisdiction, permanently or
      temporarily enjoining, barring, suspending or otherwise limiting his
      involvement in any type of business, securities or banking activities;
      or•
            found
      by a court of competent jurisdiction (in a civil action), the Commission
      or the Commodity Futures Trading Commission to have violated a federal or
      state securities or commodities
law.





Code of
Ethics





We have
adopted a Code of Ethics applicable to our Chief Executive Officer and Chief
Financial Officer. This Code of Ethics is filed herewith as an
exhibit.





Compliance with Section
16(a) of the Exchange Act




Section
16(a) of the Securities Exchange Act of 1934 requires the Company's officers and
directors, and persons who own more than 10 percent of a registered class of the
Company's equity securities, to file reports of ownership and changes in
ownership with the Securities and Exchange Commission (SEC). Officers,
directors, and greater than 10 percent stockholders are required by SEC
regulation to furnish the Company with copies of all Section 16(a) forms they
file.




To the
Company's knowledge, based solely on a review of the copies of such reports
furnished to the Company, all reports under Section 16(a) required to be filed
by its officers and directors and greater than ten percent beneficial owners
were timely filed as of the date of this filing.


22




Item 11.
            Executive
      Compensation.




Compensation of Executive
Officers




The
following summary compensation table sets forth all compensation awarded to,
earned by, or paid to the named executive officers paid by us during the fiscal
years ended December 31, 2007 in all capacities for the accounts of our
executives, including the Chief Executive Officer (CEO) and Chief Financial
Officer (CFO):




Compensation of Executive
Officers (continued)





SUMMARY COMPENSATION
TABLE





Name and
              Principal
      Position
            
            Year
            
            Salary
              ($)
            
            Bonus
              ($)
            
            Stock
              Awards
              ($)
            
            Option
      Awards
              ($)
            
            Non-Equity Incentive
              Plan Compensation
      ($)
            
            Non-Qualified Deferred
      Compensation Earnings
              ($)
            
            All Other
      Compensation($)
            
            Totals
              ($)William
      Solko
              President,
      Chief
            
            
            2007
            
            $
            339,511
            
            
            -0-
            
            
            -0-
            
            
            -0-
            
            
            -0-
            
            
            -0-
            
            
            -0-
            
            $
            339,511Executive
      OfficerMichael
      Shaw, Vice
              President
            
            
            2007
            
            
            272,579
            
            
            -0-
            
            
            -0-
            
            
            -0-
            
            
            -0-
            
            
            -0-
            
            
            -0-
            
            $
            272,579Marsha
      Solko,
              Director
      of
              Administration
            
            
            2007
            
            $
            120,000
            
            
            -0-
            
            
            -0-
            
            
            -0-
            
            
            -0-
            
            
            -0-
            
            
            -0-
            
            $
            120,000




Outstanding Equity Awards at Fiscal
Year-End Table. There
were no individual grants of stock options to purchase our common stock made to
the named executive officers in the Summary Compensation Table during the fiscal
year ended December 31, 2007, and the subsequent period up to the date of the
filing of this prospectus.


23


Compensation of
Directors




For the
fiscal year ended December 31, 2007, we did not compensate our directors for
their services.





Item 12.
            Security Ownership of Certain
      Beneficial Owners and Management and Related Stockholder
      Matters.




The
following table sets forth certain information regarding the ownership of our
capital stock, as of March 7, 2008, for: (i) each director; (ii) each person who
is known to us to be the beneficial owner of more than 5%of our outstanding
common stock; (iii) each of our executive officers named in the Summary
Compensation Table; and (iv) all of our current executive officers and directors
of as a group. Except as otherwise indicated in the footnotes, all information
with respect to share ownership and voting and investment power has been
furnished to us by the persons listed. Except as otherwise indicated in the
footnotes, each person listed has sole voting power with respect to the shares
shown as beneficially owned.





Title of
      Class
            
            Name and Address of
              Beneficial Owner
            
            Amount and Nature of
              Beneficial Ownership
            
            Percent of
              Class(2)Class
      A Common
              Stock
            
            
            William
      Solko (1)
              Michael
      Shaw (1)
            
            
            15,000,000
              2,000,000
            
            
            56.4
              7.5
            %
              %





(1)
            Unless
      otherwise indicated in the footnotes to the table, (1) the individuals
      listed have sole voting and sole investment control with respect to the
      shares they beneficially own and (2) the address of each beneficial owner
      listed is c/o the Company, 2174 Hewlett Avenue, Suite 206, Merrick, New
      York 11566.(2)
            Based
      on 100,000,000 shares of Class A Common Stock authorized, 26,618,586
      shares issued and outstanding.





Item 13.
            Certain Relationships and
      Related Transactions.





None.




Item 14.
              Principal Accounting Fees and
      Services.
  Audit
Fees
  For
our fiscal year ended December 31, 2007, we were billed approximately $30,000.00
for professional services rendered for the audit and reviews of our financial
statements.
  Tax
Fees
  For
our fiscal year ended December 31, 2007, we were not billed for professional
services rendered for tax compliance, tax advice, and tax planning.
  All Other
Fees
  The
Company did not incur any other fees related to services rendered by our
principal accountant for the fiscal year ended December 31, 2007.
  Audit Related
Fees
  For
our fiscal year ended December 31, 2007, we were not billed for professional
services rendered for audit related fees.
 
 Pre-approval
Policy
 
 Our
Board of Directors has adopted a procedure for pre-approval of all fees charged
by our independent auditors. Under the procedure, the Board approves the
engagement letter with respect to audit, tax and review services. Other fees are
subject to pre-approval by the Board, or, in the period between meetings, by a
designated member of Board. Any such approval by the designated member is
disclosed to the entire Board at the next meeting. The audit and tax fees paid
to the auditors with respect to fiscal year 2007 were pre-approved by the entire
Board of Directors.




24




Item 15.
            Exhibits.





Exhibit No.
            
            Title of
      Document
            
            Location3.1
            
            Articles
      of Incorporation
            
            Incorporated
      by reference to Information Statementfiled on November 8,
    20073.2
            
            Bylaws
            
            Incorporated
      by reference to Information Statement filed on November 8,
      200714.1
            
            Code
      of Ethics
            
            Incorporated
      by reference to Form 10-K filed on April 14, 200831.1
            
            Certification
      of Chief Executive Officer and Chief Financial Officer Pursuant to
      Rule 13a-14(a) of the Securities Exchange Act of 1934
            
            Filed
      herewith32.1
            
            Certification
      of Chief Executive Officer and Chief Financial Officer pursuant to 18
      U.S.C. Section 1350, as adopted pursuant to Section 906 of the
      Sarbanes-Oxley Act of 2002
            
            Filed
      herewith


25





SIGNATURES




In
accordance with Section 13 or 15(d) of the Exchange Act, the registrant caused
this report to be signed on its behalf by the undersigned, thereunto duly
authorized.




NORTHEAST AUTOMOTIVE HOLDINGS,
      INC.By:
            /s/ William
      SolkoWILLIAM
      SOLKOPresident,
      Chief Executive OfficerDate:
            May
      1, 2009





In
accordance with the Exchange Act, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the
dates indicated.





Name
            
            Title
            
            Date/s/ William
      Solko
            
            President,
      Chief Executive Officer
            
            May
      1, 2009WILLIAM
      SOLKO


26