UNITED
STATES


SECURITIES
AND EXCHANGE COMMISSION


Washington,
D.C. 20549


FORM
10-Q





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





For
the quarterly period ended June 30, 2009





or





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


For the transition period from                 to




Commission
file number: 000-51997





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 Number)





2174
HEWLETT AVENUE, SUITE 206


MERRICK,
NY 11566


(Address
of Principal Executive Offices)


(Zip
Code)





(516)
377-6311


(Registrant’s Telephone Number
including area code)




Indicate
by check mark whether the registrant (1) has filed all reports required to be
filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the
preceding 12 months (or for such shorter period that the registrant was required
to file such reports), and (2) has been subject to such filing requirements for
the past 90 days. Yes x No  ̈





Indicate
by check mark whether the registrant has submitted electronically and posted on
its corporate Web site, if any, every Interactive Data File required to be
submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this
chapter) during the preceding 12 months (or for such shorter period that the
registrant was required to submit and post such files).  
Yes o No o





Indicate
by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer, or a smaller reporting
company.





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





Indicate
by check mark whether the registrant is a shell company (as defined in Rule
12b-2 of the Exchange Act). Yes  ̈ No x





The
number of shares outstanding of the Registrant’s common stock as
of  August 19, 2009 was 554,017 shares.





NORTHEAST
AUTOMOTIVE HOLDINGS, INC.





FORM
10-Q





June
30, 2009





TABLE
OF CONTENTS





PART
      I— FINANCIAL INFORMATION
              3Item
      1.
              Financial
      Statements
              3Item
      2.
              Management’s
      Discussion and Analysis of Financial Condition and Results of
      Operations
              12Item
      3.
              Quantitative
      and Qualitative Disclosures About Market Risk
              15Item
      4.
              Controls
      and Procedures
              16PART
      II— OTHER INFORMATION
              16Item
      1.
              Legal
      Proceedings
              16Item
      1A.
              Risk
      Factors
              16Item
      2.
              Unregistered
      Sales of Equity Securities and Use of Proceeds
              16Item
      3.
              Defaults
      Upon Senior Securities
              17Item
      4.
              Submission
      of Matters to a Vote of Security Holders
              17Item
      5.
              Other
      Information
              17Item
      6.
              Exhibits
              17SIGNATURES
              17


2


PART
1 - FINANCIAL INFORMATION





Item
1.  Financial Statements





NORTHEAST
AUTOMOTIVE HOLDINGS, INC.





CONSOLIDATED
BALANCE SHEETS





June
      30,
                        
                        
                        December
      31,2009
                        
                        
                        2008(unaudited)ASSETSCurrent
      Assets:Cash
                        
                        $
                        512,606
                        
                        
                        $
                        934,118Inventory
      (Note 4)
                        
                        
                        1,510,493
                        
                        
                        
                        1,485,247Accounts
      receivable
                        
                        
                        199,270
                        
                        
                        
                        421,909Total
      Current Assets
                        
                        
                        2,222,369
                        
                        
                        
                        2,841,275Equipment,
      net (Note 5)
                        
                        
                        18,974
                        
                        
                        
                        21,698Other
      assets (Note 6)
                        
                        
                        6,785
                        
                        
                        
                        8,479TOTAL
      ASSETS
                        
                        $
                        2,248,128
                        
                        
                        $
                        2,871,452LIABILITIES
      AND STOCKHOLDERS' EQUITYCurrent
      Liabilities:Accounts
      payable
                        
                        $
                        172,786
                        
                        
                        $
                        159,040Note
      payable to bank (Note 7)
                        
                        
                        100,000
                        
                        
                        
                        100,000Credit
      line (Note 7)
                        
                        
                        125,599
                        
                        
                        
                        198,006Demand
      loans payable (Note 7)
                        
                        
                        795,346
                        
                        
                        
                        904,246Credit
      Card loan payable (Note 7)
                        
                        
                        -
                        
                        
                        
                        -Due
      to stockholders (Note 7)
                        
                        
                        1,234,346
                        
                        
                        
                        1,746,269Accrued
      expenses
                        
                        
                        123,470
                        
                        
                        
                        133,946Payroll
      taxes withheld and accrued
                        
                        
                        2,483
                        
                        
                        
                        1,961Total
      Current Liabilities
                        
                        
                        2,554,030
                        
                        
                        
                        3,243,468Stockholders'
      equityPreferred
      stock, 0.0001 par value, 10,000,000 shares authorized, 10,000,000 issued
      and outstanding
                        
                        
                        1,000
                        
                        
                        
                        1,000Common
      stock, .001 par value, 300,000,000 shares authorized, 554,017 shares
      issued and outstanding June 30, 2009 and December 31, 2008
                        
                        
                        554
                        
                        
                        
                        554Capital
      Stock to be issued (500,000 Shares)
                        
                        
                        20,000
                        
                        
                        
                        20,000Additional
      Paid in Capital
                        
                        
                        3,957,424
                        
                        
                        
                        3,957,424Deficit
                        
                        
                        (4,283,704
                        )
                        
                        
                        (4,349,817
                        )(304,726
                        )
                        
                        
                        (370,839
                        )Less:
      Treasury stock (200,000 common shares)
                        
                        
                        (1,176
                        )
                        
                        
                        (1,176
                        )Total
      Stockholders' Equity
                        
                        
                        (305,902
                        )
                        
                        
                        (372,015
                        )TOTAL
      LIABILITIES AND STOCKHOLDERS' EQUITY
                        
                        $
                        2,248,128
                        
                        
                        $
                        2,871,452


3


NORTHEAST
AUTOMOTIVE HOLDINGS, INC.





CONSOLIDATED
STATEMENTS OF OPERATIONS


(Unaudited)





Three
                  
                  
                  Three
                  
                  
                  Six
                  
                  
                  SixMonths
                  
                  
                  Months
                  
                  
                  Months
                  
                  
                  MonthsEnded
                  
                  
                  Ended
                  
                  
                  Ended
                  
                  
                  EndedJune
      30,
                  
                  
                  June
      30,
                  
                  
                  June
      30,
                  
                  
                  June
      30,2009
                  
                  
                  2008
                  
                  
                  2009
                  
                  
                  2008Net
      sales
                  
                  $
                  4,562,565
                  
                  
                  
                  13,679,407
                  
                  
                  
                  9,364,486
                  
                  
                  
                  31,938,897Cost
      of sales
                  
                  
                  4,292,413
                  
                  
                  
                  13,625,613
                  
                  
                  
                  8,783,234
                  
                  
                  
                  31,434,719Gross
      profit
                  
                  
                  270,152
                  
                  
                  
                  53,794
                  
                  
                  
                  581,252
                  
                  
                  
                  504,178Operating
      expenses:Officers
      salaries
                  
                  
                  12,270
                  
                  
                  
                  79,756
                  
                  
                  
                  92,026
                  
                  
                  
                  201,444Interest
      expense
                  
                  
                  33,347
                  
                  
                  
                  87,093
                  
                  
                  
                  94,124
                  
                  
                  
                  176,791Selling,
      general and administrative
                  
                  
                  154,084
                  
                  
                  
                  189,177
                  
                  
                  
                  324,739
                  
                  
                  
                  403,191Total
      operating expenses
                  
                  
                  199,701
                  
                  
                  
                  356,026
                  
                  
                  
                  510,889
                  
                  
                  
                  781,426Profit
      (Loss) from operations
                  
                  
                  70,451
                  
                  
                  
                  (302,232
                  )
                  
                  
                  70,363
                  
                  
                  
                  (277,248
                  )Income
      taxes
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  4,250
                  
                  
                  
                  1,300Net
      profit (loss)
                  
                  $
                  70,451
                  
                  
                  
                  (302,232
                  )
                  
                  
                  66,113
                  
                  
                  
                  (278,548
                  )Deem
      preferred dividend
                  
                  
                  -
                  
                  
                  
                  401,061
                  
                  
                  
                  -
                  
                  
                  
                  401,061Net
      profit (loss) available to common stockholders
                  
                  $
                  70,451
                  
                  
                  
                  (703,293
                  )
                  
                  
                  66,113
                  
                  
                  
                  (679,609
                  )Net
      profit (loss) per share, basic (Note 9)
                  
                  $
                  0.13
                  
                  
                  
                  (1.27
                  )
                  
                  
                  0.12
                  
                  
                  
                  (1.23
                  )Weighted
      average number of shares outstanding - Basic
                  
                  
                  554,017
                  
                  
                  
                  554,017
                  
                  
                  
                  554,017
                  
                  
                  
                  554,017Net
      profit (loss) per share, diluted (Note 9)
                  
                  $
                  0.01
                  
                  
                  
                  (1.27
                  )
                  
                  
                  0.01
                  
                  
                  
                  (1.23
                  )Weighted
      average number of shares outstanding - Diluted
                  
                  
                  11,054,017
                  
                  
                  
                  554,017
                  
                  
                  
                  11,054,017
                  
                  
                  
                  554,017





See
Notes to Financial Statements


4


NORTHEAST
AUTOMOTIVE HOLDINGS, INC.





CONSOLIDATED
STATEMENTS OF CASH FLOWS







Six Months
                              
                              
                              Six MonthsEnded
                              
                              
                              EndedJune 30, 2009
                              
                              
                              June 30, 2008CASH
      FLOWS FROM OPERATING ACTIVITIES:Net
      profit (loss)
                              
                              $
                              66,113
                              
                              
                              $
                              (278,548
                              )Adjustments
      to reconcile net profit to net cash used by operating
      activities:Depreciation
      and amortization
                              
                              
                              2,724
                              
                              
                              
                              2,556Changes
      in operating assets and liabilities:(Increase)
      decrease in accounts receivable
                              
                              
                              222,639
                              
                              
                              
                              433,220(Increase)
      decrease in inventory
                              
                              
                              (25,246
                              )
                              
                              
                              1,172,741(Increase)
      decrease in other assets
                              
                              
                              1,694
                              
                              
                              
                              9,642Increase
      (decrease) in accounts payable
                              
                              
                              13,746
                              
                              
                              
                              133,611Increase
      (decrease) in accrued expenses
                              
                              
                              (10,400
                              )
                              
                              
                              (69,368
                              )Increase
      (decrease) in payroll taxes
                              
                              
                              522
                              
                              
                              
                              (141,166
                              )Total
      adjustments
                              
                              
                              205,679
                              
                              
                              
                              1,538,680CASH
      PROVIDED (USED) BY OPERATING ACTIVITIES
                              
                              
                              271,792
                              
                              
                              
                              1,262,688CASH
      FLOWS FROM INVESTING ACTIVITIES:Purchase
      of fixed assets
                              
                              
                              -
                              
                              
                              
                              (3,347
                              )CASH
      USED BY INVESTING ACTIVITIES
                              
                              
                              -
                              
                              
                              
                              (3,347
                              )CASH
      FLOWS FROM FINANCING ACTIVITIES:Proceeds
      of line of credit
                              
                              
                              1,397,167
                              
                              
                              
                              3,586,106Repayment
      of line of credit
                              
                              
                              (1,469,574
                              )
                              
                              
                              (4,155,727
                              )Proceeds
      of stockholders loans
                              
                              
                              10,869
                              
                              
                              
                              480,425Repayment
      of stockholders loan
                              
                              
                              (522,866
                              )
                              
                              
                              (244,894
                              )Proceeds
      of demand loans
                              
                              
                              -
                              
                              
                              
                              257,214Repayment
      of demand loans
                              
                              
                              (108,900
                              )
                              
                              
                              (200,000
                              )Repayment
      on credit card loan
                              
                              
                              -
                              
                              
                              
                              (138,299
                              )CASH
      PROVIDED (USED)BY FINANCING ACTIVITIES
                              
                              
                              (693,304
                              )
                              
                              
                              (415,175
                              )NET
      INCREASE (DECREASE) IN CASH
                              
                              
                              (421,512
                              )
                              
                              
                              844,166CASHBeginning
      of year
                              
                              
                              934,118
                              
                              
                              
                              328,658End
      of period
                              
                              $
                              512,606
                              
                              
                              $
                              1,172,824SUPPLEMENTAL
      CASH FLOW INFORMATIONCash
      paid for:Interest
      payments
                              
                              $
                              94,124
                              
                              
                              $
                              176,791





See
Notes to Financial Statements.


5


NORTHEAST
AUTOMOTIVE HOLDINGS, INC.





NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS


(Amounts
and Disclosures at and for the Six Months Ended June 30, 2009 and 2008 are
unaudited)





NOTE
1 – ORGANIZATION AND NATURE OF BUSINESS





The
accompanying interim financial statements of Northeast Automotive Holdings, Inc.
are unaudited.  However, in the opinion of management, the interim
data includes all adjustments, consisting of only normal recurring adjustments,
necessary for a fair presentation of the results for the interim
period.  The results of operations for the period ended June 30, 2009
are not necessarily indicative of the operating results for the entire
year.





The
Company buys used automobiles at auctions, then repairs, cleans, transports and
resells them wholesale throughout the United States.





NAME CHANGE OF THE
COMPANY





The Board
of Directors of Northeast Auto Acceptance Corp. (the “Company”) approved the
Merger of the Company, a Florida Corporation with Northeast Automotive Holdings,
Inc., a Nevada Corporation. Pursuant to an Information Statement filed on
November 8, 2007 with the Securities and Exchange Commission, Northeast
Automotive Holdings, Inc. executed an Agreement and Plan of merger with the
Company, with Northeast Automotive Holdings, Inc. being the surviving entity.
The purpose of this merger was to change the legal domicile of the Company from
Florida to Nevada.





GOING
CONCERN





The
financial statements have been prepared on the basis of a going concern which
contemplates the realization of assets and the satisfaction of liabilities in
the normal course of business. The Company has a working capital deficiency of $
331,737 at June 30, 2009 and the Company has an accumulated deficit of $
4,283,704 since inception.





While the
Company is attempting to produce sufficient revenues, the Company's cash
position may not be enough to support the Company's daily operations. Management
believes that the actions presently being taken to further implement its
business plan and generate sufficient revenues provide the opportunity for the
Company to continue as a going concern. While the Company believes in the
viability of its strategy to increase revenues and in its ability to raiseadditional
funds,there
can be no assurances to that effect. The ability of the Company to continue as a
going concern is dependent upon the Company's ability to further implement its
business plan and generate sufficient revenues. The financial statements do not
include any adjustments that might be necessary if the Company is unable to
continue as a going concern.


6


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 affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements, and the reported amounts of revenues and expenses during the
reporting period.  Actual results could differ from those
estimates.





Inventory





Inventory
is stated at the lower of cost or market.





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.





Revenue
Recognition





The
Company buys used autos and recognizes revenue when it resells them and the
title is transferred to the buyer.





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.





Adopted Accounting
Principles





In the
first quarter of 2009, we adopted Statement of Financial Accounting Standards
(SFAS) No. 141 (revised 2007), “Business Combinations” (SFAS
No. 141(R)) as amended by FASB staff position FSP 141(R)-1, “Accounting for
Assets Acquired and Liabilities Assumed in a Business Combination That Arise
from Contingencies.” SFAS No. 141(R) generally requires an entity to
recognize the assets acquired, liabilities assumed, contingencies, and
contingent consideration at their fair value on the acquisition date. In
circumstances where the acquisition-date fair value for a contingency cannot be
determined during the measurement period and it is concluded that it is probable
that an asset or liability exists as of the acquisition date and the amount can
be reasonably estimated, a contingency is recognized as of the acquisition date
based on the estimated amount. It further requires that acquisition-related
costs be recognized separately from the acquisition and expensed as incurred,
restructuring costs generally be expensed in periods subsequent to the
acquisition date, and changes in accounting for deferred tax asset valuation
allowances and acquired income tax uncertainties after the measurement period
impact income tax expense. In addition, acquired in-process research and
development is capitalized as an intangible asset and amortized over its
estimated useful life. SFAS No 141(R) is applicable to business combinations on
a prospective basis beginning in the first quarter of 2009. We did not complete
any business combinations in the first quarter of 2009.


7


In
February 2008, the FASB issued FSP 157-2, “Effective Date of FASB Statement
No. 157” (FSP 157-2), which delayed the effective date of SFAS
No. 157, “Fair Value Measurements” (SFAS No. 157) for all
non-financial assets and non-financial liabilities, except for items that are
recognized or disclosed at fair value in the financial statements on a recurring
basis (at least annually), until the beginning of the first quarter of 2009.
Therefore, in the first quarter of 2009, we adopted SFAS No. 157 for
non-financial assets and non-financial liabilities. The adoption of SFAS
No. 157 for non-financial assets and non-financial liabilities that are not
measured and recorded at fair value on a recurring basis did not have a
significant impact on our consolidated financial statements.





Recent
Accounting Pronouncements





In
December 2008, the FASB issued FSP 132(R)-1, “Employers’ Disclosures about
Postretirement Benefit Plan Assets” (FSP 132(R)-1). FSP 132(R)-1 requires
additional disclosures for plan assets of defined benefit pension or other
postretirement plans. The required disclosures include a description of our
investment policies and strategies, the fair value of each major category of
plan assets, the inputs and valuation techniques used to measure the fair value
of plan assets, the effect of fair value measurements using significant
unobservable inputs on changes in plan assets, and the significant
concentrations of risk within plan assets. FSP 132 (R)-1 does not change the
accounting treatment for postretirement benefits plans. FSP 132(R)-1 is
effective for us for fiscal year 2009.





In
April 2009, the FASB issued FSP FAS 157-4, “Determining Fair Value When
Volume and Level of Activity for the Asset or Liability Have Significantly
Decreased and Identifying Transactions That Are Not Orderly” (FSP 157-4). FSP
157-4 provides guidance on how to determine the fair value of assets and
liabilities when the volume and level of activity for the asset/liability has
significantly decreased. FSP 157-4 also provides guidance on identifying
circumstances that indicate a transaction is not orderly. In addition, FSP 157-4
requires disclosure in interim and annual periods of the inputs and valuation
techniques used to measure fair value and a discussion of changes in valuation
techniques. FSP 157-4 is effective for us beginning in the second quarter of
fiscal year 2009. The adoption of FSP 157-4 is not expected to have a
significant impact on our consolidated financial statements.





In
April 2009, the FASB issued FSP FAS 115-2 and FAS 124-2, “Recognition and
Presentation of Other-Than-Temporary Impairment” (FSP 115-2/124-2). FSP
115-2/124-2 amends the requirements for the recognition and measurement of
other-than-temporary impairments for debt securities by modifying the
pre-existing “intent and ability” indicator. Under FSP 115-2/124-2, an
other-than-temporary impairment is triggered when there is an intent to sell the
security, it is more likely than not that the security will be required to be
sold before recovery, or the security is not expected to recover the entire
amortized cost basis of the security. Additionally, FSP 115-2/124-2 changes the
presentation of an other-than-temporary impairment in the income statement for
those impairments involving credit losses. The credit loss component will be
recognized in earnings and the remainder of the impairment will be recorded in
other comprehensive income. FSP 115-2/124-2 is effective for us beginning in the
second quarter of fiscal year 2009. Upon implementation at the beginning of the
second quarter of 2009, FSP 115-2/124-2 is not expected to have a significant
impact on our consolidated financial statements.





In
April 2009, the FASB issued FSP FAS 107-1 and APB 28-1, “Interim Disclosure
about Fair Value of Financial Instruments” (FSP 107-1/APB 28-1). FSP 107-1/APB
28-1 requires interim disclosures regarding the fair values of financial
instruments that are within the scope of FAS 107, “Disclosures about the Fair
Value of Financial Instruments.” Additionally, FSP 107-1/APB 28-1 requires
disclosure of the methods and significant assumptions used to estimate the fair
value of financial instruments on an interim basis as well as changes of the
methods and significant assumptions from prior periods. FSP 107-1/APB 28-1 does
not change the accounting treatment for these financial instruments and is
effective for us beginning in the second quarter of fiscal year
2009.


8


NORTHEAST
AUTOMOTIVE HOLDINGS, INC.





NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS


(Amounts
and Disclosures at and for the Six Months Ended June 30, 2009 and 2008 are
unaudited)





NOTE
3 – ACCOUNTS RECEIVABLE





June 30,
                
                
                December 31,2009
                
                
                2008Accounts
      receivable
                
                $
                199,270
                
                
                $
                421,909





The
accounts receivable are due from the sale of used autos.  No provision
for doubtful accounts has been recorded.





NOTE
4 – INVENTORIES




Inventory consists of the following:
                
                June 30,
                
                
                December 31,2009
                
                
                2008Automobiles
      purchased for resale
                
                $
                1,510,493
                
                
                $
                1,485,247





Inventories
are stated at the lower of cost or market.





The
automobile inventory is limited by the amount of working capital the Company has
at any one time.





NOTE
5 – OFFICE EQUIPMENT





The
      following is a summary of equipment:
                  
                  June 30,
                  
                  
                  December 31,2009
                  
                  
                  2008Equipment
                  
                  $
                  4,243
                  
                  
                  $
                  4,243Office
      equipment
                  
                  
                  7,673
                  
                  
                  
                  7,673Office
      furniture
                  
                  
                  25,148
                  
                  
                  
                  25,148Leasehold
      improvements
                  
                  
                  2,700
                  
                  
                  
                  2,700Total
                  
                  
                  39,764
                  
                  
                  
                  39,764Less:
      Accumulated depreciation
                  
                  
                  (20,790
                  )
                  
                  
                  (18,066
                  )$
                  18,974
                  
                  
                  $
                  21,698





NOTE
6 – OTHER ASSETS





Other assets consists of the following:
                
                June 30,
                
                
                December 31,2009
                
                
                2008Prepaid
      federal corporate taxes
                
                $
                -
                
                
                $
                -Prepaid
      state corporate taxes
                
                
                4,985
                
                
                
                6,679Security
      deposit
                
                
                1,800
                
                
                
                1,800$
                6,785
                
                
                $
                8,479


9


NORTHEAST
AUTOMOTIVE HOLDINGS, INC.





NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS


(Amounts
and Disclosures at and for the Six Months Ended June 30, 2009 and 2008 are
unaudited)





NOTE
7 – NOTES AND LOANS PAYABLE





June 30,
                                    
                                    
                                    December 31,2009
                                    
                                    
                                    2008Line
      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.
                                    
                                    $
                                    125,599
                                    
                                    
                                    $
                                    198,006Note
      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
      officers.  Interest is paid monthly on account.
                                    
                                    $
                                    100,000
                                    
                                    
                                    $
                                    100,0009%
      convertible demand notes -The 9% convertible demand notes in the amounts
      of $150,000, $250,000 and $300,000, issued September 15, 2004, December
      19, 2005 and June 15, 2007 respectively, are convertible at $0.25 per
      share. Interest is payable monthly.
                                    
                                    $
                                    -
                                    
                                    
                                    $
                                    100,000Unsecured
      demand notes payable. Interest is payable monthly at the rate of 6%
      through February 2009 and 5% thereafter..
                                    
                                    $
                                    795,346
                                    
                                    
                                    $
                                    804,246Due
      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.
                                    
                                    $
                                    1,234,346
                                    
                                    
                                    $
                                    1,746,269





NOTE
8 – RELATED PARTY TRANSACTIONS





None





NOTE
9 – INCOME (LOSS) PER SHARE




Basic net
income per share is computed by dividing net income by the weighted-average
number of shares outstanding during the period.




10





Diluted
net income per share is computed by using the weighted-average number of shares
of common stock outstanding and, when dilutive, potential shares from options
and warrants to purchase common stock, using the treasury stock
method.




The
following table illustrates the computation of basic and dilutive net income per
share and provides a reconciliation of the number of weighted-average basic and
diluted shares outstanding:





Three Months ended
                          
                          
                          Six Months endedJune30,
                          
                          
                          June30,2009
                          
                          
                          2008
                          
                          
                          2009
                          
                          
                          2008Net
      profit (loss) available to common stockholders
                          
                          $
                          70,451
                          
                          
                          $
                          (703,293
                          )
                          
                          $
                          66,113
                          
                          
                          $
                          (679,609
                          )Denominator:Basic
      weighted-average shares outstanding
                          
                          
                          554,017
                          
                          
                          
                          554,017
                          
                          
                          
                          554,017
                          
                          
                          
                          554,017Effect
      of convertible preferred stock
                          
                          
                          10,000,000
                          
                          
                          
                          10,000,000
                          
                          
                          
                          10,000,000
                          
                          
                          
                          10,000,000Shares
      to be issued
                          
                          
                          500,000
                          
                          
                          
                          500,000
                          
                          
                          
                          500,000
                          
                          
                          
                          500,000Diluted
      weighted-average shares outstanding
                          
                          
                          11,054,017
                          
                          
                          
                          554,017
                          
                          
                          
                          11,054,017
                          
                          
                          
                          554,017Net
      income per share:Basic
                          
                          $
                          0.13
                          
                          
                          $
                          (1.27
                          )
                          
                          $
                          0.12
                          
                          
                          $
                          (1.23
                          )Diluted
                          
                          $
                          0.01
                          
                          
                          $
                          (1.27
                          )
                          
                          $
                          0.01
                          
                          
                          $
                          (1.23
                          )





NOTE
10 – OFF BALANCE SHEET RISK





Included
in the accompanying balance sheet is inventory of used automobiles at a carrying
value of $1,510,493 as of June 30, 2009, which represents management's estimate
of its net realizable value which approximates 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.


11


ITEM
2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS





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 the Consolidated Financial
Statements, the related Notes to Consolidated 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, 2008, the unaudited interim Condensed Consolidated Financial
Statements and related Notes included in Item 1 of this Report on
Form 10-Q (“Form 10-Q”) and the Company’s other SEC filings and public
disclosures.





This
Form 10-Q may contain “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’s market 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 are not limited to, the
risks described below under “Risk Factors” in Part II, Item 1A. The
Company undertakes no obligation to update any forward-looking statements for
revisions or changes after the date of this Form 10-Q.





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.





Adopted Accounting
Principles




In the
second quarter of 2009, we adopted Statement of Financial Accounting Standards
(SFAS) No. 141 (revised 2007), “Business Combinations” (SFAS
No. 141(R)) as amended by FASB staff position FSP 141(R)-1, “Accounting for
Assets Acquired and Liabilities Assumed in a Business Combination That Arise
from Contingencies.” SFAS No. 141(R) generally requires an entity to
recognize the assets acquired, liabilities assumed, contingencies, and
contingent consideration at their fair value on the acquisition date. In
circumstances where the acquisition-date fair value for a contingency cannot be
determined during the measurement period and it is concluded that it is probable
that an asset or liability exists as of the acquisition date and the amount can
be reasonably estimated, a contingency is recognized as of the acquisition date
based on the estimated amount. It further requires that acquisition-related
costs be recognized separately from the acquisition and expensed as incurred,
restructuring costs generally be expensed in periods subsequent to the
acquisition date, and changes in accounting for deferred tax asset valuation
allowances and acquired income tax uncertainties after the measurement period
impact income tax expense. In addition, acquired in-process research and
development is capitalized as an intangible asset and amortized over its
estimated useful life. SFAS No 141(R) is applicable to business combinations on
a prospective basis beginning in the second quarter of 2009. We did not complete
any business combinations in the second quarter of 2009.


12


In
February 2008, the FASB issued FSP 157-2, “Effective Date of FASB Statement
No. 157” (FSP 157-2), which delayed the effective date of SFAS
No. 157, “Fair Value Measurements” (SFAS No. 157) for all
non-financial assets and non-financial liabilities, except for items that are
recognized or disclosed at fair value in the financial statements on a recurring
basis (at least annually), until the beginning of the first quarter of 2009.
Therefore, in the first quarter of 2009, we adopted SFAS No. 157 for
non-financial assets and non-financial liabilities. The adoption of SFAS
No. 157 for non-financial assets and non-financial liabilities that are not
measured and recorded at fair value on a recurring basis did not have a
significant impact on our consolidated financial statements.




Recent Accounting
Pronouncements




In
December 2008, the FASB issued FSP 132(R)-1, “Employers’ Disclosures about
Postretirement Benefit Plan Assets” (FSP 132(R)-1). FSP 132(R)-1 requires
additional disclosures for plan assets of defined benefit pension or other
postretirement plans. The required disclosures include a description of our
investment policies and strategies, the fair value of each major category of
plan assets, the inputs and valuation techniques used to measure the fair value
of plan assets, the effect of fair value measurements using significant
unobservable inputs on changes in plan assets, and the significant
concentrations of risk within plan assets. FSP 132 (R)-1 does not change the
accounting treatment for postretirement benefits plans. FSP 132(R)-1 is
effective for us for fiscal year 2009.




In
April 2009, the FASB issued FSP FAS 157-4, “Determining Fair Value When
Volume and Level of Activity for the Asset or Liability Have Significantly
Decreased and Identifying Transactions That Are Not Orderly” (FSP 157-4). FSP
157-4 provides guidance on how to determine the fair value of assets and
liabilities when the volume and level of activity for the asset/liability has
significantly decreased. FSP 157-4 also provides guidance on identifying
circumstances that indicate a transaction is not orderly. In addition, FSP 157-4
requires disclosure in interim and annual periods of the inputs and valuation
techniques used to measure fair value and a discussion of changes in valuation
techniques. FSP 157-4 is effective for us beginning in the second quarter of
fiscal year 2009. The adoption of FSP 157-4 is not expected to have a
significant impact on our consolidated financial statements.




In
April 2009, the FASB issued FSP FAS 115-2 and FAS 124-2, “Recognition and
Presentation of Other-Than-Temporary Impairment” (FSP 115-2/124-2). FSP
115-2/124-2 amends the requirements for the recognition and measurement of
other-than-temporary impairments for debt securities by modifying the
pre-existing “intent and ability” indicator. Under FSP 115-2/124-2, an
other-than-temporary impairment is triggered when there is an intent to sell the
security, it is more likely than not that the security will be required to be
sold before recovery, or the security is not expected to recover the entire
amortized cost basis of the security. Additionally, FSP 115-2/124-2 changes the
presentation of an other-than-temporary impairment in the income statement for
those impairments involving credit losses. The credit loss component will be
recognized in earnings and the remainder of the impairment will be recorded in
other comprehensive income. FSP 115-2/124-2 is effective for us beginning in the
second quarter of fiscal year 2009. Upon implementation at the beginning of the
second quarter of 2009, FSP 115-2/124-2 is not expected to have a significant
impact on our consolidated financial statements.




In
April 2009, the FASB issued FSP FAS 107-1 and APB 28-1, “Interim Disclosure
about Fair Value of Financial Instruments” (FSP 107-1/APB 28-1). FSP 107-1/APB
28-1 requires interim disclosures regarding the fair values of financial
instruments that are within the scope of FAS 107, “Disclosures about the Fair
Value of Financial Instruments.” Additionally, FSP 107-1/APB 28-1 requires
disclosure of the methods and significant assumptions used to estimate the fair
value of financial instruments on an interim basis as well as changes of the
methods and significant assumptions from prior periods. FSP 107-1/APB 28-1 does
not change the accounting treatment for these financial instruments and is
effective for us beginning in the second quarter of fiscal year
2009.




For
the Six months Ended June 30, 2009 and June 30, 2008





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 six months period ended June 30, 2009 and June 30, 2008.


13





Six months ended June 30,2009
                  
                  
                  2008Percentage
      of net revenues:Net
      revenues
                  
                  
                  100
                  %
                  
                  
                  100
                  %Cost
      of revenues
                  
                  
                  93.8
                  %
                  
                  
                  98.4
                  %Gross
      profit
                  
                  
                  6.2
                  %
                  
                  
                  1.6
                  %Sales,
      general and administrative expenses
                  
                  
                  3.5
                  %
                  
                  
                  1.3
                  %Other
      operating expenses
                  
                  
                  2.0
                  %
                  
                  
                  1.2
                  %Total
      operating expenses
                  
                  
                  5.5
                  %
                  
                  
                  2.5
                  %Profit
      (loss) from operations
                  
                  
                  0.8
                  %
                  
                  
                  (0.0
                  )
      %





Revenues


Revenue
for the six month periods ended June 30, 2009 were $9,364,485 a decrease of $
22,574,411or 70.6% as compared to revenues for the six months period ended June
30, 2008 of $31,938,897. The decrease in revenue was a result of a decrease in
the number of vehicles we sold in the six months period in 2009 over 2008.
Specifically, in the six months period ended June 30, 2009 we sold 730 vehicles
at an average sales price of $12,857 as compared to 2,211 vehicles at an average
sales price of $14,446 during the comparable period in 2008.





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 $8,783,234or 93.8% of net revenues during the
six months period ended June 30, 2009 as compared to $31,434,719 or 98.4% for
the comparable period in 2008, a decrease of $22,651,485 or 72.0%. Thus, our
gross margin was 6.2% for the six months period ended June 30, 2009 as compared
to 1.6% for the comparable period in 2008. The decrease in our cost of revenue
as a percent of revenue is attributable to a decrease in the cost of the
vehicles sold during the six months period ended June 30, 2009 as compared to
the comparable period in 2008.




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 $324,739 for the six months period
ended June 30, 2009 or 3.5% of net revenue as compared to $403,191 or 1.3% of
net revenue for the comparable period in 2008, a decrease in such expenses of
$78,452 or 19.5% The decrease in the ratio of SGA expenses to net revenue was
primarily due to a decrease in operating expenses.





Other
Expenses


Our
combined expenses for officers salaries and interest was $186,150 for the six
months period ended June 30, 2009 or 2.0% of net revenue compared to the
comparable period in 2008 when such expenses were $378,235 or 1.2% of net
revenue. The decrease in such expenses is attributable to decreased officers’
salaries in 2009 as well as a decrease in interest expense. The following table
shows the changes in the components of these expenses during the comparable
periods.


14





Six months
                      Period Ended
                      June 30
                      2009
                    
                    
                    Six months
                      Period Ended
                      June 30,
                      2008
                    
                    
                    Change
                    
                    
                    Percent ChangeOfficers
      Salaries
                    
                    $
                    92,026
                    
                    
                    $
                    201,444
                    
                    
                    $
                    (109,418)
                    
                    
                    
                    (54.3%)Interest
      Expense
                    
                    $
                    94,124
                    
                    
                    $
                    176,791
                    
                    
                    $
                    (82,667)
                    
                    
                    
                    (46.8%)





Operating
Gain (Loss)


Operating
gain or loss is calculated as our revenues less all of our operating expenses.
Our operating gain for the six months period ended June 30, 2009 was $66,113 or
0.7 % of net revenue as compared to an operating (loss) of $(278,548) or (0.9%)
of net revenue for comparable period in 2008, an increase of $344,661. This
increase in operating gain was primarily as a result of an increase in gross
profits as well as a decrease of operating expense.





Capital
Resources and Liquidity





Our
liquidity is directly related to market trends and events, as well
as our ability to interpret those trends and events and react
accordingly. We are active in the used vehicle market daily, and we believe
that while there will always be uncertainties and unusual events that may shape
the market, we are highly capable of dissecting the data available to us,
and both willing and able to make whatever changes are needed in a timely
fashion to protect our liquidity. Unusual events may include the rise or fall of
the cost of fuel, unforeseen economic changes in the geographic areas with
which our company operates, or even acts of God. While we feel we are well
capitalized at this time with the cash we have on hand, we do have a line
of credit with Manheim Automotive Financial Services in the amount of $1,000,000
with which we typically have only 50% in use.





We have
no material commitments for capital expenditures at this time. Our capital
resources are used primarily for the purpose of purchasing inventory. However,
we are under no obligation or contract to purchase inventory at any specific
time or from any specific source.





Off-Balance
Sheet Arrangements




We do not
have any off-balance sheet arrangements.





ITEM
3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK





As of
June 30, 2009, we had cash and cash equivalents of $512,606 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 June 30, 2009, we
had an outstanding balance of $125,599 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 June 30, 2009, 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%.


15


ITEM
4. CONTROLS AND PROCEDURES





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-14(c) promulgated under the Securities Exchange Act of 1934, as
amended (the “Exchange Act”), within 90 days of the filing date of this report.
In designing and evaluating the Company’s disclosure controls and procedures,
management recognized that any controls and procedures, no matter how well
designed and operated, can provide only reasonable assurance of achieving their
objectives and management necessarily applied its judgment in evaluating the
cost-benefit relationship of possible controls and procedures. Based on this
evaluation, the Company’s chief executive officer and chief financial officer
concluded that as of June 30, 2009, the Company’s disclosure controls and
procedures were (1) designed to ensure that material information relating to the
Company, including its consolidated subsidiaries, is made known to the Company’s
chief executive officer and chief financial officer by others within those
entities, particularly during the period in which this report was being prepared
and (2) effective, in that they provide reasonable assurance that information
required to be disclosed by the Company in the reports that it 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.




Limitations
on the Effectiveness of Internal Controls




Management
does not expect that our disclosure controls and procedures or our internal
control over financial reporting will necessarily prevent all fraud and material
errors. An internal control system, no matter how well conceived and operated,
can provide only reasonable, not absolute, assurance that the objectives of the
control system are met. Further, the design of a control system must reflect the
fact that there are resource constraints, and the benefits of controls must be
considered relative to their costs. Because of the inherent limitations on all
internal control systems, no evaluation of controls can provide absolute
assurance that all control issues and instances of fraud, if any, within the
Company have been detected. These inherent limitations include the realities
that judgments in decision-making can be faulty, and that breakdowns can occur
because of simple error or mistake. The design of any system of internal control
is also based in part upon certain assumptions about the likelihood of future
events, and there can be no assurance that any design will succeed in achieving
its stated goals under all potential future conditions. Over time, controls may
become inadequate because of changes in circumstances, and/or the degree of
compliance with the policies and procedures may deteriorate. Because of the
inherent limitations in a cost effective internal control system, financial
reporting misstatements due to error or fraud may occur and not be detected on a
timely basis.





There
have been no significant changes (including corrective actions with regard to
significant deficiencies or material weaknesses) in our internal controls or in
other factors that could significantly affect these controls subsequent to the
date of the evaluation referenced in the above paragraph.





PART
II – OTHER INFORMATION





ITEM
1. LEGAL PROCEEDINGS





We are
currently not involved in any litigation that we believe could have a material
adverse effect on our financial condition or results of operations. There is no
action, suit, proceeding, inquiry or investigation before or by any court,
public board, government agency, self-regulatory organization or body pending
or, to the knowledge of the executive officers of our company or any of our
subsidiaries, threatened against or affecting our company, our common stock, any
of our subsidiaries or of our companies or our subsidiaries’ officers or
directors in their capacities as such, in which an adverse decision could have a
material adverse effect.





ITEM
1A. RISK FACTORS





There are
no material changes to our risk factors previously disclosed on Form 10-K, dated
December 31, 2008.




ITEM
2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS





There
were no unregistered sales of Equity Securities and Use of Proceeds during the
period ended June 30, 2009.


16





ITEM
3. DEFAULTS UPON SENIOR SECURITIES





There
were no defaults upon senior securities during the period ended June 30,
2009.





ITEM
4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS





There
were no matters submitted for a vote of our security holders during the period
ended June 30, 2009.





ITEM
5. OTHER INFORMATION





There is
no other information required to be disclosed under this item which was not
previously disclosed.





ITEM
6. EXHIBITS





31.1
            Rule
      13a-14(a)/15d-14(a) Certification of Chief Executive Officer and Chief
      Financial Officer





32.1
            Section
      1350 Certifications of Chief Executive Officer and Chief Financial
      Officer





SIGNATURES





Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant has
duly caused this report to be signed on its behalf by the undersigned thereunto
duly authorized.





NORTHEAST
      AUTOMOTIVE HOLDINGS, INC.Date:
      August 19, 2009
              By:
              /s/
      William SolkoWilliam
      Solko, Chief ExecutiveOfficer
      and Chief Financial
Officer




17